How to start an online store today

By 2027, more than 20% of total US retail sales will be the result of e-commerce, according to Insider Intelligence/eMarketer. Consumers increasingly prefer the convenience and speed of online shopping.

Many entrepreneurs and small-business owners should see this as a call to action — there’s significant opportunity awaiting your business if you’re willing to build an online store. And, learning how to start an online store doesn’t have to be daunting.

If you’re starting from square one with your business, we’ll walk you through every step — from generating product ideas to effectively marketing your store. Alternatively, if you already sell products offline and want to move online, you can jump straight to step 4 and expedite the process.

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1. Choose your niche

The first step to finding success in the world of e-commerce is identifying your niche market. Market niches represent specific segments within larger markets, distinguished by their unique needs, preferences and identities. It helps you position your business for the right audience.

But how do you find your niche for your online store?

• Find your passion: Embarking on your entrepreneurial journey with a product you’re passionate about makes it more exciting. It motivates you to dedicate time to sharing knowledge about the thing you’re passionate about and excel in.

• Identify market opportunities: The best niche is the one that has a lot of demand but limited supply. Conduct keyword research and analyze trends and consumer preferences to learn about the potential market opportunities for your online store.

• Consider competition and narrow down your niche: You don’t want to enter a niche that is already oversaturated. For example, direct keywords like “laptops” will have high search volume and competition. But if you narrow your search to “gaming laptops,” “HP stream laptop” or “second-hand laptops,” you’ll find comparatively less competition. The idea is to search for keywords that strike a good balance between search volume and competition.

• Evaluate profitability: While passion is important, it’s also essential to consider the financial viability of your niche. Evaluate the potential profitability and scalability of your chosen niche. Calculate costs and margins to ensure that your online store is sustainable in the long run.

2. Create an operational plan

Once you’ve narrowed down your niche, the next step is to create an operational plan — how you will run your online business and get products to customers. If you’re unsure where to start, consider the following ideas:

• Direct-to-consumer (DTC): If you’re already a manufacturer, take the DTC approach. Customers are increasingly looking to purchase directly from a brand’s online store as it eliminates the middleman and lowers pricing.

• White labeling: White labeling offers a lucrative opportunity for small and medium-sized businesses (SMBs) to establish their brand presence in the market without the need for significant capital investment. By partnering with a manufacturer, you can customize products with your own branding and sell them through your online store.

• Wholesale-to-online: If you’re starting an online store but don’t have your own products, partnering with a wholesaler is a fantastic option. Reach out to wholesalers and express your interest in showcasing their products on your platform. In the US, you can check out a site like WholesaleCentral.com to locate wholesale suppliers. Consider capitalizing on the popularity of certain region-specific items like food or handicrafts by purchasing them in bulk and selling them online.

• Dropshipping: Dropshipping is one of the most cost-effective ways to start an online store. With dropshipping, you can sell products to customers without the need to hold inventory. Instead, you purchase items from a third-party supplier who then ships them directly to the customer.

• Digital products: If you don’t have the capital to invest in physical inventory, consider digital products like ebooks, software and online courses, which require minimal upfront costs.

3. Register your business

Once you have decided on your product, registering your business becomes essential for legal compliance and building credibility. This process facilitates obtaining a tax ID number and necessary licenses and permits, while also safeguarding your personal assets by separating business liabilities from personal finances. However, your business structure determines the specific registration requirements you’ll need to fulfill.

According to the US Small Business Administration, the most common business structures for small businesses include:

• Sole proprietorship: This means you’re the sole owner of the business and personally responsible for its debts and liabilities. While it’s easy to set up and allows for complete control, it offers no legal separation between you and your business.

• Partnership: A partnership is when two or more individuals share ownership of the business and are equally responsible for its debts and liabilities. Partnerships can be unlimited partnerships (all partners share equal liability) or limited partnerships (only one partner has limited liability).

• Limited liability company (LLC): An LLC combines the limited liability protection of a corporation with the tax advantages of a partnership, making it a popular choice for small businesses. Owners are shielded from personal liability for the company’s debts and liabilities. Explore our comprehensive guide on starting an LLC to establish a solid legal structure for your small business.

• Corporation: A corporation is a separate legal entity from its owners and offers full protection to its owners from the company’s liabilities. However, corporations face more complex legal and tax obligations, making them more suitable for larger businesses.

