10 Step Guide to Starting an E-Commerce Business in Canada

Originally Published: July 15, 2019

The way we shop has changed dramatically with the rise of online shopping, and that has transformed the way we do business. If you are looking to take advantage of this new trend, it’s never been easier to start your own e-commerce company. Whether you start an online business from a passion or grow an idea, potential customers are ready and waiting. Starting an ecommerce business offers exciting opportunities and huge potential for growth.

Of course, taking the first step can seem overwhelming. We’ve outlined simple steps to help you establish an online business. These steps will help attract potential customers and build a strong foundation for success.

What is an Ecommerce Business?

Before looking at how to start an ecommerce business, it’s important to understand exactly what it entails. An ecommerce business is any business that conducts its sales primarily online through a website or other online platform. This differs from traditional brick-and-mortar stores, where customers visit a physical location to purchase goods or services.

The core of an ecommerce company is its online presence. This allows customers to browse products or services, add them to a virtual cart, and check out securely. Most ecommerce businesses operate 24/7, providing customers the convenience to shop whenever they want.

Types of ecommerce stores include:

Retail Businesses: Selling physical products directly to consumers.
Service-Based Businesses: Offering digital services like web design, marketing, or consultations.
Digital Product Businesses: Selling downloadable goods like software, music, or ebooks.
Subscription Businesses: Regularly deliver ongoing services or products to customers.

An ecommerce business can be a standalone online store or a complementary part of a business with physical locations. With more people shopping online, starting an ecommerce business is a great way to enter a growing market.

How to Start an Ecommerce Company

Starting an ecommerce company offers exciting opportunities in today’s digital marketplace. With the right approach, you can build a business that reaches customers globally and grows steadily over time.

Following these steps will create a strong foundation for a successful online business.

Step 1: Define Your Business Idea & Niche

Before starting an e-commerce business, it’s essential to define what products or services you want to offer. This step forms the foundation of your entire business.

Think about your target audience and the specific needs or gaps in the market that your business can address. Whether you sell products, services, or digital content, you need to know your niche and who your potential customers are. For instance, ecommerce businesses that specialize in eco-friendly products or unique, handcrafted goods are booming.

Make sure your idea aligns with your passion and offers value to your target market. Bringing personal knowledge or expertise to a niche area helps customers connect more easily with your business.

You can expand your niche by researching trends in online shopping. Look at growing areas like online retail in health, wellness, technology, and sustainable goods. With the right niche, your ecommerce business can stand out from the competition and attract loyal customers.

Starting an ecommerce business as a side hustle is a great way to earn extra income while testing your idea. You can grow it at your own pace alongside your main job.

Step 2: Write a Business Plan

A well-thought-out business plan is an important tool when starting an online business. A business plan will guide your decisions and help you prepare for growth. Your plan should cover aspects such as:

Business Goals: Define clear, measurable objectives for both the short and long term. These will guide your business decisions and help you stay focused as your ecommerce company grows.
Target Audience & Market Research: Identify who your customers are and what they need. Conduct market research to understand your competitors, trends, and opportunities within your niche.
Marketing Strategy: Outline the methods you’ll use to attract and engage customers. These may include social media, email marketing, SEO, and paid advertising.
Financial Projections: Estimate your expected revenue, expenses, and profits. This will help you plan for the future and manage your business’s finances effectively.
Plans for Growth: Detail how you’ll expand your business over time. This may be adding new products, entering new markets, or increasing operational efficiency.

If you are uncertain where to begin, online tools and templates are available to assist you. These can help you with writing a business plan specifically for ecommerce. Make sure to include how you’ll manage payment processing and logistics, which are important to your business’s success.

One critical area to cover in your business plan is your strategy for handling competition. Research what your competitors are doing, especially those in the same niche. Studying your competitors will show you pricing strategies, customer service methods, and online sales tactics. This can help your business stand out among online businesses in Canada.

Step 3: Register Your Business

Once your business idea and plan are ready, the next step is to officially register your ecommerce company. You can choose to register as a Sole Proprietorship, General Partnership, or Incorporate based on your business needs. Understanding differences between registration and incorporation will help you choose the best option for your business structure.

BizPaL can be helpful to find the permits and licenses your business needs. By entering your location and industry, you can quickly see local, provincial, and federal requirements.

How Do You Start an Ecommerce Business in Canada?

