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Business start up blog.

 How To Start An Online Store In 9 Steps (2025 Guide)

Businesses of all sizes can compete for larger customer bases thanks to e-commerce. It is possible to get started as a solopreneur or even part-time with an online store because it typically requires a lower initial investment than a site-based store. However, the procedure may initially appear overwhelming. I'll show you how to start an online store and take the mystery out of the process

1.  Define Your Product Line

Make a decision about what you'll be selling first. What type of product or service you sell will affect what e-commerce platform you use, taxes, licensing in some situations and whether or not you must manage inventory and shipping.

Online goods fall into the following main categories:

• Physical.  a tangible item that needs to be shipped to the customer. Dropshipping products is included in this.  

• Subscriptions.  Content downloads or physical products sold on a subscription basis are examples of subscriptions.    

• Services.  Services include everything from restaurant reservations to setting appointments for businesses such as HVAC repair or hair salons.

• Digital merchandise. Digital products include anything downloaded, such as video exercise tutorials, print-your-own wedding invitations and coloring pages.

Before making a decision, look at online products and ideas for profitable e-commerce businesses and consider how they align with your own knowledge and experience. For instance, homemade dog treats may be popular, but do you have permission to cook at home or a great recipe from which to make the treats?

2.  Pick a Location to Sell

 Yes, you will sell online; however, where will you do so? Will you use a stand-alone e-commerce store, social media, a third-party marketplace such as Amazon or Etsy, or multichannel selling combining several of these options?  Even selling your used items online is an option.

Each option has pros and cons.  Social media selling is the easiest to set up, but it has more restrictions and can't be customized. There are a lot of rules to follow in third-party marketplaces, but there are already established customer bases. The most freedom is provided by a fully functioning e-commerce website, but it also requires you to cultivate your own clientele.

3.  Select a Method of Fulfillment

You will need to select a fulfillment method for physical products, or how to get the products to your customers. Dropshipping, a fulfillment service, and in-house fulfillment are the three main fulfillment methods.

Dropshipping is popular for new stores because it eliminates the need to store stock, physically ship it, and pay for inventory upfront.

For small businesses, third-party fulfillment, like Amazon FBA, reduces costs and hassle.

General services as well as fulfillment services like Fulfillment by Amazon (Amazon FBA) can sometimes be linked to your third-party marketplace. In addition to charging you a fee for storing products prior to shipping, these services also provide pick, pack, and ship services. Smaller businesses without warehouse facilities will appreciate this option.

When you use in-house fulfillment, you store, pick, pack, and ship your inventory yourself. This means that boxes will take up at least one room in your home for many new online stores. For existing site-based businesses, there is often already a shipping procedure in place.

4.  Set Your Target Audience

You must determine who your customers are before you can decide what you want to sell and how you will deliver it to them. When brick-and-mortar stores start offering e-commerce, it's possible that they'll discover a slightly different set of customers than before.

E-commerce-specific considerations include, for instance, whether your customers are local or global. Locally produced goods like regional BBQ sauces may attract devoted customers across the nation to a small local grocery store.

The location of your target audience online is yet another crucial aspect of defining an e-commerce audience. Which browser they use and if they are active on a specific social media platform is part of figuring out how you’ll reach your audience later on.

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5.  Establish Your Company

You can move on to taxes for businesses that are already in operation. Consider the legalities of setting up your business if you are just getting started. Just because your business is going to be online doesn’t mean you are free of legal entanglements; sometimes, there are more rules than there are for site-based businesses.

Licensing for Businesses:

I frequently get the question, "Do I need a business license to sell products online?" as one of the first ones I hear. For physical stores, determining whether you require a business license is typically fairly straightforward. However, online stores frequently require a license as well. The problem is that you might get different responses from different people even if you call your state or local government.

Select a Business Type:

Choosing a business type is a big part of starting a business. In the event that you are ever sued, the way your business is set up can have an impact on tax burdens, privacy, and protections for your personal property. S-corporation, limited liability company (LLC), and sole proprietorship are the most prevalent business structures. The formation of LLCs and S-corporations does require paperwork, whereas sole proprietorship rarely does.

