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eCommerce guide – Part 1: Market Research


This is part one of our free guide to starting an ecommerce business. The first part covers market research for your products and customers to increase the chances of making good profits, before you even start putting your ecommerce website together.

Market Research

Make sure you do your market research. This step is missed by so many startups and small businesses and could sink your business very quickly. Before you even plan your website, you need to know that there are enough people out there wanting to buy your product and that you don’t have unbeatable competition. A simple fact is that if you don’t sell enough of your products at a high enough markup to pay your bills and turn a profit, your business will fail quickly.

What are you thinking of selling, and to whom?

Is this suitable for selling online? What will your focus be? You can’t sell all things to all people, so choose a specific demographic and product range. This will influence the shop name, branding and design. Get this wrong and you could be alienating your target market before you have even started.

Is there a market?

Do people even want to buy your product?

Is the market big enough?

If there are people who want to buy your products, will there be enough sales to make the business profitable? What kind of sales volume can you realistically expect?

Who else is selling to this market?

Can you compete against established players? Will any new arrivals impact your trade?

Why will people buy from you?

What is special about your business that will make people stop buying somewhere else and then stay with you?

Validating your idea

If you are in any doubt about whether your idea is going to work, you can set up a basic shop using Shopify, Amazon or eBay and drive some traffic to it using Facebook Ads or Google Adwords. This will give you some quick feedback on whether there is a market and whether your pricing is right.

Knowing whether you’ve got a good idea is vital and can prevent you investing thousands of pounds into a custom designed ecommerce website that will not make any sales.

So, looking good?

If your research is positive and you find out that you can profitably compete in a certain market, then you are ready to plan your shop. If there is no market, the market is too small or you cannot compete against established players then you have a choice on whether to continue. The idea is not going to make you money, so will essentially be an expensive hobby. There is nothing wrong with doing that, but understand that it will not support you financially and will take up time and money that you could be spending on something more profitable.


So is your ecommerce idea still a winner after doing your market research? Excellent. We can now move on to more detailed planning in part 2

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