An eCommerce is a business that delivers products and services via electronic platforms, such as the Internet, computer networks, email, or mobile phones. Retailers use the internet to sell their products, while businesses and financial institutions use it to exchange information as it relates to finances, to support both domestic and international trade.
It is imperative to know that Canada, ahead of Australia and behind Indonesia, was the tenth-largest market for eCommerce in 2021, with revenues of US$35.5 billion. The Canadian eCommerce market grew by 14 percent in that same year, which helped the global eCommerce market to grow by 15 percent.
Steps on How to Start an Ecommerce Business in Canada
Table of Contents
Conduct Market Research
In conducting market research for your eCommerce business, the first step is to create market-based research that is consistent with your goals and objectives.
You should look for information that will help you maximize your business, and also provide you with accurate data regarding what your potential market will be needing from an eCommerce business, the products that people will be willing to pay a premium for, and information that will guide you to operate your business with less stress.
a. Who is the Target Market for an Ecommerce Business?
- Internet users
- Businesses
- Everyone within your target market location.
b. Is Ecommerce a Profitable Business in Canada?
Yes, eCommerce is a profitable business in Canada, and across the globe. This is because as long as you have a formal agreement with the manufacturer, there is no restriction on the kinds of goods and services you can showcase on your e-commerce website. They are not constrained by floor area, and internet retailers can provide varieties of goods than traditional retailers.
c. Are There Existing Niches in the Industry?
Yes, there are niche niches when it comes to the eCommerce business, and they are;
- Business to Consumer
- Business to Business
- Business to Government
- Business to Business to Consumer
- Consumer to Consumer
- Consumer to Business.
d. Who are the Major Competitors?
- Amazon Canada
- Kijiji
- Walmart Canada
- eBay Canada
- Best Buy Canada
- Canadian Tire
- Costco Canada
- Hudson’s Bay
- Shopify
- Wix
- BigCommerce
- Square Online
- Squarespace
- Home Depot Canada
- Newegg Canada
- Deliverr
- Thermo Fisher Scientific
- iQlance Solutions
- Accubits Technologies.
e. Are There County or Province Regulations or Zoning Laws for ECommerce Businesses in Canada?
Yes, there are county regulations and zoning laws for eCommerce businesses in Canada. Except for Quebec, every province in Canada has a law governing electronic commerce that is based on the UN Model Law on Electronic Commerce. Although it was created independently, Quebec’s statute is broadly consistent with the model law.
f. Is There a Franchise for ECommerce business in Canada?
No, there are no franchise opportunities for eCommerce businesses in Canada.
g. What Do You Need to Start an ECommerce Business?
- A feasibility report
- Business and marketing plans
- Business licenses and permits
- Online store
- A good warehouse facility
- Goods and Services Tax/ Harmonized Sales Tax (GST/HST)
- A corporate bank account
- Products
- Employees
- Startup capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for an ecommerce business in Canada are;
Creative eCommerce Business Name ideas
- Kitchen Wares® ECommerce Company, Inc.
- Babies and More® ECommerce Company, Inc.
- Ophelia Stores ® ECommerce Company, Inc.
- Windsor Jackson™ eCommerce Store, Inc.
- John’s® ECommerce Company, Inc.
- White Rock ® ECommerce Company, Inc.
- Red Deer® ECommerce Company, Ltd
- Macron Martins® ECommerce Company, Ltd
- Sudbury Stores® ECommerce Company, Inc.
- Peterborough Stores® ECommerce Company, Inc.
- Elena Rosa® eCommerce Store, Inc.
- Stan Milton™ eCommerce Store, Ltd.
- Chilliwack Jeff™ ECommerce Company, Inc.
- Parkson Pelham™ ECommerce Company, Ltd
- Bella Signature® ECommerce Company, Inc.
- Prime Stores® ECommerce Company, Inc.
- Bowmanville Newcastle© ECommerce Company, Inc.
- Saint Hyacinthe™ ECommerce Company, Ltd
- Woodstock Stores™ ECommerce Company, Inc.
- Peter Stratford® ECommerce Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for ECommerce Business in Canada?
There are different options for business structures when creating an eCommerce business, but the corporation is the one most people in the industry considered best. The reason is that a corporation has limited liability—the owners are not liable for the debts or liabilities of the business.
Obtaining funding from investors or financial organizations is easy. Note that is necessary to be incorporated, in order to transact business with governments or other companies, and business income can be distributed in the form of dividends or salaries, allowing you to minimize your tax liability.
b. Steps to Form a Corporation in Canada
- Whether it is a federal or provincial/territorial incorporation, you should register your business
- Contact the Canada Revenue Agency to open a corporate income tax account, and obtain a federal business number (CRA).