If you operate your business under your legal name, registration may not be necessary. However, failing to register could expose you to personal liability risks and prevent you from accessing legal and tax benefits.

Remember, the process of registering your business can vary based on your location. Thus, it’s best to consult with business counselors or attorneys to avoid any complications later.

We recommend checking out our guide on starting a business from scratch for detailed insights and step-by-step instructions.

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4. Select an e-commerce platform

To start an online store, you need an e-commerce platform. An e-commerce platform is where your online store will be created and hosted. A well-chosen platform provides the necessary tools and features to effectively showcase your products, process transactions securely and grow your business online.

According to Matt Little, owner of Festoon House, a lighting company, the right e-commerce platform can directly impact the functionality and customer experience of your online store.

“Prior to opening an online store, each small business owner should understand how important it is to have a website that is responsive and easy to use. Investing in a smooth online shopping experience for clients is essential, as it guarantees simple navigation, lucid product details and safe payment methods.”

Matt Little, owner of Festoon House

Here are a few key factors to consider when choosing an e-commerce platform:

• Security: Customers won’t buy from your store if they don’t trust you with their personal information. Select a platform that emphasizes security measures, such as SSL encryption, PCI compliance and regular security updates to protect your customers’ sensitive information.

• Payment integration: Ensure that the platform supports integration with popular payment gateways and offers a variety of payment options for your customers, including credit/debit cards, digital wallets, etc., to streamline the checkout process and increase conversions.

• Mobile responsiveness: 76% of customers have used a smartphone to buy things online. Modern e-commerce stores should opt for a platform with responsive design templates and mobile-friendly features to ensure a seamless shopping experience across all devices, including desktops, tablets and smartphones.

• SEO tools: SEO is crucial to optimize your online store for search engines. Look for platforms with built-in SEO features such as customizable meta tags, sitemaps, URL structures and image optimization to improve visibility and drive organic traffic to your online store.

• Technical support: Consider the level of customer support provided by the platform. Unforeseen circumstances like server downtimes and crashes can disrupt customer access to your site. Prompt technical support from your e-commerce platform provider is essential to get your store up and running in no time.

There are several great e-commerce platforms to choose from, such as Shopify, Wix, Shift4Shop and Ecwid. For an in-depth look at these platforms, check out our guide to the best e-commerce platforms.

5. Design and build your online store

Now that you’ve chosen your product niche, registered your business and selected your e-commerce platform, it’s time to dive into building your online store. Your website becomes your 24/7 storefront, working tirelessly even when you’re away or off duty.

The key lies in creating an online store that not only reflects your brand but also drives conversions effectively. Here are some essential tips to consider as you design your e-commerce website:

• Choose an appropriate template: When selecting a template for your e-commerce website, prioritize functionality, aesthetics and responsiveness. Look for a design that aligns with your brand identity and offers customizable features to tailor the layout and design elements to your specific needs.

• Keep your website structure simple: While designing your website, think like an audience. Visitors should enjoy a seamless browsing experience while exploring products and find the checkout process optimized for ease and efficiency. Therefore, you should ensure that your website is intuitive and easy to navigate. Optimize product categories, sorting options and search functionality to help shoppers quickly find what they’re looking for.

• Use high-quality images: If you want to grab your visitors’ attention, the easy trick is to use high-resolution images. Include multiple images of your products from different angles and videos if possible to give customers a comprehensive view of the product. High-quality images can result in a 94% increase in views, potentially boosting conversion rates and driving revenue growth.

• Be clear on what you sell: Clearly define your product offerings. When crafting your product descriptions, clarity is the key to effectively communicating what you sell to your customers. A detailed description highlights the key features, specifications and benefits of your products. Also, include relevant keywords and meta details to optimize for search engines.

6. Add a payment gateway

Adding a payment gateway to your e-commerce website is paramount. A payment gateway is an online tool that facilitates the secure transfer of funds between a customer and a merchant using various payment methods such as credit cards, debit cards, digital wallets, etc.

Digital payments have become the norm for the majority of consumers. With over 90% of US consumers utilizing digital payment methods, a seamless payment process is essential for both consumers and business owners alike.

There are hundreds of payment gateways to choose from such as Shopify, Razorpay, Stripe, PayPal, etc. However, you need an option that can easily be integrated with your platform. When selecting a payment gateway, there are many factors to consider — security being the primary concern. A report from Experian shows that 55% of consumers consider security in their online experiences the top priority.

