Have you ever had a great idea for a product but didn’t know how to start a business from scratch?
Jason Hernandez started Pooch Selfie and is on track to make $250k this year selling one product! We’ll show you how to do it too.
Jason’s path started with a product idea that originated while his wife was playing with their dog and trying to get a picture.
From there he created a prototype, started a KickStarter, and 10 days later got the funding through a featured article on Buzzfeed.
A couple of years later, he got featured on Shark Tank and is making a great living selling a product he loves.
If you want to start an e-Commerce store keep reading. We’ll walk you through the process of how to start an online business from your home.
We’ll cover everything you need to know to start an e-Commerce business including:
- Coming up with product ideas
- Choosing a business name
- Writing a business plan
- How to register your business
- Creating a prototype
- Applying for patents and trademarks
- Ways to fund your new business
- Finding suppliers, employees, and freelancers
- Setting up your website
- How to market your business online
- How to start selling products
- Shipping your products
In each step, we’ll share tips from Jason, links to complete the steps, and relevant blogs on how to start an online store. Keep reading to learn how to come up with a good idea.
Step 1: Coming up with e–Commerce business ideas
The first step to starting an internet business is coming up with business ideas.
Starting an online business will require learning a lot of skills, so you’ll want to start by considering what products you want to sell.
There are some questions I ask myself when considering whether to start selling a new product:
- Have products like it already been created?
- Do I like the product?
- Do I know people who will buy the product?
- What is the target market?
- How large is the target market?
- How will I reach potential customers?
An e-Commerce business will typically involve selling products or services. There are 4 basic e-Commerce business models that business owners use:
- Selling physical products from other businesses
- Creating, selling, and fulfilling orders for your own products
- Designing products and clothes using Print-on-Demand companies
- Affiliate marketing
Keep reading to find out more about each to decide which is right for you.
Selling physical products from other businesses
This type of e-commerce business focuses on selling products or services that are purchased from a distributor.
This type of online business will normally require enough space to hold inventory for products to sell.
This business model is typically best when you also have a brick-and-mortar store because of the space requirements.
Creating, selling, and fulfilling orders for your own products
If your product ideas are like Jason’s, this is the business model you’ll want to use. His product includes a tennis ball with their logo and a clip that attaches to your phone to hold the ball.
In this business model, you’ll have to create the products to sell (or pay a manufacturer to create the products and ship them to you) because it’s your invention.
You’ll need to patent your invention and trademark the logo and any slogans to protect your intellectual property. I’ll cover the process of applying for trademarks and patents in a later section.
This type of e-Commerce can also be used to sell software that you create.
Most of the advice in this blog will be focused on this type of e-Commerce store, but it applies to other types of e-Commerce businesses as well.
Design products and clothes using Print-on-Demand companies
Starting an e-Commerce business is easiest by using a print-on-demand company, like Printful. In this business model, the e-Commerce process is really simple.
To start an e-Commerce business with print-on-demand, product creation consists of:
- Creating the artwork
- Choosing the products you want to sell
- Adding the artwork to the product
- Setting the markup
- Integrating Printful with your e-Commerce platform(s)
When you sell online, Printful prints the product(s) and ships them to the customer.
This is the easiest option to start an e-Commerce business because they handle everything related to the production and shipping of the products.
You get to focus on marketing and other tasks that help grow your e-Commerce store into a successful small business. If you have tech, marketing, and design skills, this is the best online business to start.
This is the e-Commerce business to start if you’ve ever wondered “How do I start an e-Commerce business with no money?”
Affiliate marketing is similar to e-Commerce but is typically used by tech companies for purposes of growing their sales force at a low cost.
Basically, you recommend the products or services to other people or companies and get a percentage of each sale that you generate.
Tech Radar has a great list of affiliate marketing opportunities for beginners. Check it out to try some for yourself.
Step 2: Choosing a business name and logo
After you’ve decided what kind of an e-Commerce business to start, you’ll need to select the business name. The name should be something unique, identifiable, and describe what you do.
Pooch Selfie did a great job with the name and logo. If you look at their logo, it looks like a dog staring at a ball and the name Pooch Selfie. The eyes are made out of the “OO” in pooch.