- In all Canadian jurisdictions where you want to conduct business, register as an extra-provincial or extra-territorial corporation.
c. What Type of License is Needed to Open an eCommerce Business in Canada?
- General Business License
- Seller’s Permit
- Federal Export Licenses
- Provincial and Zonal Permits
- Signage Permit
- Provincial Occupational Licenses
- Operational State Facility Inspections.
d. What Type of Certification is Needed to Open an eCommerce business in Canada?
You don’t need any certifications to open an eCommerce business in Canada.
e. What Documents are Needed to Open an eCommerce business in Canada?
These are legal documents that are required if you want to run an eCommerce business in Canada;
- Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- Council Permit
- Business and liability insurance
- State Permit and Building Approval for your Warehouse
- Certificate of Incorporation
- Business License
- Business Plan
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document.
f. Do You Need a Trademark, Copyright, or Patent?
There may not be a need to file for trademark protection or intellectual property protection. The nature of the business makes it possible for you to run the company, without needing to take legal action against anyone who uses your intellectual property without your permission.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start an eCommerce Business?
The cost of starting an eCommerce business ranges from $1,000 to $100,000 or more.
b. What are the Costs Involved in Starting an eCommerce business?
- Business registration fees – $750
- Legal expenses for obtaining licenses and permits – $3,300
- Marketing, branding, and promotions – $2,000
- Business consultant fee – $2,500
- Insurance – $2,400
- Rent/Lease – $45,000
- Operational cost (salaries of employees, payments of bills et al) – $20,000
- Start-up inventory – $60,000
- Website – $1,200
- Opening party – $3,000.
c. What Factors Determine the Costs Of Opening an eCommerce Business in Canada?
- The size of the eCommerce business
- The choice of location
- The required licenses and permits
- The type of eCommerce business (services, or products)
- The cost of branding, promotion, and marketing of the eCommerce business
- The cost of furnishing and equipping the eCommerce business – facility
- The cost of the insurance policy covers
- The cost of registering the business
- Source of supplies and ongoing expenses
- Cost of recruiting and training the staff
- The cost of the purchase and customizing of uniforms, shoes, and caps for your employees
- The cost of the grand opening of the eCommerce business.
d. Do You Need to Build a Facility?
Building a new facility is not compulsory for your eCommerce business, but if you have the necessary funding, it will pay you to construct your own facility. So long as it helps you design a facility that will fit into your business plans.
e. What are the Ongoing Expenses of an eCommerce Business?
- Rent and lease
- Supplies and inventory
- Deliveries
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Maintenance of machines
- Salaries of employees.
f. What is the Average Salary of your Staff?
- Chief Executive Office – $65,000
- Warehouse Manager – $48,000
- Merchandise Manager – $45,630
- IT Manager – $42,000
- Accountant – $38,500
- Marketing and Sales Executives – $36,000
- Customer Service Executive – $29,000 Per year.
g. How Do You Get Funding to Start an eCommerce Business in Canada?
- Raising money from personal savings
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Woodstock Stores™ ECommerce Company, Inc. is a Canadian-based international online shopping website that offers a wide range of quality products, such as; electronics, groceries, fashion, home appliances, and even kid’s items. Our head office will be located in the heart of Toronto, Canada. We aim at having warehouses across different cities in Canada.
We are an eCommerce startup with a long-term goal of having our presence in major cities around the world, and also delivering different products from popular manufacturing brands at rock-bottom prices they can hardly get from other retailers.
b. Products
- Electronics and home appliances
- Children’s toys
- Sportswear
- Books
- Clothes and shoes
- Fashion accessories
- Laptops
- Smartphones
c. Mission Statement
Our mission is to establish a business endeavor; an eCommerce company whose brand will be well-known throughout the cities in Canada, and around the world.
Vision Statement
Our vision is to be among the top 10 eCommerce stores in the world.
d. Goals and Objectives
The goals and objectives are to reach many customers at the ideal time, and also boost sales and the profitability of the company. eCommerce involves the buying and selling of goods as well as the online transfer of money or data.
e. Organizational Structure
- Chief Executive Officer
- Warehouse Manager
- Merchandise Manager
- IT Manager
- Accountant
- Marketing and Sales Executives
- Customer Services Executives
- Security Guard
Marketing Plan
a. SWOT Analysis
Strength
- Ideal location for an eCommerce business
- Experienced and qualified employees and management
- Access to products on credit from manufacturers
- Excellent customer testimonials
- A wide range of products and services offered
- Well-secured payment platform
- Users-friendly online store.
