How to start your own eCommerce Store?
Introduction
Much like starting any business, learning how to start an eCommerce business isn't always easy — but setting up, launching and maintaining sites where entrepreneurs, designers, and creators of all sorts can sell their wares is more attainable now than ever. Ecommerce businesses — which are businesses that transmit goods, services, and funds over the internet — vary in size and scope, from retail behemoths like Amazon to Etsy craft sites. Online shopping is just one of many areas that have seen extensive growth over the past five years. According to a report from the U.S. Census Bureau, in the third quarter of 2019 alone, U.S. e-commerce sales amounted to approximately $154.5 billion, accounting for 11.2% of all retail sales in the nation. Depending on your goals, it might make sense to start an eCommerce business. After all, without the need for a brick-and-mortar location, eCommerce businesses offer greater flexibility, affordability, and opportunity for many entrepreneurs. So how exactly do you start an online business? This guide is here to help. We'll break down how to start an eCommerce business startup in seven simple steps — so that you have all the information you need to get your online business up and running in no time.
SO, HOW TO GET STARTED?
Although there are notable differences in starting an eCommerce business compared with starting a brick-and-mortar business — there are also a number of similarities. As we'll discuss below, many of the planning and legal steps you'll need to take will follow the same process (more or less) than any other business. However, once it's time to start your operation, you'll see how different starting an e-commerce business can be.
STEP 1: RESEARCH THE E-COMMERCE SPACE AND FIND YOUR NICHE
The first step in learning how to start an eCommerce business is performing the necessary research. It is imperative to pick the right B2B eCommerce platform. Just as if you were starting a restaurant and looking into different locations, food options, and themes, you'll want to investigate the eCommerce area you're interested in and make some decisions with regard to your specific business. For example, you'll want to consider what exactly your eCommerce business is going to offer. Will you be selling products or services? If you're selling products, are they physical or digital? Where will you source your products? Along these lines, you'll also want to think about the type of business model you want to employ — will you offer single products, packages, subscriptions, or something else?
STEP 2: SELECT YOUR BUSINESS NAME AND CHOOSE A LEGAL STRUCTURE
Once you've solidified the plan for your eCommerce business, the next step is to choose a name. Like any other business, you'll want to choose a name that's unique, but also that clearly indicates what your business is or does. You'll likely want to consult your local secretary of state's website, as well as the U.S. Patent and Trademark Office to ensure that you're not choosing a business name that's already claimed by another company. Although you won't want to invest too much time on a website quite yet, it will be worthwhile to check to see if your potential business domain name is available. If your domain name is currently being used, you may consider a different business name, or a different structure, such as "yourbusinessname.co" instead of "yourbusinessname.com."
STEP 3: APPLY FOR AN EIN
Next, you'll want to apply for an EIN, or employer identification number to start own eCommerce business. Although not all business entity types are required to have an EIN, this nine-digit number can be useful to help you separate your personal and business finances. Plus, you can apply for an EIN from the IRS, for free — either online, by mail, fax, or phone. Since you're learning how to start an eCommerce business, you'll very likely want to apply for this business tax ID online, and once you do, you'll receive your number instantly.
STEP 4: OBTAIN BUSINESS PERMITS AND LICENSES
After you've applied for your EIN, you'll now want to obtain any business licenses or permits needed to operate legally within your city and state. As we mentioned above, if you've established your eCommerce business as a sole proprietorship or general partnership, you don't actually need to register your business with the state — unless you're filing a DBA to legally operate under a specific business name. For the other business entity types, however, you will need to register your business with your state and receive a general operating license. Depending on where your business is located, you may also need to acquire a local operating license as well.