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Moreover, understanding your customers’ preferred payment methods is vital. According to McKinsey’s 2022 Digital Payments Consumer Survey, there’s a growing trend of consumers intending to use multiple digital wallets. You might be surprised to learn that many shoppers abandon their carts due to insufficient payment options on websites. That’s why integrating multiple payment gateways can be beneficial.

Using multiple payment gateways ensures that you meet your customers’ demand for various payment methods. It also enables you to accept payments in multiple currencies when selling internationally.

Another important thing to consider is the fees. Many payment gateways may offer lower fees, but it’s crucial to weigh these against potential expenses related to security concerns and fraud detection. Ultimately, finding a balance between affordability and robust security measures is imperative for safeguarding your business and maximizing profitability.

7. Choose a shipping partner

If you’re dealing with physical products, you need a shipping partner for running your online store. A reliable shipping partner plays a significant role in ensuring that packages are delivered to customers on time and in good condition. Today, where customer expectations for fast and reliable delivery are high, selecting the right shipping partner can make a substantial difference in customer satisfaction and retention.

When evaluating potential shipping partners, there are several factors to consider to ensure that you choose the best option for your business.

• Coverage: While looking for a shipping partner, check their coverage area and whether they can deliver to your target markets efficiently. Ensure that they offer both domestic and international shipping services if needed.

• Cost: Compare shipping rates and fees across different providers to determine which fits into your budget. Consider factors such as volume discounts, shipping insurance and additional surcharges.

• Customer service: Dealing with customers’ complaints about shipping can be a nightmare. Any delay in addressing customers’ issues can lead to dissatisfaction. Look for a reliable and responsive shipping partner in terms of customer support.

8. Launch and market your store

Finally, it’s time to launch your online store into the spotlight. During this crucial phase, strategic planning and execution are required to grab your audience’s attention and drive engagement and sales.

Little’s advice is “to generate anticipation in advance by providing your current client base with special discounts or rewards.”

He added, “To increase organic traffic to your website, make use of social media networks, work with influencers if you can and don’t forget to optimize it for search engines. Furthermore, gathering client endorsements and evaluations will support establishing credibility and trust with prospective customers.”

That said, here are a few effective strategies for marketing your online store:

• Give discounts and exclusive offers: Attract customers with special launch discounts and offers. Generate excitement around your store launch by teasing product launches and promotions through social media, email newsletters and blog posts.

• Do email marketing: Encourage sign-ups for your emails on your website to build an email list. Send out newsletters, promotional offers and product updates regularly to keep them engaged and informed about your store. If you can personalize your campaigns to specific subscribers or groups of subscribers, it can be even more effective.

• Use social media: Leverage social media platforms like Facebook, X and Instagram to connect with your audience and promote your store. Share visually appealing content and behind-the-scenes glimpses to generate interest and drive traffic to your website. Using analytics tools, you can gain valuable insights into the performance of your marketing efforts. Identify which social media platforms are driving the most engagement and pinpoint the content that resonates with your audience by tracking metrics like engagement rates, website traffic sources and conversion rates.

• Run paid advertising campaigns: If you have the budget, run paid advertising campaigns on platforms like Google Ads, Facebook Ads and Instagram Ads to reach a broader audience and drive targeted traffic to your website. Try various ad formats, targeting options and messaging to optimize your return on investment (ROI).

• Collaborate with influencers: Brands are increasingly investing in influencer marketing, as customers often trust influencers and turn to them to discover products. Partnering with influencers or micro-influencers in your niche, while considering factors such as their follower demographics, engagement rates and content authenticity, allows you to promote your products and reach their engaged audience. Additionally, showcasing the partnership by reposting their uploads with hashtags on your social media profile can further amplify your brand’s visibility and credibility.

Finally, remember to consistently measure and analyze your store’s performance to drive ongoing improvements. Peter Hoopis, president and owner of Hoopis Pickleball, emphasizes the importance of testing for the smooth operation of the store.

“Implement user testing platforms to get detailed information about the areas that require improvement. You can also gather feedback from real users or conduct usability testing sessions to uncover usability issues that may not be immediately apparent. Keep in mind that a smooth and user-friendly website is essential to nurture trust and drive more conversions to your online store.”

Peter Hoopis, president/owner of Hoopis Pickleball

Ease of use

Above Average

On Wix’s Website

On Squarespace’s Website

AI powered tools

Easy to use drag-and-drop builder

On Web.com’s Website

On Shopify’s Website

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