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Do you dream of owning your own online store?
Do you have great visions of working with a laptop while the ecommerce business is spinning on auto pilot sales?
Whether you are starting a small business for the first time or have been in the game for a while, this guide will teach you how to start an online store in 7 easy steps.
Our goal is to open and launch stores today, including products. You might even make your first sale!
Here’s a quick index to help you navigate through this guide:
Ready to get started?
Step 1: Decide on your niche
It basically means what you will sell and who you are selling to. Some first time entrepreneurs don’t put much thought into their niche.
Your niche influences many things, including:
- Your sales information
- How much effort you will need to put into customer support
- Whether you have repeat customers
That is why it is important to set aside some time to think about a strategic niche. Need help deciding? Take a look at these 10 flawless ecommerce niche selection strategies.
Your niche is broken into parts: price, audience, market opportunity.
First, let’s talk about pricing.
At the most basic level, we all understand this concept:
if you sell cheaper items, it is likely that they will buy more, but the average order value (AOV) will be less.
If you sell more expensive things, fewer people are more likely to buy, but the AOV will be higher.
Ok, so where do I draw the line? Is there a minimum price you must keep in mind?
Although there are no hard and fast rules, try pricing your items at $ 100 or more.
Here are the reasons:
After calculating the cost of doing business, warehousing and marketing, most ecommerce store owners end up with a 20-30% profit margin.
Let’s say you earn 20% on all the products you sell.
If you sell a $ 20 item, you only earn $ 4 on that sale, and if you sell a $ 100 item, you earn $ 20.
Think of it this way:
The amount of time and energy you spend processing and completing your order is same whether you sell for $ 20 or $ 100.
You can also get more money for your dollar (or in this case a dollar for your time), right?
On top of that, there are brand loyalty, popularity and longevity to consider.
Let’s start with brand loyalty.
Briefly, you want to avoid niches that are already dominated by household names.
Here’s an example:
Let’s say your headset is dying and you have to buy a new pair.
Either you take out your phone and go to Sony’s website (or Bose, Beats or Sennheiser) or you go to one of their stores (if you are the type of pre-purchase test product).
Image via: imgur.com
Compare that to this one else scenario:
Let’s say you remodel and decide that the chandelier is just what you need to connect jazz in the living room.
You will probably pull out your phone and google “buy chandeliers online” or “chandeliers free shipping”.
See the difference in behavior?
In niches dominated by several brands, consumers do not meditate about alternatives.
Their brand loyalty begins and they move straight towards the brands that capture their awareness.
Image via: themthdegree.com
Obviously, this does not bode well for new users in established markets.
So avoid these like the plague and stick to niches and products that do not elicit brand loyalty or a brand that is already top-notch for a particular type of product.
Then we move on to popularity.
I’m not saying you have to limit yourself to selling “trendy” products.
(In fact, this is probably a bad idea, as it might happen that your sales collapse after they resign.
Instead, you should give it a try identify a niche or product that is slowly but steadily growing.
To help, here’s a handy tool: Google Trends.
Just include the keyword and you’ll be able to see how many people search for the term (whether in the world or in a particular country).
For example, if you look at the term “airfryer” you will see a nice upward trend over the last 5 years.
The chart revolves every year around December (maybe air fryers are a popular Christmas gift?), But that’s okay.
It would be hard for you to find a product or niche that has a smooth path, but as long as the overall trend is positive, it’s good enough!
Last but not least, consider the longevity of your customers.
This part requires you to think a few steps ahead, but it is important to have that prediction when starting a business.
After making your first sale and running your business smoothly, the next natural step is to work to generate more revenue.
How do you do? Many entrepreneurs are trying to increase the value of their customers’ lifetime value (CLV), so they come up with strategies to refocus existing customers and continue to sell to them.
Here’s the tricky part:
Certain niches are absolutely awful for customer longevity.
It pays to be aware of these in advance, so you are not in a relationship for six months in your business and trying to figure out how to increase your CLV.
One example? Wedding niche.
People automatically assume that the wedding niche is very profitable because, well, people are willing to spend themselves on the big day.
