Business plan template
Ecommerce Business Plan Template
Updated · Team Fonda
Short answer
An ecommerce business plan has ten chapters and needs to show that you can win a customer for less than that customer is worth, and that you have the cash to pay for stock before it sells. The outline below lists what to write in each chapter and the per-order numbers to calculate.
Key takeaways
- The heart of the plan is profit per order after product, shipping, fees, returns and advertising.
- State your model clearly: your own stock, dropshipping, print on demand, a marketplace store, or a mix.
- Show where visitors come from and what each channel costs, not just a traffic total.
- Stock ties up cash, so include a month-by-month cash flow forecast that shows when you pay suppliers and when customers pay you.
Who reads an ecommerce business plan and what they look for
- A lender or stock finance provider. Online stores borrow mainly to buy inventory. A lender wants to see how fast stock sells, your margins, and any sales history you already have.
- An investor. An angel or fund looks for a brand that customers return to, and a cost of winning customers that stays below what they spend over time. They will ask what stops a larger seller from copying the product.
- A supplier or manufacturer. When you ask for better payment terms or a lower minimum order, a supplier wants to know your expected volumes and whether you will still be trading next year.
- A co-founder or first hire. They want to see the plan for the next twelve months and their part in it.
- You. Online stores can look healthy on sales while losing money on every order. The plan makes you work out the profit per order before you spend on ads.
An online store is quick and cheap to open, so readers assume plenty of other people are selling something similar. They look for three things: a specific customer, a reason to buy from you and not from a marketplace giant, and unit economics that hold up when advertising gets more expensive.
The 10-chapter ecommerce business plan outline
| Chapter | What to write for an online store | Questions to answer |
|---|---|---|
| 1. Executive Summary | What you sell, to whom, through which channels, your model (own stock, dropshipping, print on demand), results so far and the funding you need. | Who is the customer, in one sentence? What have you sold already, if anything? What is the money for: stock, marketing, people? |
| 2. Problem & Opportunity | The frustration your customer has with what is on sale today: poor quality, wrong sizes, no choice for a niche, confusing options, slow delivery. | What do shoppers complain about in reviews of existing products? What are they searching for and not finding? Why is now a good time to serve them? |
| 3. Solution & Product | Your product range, price points, where products are made or sourced, packaging, and what the customer gets that rivals do not offer. | What is your first product and why that one? What will you add next, and does it bring the same customer back? Do you own the design, or can anyone source it? |
| 4. Market Analysis | The size of the group you can realistically reach and what they spend, search demand for your product terms, and trends in the category. | How many people fit your customer description in the countries you ship to? How do they shop for this kind of product today? Is demand steady or seasonal? |
| 5. Competition & Differentiation | Direct brands, marketplace sellers, big retailers and second-hand options. Compare price, range, delivery, reviews and returns policy. | Which three stores does your customer compare you with? Where are you better: product, price, service or brand? What would it take for a competitor to match that? |
| 6. Business Model | How you earn: one-off sales, bundles, subscriptions, wholesale. Sales channels: your own site, marketplaces, social shops. Pricing and expected margins. | What is your average order value and how will you raise it? How often does a customer buy again? What does each sales channel take in fees? |
| 7. Operations & Technology | Suppliers and lead times, stock levels, storage and fulfilment (yourself or a third-party warehouse), shipping, returns, your store platform, payments and customer support. | How long from placing a supplier order to having stock ready to ship? Who packs and ships, and what does each parcel cost? What is your returns policy and who pays for return postage? |
| 8. Team & Organization | Who handles product, marketing, operations and customer service. Which jobs go to freelancers or agencies, and what you will hire for first. | Who on the team has run paid ads or email marketing before? Who talks to suppliers? Which task is taking most of your time and should be handed over first? |
| 9. Financial Plan | Startup costs, profit per order, monthly sales forecast built from traffic and conversion, marketing budget, stock purchases, cash flow and break-even. | How many visitors and what conversion rate does your sales forecast assume? What is left from an average order after all costs? In which month do you run lowest on cash? |
| 10. Risks & Mitigation | Rising ad costs, supplier delays, a marketplace or ad account being suspended, high return rates, copycats, and changes to import duties or sales tax rules. | What happens to profit if ad costs rise by half? Do you have a second supplier? How much of your traffic depends on one platform? |
Fonda's business plan uses this same 10-chapter structure, with sources. For the Market Analysis chapter, the free TAM SAM SOM calculator helps you size the group you can reach.