You can tell from the logo that the target audience is dog owners who want to take pictures with their dog.
You’ll want to make sure that no one else is using the name by doing a business name lookup for your state. The link in the previous sentence is a guide for each state.
An e-Commerce business will typically need to trademark its name, get a DBA, and get the domain name for their e-Commerce business during this time.
Make sure you check each of these to ensure the name is available for all three before choosing a name. Let’s look at each.
A trademark protects identifying aspects of your e-Commerce business like the name, logo, slogans, and anything else you want to make sure no one else uses without your permission.
You can apply for them at the USPTO.
While an e-Commerce business owner can do the trademarking process on their own, it is a bit challenging.
You are required to apply for it for every category of product you intend to use with the logo or name.
Some of the categories are difficult to distinguish between, so I strongly recommend having a company help that does it all the time. LegalZoom offers this service if you need help.
Doing Business As (DBA)
A DBA may also be called a fictitious name. It’s basically the name your e-Commerce business will be operating under. You can find the requirements for your state at DBA Filing Online.
A domain name is where people will find your e-Commerce store online. You can buy the domain name through sites like:
If you are using a web builder, you can also buy it directly from them. For more information on web builders and building your own website, check out our post How to Create a Website.
The most important things to remember about domain names are:
- Make it easy to remember.
- .com is the most familiar. Use it over other ones like .net.
- If you can afford to buy it for the long term, 10 years, there is slight preferential treatment for sites that have a longer history.
Keep reading and learn more about how to start an e-Commerce business.
Step 3: Writing a business plan
According to Harvard Business Review, entrepreneurs who write a business plan are 16% more likely to be successful. That’s not surprising because a business plan serves two important purposes:
- Guides decision-making.
- Helps get financing and buy-in.
At a minimum, a business plan for an e-Commerce business should explain:
- Your story about how you came to the idea.
- The problem you’re solving.
- The solution.
- The market conditions.
- The organizational structure.
- Your business strategy.
- Your marketing strategy.
- Your current progress.
- Your budget.
- Your funding needs.
To learn more about writing a solid business plan, check out How to Write a Business Plan.
Step 4: How to register your business
You need to establish the legal structure for your e-Commerce business.
For best results, hire legal representation that has experience starting a business, like an attorney, accountant, or tax specialist.
They’ll help you get your business started quickly so you can focus on getting your store up and running
Licenses, permits, and tax forms
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. Keep reading for information on different legal structures.
A sole proprietorship is the easiest way to start a store, but the structure doesn’t protect the owner’s personal assets from legal issues.
That means if something goes wrong, you could lose both your store and your home.
I’d only do this if you really need to save some money at the very beginning. As soon as you can, convert it to an LLC.
Limited Liability Corporation (LLC)
An LLC is the most common business structure used in the United States because the company protects the owner’s personal assets.
It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. Here’s a link to find your state’s requirements. People may register in specific states due to the cost of doing business.
Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.
Partnerships and corporations
Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC.
Investopedia has good information about partnerships and corporations.
Apply for an EIN
Every business operating in the United States needs an employer identification number.
It’s like a social security number for your business. Apply for it on the IRS website. It’s used on tax forms when filing taxes and to tie employees’ pay to the proper employer.
State/Local Business Licenses
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. Keep reading for information on different legal structures.
The U.S. Chamber of Commerce has a ton of information on unemployment and also offers links to each state agency that handles state unemployment.
You’ll have to pay $420 per employee on a federal level plus any state UI.
Creating a prototype
If you are trying to create your own product for your e-Commerce business, you’ll need to create a prototype. A prototype is just an example of how your product will look.
Jason told us when he was creating Pooch Selfie:
One of the biggest mistakes I see a lot of entrepreneurs make is they try to spread themselves too thin.
When designing a new product, focus on getting it right before taking on a second, third, or more. Getting the process down for one will make the next release easier.
Freelancer.com has a decent guide on steps to creating a product. They break it down to:
- Sketch out the basic idea – You can do this with a pen and paper
- Define required features
- Create engineering drawings
- Source materials
- 3D print a prototype
I’ll cover most of these in the following sections, but I’m not going to explain how to draw an idea because we’ve all doodled at some point.
