how to start an online store

Saturday, January 03, 2015

By 2023, ecommerce sales are estimated to account for nearly a quarter of worldwide retail sales. It’s no wonder why: the world has grown not only more modern, but increasingly global. There are virtually no limits nor constraints on your potential online customer base. In a physical shop, you could be limited to a local neighborhood, town, or city; but online, those limits are expanded worldwide.

Additionally, ecommerce is the marketplace of convenience for both merchants and customers. Customers can effortlessly shop from the comfort of their homes, while merchants can sell and manage their online storefronts from wherever they choose. Ecommerce has revolutionized retail and made some industries and products once thought to be too niche and unprofitable into lucrative and practical investments.

Because some prospective merchants may be curious about how to enter the new online frontier or how to incorporate ecommerce into their physical storefront, this article will focus on how business owners can take full advantage of the online marketplace and what they’ll need to do in order to sell online.

Decide on what to sell

Offer products that you love: Choosing to sell a product that brings you joy to make or solves a problem you care about can go a long way in keeping you determined and feeling fulfilled.

Keep an eye on market trends: Internet trends have a powerful ability to drive consumers into various markets. It’s not at all rare that one video going viral can lead to huge rises in stocks, service orders, or products flying off the virtual shelves.

Stay informed on trends through social media and act quickly, and you could see a huge boost in traction and sales. Using the COVID-19 pandemic as an example, items like casual wear, coffee accessories, and home entertainment saw significant increases in orders due to people spending large amounts of time being stationary at home. Conversely, in-person dining, retail shopping, and the tourism industry saw cutbacks and profit losses.

Research online forums: Product reviews, forum postings, and social media can help in figuring out what consumers are interested in buying:

  • See a lot of negative reviews for a product with a major defect? Fix it!
  • Reading a lot of complaints about a DIY guide or “how-to” posted online being too difficult? Find a solution to make the service easier!
  • Seeing a lot of “I wish _____ existed” comments on social media? Make it a reality!

Commoditized vs. niche products: Commoditized products are items that play to a foundational need in humans. These products make up the bulk of big stores and are safe and consistent bets for operators to stock up on. Pet supplies, food, clothing, home decor, and baby items are examples of commoditized products. Many popular chains that have stood the test of time have built their legacy off supplying commoditized products.

While there is almost always an audience for commoditized products, the market for these types of products is typically saturated and highly competitive. If you have the resources, commoditized products are a safe bet, but they might not be the product that helps you gain traction or a particular notoriety when entering the online marketplace.

Niche products, on the other hand, are a far more inviting entryway into the online marketplace, albeit with their own drawbacks. These are products that are more specific and attract a smaller, but passionate customer base. Big stores typically also carry niche items on top of commoditized items, balancing out the risk and reward, and attempting to maximize products with both the general population and more distinct groups.

Trading cards, video game character plushies, fidget spinners – these are examples of niche products that have overwhelmingly paid off for big chain stores to the point that these items are now essentially regarded as commoditized. However, for every niche success a chain store has had, they’ve also had their share of failures, investment losses, and items they’ve had to sell at a fraction of the price they initially asked for in an attempt to break even.

Niche products are certainly a risk when it comes to being able to predict whether a consumer base will grow around them; but, if that audience does form, they are typically loyal and passionate, and competitors have to catch up and compete with you for their commitment.

For these reasons, both pathways come with their own benefits and struggles; but, generally speaking, niche products are easier (and arguably more enjoyable) to sell in order to enter into the online marketplace, and commoditized options are a safer bet if you have the means and a developed audience.

Determining the content management service you will use:

Shopify and BigCommerce: Shopify and BigCommerce are beneficial for those with large production capabilities looking to sell to distributors/merchants, who in turn also benefit by them being able to repackage and sell smaller quantities at a higher price to their customers. This process of selling large quantities of products between businesses is known as “wholesaling”.

If you’re looking to get into the supply market whereby you don’t have to worry as much about growing a customer base but instead quality relationships with other businesses in need of your product, this would be your best bet. Or, if you’re trying to get into the commoditized product field, this is a good option to buy these common products in bulk at an affordable price to then distribute yourself. Note that Shopfiy and BigCommerce are also platforms that can host small business websites as well, and are not limited to only wholesale transactions.

WordPress and Wix: WordPress is a content management system that works across virtually all servers, and all its combined webpages take up roughly 40% of the internet. This platform allows for businesses to simply list their products online and have customers buy their products without having to leave their homes.

Today, WordPress websites have built in plug-ins, templates, and customization options so you can design your website yourself and represent yourself exactly as you want. They also come equipped with tools like product management, blogging, social media connections, etc.

Wix is similar to WordPress but offers more technical support and hosting options. WordPress works in conjunction with hosting websites, while Wix offers domain services.

