How to Start an Ecommerce Business in Canada

Jun 11 2021


Business Ideas


Last Updated: June 11, 2021

Author Neeraj

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The e-commerce businesses in Canada have hit an all-time high ever since the pandemic shook our world more than a year back. With many Canadians preferring online shopping over in-store purchases due to safety concerns, many existing offline brands and retailers have also jumped on the e-commerce bandwagon.

From here, the only direction of the progress of e-commerce is up. But it can be challenging and confusing to start an e-commerce business in Canada, especially if you’re doing it for the very first time. To help many such first-time business owners in the e-commerce space, we’ve put together this simple and practical blog to take you through the preliminary steps.

15 Steps to Start an Ecommerce Business in Canada

Anyone can start an e-commerce business in Canada and the market is very ripe to get in now. According to the BDC survey conducted among 1500 Canadian entrepreneurs, it was found that around 46%of Canadian SMEs don’t have a website and only 8.5% of the websites had any features for in-website shopping including online payments.

BDC survey

So, if you already have a small business in Canada and are thinking of branching online or hoping to enter into the e-commerce space, now is the best time.

Let’s jump in and see everything you need to do to start and successfully run your e-commerce business in Canada.

1. Identify the Niche You Prefer

identify business niche

The niche is the industry your business will be in. There are thousands of options to start an e-commerce business and it all starts with picking a niche.

There are two different ways to pick a niche.
A. Pick a niche that plays to your strength
B. Pick a niche that has high chances of bringing in revenue

There are both advantages and disadvantages either way. When you pick a niche that you don’t have much knowledge of, then you need to spend a lot of time researching and understanding that niche to choose the best product or services.

When you’re planning to pick a niche you’re interested in, then you may already have some expertise to start with. And you wouldn’t be starting from zero. But there may be chances that the market is quite small in your interested niche.

Make sure to think outside the box and brainstorm about the probabilities that you see. You don’t have to drill deeper down at this stage — just research the generic audience of this market and see if this is something that you can work with.

2. Know About the Various Selling Choices

selling choices in business

When you’re sure about a niche, the next step is to decide what you’re going to sell. We aren’t talking about the product but about the different types of selling opportunities in the e-commerce industry. There are three main choices you have:

A. Sell a digital product

A digital product can be anything from an ebook, a bunch of resources, videos, website designs, templates or courses. You can even go beyond these usual digital products and create an entirely new one and sell them on your e-commerce store.
The best part about choosing a digital product is that you don’t have to handle any physical shipping, warehousing and inventories. The product will be directly delivered to the person as soon as they’ve paid for it online.

B. Sell a physical product

When you want to sell a physical product, then there may be some groundwork involving the inventories, sourcing, shipping and packaging. Of course, this can vary depending on the type of product you want to sell:

a. Your own product: If you’re selling your product, then you need to source the raw materials, packaging materials and handle the shipping details.
b. Private labels: When you want to sell private labels, you can partner with them, ask them to send you the goods and you can take care of the packaging and shipping alone. You’ll have complete control over the cost you decide, the offers and the overall running of your e-commerce store.
c. Dropshipping: With dropshipping, you don’t have to handle any of the physical tasks like shipping, sourcing, inventory, warehousing or packaging. All you need to do is to develop an e-store and market the products. Once the order is placed, you’ll send the details across to the dropshipper and they’ll take care of shipping the products to the customers.

C. Sell a service

If you don’t want to sell any product, then you can sell a service. You’ll be running a service-based business online which often brings in repeat customers. There are two different services you can sell:
a. An online service: In an online service, you’ll be selling services like mentoring, coaching, designing, writing or any other service that can be delivered online.
b. An offline service: While you’ll be accepting the orders for this service online, the service actually happens offline. This can be anything like cleaning, gardening, plumbing, electrical works, teaching and painting.
You can weigh your capabilities and the ability to handle various tasks involved in each of these choices to decide the type of product/service you want to sell.

3. Choose a Suitable Product to Sell

Once you’ve decided on the type of commodity you want to sell, the next step is to decide on the actual product.
For example, if you’re picking a service-based product, then you may need to research and start with that one service that you can handle. If it’s an online product, then you may need to actually start creating the product, gathering materials, deciding on a name and so on.
For every product you choose, you need to understand the groundwork needed, the expertise and the physical or online challenges to reach your customers. Keeping all of these in mind, you can zero in on one product to start with.

4. Perform the Initial Market Research

market research during initial stages of business

What are the current players in the market already doing? How are they marketing the products?