Define Required Features
When designing a product, you need to consider what it is supposed to do. In the case of Pooch Selfie, the product requirements might have been something like:
- Hold a tennis ball.
- Attach to any cell phone.
- Made of plastic.
- Dimensions of parts. For instance, a tennis ball has dimensions between 2.575-2.7″. That means you’ll need the part that holds the tennis ball to have a space that is the diameter of a tennis ball.
Color requirements might also be on this list.
Create Engineering Drawings
I’ll discuss printers and finding manufacturers in greater detail later.
Unless you have experience with creating engineering drawings, the programs are too complex to pick up quickly.
It’s best to hire someone to create them based on your drawings.
Applying for patents
Patents are to protect your intellectual property and keep others from stealing your ideas. The USPTO has a ton of information on Patents and the forms to apply for one.
Jason discusses patents in our interview with him:
He says :
For information on how different platforms protect intellectual property, select the platform you are interested in:
Please note, you should expect fairly similar results from Instagram and Facebook policies as Instagram is owned by Facebook.
Ways to fund your new e-Commerce business
Starting an e-Commerce company doesn’t cost a fortune.
We’ve talked to a ton of online business owners, and the costs of starting an e-Commerce business can range anywhere from under $1,000 to $250,000 if you are starting a franchise.
In our interview with Marcus from Portland Gear, Marcus suggested beginners use the following if they wonder how to start an e-Commerce business :
- A print-on-demand company. I find Printful easy to use.
- Social media marketing of less than $500/mo.
Hear from him here:
Meanwhile, Jason started Pooch Selfie using Kickstarter to raise approximately $7,000 for an injection molding tool.
He told us:
We’ll discuss his challenges with getting the Kickstarter right in the marketing section because he found getting the marketing and copy for the Kickstarter campaign to be the most challenging.
From a funding standpoint, common funding paths include:
- Personal funds, savings, 401K loans
- Loans from family or friends
- Business partner(s)
- Credit cards
- Home equity loan
- Rollover for business startups (ROBS)-these are similar to 401K loans, but with different requirements
I think it’s worth noting that the majority of these options will involve contracts, and you should consult one of our agents for help on getting started. Alternatively, you can search “corporate lawyers near me.”
Finding suppliers, employees, and freelancers
One of the biggest challenges that you will face when you start your e-Commerce business is finding suppliers, employees, and freelancers.
I’ve discussed great places to find freelancers earlier, but let’s look at what business owners will need to consider when starting their e-Commerce businesses.
Depending on what business model you choose when starting an online business, your skillset, and your other obligations, the approaches to each of these may be slightly different.
Let’s look at suppliers first.
What kind of suppliers or vendors will I need to find to start a small business online?
Regardless of what kind of e-Commerce company you are starting, there are certain resources every e-Commerce business needs. Online businesses will always need to pay another company for the following:
- An e-commerce website, like Shopify
- A payment processor
Depending on your niche and business skills, you may also need to develop relationships with:
- Distributors (for all but affiliate marketing)
- Manufacturers (for creating your own product idea)
- Raw materials suppliers (for sourcing materials for your own product ideas)
- Marketing agencies- If you need to outsource marketing
- Legal and accounting firms- For your legal and financial advice
- Software development companies- For Tech issues beyond what you and employees can cover
Are you starting to ask yourself, “Is starting an e-Commerce business worth it?” Check out our e-Commerce business for-sale listings.
If you’re still excited to learn how to start an e-Commerce business, keep reading for tips on setting up your e-Commerce site.
Setting up your e-Commerce website
An e-Commerce website is your portion of the internet where you can sell your products online and have full control of the layout, content, and customer data.
Every brand needs a website even if it is not the primary driver of revenue for your company.
E-Commerce differs from other websites because it handles the sale of products, which means you’ll have some special requirements when starting an e-Commerce business.
The primary differences between an e-Commerce platform and other sites will be some of the pages, including:
- Product pages
- The backend of the platform
- Cybersecurity requirements to protect your customers’ credit card information
Product pages are dedicated to selling a specific product online.
