E-COMMERCE PROFITABLE BUSINESS YOU CAN START TODAY (2023)

12 Profitable Ecommerce Business Ideas You Can Start Today

Starting a traditional retail store presents challenges: rising overhead costs, limited reach, and market saturation.

With ecommerce, you can now overcome these barriers, reach a global customer base, and achieve uncapped growth.

But with more than Two million businesses created in the Nigeria last year, competition is steep for startups. To help you choose your business idea for your online store, we’ve put together 12 innovative ecommerce ideas, along with their business model and projected market growth.

We’ll also look at how you can start a lucrative ecommerce store, with insights from successful ecommerce entrepreneurs.

Should you start an ecommerce business in 2023?

Starting a new business? In this economy?

Turns out, 2023 is the right time to do it. 

Big Tech layoffs at Google, Meta, Microsoft, and Amazon mean experienced and highly skilled professionals are now available for hire. The silver lining of these widespread layoffs might be a more even distribution of top talent, giving startups the chance to compete in digital spaces.

Ecommerce makes up 22% of sales and is likely to reach sky rocket by 2026. There has been no visible ceiling for ecommerce growth globally, indicating a major shift in the way people like to shop.

“One of the biggest growth areas in tech for 2023 will be on Digital Main Street, in small online businesses like mobile apps, SaaS solutions, ecommerce stores, blogs, content-based websites, and other digital assets,” says Blake Hutchison, CEO of Flippa, in an op-ed on Entrepreneur.com.

Top 12 profitable ecommerce business ideas:

1. Subscription boxes

2. Print-on-Demand merchandise

3. Dropshipping

4. AR/VR products (headsets and other accessories)

5. Smart home products

6. Organic and natural products

7. 3D printing

8. Health and wellness products

9. Online fitness programs

10. Personalized gifts and accessories

11. Digital products and courses

12. Niche and specialized smartwatches

1. Subscription boxes

Dollar Shave Club, a subscription box service

A subscription box is a curated collection of products tailored to specific interests. Customers sign up to receive a box monthly, or over a specified time period. A subscription box makes it easy for customers to reduce time spent shopping and get their favorite products delivered without needing to proactively restock. According to TBRC, the subscription box market shows no signs of slowing down, growing over 100% annually and with a current value of 10 billion. While the profit margin of subscription boxes can differ significantly across industries, the majority of them achieve a profit margin ranging from 40% to 60%. 

For example, Dollar Shave Club has disrupted the grooming industry by delivering razors and other personal care products directly to subscribers. 

Purple Carrot is a plant-based meal subscription box that delivers meal kits or prepared meals. You can also start a subscription box by curating third-party products. MunchPak is a snack curation subscription box that delivers snacks from all around the world.

A subscription box ecommerce business requires distinct brand style and packaging design.

2. Print-on-Demand merchandise

Featured products on Redbubble, designed by users

Print-on-demand services provide entrepreneurs an opportunity to create custom-designed products, without the upfront costs of creating a large product inventory. The global custom t-shirt printing market was valued at 4.3 billion in 2022 and is expected to grow annually at 11.1% from 2023 to 2030, as reported by Grand View Research. Business owners can get an average profit margin of around 15% to 20%. 

Redbubble is a platform where artists can showcase their unique designs and sell them on different products like t-shirts, mugs, or upholstery.

3. Dropshipping

Dropshipping involves selling products without inventory management or order fulfillment. Instead, the retailer partners with a supplier and takes care of these aspects of the business. 

This frees up the retailer to focus on other important aspects of the business, such as marketing and customer service. 

Shopify, a leading ecommerce platform, offers an integration with Oberlo, a popular dropshipping app. This integration has made it easier than ever for entrepreneurs to get started with dropshipping. With just a few clicks, they can set up their online store and begin selling products from their supplier’s inventory. 