How are customers reacting to the current product?

Is there any customer expectation or market gap that you can bridge with your product?

These are a few questions that you can ask yourself. Instead of just looking at various companies and their products, note them down. Gather data from different credible sources about the current market scenario, your competitors, their performance, their current marketing and customer outreach strategies and a lot more.

This initial data you gather will be so much more useful when you’re in the stage of starting your e-commerce business. You can use the information when you’re choosing your store name, designing your product, marketing your product, introducing offers and a lot more. You can also learn a lot from the success and the failures of your competition and apply them to your own business.

5. Understand Who Your Audience Are

audience research for business
target group

This is one of the most crucial steps in setting up any business. Your audience holds the key to the success of your e-store and it’s important to spend as much time as you want to understand them.

You can get some secondhand data from surveys and studies but nothing comes close to actually talking to the customers. Identify who your target customers are and start interacting with them online. Monitor their social media posts and their online interactions. You’ll find interesting information about their choices, likes, dislikes and preferences.

You can also reach out to the specific members of the audience, strike up a chat, introduce yourself and your product and get their insights to develop on it. You can also stay in touch with such people to get regular feedback on any other future products you introduce.

6. Choose a Memorable Business Name

choose business name

As you perform the market research and weigh your competitors, you can, in parallel, note down some ideas for your business name. This will be the name of your e-commerce store — something that your customers will identify your product with.

You can go for the professional business names that directly represent what you sell or any other unique name that stands out from the crowd. It’s totally dependent on your choice.

As you’re shortlisting a few business names, make sure to check if the domain name is also available. The domain name is the URL of your e-commerce store and you need a business name that’s available as a domain name too.

7. Set Up Your Financials

Steptoinbound financials blog image

You need to set up a separate bank account for your business to accept and make transactions. It’s also best to have a PayPal business account and other required online payment service providers and link them with your local business bank account. This will make it easier to track your expenses and income and also good for tax purposes.

If you want to get a better grip on handling your finances from the beginning, then you can use any financial accounting software to keep track of your money. It will make it easier to calculate and pay your taxes and even factor them into the cost of your product.

8. Register Your Business with the Canadian Government

register new business

Even if you’re an e-commerce business, you still need to register your business with the Canadian government.
Alternatively, you can use ownr to get all of these done for you.

● You need to choose a trade name for the company for the registration.
● You need to declare the type of your company (partnership, limited, etc.)
● You need to register with the Registrar and the government tax organizations.
● You need to provide a physical address of your e-commerce business even when your whole operation is online.
● You also need to provide your official phone number and email addresses, which should also be the same as the contact information on the website.
● You should get a tax identification number and a VAT number to associate with your e-commerce business.
● If you’re offering physical products through your e-store, then you have to check if there are any licenses you need to apply for storing the inventory and for shipping.

You should also check the Canadian legislation to be aware of the limits of your business and other privacy regulations you need to comply with.

9. Start Your E-Store with an E-Commerce Tech Provider

ecommerce store business

When you’re sure about the product you want to sell, next comes the most important task — creating your e-commerce store.
To start with, you need to buy a domain name, which is the same as your business name, a hosting provider and an e-commerce technology provider and we can help you will all of this. Check out our plans.

You can easily buy your domain names from Namecheap, GoDaddy or any other similar platform. If your company is local to Canada, you can go for a .ca extension as well.

The hosting provider can be Bluehost, Hostgator, Hostinger or any other hosting that works well for an e-store. We do provide hosting for free with our Growth and Professional Plans.

After choosing the hosting and buying the domain, the last step is the e-commerce service provider. While you can create your own e-commerce store, it’s easier to make use of an e-commerce service provider.

There are a few e-commerce tech providers like Shopify and BigCommerce that offer domain, hosting and content management together as a single package. This could simplify your work when you’re working with just a single platform instead of working between multiple vendors.

Most of these e-commerce tech providers offer a free trial. You can check out the actual functionalities and usability and weigh them with the basic requirements of your e-store.

10. Decide Your Website Design & Content

website design steptoinbound example

After you’ve decided on one e-commerce service provider, now all that’s left is to build your e-store. We can do this end to end for you, right from design, development, hosting and even during security checks and regular updates for you.

Colour palette: Before you do that, you need to decide on a colour palette that you will follow uniformly across your website and even across your products. This can be a combination of a primary colour and a couple of secondary colours.