The key numbers an ecommerce plan needs
Calculate these from your own store data if you are already selling. If you are not, use supplier quotes, shipping rate cards and a small paid test, and say clearly which figures are assumptions.
| Number | How to calculate it | Why the reader wants it |
|---|---|---|
| Average order value | Total sales / number of orders. | Sets how much room each order has to absorb shipping and advertising. |
| Conversion rate | Orders / store visits, as a percentage. | Visits x conversion rate x average order value is your sales forecast. Try the conversion rate calculator. |
| Landed cost per unit | Product cost + freight to you + import duties + packaging, per unit. | The true cost of the product, which is often well above the factory price. |
| Contribution margin per order | Average order value - landed product cost - outbound shipping and packing materials - payment and platform fees - an allowance for returns. | What an order earns before marketing and overheads. |
| Customer acquisition cost | Marketing and advertising spend / new customers won in the same period. | Whether the first order pays for the customer. See the CAC calculator. |
| Repeat purchase rate | Customers who order more than once in a period / all customers in that period. | Whether you are building a customer base or paying for every sale. |
| Customer lifetime value | Average contribution margin per order x average number of orders per customer over their life with you. | The ceiling on what you can afford to pay to win a customer. See the LTV calculator. |
| Return rate | Orders returned / orders shipped. | Returns cost postage, handling and sometimes the product itself. |
| Stock turnover | Cost of goods sold in a period / average value of stock held in that period. | How long cash sits on a shelf before it comes back. |
Example chapter: Financial Plan extract for an imaginary online store
Worked illustration
Loam & Leaf is an imaginary online store that sells ceramic plant pots. These figures are made up to demonstrate the layout of a per-order calculation. They are not typical values for any real store.
Profit on an average order. The table shows what remains from one order before and after advertising.
| Line | Amount per order |
|---|---|
| Average order value | $62.00 |
| Landed product cost | -$19.00 |
| Outbound shipping | -$8.00 |
| Shipping box and padding | -$1.50 |
| Payment and platform fees | -$2.10 |
| Returns and breakage allowance | -$2.40 |
| Contribution margin before marketing | $29.00 |
| Advertising cost to win the customer | -$24.00 |
| Profit on a first order | $5.00 |
What this means. A first order leaves $5.00 toward overheads such as software, photography and the founders' pay. That is thin. The plan therefore depends on repeat orders, which cost little to win because they come from email.
Repeat orders. We assume 3 in 10 customers place a second order within a year. Each repeat order earns the full $29.00 contribution. Across 10 customers, that is 10 x $5.00 + 3 x $29.00 = $137.00, or $13.70 per customer in the first year.
Monthly break-even. Fixed costs are $4,110 a month. At $13.70 per customer, the store needs 300 new customers a month to cover them. The sales forecast in the appendix shows when traffic reaches that level and how much cash is needed until it does.
This layout lets a reader test your assumptions one at a time. If advertising cost rose from $24 to $30, a first order would lose $1.00 and the whole plan would rest on repeat purchases.
Mistakes that sink ecommerce business plans
- Forecasting sales with no traffic plan. State where visitors come from, channel by channel, what each costs, and what you have tested so far.
- Using the factory price as the product cost. Freight, duties, packaging and damaged units all sit on top. Use the landed cost.
- Leaving out returns. Clothing, shoes and fragile goods come back. Include a return rate and what each return costs you.
- Mixing up sales and cash. You often pay a supplier weeks or months before a customer pays you. A plan that is profitable on paper can still run out of money while stock is at sea.
- Relying on one platform. If one marketplace or one ad network brings nearly all your sales, say how you will build email, search or repeat custom alongside it.
- Ordering stock before testing demand. A pre-order page, a small first batch or a simple landing page tells you if people will pay. See how to validate a startup idea for ways to test, and the guide on how to start an ecommerce business for the steps that follow.
Frequently asked questions
Does a dropshipping store need a business plan?
Yes, though a short one. You hold no stock, so the stock and cash sections shrink. The margin section grows in importance, because dropshipped products usually leave less per order and you rely on the supplier for delivery times and quality. Work out profit per order after advertising before you launch.
How do I forecast sales for a store with no history?
Build it from the bottom up: expected visits from each channel, multiplied by a cautious conversion rate, multiplied by average order value. Run a small paid test or a pre-order campaign to replace guesses with your own early figures, and label every assumption.
Should the plan cover marketplaces as well as my own site?
Cover each channel you intend to use, with its own fees, rules and expected sales. Marketplaces can bring buyers quickly but charge commission and control the customer relationship. Your own site takes longer to fill with visitors but lets you keep customer emails and sell again.
What tax and legal points belong in an ecommerce plan?
Note the business structure, where you must collect sales tax or VAT, import duties on your products, consumer rights on returns and refunds, and any product safety rules for your category. These differ by country and state, so check with an accountant or the relevant tax authority before you fix prices.