If you want to maximize creative control, both WordPress and Wix are great choices. WordPress will most likely be more desirable for those with coding experience and domain experience, while Wix will be more inviting for those newer to website designing and web hosting. However, with both, you’ll have to gain traffic and grow a consumer base yourself.

Buy and create a domain for your business: After determining what you’re going to sell online, you’ll want to purchase a domain in order to have a dedicated website for your customers to find and buy from you. As mentioned earlier, Wix is a popular choice for this service, as is GoDaddy, Namecheap, and Buydomains.

After deciding on a web host to secure a domain from, you’ll hopefully be able to secure a domain name that is the name of your business. Many customers will assume they can find your website by simply adding “.com” to your business name. If the domain name for your business name is taken, consider changing it, buying out the domain name, or, if changing your business name isn’t an option, then get creative with the domain name. For example, if your business name is “Summit Ice Cream” but “” is taken, then perhaps try these options:


Register your business entity and acquire a business account

Now that you’ve established what you’ll sell and which ecommerce platform you’ll be operating from, your next step is to establish the extent of your business’s entity.

If you’re just starting out, have no employees, and are making less than $1,000 per month, then you’ll most likely want to operate as a sole proprietor, which means you’ll simply use your social security number for your business’s tax purposes.

If your business begins gaining traction, or if you start hiring employees, you’ll need to acquire a state Tax Identification Number (TIN) and an Employee Identification Number (EIN). You’ll want to do this to open a business account and have your business be a separate entity from you, with its own taxes, responsibilities, and ordinances.

If you’re unsure whether your ecommerce store requires obtaining an EIN, you can check out the Internal Revenue Service’s guide regarding this (see: IRS | Does your business need an EIN?).

Connecting with a payment provider

Built-in platform payment systems: Something to keep in mind is how you’ll perform transactions and which payments you’ll accept. Some platforms, specifically larger ones, have built-in payment options you can opt into. Note that these built-in options can cost money, take up a percentage of your profits, and cost more than alternative processing options.

While it seems that the obvious choice is to accept credit card payments, it’s good to keep in mind that digital payment transactions like PayPal, Apple Pay, etc., account for roughly a quarter of online sales. Other options like cryptocurrency also account for a significant portion of sales. With this in mind, it’s always a good idea to have some variety in payment options. One approach would be to accept credit cards and one form of online transfer service.

Team up with a payment processor: While using built-in payment processors is convenient, they can become tricky once your business gains traction. An increased consumer base means you’ll need to start incorporating anti-fraud protocols, protect customer’s sensitive data, and stay informed and follow tax regulations.

For these reasons, teaming up with a payment processor is a smart long-term decision that will seamlessly fit into whatever business you’re constructing, and can be customized to fit your exact business needs. They’ll allow you to accept all popular forms of payment seamlessly and securely.

A good payment processor will save you time and money, allowing you to focus on strengthening your relationship with customers, researching trends, and managing your products.

Choose between dropshipping or manufacturing your own products

Purchase from a wholesaler/manufacturer: This method involves buying items in bulk (wholesaling) from a distributor and then selling the items at a higher cost through your storefront. This entails maintaining a good relationship with a manufacturer/supplier, assessing the quality of the products, and then shipping the items to your customers.

The benefits of this method is that with the right negotiation and a significant customer base, you could make the most profit and have the most control over your ecommerce business.

The downsides are that it takes a considerable amount of cash to get started, and if you’re unable to sell off what you’ve ordered, then you can lose a substantial amount of money. This makes it an especially risky option for those just entering the online marketplace. Additionally, you have to store the products and either make room for them in your home, rent storage space, or partner with a third-party fulfillment service.

Dropshipping: Dropshipping is a popular supply method for newcomers and those who haven’t yet built a consumer base, because unlike wholesaling, dropshipping has no initial costs.

This method involves working with a supplier who offers dropshipping, which means that they’ll supply your product and package and send the product to your customers. This means that you only make money, and acquire costs, when you make sales.

This is the safest approach to entering ecommerce; but keep in mind that you lose out on some control and profit due to having to work through an intermediary (see: What is dropshipping?).

Make the product yourself: If your product is centered on an item or service that you’re passionate about, then you may just want to supply the product yourself. This is especially prevalent when dealing with more niche products or items that only you can make.

One difficulty with handling production yourself is having to limit your orders so as to not get overwhelmed. This can mean losing out on profit you would normally receive if you had a more consistent and substantial stock.

But it also means you get to:

  • Take joy in creating items you love
  • Proudly sell hand-crafted quality items
  • Offer customization of products
  • Pay production costs only as you receive orders

Many individuals have started online selling simply to live out their hobbies and side gigs, but it’s not rare for these side hustles to gain traction and turn into lucrative careers.