Customers expect certain information from a product page. Anyone who wants to sell products to their customer base should follow these best practices:
- Multiple pictures of the product. I suggest following Amazon photography specs as they are the leader in e-Commerce sales.
- Capitalize the 1st letter of each word in the title but don’t use all caps. Make sure the brand and product name is in the title too.
- Include the price, quantity, and an add-to-cart button.
- Product descriptions should communicate the purpose of the product, important features, dimensions, care instructions, and warranty.
- Product identifier that is used to differentiate products. To learn about them or buy some for your products, go to the GS1 website. You’ll need a separate barcode for each variation of size, color, style, or quantity.
- Quick checkout buttons, like the Checkout with Paypal button, are fabulous for conversions.
- Manufacturer information if it is not your own brand.
Modeling your pages after Amazon’s pages makes a lot of sense because potential customers are familiar with their layouts. Check out Amazon’s Quick Style Guide for more information.
The e-Commerce platform back end
An online store has a lot of features that other websites might not.
Given most e-Commerce businesses sell on multiple platforms, there are elaborate backends that help manage your business. The most common services to run an e-Commerce store are:
I’ve used most of these at different times. I personally prefer Shopify because I find its interface easier than the others, but most have either a completely free version or a free trial.
Make sure to integrate the backend with popular sales channels like Amazon, Instagram, and Facebook.
The downside of Shopify is it uses a proprietary code called Liquid that you’ll need to familiarize yourself with if you want to do extensive search engine optimization or custom coding.
This limits the number of developers who can help you.
If you are going to build your store yourself, I would recommend looking at each of them to see which you find least difficult to use.
Check out our blog How to Create a Website (in 9 Simple Steps) for a more in-depth look at how to build a website.
E-commerce is a target for cybercriminals everywhere. According to Magneto, e-Commerce is the most vulnerable industry to cyber attacks.
That’s no surprise given how easy it is to start an e-commerce business.
While these are complex, they will help protect your sales and customers to reduce the chances of a cyber-attack costing as much money as you make.
If you’re still not confident that you can protect the brand name with technology, talk to your insurance agent about cybersecurity insurance.
Payment processors are responsible for collecting e-Commerce payments from customers.
The majority of e-Commerce website payment processing is through PayPal. Other payment processors include:
All of them include similar features and pricing. If your store has the option to integrate with them, offering the payment options your target customers want can increase sales dramatically.
I know a platform like Shopify allows multiple integrations fairly easily.
Distributors, manufacturers, and raw materials for a new business
Distributors can play multiple roles for an e-Commerce business. Distributors can help an online business with:
- Receiving brand-name products you need to sell to your customers.
- Shipping your products to online orders.
- Shipping bulk orders of your products to brick and mortar stores.
Jason told us:
As a small business, it can be difficult to keep up with business if you grow too quickly. Distributors play a huge role in helping start a successful e-Commerce business.
Print-on-Demand companies play the role of both manufacturer and distributor, but you are normally paying for all those services in their costs.
You’re typically paying 5-7x for the service as you would if you source the products yourself and create them, but are saving time and paying as you sell online.
To learn more about print-on-demand companies, check out this Wix blog.
The best ways to find distributors are:
- Search “Become a (Insert Company Name) Reseller,” then go to the link for the company and apply to sell products online.
- Go to trade shows.
- Search “fulfillment services near me” to find distributors near you.
The same advice goes for manufacturers and raw materials.
One of the challenges I have seen for new e-Commerce business models is many new business owners want to meet people they are considering hiring as suppliers.
If the supplier is not in the same location as you, it can make scheduling meetings challenging.
Another challenge I have seen is not comparing pricing options. One of my clients made the mistake of ordering a single roll of fabric from China and paying for shipping himself.
The shipping was nearly $1,000 compared to a $100 roll of fabric. Meanwhile, he could have paid $300 for the same roll in town. Comparing alternatives makes it easier to sell online for a profit.
Hiring Employees and Freelancers
It is nearly impossible to have all the skills you need to run online businesses and sell products. You’re going to need other people to help when you venture into website sales.
I’ve already given you some information on where to find good freelancers, but I think it makes sense to discuss how to decide whether to hire an employee or a freelancer.
I’ll also discuss some of the requirements when hiring an employee.