Weakness
- Financial constraints
- A new business that will be competing with established eCommerce business brands, not just in Canada but all across the internet
- Inability to retain our experienced and qualified employees longer than desired.
Opportunities
- An increasing number of people want to buy things from online stores
- Online market, services, technologies, and opening of new markets.
Threats
- The arrival of new eCommerce business within our market space
- Internet hackers
- Unfavorable government rules and regulations
- Regular expenses and increasing prices of gas will reduce industry profitability (deliveries of goods)
- Economic uncertainty
- Liability issues.
b. How Do eCommerce Businesses Make Money?
The eCommerce companies make money by selling different types of products online.
c. Payment Options
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Sales and Advertising Strategies
- Place adverts on both print (newspapers and fashion magazines) and electronic media platforms
- Sponsor relevant community-based events/programs
- Leverage the internet and social media platforms like; Pinterest, Instagram, Facebook, Twitter, YouTube, Google + et al to promote your online store
- Install your billboards in strategic locations all around the city
- Distribute fliers and handbills in target areas
- List your eCommerce business in local directories/yellow pages
- Advertise the business on your official website and use strategies that will help you pull traffic to the site
- Position the flex banners at strategic positions in the location where your eCommerce business is located
- Ensure that all the staff wears your branded shirts and that all the vehicles are branded with your company logo et al.
Financial Projection
a. How Much Should You Charge for your Products?
The price of products in eCommerce stores depends on the type, size, and brand.
b. How Much Profit Do Ecommerce Business Owners Make a Year in Canada?
The report shows that the average earnings for eCommerce business owners are approximately $55,000 per year.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the eCommerce business
- The location eCommerce business is covering
- The management style of the eCommerce business
- The approach of the eCommerce business
- The advertising and marketing strategies adopted by the eCommerce services
- The number of years the eCommerce is in business.
d. What is the Profit Margin of an eCommerce business Product/Service?
The eCommerce business profit margin is not usually fixed, it will be determined by the type and brand of products or services offered.
e. What is the Sales Forecast?
- First Fiscal Year: $240,000
- Second Fiscal Year: $350,000
- Third Fiscal Year: $480,000.
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for an eCommerce Business?
- The demography of the location
- The purchasing power of the businesses and the residents of the location
- Accessibility of the location
- The number of eCommerce companies and wholesalers in the location
- The local rules and regulations of the community or province
- The road network, traffic, parking, and security et al.
b. What City and Province are Best to Open an eCommerce Business in Canada?
- Toronto, Ontario
- Mount Royal, Quebec
- Charlottetown, Prince Edward Island
- Kelowna, British Columbia
- Saskatoon, Saskatchewan
- Nova Scotia, Halifax
- Manitoba, Winnipeg
- Mississauga, Ontario
- Vancouver, British Columbia
- Surrey, British Columbia
- Hamilton, Ontario.
c. What Equipment is Needed to Operate an eCommerce Business?
- Computers
- Internet facility and server
- Pallets
- Forklifts
- Delivery vehicles.
Hire Employees
When hiring employees for an eCommerce business, you should hire a competent chief executive officer, warehouse manager, merchandise manager, accountant, marketing and sales executives, IT manager, and security guard.
Launch the Business Proper
No eCommerce opens for business without first planning an opening party to formally introduce the business. If you have a small budget, you may want to host a soft opening party. If not, you may want to host a grand opening party for everyone in the area, where your eCommerce business will be located. With proper launching will formally inform the general public that your eCommerce business is open.
a. What Makes an ECommerce Business Successful?
- Make sure your online store is easy to use and navigate
- Make sure your payment portal is secured and reliable
- Make sure your website site is always live, and your downtime is reduced to the barest minimum
- Offer a wide range of products and services
- Make sure your products and services are unique
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your business
- Leverage all available online and offline platforms to promote your eCommerce business.
b. What Happens During a Typical Day at an eCommerce Business?
- The warehouse and office are open for the day’s work
- The facility is cleaned and products are well-arranged
- Orders are taken via the online store
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted to superior officers
- The business is closed for the day, but the online store will remain open for shopping.
c. What Skills and Experience Do You Need to Build an eCommerce Business?
- Good internet handling skills
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Good logistics handling skills
- Work experience in an eCommerce business environment
- Experience in managing people
- Experience in business administration
- Experience in handling different eCommerce software.