How to Start an Online Business in Canada (2023)

Starting an online business in Canada requires a business plan, a suitable structure to manage your enterprise long-term, and some niche product ideas. Canada is a lucrative market, with ecommerce revenue alone exceeding $58 billion in 2021. It's currently the ninth-biggest ecommerce market in the world. 

If you want to get started with an online business, you've come to the right place. This detailed guide will tell you all you need to know. 

How to figure out what to sell 

All businesses in Canada (and elsewhere) typically start in the ideation phase. You look for market gaps and try to fill them. To choose what to sell, you need to look at past and more recent sales figures of such items or similar ones, how much competition there is for that product, and the growth potential in the current marketplace.

Following these three steps for each item or service you're considering providing will help eliminate ones that might not end up selling well. If there is a lot of competition in a given niche, you'd best avoid it. Ideally, you'll be able to sell well and find products that haven't gotten to the point of market saturation yet. 

This way, you'll be able to find clients without competing with Amazon, eBay, and other retail titans. 

Follow the suggestions below when researching what to sell:

Essentials: Markets like clothes and cosmetic products are hard to penetrate, so it's important to proceed with caution. To make it in a market like this, you need a unique proposition or experience to attract new customers. Companies like Stitch Fix made it by curating subscriptions, thereby making old products more appealing. 

Sell what people want: Research trending topics and interests for this method, but don't embrace fads. It's risky to react to current market trends with innovative products and best left to experienced retailers who have learned the ropes of "hitting a moving target." You need to be able to predict what will change and the nature of those changes. 

The impact of the pandemic 

Successful online businesses saw an uptick in all website and ecommerce traffic and decided not to introduce too many new products. Many companies profited from pandemic-related products, but those who were in it for the long haul focused on its long-term impact on consumer behavior. For instance, many employees are expected to continue working from home. People need office supplies and furniture, and electronics to work from home. They also need reliable internet access, so web hosting is likely to remain profitable. When you apply market knowledge to a given niche, you'll access all kinds of excellent opportunities.

Another consequence of working from home is a buoyant pet care market. New pet parents or people adding a new member to their pet family need everything from premium treats to beds. Some might be interested in pet care tutorials and books.

Build a website 

Your online business will benefit from having a website for multiple reasons, even if you don't plan to sell outside of an online marketplace. Websites foster trust and make a business seem more tangible. They are like a marketing home base. You can develop your own business instead of hiring someone. You can offer service or product information, reviews, feedback, and other content that helps attract new customers.

Finally, satisfied customers can share the link to your site with their friends.

Final thoughts 

Canada has a solid infrastructure, direct access to the Pacific and the Atlantic, and high-traffic railroads and airports. On desktops and mobile devices, online shopping is very popular with Canadians. The country has direct trading routes to the US and connections with Mexico for online sales, production, and more. Its vast territory gives ecommerce businesspersons accessible shipping routes to Asia, Europe, Alaska, and Greenland. Setting up an online business in this market is definitely worth your time.