Dropshippers typically maintain a profit margin within the range of 15% to 20%, as observed within the industry. In general, aiming to sell products above 10% of their wholesale price is a positive indicator for achieving a favorable profit.

According to Grand View Research, the global dropshipping market size was valued at 225.99 billion in 2022 and is expected to register a compound annual growth rate (CAGR) of 23.4% from 2023 to 2030. 

4. AR/VR products (headsets and other accessories)

Source: Unsplash

The augmented reality/virtual reality (AR/VR) market has witnessed remarkable growth in recent years and is poised for continued expansion. 

According to Statista, revenue in the AR/VR market is projected to reach 31.12 billion in 2023. As more industries embrace AR/VR technology for applications such as gaming, education, health care, and entertainment, the demand for AR/VR products continues to rise.

According to Forbes, Pokémon GO popularized augmented reality (AR) in the mainstream as a gaming app. Despite a decline in popularity, the app still earns $2 million daily, becoming the fastest game to reach $600 million revenue in three months. This makes the profit margins more than the investment. AR/VR headsets and accessories provide users with immersive experiences, transporting them to virtual worlds or overlaying digital information onto the real world. 

There are various accessories that can complement the AR/VR experience and generate additional revenue streams. For example, handheld controllers, haptic gloves, motion trackers, and protective cases. 

By offering a comprehensive range of AR/VR products and accessories, you can cater to the diverse needs and preferences of consumers, further boosting your ecommerce business’s profitability.

It’s important to create an engaging online experience for customers, especially in the AR/VR ecommerce space. Use high-quality product images and videos that showcase the immersive capabilities of your AR/VR products.

Invest in virtual try-on features or interactive demos whenever possible to allow customers to envision the product experience.

5. Smart home products

There’s more to a smart home than having an Alexa. Smart home products encompass a wide range of devices, including smart thermostats, lighting systems, security cameras, door locks, voice assistants, and more. 

Nest, known for its smart thermostats and security systems, is a prime example of a successful ecommerce business in this niche. 

This exponential growth is fueled by advancements in Internet of Things (IoT) technology, increased connectivity, and the desire for convenience, security, and energy efficiency in households worldwide. 

Smart home products offer homeowners the ability to control and automate various aspects of their homes, enhancing comfort, energy efficiency, and security. By curating a selection of cutting-edge smart home products, cater to the needs of tech-savvy consumers who seek to transform their living spaces into intelligent, interconnected environments. Identify popular brands and products that resonate with consumers, ensuring they align with quality, reliability, and compatibility standards. Providing detailed product information, including specifications, features, and installation guides, is crucial for customers to make informed purchasing decisions.

6. Organic and natural products

Thrive Market, an organic ecommerce startup

The demand for organic and natural products is on the rise as consumers increasingly prioritize their health, well-being, and environmental impact. 

According to Food Navigator, the gross profit margins for organic and natural profits is 96% higher than non-organic counterparts. The global organic personal care market is projected to expand at a CAGR of 9.1% from 2022 to 2030, according toGrand View Research. 

Thrive Market, an online retailer focusing on organic and non-GMO products, shot to popularity as a convenient platform for consumers to access high-quality organic products at competitive prices. Its model allows customers to easily browse and purchase a diverse selection of organic groceries, personal care items, supplements, and household products. 

To succeed in the organic and natural products ecommerce space, it’s important to establish trust and credibility with customers. Clearly communicate the authenticity and quality of your products, provide transparent information about ingredients and certifications, and highlight the environmental sustainability of your offerings. 

Ryan Mckenzie is the cofounder and CMO of Tru Earth, a leading eco-friendly household product company. Tru Earth had a three-year growth rate of 944%, and is the 46th fastest-growing company in Canada. “To identify our target market, we researched current eco-friendly trends and consumer preferences. This research allowed us to pinpoint environmentally conscious consumers who prioritize sustainable and practical solutions for their households,” says Mckenzie. 