Starting an online business in Canada is fairly simple but can vary by province. If you plan on opening an ecommerce business to sell worldwide, remember to check for any tax or customs rules.

Ontario Business Central simplifies the process of starting your ecommerce company. Whether you are setting up a Sole Proprietorship, General Partnership, or Corporation, we offer comprehensive support for registering or incorporating your business efficiently. We design our services to take the stress out of the process, so you can focus on building your business.

One of the helpful tools we offer is our Preliminary Name Search. A name search allows you to check the availability of your desired business name before registering. Conducting a Pre-Search ensures that your business name is unique, helping you avoid potential issues later on.

In addition to business registration, we assist with Domain Name Registration to help establish your online presence. A strong, memorable domain name is important for your ecommerce business, and our team will help you choose the right one.

With our experience and user-friendly services, Ontario Business Central is your trusted partner in launching a successful business. Ontario Business Central can assist with registering a small business in the following Provinces:

Small Businesses

Alberta Registration
British Columbia Registration
Manitoba Registration
Ontario Business Registration
Saskatchewan Registration

If you’re looking to incorporate your business, we can assist in any of these jurisdictions:

Incorporations

Alberta Incorporation
British Columbia Incorporation
Manitoba Incorporation
Ontario Incorporation
Saskatchewan Incorporation
Federal Incorporation

For Corporations, you will receive Articles of Incorporation, which serve as the official legal document establishing your company.

You may wish to register your tax accounts with the Canada Revenue Agency (CRA). This includes setting up accounts for HST and Payroll if applicable. Ontario Business Central can assist with registering these tax accounts, ensuring your business remains compliant right from the start.

Step 4: Build Your Ecommerce Website

Your website is the heart of your ecommerce business. This is where potential customers will browse, buy, and interact with your brand. Creating a site that is user-friendly and visually appealing keeps customers on your page and encourages online sales.

Consider using established commerce platforms like Shopify, WooCommerce, or BigCommerce to simplify the process. These platforms offer a range of built-in tools for managing inventory, shipping, and payment processing. Wix is a popular website builder that offers an easy-to-use platform for creating your ecommerce website. With its drag-and-drop features, you can design a professional-looking site without needing advanced technical skills.

In addition to good design, search engine optimization (SEO) is how your website shows in search results. Using the right keywords, fast load times, and being mobile-friendly will improve your ranking and the customer experience.

An easy-to-use website helps customers find what they need and make purchases faster. Testing your website to ensure that all functions work smoothly is another key step before launching.

Step 5: Choose Your Products & Suppliers

Selecting the right products and suppliers is an essential step in building a successful ecommerce business. Your products and the reliability of your suppliers affect the customer experience and how smoothly your business runs.

If you’re selling physical products, you have several options for sourcing inventory. You can work with wholesale suppliers who provide products in bulk, or you may consider dropshipping. With dropshipping, your supplier handles storage, packaging, and shipping, which can save you time and reduce upfront costs. Choose a supplier with a proven track record to ensure reliable shipping and high-quality products.

Reliable suppliers are essential for maintaining high levels of customer service. Their ability to meet your quality and delivery standards directly impacts how your customers perceive your business. Poor supplier performance can lead to delays, damaged goods, or other issues, negatively affecting customer satisfaction.

For those offering digital products or services, it’s important to make sure everything is polished and professional. Test digital products for usability, and service-based businesses should be ready to deliver value right away. Your pricing should be competitive and reflect the value you offer. Do market research to see what competitors charge, but also consider the unique benefits your business provides.

Whether you sell physical or digital products, working with good suppliers or service providers keeps your business running smoothly. This allows you to focus on growth and customer satisfaction.

Step 6: Set Up Payment & Shipping Methods

Your payment and shipping options can make or break your business. The convenience, security, and efficiency of these processes directly impact customer trust and satisfaction. Integrate trusted payment gateways like PayPal, Stripe, or Shopify Payments into your site. If you sell internationally, ensure you offer currency conversions and global shipping options.

Shipping can be a challenge for ecommerce businesses, especially for small business owners who are just starting. Fast, affordable shipping is often a deciding factor for customers when choosing where to shop. Choose reliable carriers to deliver your products on time and at a reasonable cost. You should also offer a range of shipping options, such as standard, express, or even same-day delivery.