Should I hire an employee or a freelancer?
E-Commerce will have some positions that are more suited to an employee, while there are others that are more suited to freelancers.
Ultimately, you want to look at 3 things when deciding whether to hire an employee or freelancer for your store:
How to market your business online
E-Commerce marketing is an extraordinarily competitive field. Given all competing e-Commerce businesses are trying to sell to similar customers online, you’ll have to stand out to your target audience.
Companies use a ton of different marketing strategies, find what works best for them, then focus more on that particular segment of marketing. Strategies used in e-Commerce marketing include:
- Social media organic marketing
- Paid ads
- Search engine optimization (SEO)
- Email marketing
- Affiliate/Influencer marketing and content creation
- Public relations
Jason discusses his online marketing throughout both of the videos. In the first video, he discusses Kickstarter, getting on Shark Tank, and social media.
He started by doing market research to find the best way to reach people who would be interested on Kickstarter, then launched his listing and got lucky that it was featured on Buzzfeed.
He told us:
You’ll probably want to start by following KickStarter’s Creator Handbook. Make sure to make it personal but realistic.
During the early stages, he benefited from influencer marketing through Buzzfeed and Shark Tank.
It was also part public relations, paid ads, and organic marketing that was mostly through the Buzzfeed post.
Now he uses a little bit of most of the marketing strategies. Let’s look at each.
Social media organic marketing
You can’t always count on being picked up by a major publication, so normally you’ll need to hire a freelancer or agency to help you with social media marketing.
Each social media platform is different, so focus on the one that has the most engagement and customers in your niche. Jason’s recommendation for products similar to his e-Commerce marketing:
That’s consistent with today’s consumer behavior. Consumer behavior is different based on the target demographic from your market research. Go where your customers are!
For a great overview on where to reach different demographics, check out this overview of 2021 social media marketing.
Paid ads are a great way to remarket your brand to people who have been to your e-Commerce website or social media assets.
When you integrate ads with analytics, you can structure ads to get people to come back and potentially complete the sale.
To learn about paid ads, I suggest you check out the following resources:
This is a niche I have seen people make some big mistakes. You need to know how much you can spend and start small.
There are 3 basic methods of charging:
- Cost per Click (CPC)- Pay for people to click on the web asset. This is for each person who interacts with your ad by clicking on it. CPC is a step between awareness and completing sales
- Cost Per Impression (CPM)- Pay based on 1,000 people seeing your ads. This is for awareness only.
- Cost per Action (CPA)- Pay based on performing an action. An example of an Action would be buying a product from your e-Commerce store. This is focused on closing sales or getting email lists.
If selling a product would create $10 in revenue, then you would want to spend $.80-$2.00 to get a sale based on the suggested marketing percentage from the Small Business Administration.
That includes all labor and costs to create marketing assets like a website, graphic design, and copy for ads.
Using Facebook averages, you wouldn’t make a profit on a $10 product. You just lose money, which is why a bunch of small business owners won’t touch paid ads.
If you want to actually make a profit, you have to decrease your CPM, CPA, and CPC.
Alternatively, you can improve your Clickthrough rate or Conversion Rate. Here’s what it would look like if you decrease your costs. You’d have to decrease them by over 90%.
Jason gave some advice on how to avoid these pitfalls:
Professionals have spent years learning their niche. If you want to grow your brand, make sure to work with someone who has already done it.
Make sure to ask for proof they know how to start an online business by asking for their analytics. Any respectable marketer should be willing to provide this.
Search Engine Optimization (SEO)
Search engine optimization is focused on making your online business-friendly to web crawlers that index the internet.
This field is a mix of development and marketing best practices.
I’m not going to spend a ton of time on this as you should really hire professionals to help you with it, but here are some general best practices:
- Do keyword research using tools like Ubersuggest, Ahrefs, or Keyword Surfer. I use all three.
- Use keywords to drive your content strategy. Check out this article for tips on how to drive strategy with keywords.
- Make sure to specify metadata to be included in pictures and websites. Moz has a great article on this.
- Keep each page of your online store as small as possible while still giving the information users expect, typically under 2 MB is best.
