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With more than 206 million predicted shoppers spending money online this year, there’s never been a better time to start an eCommerce business. If you’re thinking about starting an eCommerce business and selling products online, use this checklist to do it the right way.
1. Start With Your Business Name
The first thing to do (after you decide what you want to sell, of course) is choose a fabulous, memorable business name that no one else is using. You can conduct a corporate name search to make sure it’s not already in use. Once you’ve chosen the name, register it. (If you form an LLC or corporation, this will happen automatically in the state where you file your paperwork.)
2. Secure Your Domain Name and Website
Ideally, you’ll get your business name as your domain name, but if it’s not available, choose a URL that’s easy to say and spell, and relates to your business. So if your business is Karen’s Craft Creations and KarensCraftCreations.com isn’t available, try something similar like CraftsbyKaren.com.
The design of your eCommerce site may be the biggest business expense you have. But you want to ensure that it’s not only visually appealing, but also functional. There are out-of-the-box eCommerce solutions like Shopify to begin with, but you may require something more custom-made if your needs are more than basic.
3. Select The Best Business Structure and Register Your Business
You’ve got several options when it comes to your business structure:
- Sole Proprietor
- Partnership (if you have a business partner)
- LLC
- Corporation
If you don’t choose a business structure like a corporation or LLC, you’ll automatically be considered a sole proprietor (or partnership) by the IRS. However, operating as a sole proprietor, your personal assets are at risk. If your company is ever sued, the court can seize your personal assets if your business doesn’t have enough to cover its debts. Both the corporation and LLC separate you and your assets from the business, and provide other tax benefits.
You can register on your own by filling out the appropriate business structure paperwork from the IRS yourself, or you can hire a business filing company to do it for you. A lawyer is another option, but that’s often overkill for the average small business owner’s needs.
4. Get Your Employer Identification Number
You’ll need an Employer Identification Number (EIN) to open a business bank account and file your business taxes next April. Your EIN is a bit like your business’ social security number: it’s a unique number that identifies your business and helps you file important paperwork. Every business needs one, whether you’ll have employees or not.
5. Apply for Business Licenses and Permits
Operating an eCommerce business does not exclude you from needing certain business licenses and permits. Check with your city, county, and state to see what sorts of sales tax licenses or home business licenses you need, and get those approved before you start operating.
6. Find the Right Vendors
You’ll have a lot of competition selling products online, so it’s in your best interest to find the best quality and best prices for the products you sell or materials you use to create your products. Shop around until you find a vendor you want to do business with long-term.
7. Start Marketing Early
Even if you’re not up and running, it’s a good idea to set up social media profiles and writing content for your blog now so that you’re not starting from scratch Day 1. You can set up your website with a “coming soon” page where people who are interested can sign up to get updates, using a tool like LaunchRock.
8. Get More Productive with the Right Software
Technology can make so much of your work easier, so before you start your eCommerce business, play around with customer relationship management, accounting, project management, and email marketing software that you can integrate into what you’re doing once you launch.
9. Stock Your Inventory
Whether you’ve got a warehouse full of products somewhere or your inventory lives in your garage, make sure you’ve got enough to launch. It can be tricky, not knowing how much you’ll need, but in general, it’s better to have too much inventory than not enough. Pay attention to how your sales increase so you can be smart with future orders.
10. Make Sure Your Business Stays Compliant
Once you launch your eCommerce business, things are going to move at the speed of light. Don’t overlook filing your annual report, if you incorporated or filed an LLC, nor those annual fees for business permits. If you need to, put these deadlines on your calendar so you stay on top of them.
Can you check all 10 of these items off your list? Great! It’s time to launch. Having done all the preparation up front, your eCommerce business will skyrocket.
| Step | Description |
|---|---|
| 1. Start With Your Business Name | Choose a unique and memorable business name that’s not already in use. Conduct a corporate name search to ensure availability. Register the name accordingly. |
| 2. Secure Your Domain Name and Website | Ideally, get your business name as the domain name. Choose an easy-to-remember URL related to your business if the desired domain is unavailable. |
| 3. Select The Best Business Structure and Register Your Business | Decide on a suitable business structure (Sole Proprietor, Partnership, LLC, or Corporation) and complete the necessary registration process. |
| 4. Get Your Employer Identification Number (EIN) | Obtain an EIN for your business, which is crucial for opening a business bank account and fulfilling tax obligations. |
| 5. Apply for Business Licenses and Permits | Check and secure any required sales tax licenses or home business permits from city, county, and state authorities before starting operations. |
| 6. Find the Right Vendors | Research and identify vendors offering quality products at competitive prices to ensure a steady supply for your eCommerce store. |
| 7. Start Marketing Early | Create social media profiles and blog content in advance to build anticipation. Set up a “coming soon” page on your website to capture visitor interest. |
| 8. Get More Productive with the Right Software | Utilize customer relationship management, accounting, project management, and email marketing software to enhance business efficiency. |
| 9. Stock Your Inventory | Ensure sufficient inventory to meet initial demand. Monitor sales to make informed decisions on future inventory orders and prevent stockouts. |
| 10. Make Sure Your Business Stays Compliant | After launching, adhere to annual reporting and business permit requirements to stay compliant with legal regulations and deadlines. |
Completing this comprehensive checklist will lay a strong foundation for your eCommerce business, setting you up for success in the competitive online marketplace.
Frequently Asked Questions
What should be the first step when starting an eCommerce business?
Choose a unique and memorable business name that aligns with your products. Register the name to protect your brand identity.
How can I secure a domain name and website for my business?
Ideally, get your business name as the domain name. If unavailable, choose a related and easy-to-remember URL. Design a visually appealing and functional eCommerce website using platforms like Shopify.
What are the business structure options, and how can I register my business?
Business structure options include sole proprietorship, partnership, LLC, and corporation. Register your chosen structure by filing appropriate paperwork with the IRS, or hire a business filing company to assist you.
Do I need an Employer Identification Number (EIN) for my eCommerce business?
Yes, obtaining an EIN is essential for opening a business bank account and filing taxes. It acts as a unique identifier for your business.
Are there any licenses and permits required for an eCommerce business?
Yes, you may need sales tax licenses or home business licenses. Check with your city, county, and state authorities to ensure compliance.
How can I find the right vendors for my products?
Research and compare vendors to find the best quality and pricing for your products or materials.
When should I start marketing my eCommerce business?
Start marketing early by setting up social media profiles and writing blog content. Create a “coming soon” page on your website for interested visitors to sign up for updates.
What software can I use to improve productivity for my eCommerce business?
Utilize customer relationship management, accounting, project management, and email marketing software to streamline your operations.
How can I ensure I have enough inventory for the launch?
Stock your inventory adequately, aiming to have more rather than less. Monitor sales patterns to make informed decisions for future orders.
How can I stay compliant with legal requirements for my eCommerce business?
Stay organized by filing annual reports for your business structure and paying the required fees for permits. Set reminders to meet deadlines and stay on track.
Completing this checklist will ensure you’re well-prepared to launch your eCommerce business and thrive in the ever-growing online marketplace.
eCommerce Website Photo via Shutterstock
CorpNet offers business formations, filings, state tax registrations, and corporate compliance services in all 50 states. Express and 24 hour rush filing services available upon request. Click here to learn more.