To further entice customers, consider offering free or discounted shipping. Studies show that customers are more likely to complete their purchase when they see that shipping is free or discounted. While offering free shipping may seem like a financial burden, you can build the cost into your product pricing. Offering free shipping as part of a promotion, such as on orders over a certain amount is another option.

You’ll also want to plan for handling returns and exchanges, which can significantly impact customer satisfaction. A clear, easy-to-understand return policy builds trust and makes customers feel more confident in their purchase.

Step 7: Develop a Marketing Strategy

Once your ecommerce website is live, the next step is to attract customers. A solid marketing strategy should combine various tactics, such as email marketing, social media, and paid advertising. Create a plan to build an online presence that resonates with your target audience and drives traffic to your site.

Social Media Marketing: Platforms like Instagram, Facebook, and Pinterest are great for reaching your audience. Don’t just promote your products—engage with your followers and provide valuable content. Tools such as Buffer or Hootsuite can help you manage your social media accounts.
Email Marketing: Email campaigns are an effective way to keep your customers informed about new products, sales, and promotions.
Affiliate Marketing: Consider partnering with affiliate marketers to drive traffic to your site through their platforms.

The goal is to attract a constant flow of customers to your site and turn them into paying customers.

Step 8: Optimize for SEO & Analytics

Search engine optimization (SEO) is important for the long-term success of your ecommerce business. SEO will help increase your visibility on Google and other search engines, driving organic traffic to your site. Make sure to:

Use Relevant Keywords: Research and add important keywords to your website content and product descriptions. This helps search engines find your site.
Improve Page Speed & Mobile Friendliness: Make sure your site loads quickly and works well on mobile devices. These factors improve your search ranking and customer experience.
Update Content Regularly: Keep your site fresh by posting new blog content, launching products, and sharing industry updates. This helps maintain your ranking and engages your audience.

Use tools like Google Analytics to track visitor behavior and adjust your marketing and SEO strategies accordingly. Services like Semrush can help you track and optimize the SEO performance of your website. Tracking key metrics like conversion rates, bounce rates, and traffic sources will help you make smart, data-based decisions to grow your business.

Step 9: Provide Excellent Customer Service

Customer service plays a significant role in the success of any ecommerce company. Consumers expect fast, helpful responses to their questions, issues, or concerns. A positive customer service experience can be the difference between a one-time buyer and a loyal, repeat customer.

Be sure to implement a customer service strategy that includes:

Multiple Contact Options: Provide different ways for customers to reach you, like email, live chat, and phone.
FAQ Section: Add an FAQ section to your website to answer common questions.
Easy Returns & Refunds: Make sure your return and refund process is simple and customer-friendly. A clear policy builds trust and increases customer satisfaction.

The quality of your customer service has a direct impact on your business’s reputation. When customers know they can count on you for support, they’re more likely to shop with you again and leave positive feedback. The better your customer service, the more likely you are to gain repeat customers and positive reviews.

Step 10: Scale Your Business

Once you’ve established your ecommerce business and built a steady flow of traffic, it’s time to focus on growth. Here are some ways to scale your business:

Expand Your Product Line or Services: Add new products or services to offer more options to your customers.
Invest in Paid Advertising: Use Google Ads or Facebook Ads to bring more visitors to your site and increase your sales.
Enter New Markets: Expanding into international markets or opening physical stores can reach more customers and boost your presence.
Use Automation Tools: Automate tasks like inventory management, email marketing, and customer support to save time and improve efficiency.
Delegate Tasks: Hand off tasks like marketing, customer support, or inventory so you can focus on growing your business.

Growing your ecommerce business takes time, effort, and planning. With the right approach, you can move your company to the next level.

Ready to Start Your Ecommerce Journey?

Starting an ecommerce business can be a rewarding experience. However, it takes careful planning and execution to succeed. By following these steps, you should have a clear idea of how to start an internet business in Canada.

When you’re ready to take the next step, Ontario Business Central is here to help. With over 30 years of experience, we have supported countless entrepreneurs in registering and incorporating their businesses. We offer services like business registration, incorporation, and name searches to make the process easy and efficient.

By choosing Ontario Business Central, you benefit from fast, reliable service, expert guidance, and a straightforward online platform. Whether you need assistance with starting your business or advice on growing it, our team is here to support you.

Begin your ecommerce journey with the trusted expertise of Ontario Business Central!

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
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Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.