Top 10 Low Risk Tips For Starting Your Own E-commerce Company

Tech layoffs have hit hard. Starting in 2022, major brands including Spotify, Google and Microsoft have been laying off tens of thousands of workers. In the wake of the already tumultuous Covid-19 pandemic and rising inflation, many Americans have been thrust into a state of panic concerning their current and future employment.

The good news is, there are low-risk ways to start your own e-commerce company. For example, in 2021, more than 100,000 new American brands joined Amazon. Amazon’s U.S. selling partners have sold over 3.9 billion products – that equals 7,500 items every minute – and averaged about $200,000 in sales per seller.

“Today, Amazon is a preferred partner for nearly two million selling partners worldwide – most of which are small and medium-sized businesses,” says Claire O’Donnell, director of selling partner empowerment, communities and trust at Amazon. “Our selling partners are incredibly important to us, and we work hard to provide them with effective resources to run and launch successful businesses. We offer a robust suite of tools and services, lending programs, and free educational services like Amazon Small Business Academy and Amazon Seller University to make sure it’s easy for anyone to start selling in Amazon’s store and connect with a global customer base.”

Shan Shan Fu is the founder of Millennials In Motion, an e-commerce brand that sells products on Amazon, Walmart, Shopify, Etsy and Poshmark. She also serves as head of business development at Trivium, an award-winning Amazon advertising and management agency.

Here are Fu’s top 10 tips for starting an e-commerce company with her low-risk, low-investment method:

1. Look for products that have high demand and low competition. Using tools such as Helium 10’s Magnet, you can discover which keywords are being searched on Amazon. Look for products with at least 5,000 monthly searches and less than 1,000 competitors.

2. Create barriers to entry to avoid your product getting copied. Avoid “commodity products,” which are products that anyone can sell. Make your product unique with better features, better design, and/or better functionality. Patent your product, if possible. Work within a particular niche and expand from there.

3. Start with small and light products if you are low in initial cash investment. These products will cost less to ship and less to store than big, heavy, bulky products.

4. If you are on a tight budget, use your smartphone to take pictures and harness apps like GIMP and Canva to edit them. GIMP (similar to Adobe Photoshop) is a free app that allows you to cut out your product and paste it on a white background. Canva is a drag and drop website where you can create beautiful, poster-like images for your product listing pages.

5. Sell your own clothes and belongings on Poshmark in order to get the hang of e-commerce. Honing your skills by selling some of your own goods on Poshmark first will teach you about writing product descriptions, shipping and fulfillment, and customer preferences.

6. Launch on Etsy to test products before expanding your business. For Etsy, you don’t even need a barcode; only images and a product description are required. By testing first, you can save on the cost of launching. The bottom 80 percent of products will not survive.

7. Target your demographic with PickFu. PickFu.com allows you to ask your target demographic if they like your products for only $1 per response. Use it to test photos and product ideas so you don’t waste time or money on a bad product launch.

8. Once you have figured out the top 20 percent winners on Etsy and PickFu, then launch the product on Amazon’s Fulfilled by Amazon (FBA) service. It’s important to launch on Amazon using FBA because this will get you the “Prime” badge, which can significantly increase your sales. Plus, you will no longer have to deal with customer service or order fulfillment, as Amazon will handle it all for you.

9. Invest in Amazon advertising. The pay-per-click platform is a low-cost way to generate sales and increase your organic ranking.

10. Later, you can launch products on Shopify to build your brand and catch sales from influencers. The Shopify app called Shogun allows you to create easy drag-and-drop brand websites. Divert influencer traffic here because Shopify has the lowest fees.

Tracy Sun is the cofounder and SVP of seller experience for Poshmark. She has this to say about Shan Shan Fu. “Our community and their triumphs are the heart of Poshmark and Shan Shan Fu is truly a reflection of that. Her ability to grow her side hustle into a thriving full-time reselling career serves as inspiration to many. Her journey is a testament to the entrepreneurial freedom found through reselling. We are so proud she is a member of the Poshmark community.”

Fu’s parents immigrated to the U.S. from China in the 1990s. Although her father was trained as an engineer and her mother as a doctor, they were not able to pursue their professional careers once they arrived in America due to their degrees not being honored. They had to start from scratch. After working in grocery stores for a long time, Fu’s father decided to move to Mexico and start an import/export business. He met with great success. Since then, Fu felt called to follow in his entrepreneurial footsteps.

The greatest challenges of running her own e-commerce business, Fu says, are lack of stability and uncertainty. Also, for women’s clothing, a return rate of 20 to 30 percent is not uncommon. This can eat into your profit margins. You may face cash flow problems when you have to pay for inventory and advertising upfront, even though you may not sell the products until months later. That is why Fu recommends her “low-risk, low investment method.”

That said, Fu loves what she does and, she remarks, when you love what you do, it’s like doubling your lifespan. “Now, instead of enjoying just time after work and on weekends, you enjoy time during work,” she explains.

To people looking to tap into their life purpose by starting their own e-commerce companies, Fu offers this advice. “Self-reflection is the first step. Assess and rank your primary joys and drivers for happiness. When you understand what makes you happy, get ready to overcome your fear of failure, procrastination, and lack of progress by embracing the idea of being uncomfortable. When you are uncomfortable, that means you are successfully pushing yourself forward.”