Starting an Ecommerce Business: The Complete Guide

Starting an ecommerce business where entrepreneurs, designers, and artists of all stripes can sell their stuff is easier than ever.

Starting an Ecommerce Business: The Complete Guide

Retail juggernauts like Amazon and Etsy lie on opposite ends of the eCommerce spectrum.

At the same time, enterprises that facilitate the exchange of products, services, and money online span everything from the Fortune 500 to the DIY community.

In the last five years, there has been an explosive development in numerous industries, and online shopping is only one example.

In the third quarter of 2019, online sales in the United States reached around $154.5 billion, accounting for 11.2% of total retail sales in the country, according to data from the United States Census Bureau.

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It might make sense to launch an online store, depending on your objectives.

Since they don’t need a physical storefront, e-commerce enterprises provide their owners with a number of advantages.

So, what is the process of starting an ecommerce business? This guide aims to help you on everything you need to know on starting an ecommerce business.

To help you get your online store up and operating quickly, we will outline the basic processes involved in starting an ecommerce business.

How to start an eCommerce business

There are some key distinctions between opening an online store and a traditional retail shop, but there are also some similarities.

s we’ll see below, many of the legal and strategic considerations you’ll need to make are standard across industries.

When it comes time to launch, you’ll quickly see how different an e-commerce startup may be.

Research The E-commerce Space And Find Your Niche

Doing your homework is the first step in learning how to launch an online store.

You’ll need to research the e-commerce sector you’re interested in and make some judgments pertaining to your company, just as you would if you were opening a restaurant and considering various locations, cuisine selections, and themes.

Think about the specific products or services you want to sell online.

What exactly are you planning to sell? Are the goods you sell digital or physical? From what places will you be obtaining your goods?

Similarly, you should consider what business strategy you want to implement: selling individual items, bundles, subscriptions, or anything else.

It’s also important to consider the big picture as you go along: To whom you will be offering your goods or services? What will the first capital investment be like? Is it important to comply with any specific legal or regulatory requirements while offering your product or service?

These questions, among others, will be crucial to your company’s launch and your business strategy’s development.

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Following these steps will help you clarify your objectives and develop a plan to achieve them.

Finding your market niche is crucial in any business, especially online sales.

A growing e-commerce sector is a fantastic news for those interested in learning the ropes of online entrepreneurship, but it also means greater competition.

You need to look into the competition to locate a market where you have a good chance of establishing your brand and selling items or services.

Determine The Company’s Name And Organizational Structure

Choosing a name is the next step after finalizing the strategy for your online store.

To succeed, your company needs a name that stands out from the crowd while conveying what it does or sells.

To avoid picking a company name already in use, you should check with the local secretary of state and the United States Patent and Trademark Office.

You probably shouldn’t spend too much time on a website just yet, but it’s still a good idea to see whether the domain name you’re considering for your company is taken.

The “” domain name may be already in use, in which case you may want to try something like “”

Step two is determining the appropriate legal framework for your company.

Your chosen company structure significantly affects your online store’s legality and profitability.

The most common business structures are sole proprietorships, general partnerships, limited liability companies, and corporations.

Each of these entity kinds has its advantages and disadvantages; you may want to seek the assistance of an attorney or other qualified legal advisor before deciding which is ideal for your company.

In most states, starting a business as a single proprietor or general partnership does not need formal registration.

Instead, your firm will be legally connected with your name; to use the name you’ve selected, you’ll need to submit a “doing business as” (DBA) application with the appropriate authorities in your area.

Apply for an EIN

Another step is registering for your online store’s EIN or employer identification number.

The EIN may help you keep your company and personal funds distinct, even if your firm doesn’t need one.

Additionally, the IRS EIN application process is easy and free, regardless of whether you want to apply in person, over the phone, through fax, or via the Internet.

If you’re looking into starting an ecommerce business, you may get a tax ID number for your company right away by filling out an application on the IRS’s website.

Obtain The Necessary Licenses And Permissions

Next, you’ll need to apply for any local, state, and federal licenses and permissions your company will need to conduct operations lawfully after obtaining your EIN.

We’ve already established that running an online store as a sole proprietorship or general partnership doesn’t need submitting any paperwork with the state, except registering a DBA to conduct business under a different name.