- Work with an SEO developer to make sure that your online store loads on mobile in under 3 seconds.
Jason told us:
Email and text message marketing
The idea behind email and text message marketing is to follow up with customers who have provided their information to your online store. You can send them emails or texts about:
- New products
- Reminders about abandoned carts
- New features offered
There is normally a process for email marketing that includes:
- Offer something of value in exchange for email, for instance, a discount.
- Save email in a database.
- Send emails routinely. There’s a lot of debate about how often to do this. I personally don’t want more than 1-2 per week from a company before I feel like they are harassing me.
- Track results using analytics.
Affiliate/Influencer marketing and content creation
All 3 of these go hand-in-hand. They are all ways of increasing the awareness of your online store so more people are aware of your brand. They can increase sales if done correctly. Let’s look at each.
Affiliate marketing is basically outsourcing your sales department where other people promote your brand and products.
In exchange, they get a commission from each sale. You’ll need to create messaging and creative-use guides to specify how they can and cannot market your brand.
You may also want to create content of your own and just have them share it.
They’ll create content like blog posts, videos, social media posts, and memes endorsing your products. Option Monster explains how to set up an affiliate marketing program.
Influencer marketing is hiring celebrities or people well known within your niche to promote your products.
They range from mega-celebrities to people with a few thousand followers. There are some differences between influencer marketing and affiliate marketing.
The primary differences are:
- You may have to pay a per-post fee that varies based on their engagement and size of the audience.
- You’ll be reaching out to them instead of them applying to be part of your affiliate marketing.
- You’ll normally have to give them free products.
- You should see a noticeable bump in sales after each post.
Alexa Blogs has a great blog about how to find influencers.
BigCommerce has statistics on the business results from hiring influencers, and they find that 89% of businesses say they get comparable or better results from influencer marketing than other forms of marketing.
We normally provide a list of influencers at the end of each of our blogs to make it easier for you to find them, but since there is a whole section about it in this blog, I’ll include it here:
- Tobi Lutke – Founder and CEO of Shopify
- Linda Bustos – A highly respected e-Commerce consultant
- Connor Gillivan – Makes over $10m a year from e-Commerce.
- More Influencers – Check out this list of 10 influencers.
Content creation includes blog posts, videos, memes, and written content that goes on your website or social media channels.
This can be interesting subjects, news about product releases, or just a funny meme.
It’s preferable not to be focused on sales in every post. People like hearing about what others are doing in their personal and work lives, so make it personable, friendly, and relevant to the brand.
Help them get to know you. In an interview with Portland Gear, Marcus Harvey discussed how he started the company as a spin-off from his love of Portland.
How to start selling products
Selling your products in e-Commerce is focused mainly on marketing and managing your inventory. Once you have your products and your marketing is running, you should see sales coming in.
If they aren’t you may want to go to community events where small businesses sell their products. Some places people have a lot of success selling products include:
The links above give you references of where to find different kinds of events in the U.S. Make sure your target market actually goes to the events.
From there you contact the event host and apply for a booth. Make sure you are set up to take both cash and in-person credit card sales with your payment processor.
Shipping your products
If you’re not using a print-on-demand or distributor to handle most of your shipping, you’ll need to ship your own products. I strongly discourage this for a few reasons:
- It eats up your time packaging, printing labels, and arranging pickup/drop off.
- Getting the best costs requires quantity deals. Most businesses don’t have enough quantity when they first start to get the best deals.
- Everyone expects 2-day shipping. That’s hard to do as an independent seller managing all their orders.
If you choose to handle shipping on your own, I strongly suggest you read this article from a fulfillment center about what all goes into shipping.
One other thing I feel is important to mention: when using print-on-demand to manufacture, sell, and ship your products, they don’t print the item until the order, so customers should expect it to be 7-10 business days for delivery.
You absolutely have to let customers know before they purchase from your e-commerce store or they will be upset when it takes longer than Amazon Prime.
We’ve given you all the tools you need to learn while researching how to start a successful e-Commerce business. Hopefully one day we’ll get to feature your store in Upflip’s videos and blogs.
Make sure to follow us on YouTube and subscribe to our mailing list to keep up to date on what e-Commerce businesses do to succeed.