In any state, you can set up an LLC on your own or hire a service to handle most of the paperwork. For S-corporations, you’ll need to fill out form 2553 with the IRS and there are certain operating rules that must be followed.  Before choosing a type of business structure, it is always a good idea to talk about your particular situation with experts like lawyers or qualified counselors through the local Small Business Administration brand.

Taxes

Sales and income taxes must be managed by online businesses. Keeping separate accounts for all of your business's finances is the first step in dealing with income taxes. Additionally, you will need to keep excellent records, and I always advise consulting a tax professional before beginning.

Online sales taxes are a little more complicated. Originally, online businesses had to have a physical presence in a state before becoming subject to sales tax.  However, in a short period of time, a lot of states started putting that responsibility on the shoulders of consumers, requiring them to report online purchases and pay taxes when they filed income tax returns.

A little later, states began mandating that online businesses collect sales tax regardless of their physical location.

In the end, the argument resulted in a decision by the Supreme Court in South Dakota v. Wayfair, Inc., where the Supreme Court decided that the test would be customer location and sales volume. Due to the fact that juggling the various tax rules for each state was beyond the capabilities of individual sellers, numerous small online sellers either went out of business or exclusively switched to third-party marketplaces that handled the sales tax at first.

E-commerce eventually recovered as new software and services made it possible to automate managing the rule patchwork. However, for new online sellers, it can still be a confusing subject.

The number of sales or revenue that necessitates the collection of sales taxes in that region depends on the state's threshold for tax nexus status. As a result, I always advise new stores to use a platform that includes automated sales tax compliance.

6.  Choose Your Selling Platform:

You ought to already have a strategy for the kind of platform through which you want to sell, but now you need to make a decision about the specifics.

Hosting for e-commerce versus Platform for E-Commerce:

The main distinction between e-commerce hosting and an e-commerce platform is that e-commerce platforms are the software systems that power e-commerce, whereas e-commerce hosting is web hosting with more power, resources, and compliance with e-commerce security requirements. Despite the fact that the lines between the two are beginning to blur here, Hosting is included in some e-commerce platforms, but not all of them.

Shopify, WooCommerce, and Ecwid are a few of the best e-commerce platforms. Because it is only compatible with WordPress as a plugin, WooCommerce is a little bit of an exception. However, it is extremely popular, powering around 30% of all online stores.

Consider the following when selecting a platform:

Performance:

• Whether hosting is included or an additional charge.   

• compatibility with selling via multiple channels.    

• E-commerce-specific plugins or integrations like dropshipping, inventory management, automation of sales taxes, and shipping.    

• Security and compliance, such as PCI-DSS that is required by credit card companies.

• Transaction fees in addition to payment processor fees..

• Any product limits

• Supported product categories include physical, digital, subscriptions, and gated content.

Domain

Your online address is a custom domain name. Registering a domain name not only gives customers a quick and easy way to find you online, but it also helps protect your brand and boosts customer confidence in the security of their personal information.

Although some e-commerce platforms, like Ecwid, provide free subdomains, the majority of businesses typically achieve greater success by purchasing a custom domain name. Since Freenom is no longer in business, the number of free domain names is limited. However, there are many affordable domain registrars, and the majority of domain names cost between $10 and $50 per year. However, prices vary quite a bit depending on the registrar you select. For example, while I find IONOS usually has the best introductory-level pricing, Cloudflare generally has better renewal rates.

Marketplaces from Third Parties:

A third-party marketplace might be better for you if you aren't ready for a full-fledged e-commerce store. Etsy, eBay, Walmart, Target, and Amazon are among the biggest third-party marketplaces.

These are popular platforms for new online sellers because they come with a built-in customer base and handle some of the little things, like collecting sales taxes. However, you must play by the rules of each marketplace, including frequently allowing them to determine refund and return outcomes.

A lot of the business side of online selling is handled by third-party marketplaces like Etsy, but this comes at the expense of less control. 

You can sign up for each of these marketplaces separately or connect them through a separate e-commerce platform. It is possible to sell on multiple third-party marketplaces.

7.  Create an Online Store:

Your online store can take a long time to build. To begin, there are numerous moving parts to set up. However, maintenance time requirements are usually low once your initial setup is finished.