That’s true, but what they don’t realize is that each customer’s “lifetime” is insanely short.
You might have 100 customers today, but those 100 customers would burn out in three months – and never come back.
While other ecommerce stores may work to retain customers and sell them to existing customers, this is a different story for you.
To grow your business, you’ll need to spend aggressively on ads and other forms of marketing.
You would be stuck in an endless buying loop. And when you stop, the sales drop.
Pretty scary thought, right?
Okay, before we move on to the next section, here’s a quick summary:
Nonprofit niches are usually associated with cheaper products, attracting a ton of brand loyalty, not growing in popularity, or lacking customer longevity.
Professional niches, on the other hand, are associated with more expensive products, do not raise brand loyalty, grow in popularity, and have customer longevity.
One more thing:
recommend not blindly entering a niche you know absolutely nothing about.
If you find a niche that meets the criteria above but is new to you, take some time to research the market.
At the end of the day, the more you understand your competitors and how a niche or industry works, the better your chances of building a successful online store.
Step 2: Choose between dropshipping or holding your own products.
The next step in starting an online business? Decide if you want a drop or hold your own!
Dropshipping has become super popular, but like anything else, it comes with its own set of challenges.
In this section we will introduce you the advantages and disadvantages of dropshipping over holding your own products so you can make an informed decision about the best choice for you.
Let’s start with dropshipping.
Image from Linkedin.com.
In some ways, drophipping can feel like the ultimate hack in an ecommerce store.
You have no stock, which means:
- You do not need capital to buy items
- You can list multiple items in your ecommerce list, without any risk
- No storage costs
- No picking and packing
Basically, dropshipping evens the playing field.
With dropshipping, almost anyone can enter ecommerce.
Even a guy who’s too broken to move out of his parents’ basement.
Even a high school student who still receives allowance from mom and dad.
But here are some good things about dropshipping:
First, you have zero control over fulfillment.
Certainly, the idea of putting your foot down while a third company looks after your fulfillment is quite tempting.
Image via: giphy.com
But here’s the problem.
When they squeak (and they want, at some point or another), customers will point their fingers at you.
For ecommerce stores that manage fulfillment in their business, it’s easy enough to apologize, resolve the issue, and move on.
But ship pilots who have to interact with manufacturers who are in another city, or even continent …
Obviously, it’s not easy.
On top of that, product returns are also problematic.
Most sellers on AliExpress (which is the most popular dropshipping platform out there) do not make a return.
So even if they do, it will take you forever to send the defective product of your customer to the manufacturer, pick up the replacement from him and send it back to your customer.
So you have two options:
1. State in the store rules that you do not entertain a refund at all
2. Enable refunds and absorb costs.
If you are starting out with a limited budget, you may be tempted to make full money.
But don’t do it. Bad!
You are a new brand that no one has heard of and you need to build trust with your customers.
Image via: sion3media.com
So, if you have strict money-back rules, they are likely to discourage your customers from shopping at your store.
Here’s what I recommend:
Offer is refundable, but only for defective items and write that you need to return the item in a shorter time (maybe 7 days?) To qualify.
At the same time, keep track of the returns you have made makes get.
If one manufacturer keeps sending defective products, stop them and search for another manufacturer instead.
Okay, on to the last downside of dropshipping lack of brand.
So here’s the thing:
You can request your supplier from not include any promotional material within the packages they deliver to your customers, which makes it less obvious that you are a Dropship.
But you probably won’t be able to get them to use any custom packaging with your company name or logo.
This means that your customers will not have the best experience in unboxing.
Basically, it will receive a box of unwritten printers with several labels on it.
There will be nothing on the box or in the box that would mean it is from your store.
If you’re just trying to make a quick return on ecommerce, that’s fine.
But if you want to build a brand, this is a major obstacle to the path.
Your May power suppliers to put their materials in a box, but this is rare and will probably cost you quite a bit of money.
And now – we’ve covered everything there is to know about Dropship, so let’s move on to keeping our own products.
The disadvantages are obvious:
- Buying stock costs money
- Saving supplies costs money
- Picking and packing costs time and / or money
Basically, keeping your own products is more expensive and is increasingly a pain.
