How To Start an eCommerce Website Business

If you’re looking to start an eCommerce business, the question is what step do you follow and how do you do it? There are basic business steps you’ll need to follow and also eCommerce website specific decisions such as how to build the website, marketing and more. So let’s dive in!

by Jeff Hirz

Updated Dec 01, 2022

How To Start an eCommerce Website Overview

With hundreds of millions of online shoppers, starting an eCommerce website and online business seems like a great decision. But to make it successful (and legal) there are step you need to follow. More and more businesses are either starting up online or creating an eCommerce website to sell their products on, so competition is always growing. Read through the points below and make sure you have your checklist covered!

1) Determine The Products You're Selling

If you’re an established business and you’re starting an eCommerce website then you already know what products you’ll be selling, but if you’re a new business or want to dive into the eCommerce business world, this is where to start. Consider how competitive different markets are and the potential profit margin of the items you’ll be selling. It’s much easier to be successful in a space with larger markups. We’ve seen some of the most successful eCommerce businesses sell some pretty strange items, so think outside of the box!

2) Name Your Business

Coming up with a catchy name can set you apart from your competition, so spend some time making sure you nail it. Plus, changing your name isn’t an easy thing to do, so chances are you’ll be stuck with it for quite a while. Also, consider search engine marketing and the domain name you’ll be choosing. Including keywords in your name can have a big impact on you future marketing effort (more on that later). Use online tools to see if other businesses already have your name. Read up on tips to make your business name great.

3) Choose Business Structure & Register It

There are multiple options for the way you legally structure your business:

Sole proprietor
LLC
Corporation

If you opt from choosing a structure you will be considered a sole proprietor for your taxes and by the IRS. There are many things to consider when choosing your structure, mainly responsibility if you were ever sued, so be sure you talk with an attorney to make the right decision. If you’re a corporation or LLC your business assets and personal assets will be separated and protected.

4) Get Your EIN Number

Every business has EIN (Employer Identification Number) and you’ll be asked for this by your bank, when you file your taxes and more. An EIN is very similar to a personal social security number, but its for your business. Even if you’re not planning to have employees, you’ll still need to get one.

5) Handle Necessary Business Permits

Business permits are different on a state by state, sometimes county by county based, so be sure to check what permits you’ll need. Because you’re an online business you shouldn’t need as many (depending on what you’re selling), but chances are you may still need a few. Calling a local attorney is an option or do your research online. You can also call up your city town hall and ask them to point you in the right direction. Remember, all cities are looking for new businesses to boost tax revenue, whether it be online or offline, so they are willing to help.

6) Handle Drop Shipping or Stocking Products

How you’ll be stocking and shipping your products and inventory is a big decision to make. Many online business drop ship, meaning they never touch the product, but many manufacturers have also moved away from drop shipping Depending on what you’re selling, drop shipping may or may not be an option. If you’re going to be stocking items, be sure you have the space to do so and an insurance plan to protect your assets from theft or fire.

7) Set Up Accounting Software

Running an organized business from the very beginning will make future growth much easier. Use software such as QuickBooks to get started and be sure to set it up to match your business model. This will allow you to do your taxes quicker when the time comes around, but will also allow you to run profit and loss statements and other helpful reports. Knowing where your business stands financially at all times is extremely important and will help you make informed, smart decisions.

8) Buy a Domain Name

Choosing your domain name is as important, if not more important, than the name of your business. You’ll want to pick a domain name that includes keywords, if possible. As your domain name gets older and older it will rank better in Google and the other major search engines, so you’ll want to stick with the domain name you choose from the beginning. Also, be sure its easy for customers to remember.

9) Build Your eCommerce Website

The fun begins when it’s time to get designing your eCommerce website! Main critical decision and the success of your business begin here, so don’t take the decision lightly. There are two main points to consider:

What shopping cart platform will you use? There are many options from a hosted solution like Shopify to an open source platform such as Magento. What’s right for you? It all depends on what features, functionality and scale you want to take your business to. If you need a very basic shopping set up, Shopify may work. If you need customization, ERP integrations and other unique features, you’ll want to use an open source platform which gives you access to the source code (what runs the website). Talk with a trusted web design company and make the platform decision together.
Who will I choose to be the web design agency? Your agency will be with you for a long time and will also support your website after it is live. Be sure the are highly experience working with eCommerce websites. If you choose the wrong agency you’ll be redesigning your website sooner than later and be out the initial development cost. Working with an overseas agency or a an agency who outsources if not advised.

Check out the following guides:

10) Decide on Website & Email Hosting

The speed of your website will be largely dependent on website hosting. Who you need to use for hosting will be based on the eCommerce platform you decide to use. If you’re using a hosted eCommerce shopping cart provider, hosting will be provided to you within the cost. If you’re using an open source platform (Magento, NopCommerce, Onveos, etc.), then you’ll need your own host. You web design company will be able to point you in the right direction, set up and configure the account for you.

11) Start Marketing & Have a Marketing Plan

If you build it, they will not come! Having a solid marketing plan is the foundation for the success of your online business. When running an eCommerce business being on the first page of Google and the search engines when customers are looking for your items is paramount. There are two ways to achieve being on the first page of Google:

Pay to be there – Using Google AdWords you can choose the keywords that you want to be on the first page of Google for and pay each time someone clicks on your ad. This is a great way to get instant exposure, but you’ll need to have a solid budget. Most eCommerce businesses will spend at least 3-5k per month to just test out an AdWords campaign, while many successful businesses (and probably your competitors) spend six-figures a month.
Rank organically – Google shows both ads and organic results. If your below the ads, those are the organic results. Most searches actually skip past the ads and go to the organic results, so this is an ideal place to be. So, how do you get there? There is a lot that goes into being on the first page of Google for competitive search terms. It’s all about having a great website, valuable content and authority. Unless you’re an SEO expert, you’ll need to work with an SEO services agency (like us) to get on the first page. Be sure to work with an SEO agency that has a huge amount of experience in the eCommerce space.

Check out the following guides:

12) Use Software To Track Your Success

There are many softwares that you’ll want to use to track the success of sales and your search marketing campaign. Tracking your stats and getting a pulse for the business and trends will allow you to make smart business decisions. While software costs can rack up a bit, it’s well worth it to know what’s going on and stop “guessing”.

Basic Recommended Softwares: