Despite the Significant Differences Between Start an E-Commerce Business and Starting a Physical Business, There Are Several Similarities.Many of the legal and planning steps you’ll need to take will be similar to those of any other business, more or less, as we’ll see below.However, when it comes time to get your business up and running, you’ll see how different it can be.
Step 1:Find your niche by researching the e-commerce industry.
Conducting the necessary research is the first step in learning how to start an e-commerce business.Similar to starting a restaurant and researching different locations, menus, and themes, you should research the e-commerce industry you’re interested in and make some decisions about your business.
Consider, for instance, the services that your e-commerce company will provide.Will you provide goods or services for sale?Are your products digital or physical, if you sell them?Where do you intend to obtain your products?As a result, you should also consider the business model you want to use: will you sell single items, packages, subscriptions, or something else?
Throughout this process, you should also think on a broader scale:How are you going to get your goods or services to your clients?What will your initial costs be?Are there lawful or different guidelines on your item or administration that you really want to remember?
You will be able to begin writing your business plan with the assistance of these and other lines of inquiry, which will be essential to the beginning of your company.You’ll get a better idea of your specific goals and how you’ll get there from this process.Finding your niche is an important part of this step, especially in the e-commerce industry.
While learning how to start an e-commerce business is a great benefit of the e-commerce industry’s expansion, it also means more competition.Find a market where you think you can successfully establish your brand and sell products and services by conducting competitor research.
Step 2:After you have settled on a strategy for your e-commerce business,
the next step is to select a name for your company.You should pick a name that is distinctive and also makes it clear what your business does, just like any other business.You should probably check the website of your local secretary of state and the U.S. Patent and Trademark Office to make sure you don’t choose a business name that has already been claimed by someone else.
Even though you won’t want to spend too much time on a website right now, it will be worthwhile to see if the domain name you want for your business is available.Consider a different business name or a different structure, such as “yourbusinessname.co” instead of “yourbusinessname.com,” if your domain name is currently being used.
Next, select the legal structure of your company.The type of business entity you choose will have significant legal and financial effects on your e-commerce business.In most cases, you will have the option of forming a corporation, general partnership, LLC, or sole proprietorship.Each of these types of entities has advantages and disadvantages, so you might decide to get advice on which one is best for your business from an attorney or other legal professional.
You won’t actually need to register in the state where you’re operating if you decide to start a sole proprietorship or general partnership.Instead, your business will be legally associated with you under your own name. If you want to operate under the name you’ve chosen, you’ll need to apply to your local government for a DBA, or “doing business as,” license.
Step 3:Apply for an EIN
The next step for your e-commerce business is to apply for an EIN, or employer identification number.Even though an EIN is not required for every type of business entity, it can be helpful to separate your personal and business finances.In addition, the IRS lets you apply for an EIN for free online, by mail, fax, or over the phone.You’ll probably want to apply for this business tax ID online because you’re learning how to start an e-commerce business. Once you do, you’ll get your number right away.
Step 4:After you have applied for your EIN, you will now need to obtain any business licenses or permits
Required to legally operate in your city or state.Unless you are filing a DBA to legally operate under a specific business name, you do not actually need to register your e-commerce business with the state if you have established it as a sole proprietorship or general partnership.However, you will need to register your business with your state and obtain a general operating license for the other types of business entities.You may also need to get a local operating license, depending on where your business is.
Since most e-commerce businesses operate from home, they typically do not require as many business licenses and permits as traditional retail establishments.However, you will need to find out what the specific requirements are in your area. This information is usually available online on the website of your state or local government.For instance, in order to legally operate, home-based business owners must obtain a home occupation permit in the majority of jurisdictions.This permit simply demonstrates that you are not adding traffic, noise, or hazardous conditions to your location by operating your business from your home.
You might also need the following licenses and permits for your business:
trade and professional licenses for specific industries.
Allows for sales tax.
Environmental, health, and safety permits
Permits for construction and construction
Step 5:Select an e-commerce platform and build your website
At this point, you have completed the registration and legal start-up paperwork.As a result, the majority of our steps up to this point have been similar to starting a physical business.But now, you’ll start building your website and online store instead of looking for a location and getting ready to open one.
This website, like a physical storefront, will be your business’s face. Customers will see it first and use it to browse and buy your products or services.Consequently, one of the most crucial aspects of starting your e-commerce business will be creating your website.As you build your online store, there are a few things to keep in mind:
In the first place, you’ll need to ponder your area name, as we referenced previously.Your business name should at least be a close match for your domain name.Consequently, selecting an e-commerce platform will likely be your most significant decision.Your e-commerce platform—whether all-in-one software like Shopify or open-source software like Magento—will serve as the foundation upon which you construct and expand your online store.
In addition to allowing you to set up and launch your online store, the majority of e-commerce platforms enable you to manage your inventory, take and ship orders, receive payment, customize your design, add a domain (or purchase one), and more.