Dropshipping can outsource certain aspects of e-commerce.
But if you hold your products, you are responsible for everything, and there are many more puzzle pieces to put together.
On the bright side, the benefits of holding your own products are incredible:
First, you need to ensure that your customer experience is perfect.
Here’s why this is important:
Statistics show that most unhappy customers won’t actually say you are unhappy – they will simply go away into oblivion and never again protect your store.
Image from HelpScout.net.
If you work hard enough to achieve it, you hurt your own customer retention rates (and revenue!) Without being aware of it.
To ensure that you do not inadvertently empty this revenue, you must increase it when it comes to customer service.
Have they talked…
- Shorter delivery time
- Well designed packaging
- Knowing your products inside and out
And, of course, fixing problems as soon as they arise.
Still not convinced?
When you mess up, your customers talk more about it.
Image from HelpScout.net.
Who no posted an angry Facebook status or complained to a friend about a company that had poor customer service?
You don’t want to talk about them for the wrong reasons, so be sure to get a user experience.
Another advantage of holding your own products is better profit margins.
When purchasing products from the manufacturer, you usually comply with the minimum order quantity (MOQ).
Because you buy in bulk, you get a reduced rate.
You can either stay on a higher margin or pass on a discount to your customers, which will increase sales.
Either way, it means more revenue for your store!
Last but not least, holding your own products allows you to brand on your nails.
We talked about how important it is to have your brand on packaging and / or products if you are long on that.
But it’s not just about consumers recognizing your brand.
Products delivered in well-designed, branded packaging are considered more desirable and attractive.
If you have an exhausted cardboard box (except for a shipping sticker in a language you do not understand), how would you feel?
Probably like you just bought something from the black market. Or maybe some guy in the basement is trying to fool you.
Image via: giphy.com
But if you get the same product in a beautifully designed package, you’ll be a little more excited. There is a reason why people record unboxing experiences!
Image from Nashvillewrapscommunity.com.
One last point about branding:
Awesome branding and packaging also encourages consumers to share your product on social networks.
You can even include a call to action on the packaging and get consumers to use your branded hashtag when posting their purchase on social networks. (Organifi does it really well.)
Before I move on to the next step, let’s talk briefly about the subscription model, which is extremely popular at the moment.
With this business model, your client determines whether they want a 3, 6 or 12 month subscription (or any other option you offer).
Either collect the full amount upfront or charge them each month.
The great thing about this model is that there is customer longevity. Your customers are constantly paying every month (assuming you are great, which I am sure you are!).
If you’re excited about the idea of repeating your monthly income (you should be! It’s the holy grail of business), read our guide to creating a business plan for your subscription.
So, quickly report:
- Dropshipping does not require capital and is the easiest method to get started, but it has the lowest profit margins and bad brands.
- Wholesale buying requires more upfront capital and the need for packaging and shipping, but it gives you higher profit margins and better brands.
- Subscription box stores can be anything, and just about everything is great.
Once you’ve chosen the business model to work with, it’s time for fun – design your business name and register your domain.
Step 3: Brainstorm your business name and register your domain name.
Your business name is not as much a make-it or break-up as the niche you choose, but it is still very important.
But if you are not careful, it could stop your online store from starting!
People obsessed with picking a name – I know I am. My advice is yes give yourself a hefty 1-2 weeks to choose a name if you are really stuck. Otherwise you will spend months trying to figure it out and never pull the trigger at the start.
Now, to some, and we don’t want to help you choose a name:
✅ DO NOT select a name that is easy to pronounce.
Spelling is hard, people! So make the sound name as it is written and make it easier to pronounce. Otherwise, people can go to the wrong URL.
ODO choose a name with some meaning.
If it’s related to the niche you’re in, it’s easier for people to “get” your business. If it has a deeper and more personal meaning to it, it will be a good medium for writing media.
✅ BE as original as possible.
Kentucky-based entrepreneur Victor Moseley has opened a lingerie store called “Victor’s Secret.” Victoria’s Secret immediately sued them.
✅ DO NOT select a name with an available .com domain.
