Starting an e-commerce business can be quite lucrative as it involves all the benefits of having a business without the added setup costs of a brick-and-mortar store. Some people love the idea of spending hours behind the counter displaying products to customers, while others want to spend their time elsewhere.
What is an e-commerce business?
E-commerce businesses are online stores that sell products or services to customers. As an e-commerce business owner, you can choose the platform you want to use to run your business. You can also customize your website using themes and plugins, which help you add features like payment processing, inventory management, shipping, and more. Steps to starting an e-commerce business:
Find your e-commerce business niche
The first step to starting an e-commerce business is to find a niche. Whether you want to sell beauty products, handmade items, or clothes, your niche is your area of expertise.
What is a Niche?
A niche is a market segment that you can target with your products and services. Your niche includes the people who are likely to buy from you. But it’s also so much more than that.
Niches are essentially a subset of the entire market. So you’re selling something that appeals to a smaller group of people than the entire market. For example, if you sell kids’ clothing, your niche is children, but your market could be anyone who has kids or buys clothes for kids.
People who are in niches are more passionate about what they do and buy. They’re more likely to spend money on what they want because they feel strongly about it instead of just buying something because they need it. Think about how many people watch sports regularly versus how many people only watch when their favorite team is playing in the Super Bowl or World Series. That’s passion versus interest — which audience would be easier to sell to?
Choose a business name and a business structure
Your business name must be unique so no one else can use it. Your name should be simple and easy to remember. You can use your own name, or you can choose a name that describes what your business does.
For example, if you want to sell bikes and accessories, you could call your business ‘Zippy Bikes.’ You need to register your business name if you trade with a business name that is different from your own (first and last) names.
You need to decide what legal structure best suits the needs of your business. The most common structures are:
Sole traders – this is the easiest structure for a small business with one owner. Owners are personally liable for all debts and other liabilities of the business.
Partnerships – two or more people who carry on a business in common with a view to making a profit. Partners are personally liable for all debts and other liabilities of the partnership.
Companies – are separate legal entities owned by shareholders and managed by directors. The company structure provides limited liability protection for its owners (shareholders). Each state has its own rules governing how companies operate, which must be followed by directors and shareholders (owners).
Get EIN (employer identification number)
An employer identification number (EIN) is a tax identification number that’s required for your business to pay employees and file business tax returns. It’s also known as a federal tax ID number.
The IRS issues EINs and uses them to identify the tax accounts of employers and certain others who have no employees. The IRS uses EINs to identify taxpayers who are required to file various business tax returns, e.g., employment, excise, alcohol, tobacco, and firearms.
EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.
Business permits and licenses are required to start an e-commerce business. They are usually issued by the government. Business permits and licenses are important because they help the government know what type of businesses are operating in their jurisdiction and also to ensure that certain standards and rules are met.
Get business permits and licenses
A business license is a permit that allows a company or individual to conduct business within a certain jurisdiction. The license is most often issued by the local government but can also be issued state or federal level. Most licenses require renewal on an annual basis, though some licenses can be valid for up to five years.
In order to obtain a business license, an application must be submitted to the local governing authority, such as a city hall or county courthouse. Some of the information that may need to be included on the application include:
The name or names of the individuals who own the business
The address of the business
The type of business (for example, an e-commerce business)
Whether or not you plan on hiring employees
You can create a website or use an e-commerce platform
You can create an online store in two ways: build your own website or use the services of a third-party e-commerce platform. If you want to do it yourself, you should find out how to make a website and get yourself familiar with web design and coding languages. You can also hire a web developer or designer to build your website for you.
Create your website
A website is a great way to showcase your products, connect with your customers and learn about their needs. It can also help you reach more people, grow your business and work more efficiently.
Your website should include:
Useful information about the products or services you sell– make sure it’s easy for customers to find what they’re looking for, including prices, photos, and descriptions.
Contact information– so customers can easily get in touch with you by phone, email, or social media. You may want to include a contact form.
Details about any special offers, discounts, or promotions you’re running – Information about …