Website theme: Your e-commerce provider will have a set of website themes that you can choose from. Keep in mind the nature of your business and product when you’re choosing a theme. After buying them, you can start editing the elements as you wish.

Homepage: If you’re selling multiple products, then you may require multiple sections on the homepage. If not, you can keep your homepage minimal to the basic details of your product.

Product page: On the product page, you need to add a high-quality image of the product, a clear and detailed product description, shipping details (for physical products), an option for customer reviews and ratings, and videos, if needed. The product page should be optimized for SEO with keywords in the headlines, descriptions, URL, meta description, and images.

If you have more than one product, you can also display recommended products on the individual product pages.

Learn More: SEO Strategy

CTAs: Have clear CTAs that are easily recognizable the minute someone lands on your webpage. You need CTAs for ‘Add to Cart’, ‘Add to Wishlist’ and ‘Sign Up/Sign In’. Work with your colour palette to choose an attractive colour for the CTA buttons that instantly grabs attention.

Checkout: A minimal and quick checkout option can play a vital role in increasing revenue. Create a no-fuss shopping cart page and quick-access design that customers can use to place an order in not more than three steps — review the order, add address details, make payment.

Blogs: Most e-commerce websites have a separate blog section. You can post blogs about your products, your industry, customer stories, case studies, announcements, and a lot more. The blogs will increase the SEO-worthiness of your website and can gradually increase your search engine ranking. You can create a routine schedule for the blogs and stick to it.

Learn more: how to start blog in Canada.

11. Create High-Security Payment Features

secure digital payments

As an e-commerce business owner, you need to be cautious about the payment services you’re partnering with and their security.

Generally, the e-commerce service providers offer easy integration with popular payment providers like PayPal and Stripe. You can also add payments through credit cards, debit cards, online wallets and other third-party payment integrations.

All of your payments should be protected by SSL encryption to keep your customers’ sensitive data safe.

12. Open Social Media Accounts for Your Business

social media important profiles

Once you’ve completed your e-store, the next step before you launch your business is to create social media accounts. During the research phase, you must have collected the information on the social media platforms where your competitors and customers are at.
You can choose one to three to five such social media platforms where most of your customers are and create official business accounts under the name of your e-store.

After you’ve launched your business, you can start actively posting from your business accounts, interacting with your customers, promoting your products, educating your customers and creating content that sets you apart from the audience.

As a new e-commerce business, you may need to watch your expenditure. This is when your social media exposure helps. Social media coverage can be quite fruitful to build your organic reach and get customers to your website without spending a lot of money. Make sure to pick not more than three social media and be active as much as possible.

13. Create Policies for Returns & Refunds

create return policy

There will be unhappy customers in every business and we need to be prepared for that. If you’re offering physical products, then you can include the terms and conditions for the return of your goods and refunds on your website. Mentioning them on the website would give a level of security and will also make things clear to your customers.

If you’re selling an online product, again the refund policy is important. Some offer a free 7-day refund policy if the customers are not satisfied with it. And some have a no-refund policy. You can decide how you want your refund policy to be and clearly publish them on the website. If needed, you can also get some legal aid to help you create these terms and conditions.

14. Stay in Touch with Your Customers

customer engagement

Let’s say that a few people have bought your product from you. Are you going to leave them as such? No, you shouldn’t!
Keep in touch with your customers regularly over emails. You don’t need to bombard them with emails every single day. But you can send an email at least twice a month to stay on their mind and introduce any new products you’re adding.

Talk to them about their feedback and reviews, send them information about your market or any how-to guides to using the product they’ve bought for example.

15. Provide the Best Customer Service

say thanks for customers

The experience of your customers speaks a lot about your business. Customers expect businesses to answer their questions quickly and politely and help them with any information they require about the purchase. They may have issues with payment, credit card charges, product defects, product queries, disputes or any other questions.

You can add a simple chat option to your website manned by a chatbot and a 24×7 customer service email to answer any queries the customers may have.

Wrapping Up

Starting an e-commerce business in Canada is quite inexpensive but the legwork is quite extensive. No matter what kind of e-commerce business you’re planning to start, you need to be fully aware of what you’re getting into.

The foundation of the e-commerce store speaks a lot about your long-term capability. So spend time completing every one of these tasks without rushing or skipping any steps. Give particular importance to the privacy regulations and legalities of starting an e-commerce business in Canada .

Once your e-store is up and running, you need to regularly monitor your website performance, customer responses and feedback to tweak and improve your e-store.

But how much ever challenging the tasks are, running your own e-commerce business is one of the most satisfying jobs ever!

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