While .cos and other domain extensions are increasingly popular, people will still instinctively type in .com. You want customers to find you as easily as possible!
❌ DO NOT select too long a name.
Your business name should be 1-3 words, MAX! I would strongly advise that you stick to one or two words. Again, the easier it is to pronounce and type a name, the more people will remember it.
❌ DO NOT select a company name that is a combination of words and numbers.
This is no brainer, but I had to add that. That is, unless you are trying look bold and unprofessional.
❌ DO NOT select a name that refers to a specific product or product line.
You might try to achieve this if you plan to focus your efforts on selling just one (phenomenal!) And highly innovative product. But what happens when you decide on a branch in the future? You will be stuck on that one product.
If you need more help finding your name, search for Shopify’s Business Name Generator!
Step 4: Choose products to sell.
You have chosen a niche. You have a business name and a URL. Now…
How do you figure out what the hell to sell?
Simple – by looking at social proof.
Return to the Amazon bestseller list and check out the best received products below your niche.
Do the same with Bestseller List on eBay.
And a list of top AliExpress companies.
Keep a document or spreadsheet of all your ideas. Some things to keep in mind …
- Avoid brand goods (we’ve talked about this before)
- Look for a sale price of $ 50- $ 100 for good margins
- Try to find things with low shipping costs
- Choose something you know a little about (and preferably care about)
- Find things you can import newspapers for (see reviews to see what people DON’T like about a product, then make one that’s better)
Need product ideas? Check out this post on trendy products.
Once you’ve selected the specific items you want to sell, it’s time to look for suppliers.
There are plenty of vendors on both AliExpress and Alibaba, but here are the differences:
You can buy products on AliExpress without having to comply with MOQs:
But if you are in Alibaba, most of their items come with MOQ:
If international suppliers are not your thing, SaleHoo has a Supplier Directory that lists high quality suppliers (and membership is pretty cheap).
Their market research lab is also quite useful for finding hot products:
This tool allows you to compare different products and rate them based on sales trends, competition ratings (i.e., are there many other stores selling the same product) and more.
If you are looking for a supplier, here are some tips to keep in mind:
- Communicate, communicate, communicate. The more you talk to them, the better they will feel. And don’t be afraid to jump on the phone.
- Avoid vendors with excessive or odd fees.
- Be sure to ask questions early and often. Their customer support is your customer support, especially if you have a Dropship.
To learn more about finding the right supplier, check out this guide.
Let’s move on…
Step 5: Create Your Website With An Online Store Builder
When it comes to creating an e-commerce store, Shopify is the most painless and annoying solution.
(We are just freezing biased. But take a look and try it out – I think you’ll agree with us!)
We’ll now walk you through how to create an online store using Shopify.
Step 5a: Sign up for a free trial
On the Shopify main page, you’ll see the option to sign up for a free trial.
You will need to enter a few details, but this will only take you two minutes.
Once done, you will be redirected to your dashboard.
Step 5b: Choose a template / theme
Scroll down from the dashboard and click the “Customize theme” button.
This will take you to the “Themes” page.
Once you are there, scroll down and click on “Explore Free Themes”.
Here you will find about 10 free themes to choose from.
If you don’t like it, you may decide to pay for the premium theme. Or, if you want something custom made, you can hire us to help.
Expert advice: This is not necessary now, but you definitely want to optimize the topic for conversions further down the road. Bookmark this article and take a look at these great Shopify applications: Sales Motivator, Product Discounts, and Customer Special Prices.
Once you’ve chosen a theme, it’s time to bring in your products.
Step 5c: Upload Your Products
Shopify is an eCommerce web site builder pretty user friendly, so this will be a breeze …
… just click “Products” in the left panel, then click “Add Product”.
Rinse and repeat until all your products are ready.
In addition to completing standard information such as product name, description, etc., be sure to include your meta description for better SEO!
For more information, see these articles:
Step 5d: Fill in the other pages
All products are finished?
Great – fill out the other pages now.
Using the same panel on the left, click on “Online Store”, which will open a secondary menu of options.
Click on “Pages” and then on “Add Page”.