Sustainable fashion is another promising vertical, forecasted to grow at 8.3%.

Cynthia Asije is the cofounder and CEO at Adirelounge, a sustainable activewear brand. “We saw a gap in the market for activewear that combined unique designs with eco-friendly practices like made to order, while also incorporating ethnic prints, and that’s where our big idea originated,” says Asije.

7. 3D printing

From customized jewelry and accessories to unique home décor items, 3D printing allows businesses to cater to individual preferences and offer one-of-a-kind products. The level of customization creates a distinct competitive advantage. 

Traditional manufacturing processes often involve high setup costs and minimum order quantities. In contrast, 3D printing allows for on-demand production, reducing inventory costs and minimizing waste. 

MarketsandMarkets, a market research firm, predicts that the global 3D printing market will reach 34.5 billion by 2028. A 3D printing company can achieve profit margins ranging from 50% to 90% based on the cost of the materials used.

This agile manufacturing approach enables ecommerce businesses to respond quickly to market trends and customer demands. Industry growth is fueled by various factors, including advancements in 3D printing technologies, expanding applications across industries, and increasing consumer adoption. 

To succeed in the 3D printing ecommerce space, it is crucial to have a strong online presence and effective marketing strategies. 

Shapeways is a notable platform where designers can create and sell their 3D-printed products.

8. Health and wellness products

Huel, a health ecommerce business

In 2023, the health and wellness industry continues to thrive, with consumers actively seeking products to improve their well-being. 

The annual global wellness market is predicted to be more than 1.5 trillion, with annual growth of 5% to 10%. This vast market encompasses various sectors, including nutrition, fitness, mental well-being, beauty, and more.

Huel is a complete nutrition meal replacement brand in the wellness sector. Huel has successfully tapped into the market’s demand for convenient and nutritionally balanced meals. Its ecommerce platform enables customers to purchase their products with ease, catering to the growing number of health-conscious individuals seeking convenient and wholesome alternatives to traditional meals. 

Tooktake, a health ecommerce business, now available in retail stores

We spoke to Leeanna Gantt, founder and inventor of Tooktake.

“When I was diagnosed with cancer, I expected big changes in my life—little did I know that my career would be one of them! I created a product during my treatment and recovery to finally solve the problem of tracking my prescriptions, and it became a real-life product being made in America called Tooktake, now on the shelves of the country’s largest store chains,” she says.

9. Online fitness programs

Virtual workouts and online fitness programs have gained significant traction, especially with the rise of remote and home-based fitness. 

According to Research and Markets, the health and fitness club market is valued at 70.3 billion in the current year, and is projected to register a CAGR of 11.86% over the next five years. The average profit margin for gym programs are 10% to 15%. 

BODi, known for its popular programs like P90X and Insanity, has built a multimillion-dollar business in this niche. Smaller fitness influencers are also starting to create ecommerce businesses with online fitness programs, and consultation services.

10. Personalized gifts and accessories

In a world dominated by mass-produced products, there is a growing demand for unique, handmade, and artisanal goods. Personalized items that celebrate individuality have become highly sought after. Platforms like Etsy have provided a thriving marketplace for artisans to showcase their crafts and connect with a global customer base. The gross margin profits for personalized gifts and accessories is around 22%.

If you have a passion for creating handmade jewelry, pottery, or any other artisanal products, establishing an ecommerce store on Etsy or your website can be a profitable venture. According to Statista, Etsy’s revenue amounted to $1.7 billion in 2021, highlighting the potential of this niche.

11. Digital products and courses

The digital era has created opportunities for entrepreneurs to sell intangible products such as ebooks, online courses, and digital downloads. 

These platforms allow participants to learn and engage in real-time, fostering an interactive learning environment. With the right marketing and promotion, webinars and online workshops can generate revenue and establish you as an authority in your industry. 

