Did you know that the US-based eCommerce industry reached a net revenue of $538 billion in 2020?
Although there are significant differences between launching an eCommerce business and a brick-and-mortar business, there are many parallels. Many of the planning and legal processes you’ll have to take will be similar to those of any other company.
However, when it’s time to launch your eCommerce firm, you’ll discover just how different it may be. But, no worries. We’ve got your back. Read on for our full breakdown of how to start your own eCommerce company.
eCommerce Business 101: Find a Niche in the eCommerce Industry
It’s essential to do your homework before diving into the process of starting an online store. As if you were planning to open a restaurant, you’ll need to do some research into the eCommerce field you’re interested in and make some judgments about your own company.
Your eCommerce firm, for example, will need careful consideration. Are you going to be offering goods or services for sale?
What things are you going to buy? Are the goods you’re offering for sale physical or digital? You’ll also want to consider the sort of business strategy you’ll use. Will you be selling single goods, bundles, subscriptions, or something else?
In addition, you’ll need to consider on a larger scale as you go through this process: Do you have a strategy in place for getting your goods and services to your clients? What will your starting expenses be?
Determine the Name and Legal Structure of your Company
The next stage is to pick a name for your eCommerce firm once you’ve finalized your strategy. Your business name should be distinctive, but it should also clearly communicate what your company performs.
Make sure you check with your local secretary of state’s website, as well as with the U.S. Patent and Trademark Office before you choose your company’s name.
Checking to see whether your company domain name is available is a good idea, even if you don’t plan on creating a website at this time. As an alternative to “yourbusinessname.com,” if your domain name is already used, you may want to think about using a new business name or a different domain structure.
The next step is to decide on the legal form of your company. Your eCommerce company will be affected by the legal and financial ramifications of the business entity type you choose.
A sole proprietorship, a general partnership, an LLC, or a corporation are the most common business structures. Considering the advantages and disadvantages of each of these company structures, you may want to seek the opinion of an attorney or other legal expert before making a final decision.
Get an EIN
For your eCommerce firm, you’ll need an EIN or employment identification number. Even if you don’t need an EIN for your company, this nine-digit number may help you keep your personal and business funds separate.
The IRS also offers free EIN applications, which may be done either online or by mail or phone. To establish an eCommerce firm, you’ll need a business tax identification number, which you may get by completing the application process online.
Apply for Business Licenses and Permissions
Once you’ve obtained your EIN, the next step is to get any necessary business licenses and permits in your city and state. Even if you’ve created your online store as a sole proprietorship or general partnership, the state will not need you to register it unless you intend to use a DBA to do business lawfully under a different company name.
Other business entities, such as corporations and limited liability companies, must register with your state and receive a general operating license. The location of your firm may need the acquisition of a local active license.
eCommerce enterprises, on the whole, don’t need as many licenses and licenses as traditional brick-and-mortar retailers. In addition, you’ll need to figure out precisely what your state’s or local government’s criteria are.
You can typically discover this information online. Home-based company operators in many areas must get a permit before lawfully operating. You don’t have to worry about traffic, noise, or other issues if you run your company out of your house.
Create your Website on an eCommerce Platform
You’ve now finished all necessary documentation to open a legally-binding eCommerce site. As a result, the bulk of our processes thus far have been similar to the operation of founding a physical and mortar firm.
As a result, you’ll begin constructing your website and online business instead of hunting for a place and preparing to open a physical store.
Like a brick-and-mortar shop, this website will be the first thing your clients see when they visit your company and will be the primary tool they use to research and buy your goods and services. As a result, building your eCommerce website is a critical step in getting your company off the ground. As you design your online shop, keep the following things in mind.
The first thing you’ll need to do is develop a domain name. Your firm’s name should be (at least somewhat) reflected in the name of your domain.
You’ll have to make the most critical choice is which eCommerce platform you’ll choose. Your eCommerce platform, whether it’s an all-in-one program like Shopify or an open-source platform, will serve as the foundation for your online business.
Next step, you’ll need to think about your marketing and packaging. Thankfully, you can purchase conex boxes for all your packaging and shipping needs.
Becoming a Small Business Owner: The eCommerce Company Edition
The market is currently friendly to all sorts of eCommerce businesses. It’s the perfect time to take the plunge and get your project off the ground.
Hopefully, our guide has shed light on the foundational steps to get your eCommerce business up and running.