First of all, you’ll need the About Us, Shipping and Exchanges, and Contact Us pages.
Check out this guide to creating a killer page about us (plus get a free template) and check out this guide to creating a refund policy that actually brings you sales instead of getting a refund!
Expert advice: If you’re not a great writer, don’t worry – with Shopify you can automatically generate sample refund policies, privacy policies, and even terms of service. But we’re not lawyers – talk to a lawyer if you have legal questions!
Here’s how it’s done:
Click on “Settings” (all the way to the bottom of the panel on the left) and “Checkout”.
Scroll down …
… and there you have it!
Step 5e: Review other settings
The last step before posting is to check your settings and make sure everything is correct.
On the Checkout page (which you used to create the policy) you can specify whether your customers want to log out as guests or whether they need to open an account before checking out. (Choose guests – make as little billing as possible.)
You can enable different forms of payment on the Payment Providers page. (PayPal and credit cards are a good idea! Bitcoin may not be a bad thing. See this article for more information.)
On the shipping page, you can set shipping prices for different zones. We have a huge guide to all the shipments of things you should check out.
On the Notifications page, you can customize the email your customers will receive after completing their order.
And you’re done with your site! Great job.
Step 6: Start a business and get a sales tax ID
Once you’ve acquired your site, your suppliers, and your products, it’s time to think about starting a business.
The main benefit is that your business will be a separate entity from you, the owner.
Essentially, these assets are not personally liable for what happens to your business, and your personal assets are protected from any liabilities that your business may have.
You definitely need to incorporate right out of the gate.
While incorporating your business protects your personal assets, you can start as a sole proprietorship without any official paperwork. However, you may be taking a risk doing this.
My advice is to wait until you make a certain amount (say, $ 1,000 per month) before you incorporate. That way, the business can pay for its own incorporation and you know you won’t be doing it for the long run.
Read this article to learn more about incorporating and making sure you’re doing everything legally.
Again, not lawyers – If you have questions about what to do, please consult with a business lawyer! Take our advice with a grain of salt.
Now let’s talk about online business sales tax.
Here’s what you need to know:
Once you create your own online store, have a sales tax nexus in any state that you have a physical presence (including property, employees, and inventory) in.
Let’s say contained in Michigan, and your office (or garage), employees and inventory are all contained within Michigan.
This means you only have a nexus in one state. You only have to pay sales tax on orders placed by customers in Michigan.
Fast-forward a couple of years later, and let’s say your HQ is still in Michigan, but you now have warehouses in Texas as well.
This means you have nexuses in two states.
While you can collect sales tax in all states you have nexus in, you need to get a sales tax permit before you do that.
How do you register for a sales tax permit?
Simple – go to your state Department of Revenue website and register there.
Some states’ sales tax permits are free, and others will cost you a nominal sum.
Once registered for your permit, the state will give you instructions on when and how often your payments are due (either monthly, quarterly or annually.)
A bit of a hassle to go through the paperwork, but not put this off! Illegal to collect sales tax without a permit in most states, and you want to get into trouble with the law.
Step 7: Market your new online shop!
Hang in there – just reached the last section of this bumper guide on how to start an online store.
You now know how to set up a company, how to set up your website, and how to meet your online business sales tax requirements.
All on the left is to create a marketing plan for your online store that we talk about in this section.
Content marketing and SEO
You probably already know this, but Search Engine Optimization (SEO) is Amazing.
You can have two online stores selling the exact same things, but only see phenomenally different results if only one store is search optimized, and the other ones.
At the end of the day, selling stuff online is really a numbers game.
You are trying to maximize the number of people who visit your online store.
And maximize your conversion rate.
And maximize your retention rate.
You get the idea. Where content content marketing and SEO come in – high quality content helps you rank, drive traffic to your store, and build trust with your visitors, which increases sales.
I decided to get into the nitty gritty, but check out this guide to eCommerce content marketing.
Social media marketing
One golden rule of marketing: you want to have a presence where your consumers are hanging out.
So be sure to keep your social media pages updated and active!
I recommend setting goals for your various social media channels, because if you’re clear on what is it you want to achieve, you can reverse engineer the steps to get there.