If you have expertise in a particular field, you can create and sell digital products that provide value to your target audience. Udemy and Coursera are leading platforms where instructors can create and monetize online courses, while Envato offers a marketplace for digital assets like website templates, graphics, and music. These offer high profit margins. For instance, Udemy’s profit ranges between 50% to 75%.

12. Niche and specialized smartwatches

Garmin, sports watch brand

Smartwatches have become increasingly popular, due to their fitness tracking, communication features, and stylish design, leading to significant growth in demand.

According to Statista, smartwatch shipments worldwide are forecast to grow in the following years, increasing from 37 million units in 2016 to over 402 million units by 2027. 

This creates opportunity for niche and specialized smartwatches catering to specific audiences. For instance, Garmin focuses on fitness enthusiasts and outdoor adventurers, offering advanced tracking features and rugged designs. 

Niche smartwatches can target segments like health care professionals, children, or elderly individuals, providing tailored functionalities to meet specific needs.

Is ecommerce profitable?

Ecommerce can be a highly profitable business, but it ultimately depends on factors such as the niche, competition, marketing strategy, and operational efficiency.

Many ecommerce businesses operate with lower overhead costs than traditional brick-and-mortar stores, which can result in higher profit margins. Ecommerce businesses can also benefit from the ability to reach a global audience, 24/7 availability, and the ability to automate certain aspects of the business.

However, there are also challenges to consider such as fierce competition, high customer acquisition costs, and the need to continuously invest in technology and marketing. It’s important to have a solid business plan, a deep understanding of the market and customer needs, and a willingness to adapt and evolve the business over time in order to remain profitable.

“Hiring freelancers widens the candidate pool, giving us greater access to top talent,” says Dan Kroytor, the founder and director of TailoredPay. “Having such a diversity of top talent from across the globe can lead to greater innovations for your business.”

How do I start a successful ecommerce store? Experts weigh in

Starting a successful ecommerce store requires careful planning and execution. Here are some steps to get started:

1. Identify your niche

Research and identify a profitable niche that you are passionate about. Consider factors such as market demand, competition, and customer needs.

2. Develop a business plan

Create a comprehensive business plan that includes your target market, products and services, marketing strategy, financial projections, and goals.

“For someone looking to start an ecommerce business from scratch, I recommend researching current market trends and validating your idea to identify demand,” says Ryan Mckenzie. “Create a strong brand identity, establish a reliable supply chain, and focus on delivering exceptional customer experiences. Be prepared to invest time in marketing activities and be patient, as business growth might take time initially.”

3. Choose a platform 

Choose an ecommerce platform that suits your business needs and goals. Popular options include Shopify, WooCommerce, and BigCommerce. 

4. Build your store

Create a visually appealing and user-friendly website that showcases your brand, products, and services. Optimize your website for search engines, and ensure that it is responsive and mobile-friendly. “Don’t time SEO wrong. It’s not ideal to start out with SEO if you are in a competitive niche, self-funding, or have minimum capital,” advices Cody Bollerman, owner of Cody Bollerman Digital. “It’s better to build the brand first and then invest in SEO once you have more cash flow and time to be patient. Also, it helps Google identify your niche and website authority from paid ads and direct search, which indirectly helps SEO.”

5. Source or manufacture products

Invest in high-quality products that align with your niche and customer needs. Consider factors such as product quality, pricing, and shipping options.

6. Set up payment and shipping

Choose a payment gateway that is secure and reliable. Set up shipping options and consider offering free shipping or flat-rate shipping to improve customer experience.

7. Launch and market your store

Launch your store and begin promoting it through social media, email marketing, content marketing, and paid advertising. Consider offering incentives such as discounts and referral programs to attract new customers. “We owe much of our success to our investment of time, effort, and financial resources into our video marketing campaigns,” says Tony Angeleri, VP of business development at Lone Wolf Paintball. “Our videos got us the crucial initial attention that helps you get through the first and most challenging phase of a new ecommerce business.”