Theme:

Your store's look is determined by your theme. Choose a theme that matches your branding and incorporates the necessary e-commerce features. It's easier for me to distinguish myself from other stores by skipping the most popular themes. For a more individual appearance, make sure to personalize the colors and layouts.

Make a list of your products:

Your online store is built around your product catalog. Don’t rush this part of the setup.  In addition to compelling titles and descriptions packed with keywords, you will need images of the products. As part of building out your product catalog, you'll also need to set up shipping rules, taxes, pricing, and discounts.

A special note regarding product images: Do not steal images from other websites; doing so will quickly result in a copyright infringement lawsuit and the loss of customer confidence. Your product manufacturer will probably include promotional images for you to use, or you may need to take your own photos.  Hire a professional photographer to take the pictures if you lack confidence in your own abilities.

Integrate Your Payment Gateway:

Although the terminology gets a little bit lost here, the basic procedure is that in order to accept payments, you need a payment processor, and those processors use payment gateways—also known as portals—to encrypt and manage the data.

The majority of e-commerce platforms support two popular payment processors: PayPal and Stripe.

A lot of services combine the processor and gateway. Stripe, PayPal, Square, and Clover are some of the most widely used services. You may have access to a limited number of processors or many processors, depending on your platform.

Configure Checkout:

Setup Your e-commerce platform will determine how you configure checkout. However, it is usually fairly straightforward, with a series of choices presented to you by the platform.  For instance, adding checkboxes to indicate that you agree with the terms and conditions, sending any automated emails, collecting shipping information from customers, setting payment options, and connecting any upsell offers.

Connect Plugins:

By automating some backend tasks, plugins and integrations for additional features add functionality, enhance the customer experience, and simplify your life. Live chat, search functions, inventory management, automated sales tax calculation, and analytics are all common plugins.

Include all of your policies:

With policy pages, every online store must safeguard itself and set customer expectations. Some are required by law and may differ based on your location and the kind of product. To make sure you are adhering to those policies and notices, consult a local lawyer. Shipping policies, return policies, and refund rules are also common policies.

8.  Modify SEO:

The dirty secret about SEO is that it is a huge topic that is always changing. Because search engines are aware that malicious individuals will take advantage of the situation to rank scams higher than legitimate stores and websites, they never provide you with a comprehensive ranking guide.

Having said that, small businesses have every chance of succeeding on search engine result pages (SERPs). Use the SEO tools included in your platform, follow SEO checklists and consider an add-on SEO tool to help you optimize pages, conduct better keyword research and keep track of analytics.

9.  Open the Doors Online:

Congrats!  After creating your first online store, it's time to publish it and let customers in. The process for each platform is different, but most are really as easy as clicking a button.

Keep in mind, however, that populating everything will take time. That initial first-time publishing can sometimes take some time, even with fast servers. After you hit publish, take a little break to clear your head and come back in an hour or so to make sure everything worked correctly.  Then, you can troubleshoot if needed.

Promote Your New Shop:

Once your e-commerce store is set up, your job isn’t done.  You need to promote your new store, just like you would for a site-based business. While you don’t need to spend a fortune, chances are you’ll need to spend at least a few dollars to access most advertising opportunities.  In addition, as part of your ongoing upkeep, you'll need to look at analytics and adjust your marketing strategies accordingly.

Online:

Keyword ads, sponsored search results, social media posts, and social media advertisements are all common components of online marketing. For a three-day social media campaign, advertising budgets can range from $15 to hundreds of thousands of dollars.

The most crucial aspect is ensuring that your advertising targets the appropriate audience. Make use of the platforms that your target audience frequents and the demographic-adjusting targeting features in the ad setup screens.

Off-Line:

Off-line marketing is still helpful, even for online sales. A great place to start is by sponsoring local events and local magazines for location-dependent online stores like those that take appointments for services.

Digital billboard advertising using services like Blip Billboards during peak times is one effective advertising strategy I suggest to small store owners.

Many of them let you start with as little as $20, and if you choose your times and the right billboard carefully, you can reach a lot of people quickly. Even better, people think billboard advertising is expensive, so people tend to think you're a bigger business than you actually are.

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