I recommend coming up with a content calendar.
You can create and schedule your posts ahead of time and make sure you’ve always got something planned for the major holidays.
If this sounds like a lot, don’t sweat it.
Just choose ONE channel that you want to focus on first, and start small.
Also: Link your social media to your store by learning how to add your Facebook pixel to Shopify (plus 5 easy tips to maximize it).
Most first-time entrepreneurs are hesitant to try PPC (because they’re worried they’ll end up busting their budgets).
I always get the same question:
How should I spend on PPC? Is it expensive to run these ads?
To which my reply is:
It depends – I know some ecommerce stores who spend $10k or more per month.
To someone who isn’t well-acquainted with PPC, this might sound like an insane amount of money.
But what if I told you that these companies have a 100% ROI on their PPC ads, meaning they get $20k worth of sales for every $10k they put into PPC?
That $10k ad spend doesn’t sound so ludicrous anymore, does it?
Well, here’s some good news:
According to Google’s Economic Impact Report, businesses make an average of $2 in revenue for every $1 they spend on AdWords.
So even if you’re not a wizard at PPC and your ads are mediocre, you can still make a decent profit off them.
To get started, read this guide on competitive PPC analysis.
Also, don’t forget that PPC isn’t just limited to Adwords – you have Facebook ads as well. Here’s a guide that will help you set up Facebook retargeting ads.
Whenever I tell online store owners the statistic I’m about to share, their jaws always drop.
You know how I just mentioned that businesses, on average, make $2 for every $1 they spend on Adwords?
Well, with every $1 businesses spend on email marketing, they make an average of $44.
Yup, you read that right. $44 for $1. Money machine!
Don’t let anyone tell you email marketing is old-school, or outdated, or boring…it’s actually insanely powerful and effective, i one of the most profitable types of marketing that exists.
Here are some resources to get you inspired:
Influencer marketing can pay huge dividends…
…if you do it right.
There are loads of fake influencers out there who bought their followers. Avoid those at all costs!
In fact, to navigate the muddy waters and find the golden nuggets, check out this guide.
Parting Advice: Plan your marketing
So we’ve just covered a lot of ground in terms of marketing strategies, and it’s understandable if you feel a little overwhelmed at this point.
Take a deep breath, and stay with me.
All you need is a high-level plan which will allow you to have a birds eye view of everything that’s going on.
Start off by determining your financial goals for the year. How much revenue do you want to hit?
Then break it down and figure out your monthly revenue goal.
Based on estimates, work out how many products you need to sell each month.
Once you know how much you need to sell, start working on your action plan.
For more details, read our guide to planning your year. It even comes with an Excel sheet you can use to work out your sales projections – so go ahead and plug your numbers into that template!
A final word on starting an online store
Congrats, young Padawan.
You’ve made it all the way to the end of this guide…
…and you’re now a fully-fledged expert on how to open an online store.
Before I leave you, here’s one final piece of advice:
Don’t wait for that “perfect” moment.
Just go ahead and start an online business today!
As George Patton famously said, a good plan violently executed now is better than a perfect plan executed next week.
And, let’s face it…
You might tell yourself that you’ll start your own business online next week when things are less busy at work.
But when next week rolls around, you might be down with the flu. So you postpone it.
And the week after? It’s your partner’s birthday, so you postpone it again.
And the week after? Your dog is due for his check-up, so you postpone it again.
You get my point.
There’s never gonna be that one moment where the stars are all aligned. So stop waiting for that moment to happen, and just make it happen instead!
Looking to hit the ground running? Bold’s apps for Shopify are designed to increase average order value from day 1. We know you aren’t looking for extra startup costs — that’s why you can try any of these conversion apps FREE for 14 days:
- Bold Upsell – create custom upselling pop-ups before and after checkout
- Bold Discounts – run storewide sales, daily deals, and flash sales
- Bold Bundles – easily bundle products together or run BOGO (buy one get one) offers
If you found this guide useful (and I hope you did, because I poured my heart and soul into it!), please share it with your friends who are also aspiring entrepreneurs.