Developing a marketing strategy

Social media: It’s helpful to think of making a social media account for your business in the same way you’d make a personal account to get hired for a job. You want your business to appear:

  • Articulate, well-spoken, and specific with what you do and do not offer.
  • Clearly visible with professional photos of your products that show them off at their best.
  • Easily reachable with your contact information clearly located.
  • Well-reviewed and trustworthy with customer reviews acting as references and customer engagement acting as community approval.

Furthermore, many social media sites have advertising programs where your posts and business page gets pushed to users whom these sites have categorized as likely being interested in your products.

Search engine optimization (SEO): A social media page for your business not only acts as a representation of your business, but can also greatly boost its SEO, which is basically the chance that a customer sees your internet storefront as one of the top choices when using search engines like Google, Yahoo, and Bing.

Before covering how to increase your SEO on search engines that serve the entire internet, it’s first good to know that some platforms have their own search engines and built-in tools you can take advantage of to increase your outreach on these sites.

For example, if you make a post on your Facebook page with hashtags, which is achieved by using the # symbol followed by a word (e.g., #improveSEO), then when people make searches containing these words on Facebook, they are more likely to come across your posts, and therefore your products, in turn boosting traction to your online storefront and increasing purchases.

Instagram and Twitter also have their own search tools and make use of hashtags.

It’s unlikely that people will randomly search for your business or product names, but it’s highly likely they will search for keywords pertaining to your business and your products, so it’s a good habit to incorporate them regularly. While doing so will probably help your SEO on these specific sites, it can improve your SEO on search engines like Google if they gain enough hits and engagement. Two ways to increase your SEO on these more extensive search engines are through blogging and vlogging.

Blogging: The SEO process consists of Google scanning through all the information you release to the public (item descriptions, updates, prices, bios, etc.) in order to show customers the most relevant results. The more information Google has, coupled with the more engagement your website and social media have, increases your chances of having your business pushed to the top of search result pages.

That’s where blogs come in. Blogging on your social media or WordPress gives search engines a wealth of information to work with that you get to control. At first, it might not seem like you have a lot to write about, but if you break down the components of your business, you’ll begin to see quick write-ups you can hammer out relatively quickly:

  • Day recaps/weekly reviews (essentially keeping a business journal)
  • Product updates
  • New items in the store
  • Why you started your online business (people love supporting passionate people)
  • Team member bios
  • Detailing the process by which you make your products
  • Things you’ve learned/things you wish you knew (write these after spending some time in the online scene)
  • Promotions and sales

If you look closely, you’ll see a mix of posts above: some are store specific and others are more general content.

General content posts are great for attracting readership and accumulating interest in your brand, business, and online persona. These types of posts are easier to push on search engines and are typically more searched for.

The hope is that when potential customers read these more general posts, they’ll dig deeper and find your ecommerce website, or come across your store-specific posts and learn more about your business and support you by buying some of your business’s products.

Writing tutorials on your blog is a highly effective example of this. Suppose you’re the owner of “Summit Ice Cream”. Rather than simply listing your new ice cream spindle product, write up a blog post titled, “How to best spindle your own ice cream.” Then, at both the beginning and end of your blog post, include links to your spindle product and a quick sentence or two as to why it’s better than any other one on the market.

Not only will this increase traction to your website, bolster your SEO, and raise sales, but it will also build your brand’s persona as being helpful, passionate, and informative.

Vlogging: Vlogging is blogging in video form rather than written posts and is a great way to take advantage of video sharing platforms like YouTube and Vimeo.

All the blog post examples are possible here, just in a different format. Vlogs tend to be more popular among younger generations for being more visual and for being shown on more trending websites, whereby written blogs fare better among older generations and people looking to find quick answers to problems on Google.

Vlogging can take a bit more effort than blogging, but you’d be surprised how many viewers are content with simply watching someone talk about a product, guiding them through a tutorial, or reviewing a service without any special effects or professional editing. You just need to have an adequate camera and microphone to get started.

Here’s a good tip: if your main outlet is blogging, then simply use your blogs as scripts for vlogs. And if your main outlet is vlogging, then use your vlog scripts as blogs as well. Also, writing out your vlog script in the description of your vlog video will boost your SEO.

Always remember to have links to your main storefront/business website on all your blogs, vlogs, and social media!

Email marketing: Emails are still a popular way to get information out to your customers and build a loyal consumer base, but it probably shouldn’t be your only outreach. Newsletters aren't quite as popular as they used to be, but there is a new modern approach replacing them. This involves having an option at checkout for your customers to receive new product alerts, blog posts, and general updates from your business sent to the email address they use to complete their purchase. You get a free list of email contacts to interact with, so it’s a pretty safe and easy option to integrate.

Closing thoughts

Ecommerce is a new frontier, with new sets of rules, trends, and opportunities every year. For many business owners, the creativity and freedom it allows is too good to pass up, and has led to countless merchants being able to turn their passions into lucrative pursuits. While it may take time to see traction and generate sales, now is the perfect time to claim your stake in the online enterprise.

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