But if your company falls into one of the other categories of legal organization, you’ll need to apply for and get a general business license from your state.

You may also need to get a municipal operating license and federal permit, depending on your company’s location.

Because most online shops operate out of their homes, they often don’t have to get the same kinds of licenses that traditional storefronts do.

However, it is your responsibility to research the precise regulations that apply in your region; often, this information may be found on the official websites of state and municipal governments.

To lawfully run a company out of the comfort of one’s own home, one must, in most areas, first get a home occupation permit.

This permit provides evidence that your home-based business will not have any detrimental effects on the neighborhood, such as increased traffic, noise, or other nuisances.

Pick An Online Store Builder And Begin To Work On The Website

You have completed the steps to launch your online store and legally conduct business.

Most of our actions up to this point have thus been analogous to those required to launch a traditional storefront enterprise.

But now, you’ll be building an online storefront rather than looking for a physical storefront and getting it ready to open.

This website is similar to a storefront in that it is the first point of contact with potential customers and the primary means by which they will learn about, evaluate, and ultimately make purchases from your business.

Thus, developing your website will be crucial in launching your e-commerce venture. As you design an online shop, there are a few things you should keep in mind:

We already told you to give some thought to your domain name.

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A good rule of thumb is to have your domain name (or very close to it) reflect your company name. In this light, picking an e-commerce platform could end up being crucial.

Your e-commerce platform will be the foundation upon which you build and develop your online store, whether it is an all-in-one program like Shopify or an open-source system like Magento.

In addition to letting you shop online, most e-commerce systems also let you personalize your store’s look and feel, add your own domain (or buy a new one), handle stock and orders, ship products, and accept payments.

There are hundreds of e-commerce platforms to choose from, but the ones below are particularly well-liked.


Shopify, one of the most well-known and widely-used e-commerce platforms, provides a complete, intuitive, and extensible platform for online stores.

Shopify offers four different subscription plans, the most basic of which is Shopify Starter for $5 per month (but which does not include a full online store).


Download WooCommerce to begin selling on your WordPress site if you have previously launched a site using WordPress or are acquainted with the technology.

Because it is open-source and free, you may get this plugin’s whole suite of e-commerce tools.

WooCommerce, on the other hand, is better suited to company owners with some technical skills so that they may take advantage of its open-source nature.


Squarespace is a website builder with good features for those starting ecommerce business due to its sleek, up-to-date design templates.

For online storefronts, Squarespace offers two pricing tiers: the $26/month Basic plan and the $40/month Advanced plan.

Squarespace, like Shopify, is simple to use and accessible to entrepreneurs of varying technical abilities.

It’s important to remember that Squarespace is a website builder.

Therefore, it may lack some of the bells and whistles that rival platforms provide.

Promoting Your Ecommerce Business

After sucessfully starting ecommerce business, what next? After your store becomes live, put all of your efforts into eCommerce promotion.

You shouldn’t worry about anything else until you’ve shown that you can attract visitors and communicate with prospective buyers.

Choosing the right channel for your products and then perfecting your marketing plan until the cost of acquiring a single new client is less than the revenue generated from that customer is the key to successful e-commerce marketing.

You should strive for the never-ending cycle in which your daily expenses are less than your income. Once you’ve established your brand name recognition via free advertising outlets, you may expand into paid advertising.

You should also put all of your advertising income back into marketing. You shouldn’t take all of your money right now.

Check your advertising return on investment (ROI) at least twice a week to keep tabs on how your eCommerce marketing efforts are paying off financially. Try to make it a daily habit if possible.

Another advice is always to sell things with sufficient markups to meet your advertising costs.

Be cautious about setting reasonable prices for your items since investing much in e-commerce marketing might quickly drain your bank account.

To reinvest in advertising, you need to profit at least $120.00 from a $100.00 expenditure.

Some capital outlay is necessary for a successful e-commerce company strategy. You need sales. Thus it makes sense to invest in marketing strategies. E-commerce search engine optimization (SEO) and email marketing are two more methods to get customers to your business.

Increased sales are a near-instantaneous result of doing direct marketing.

Find out what other people are doing to promote their businesses on Instagram and what the newest advertising trends are on Snapchat. You may take these ideas and implement them into your e-commerce firm.

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