Learning how to start an e-commerce business isn’t always easy, but it’s now easier than ever to set up, launch, and maintain sites where entrepreneurs, designers, and creators of all kinds can sell their wares.
Ecommerce services, which transmit goods, services, and funds over the internet, range in size and scope, from retail behemoths like Amazon to Etsy craft sites. Online shopping is just one of many industries that have expanded dramatically in the last five years. According to the U.S. Census Bureau, e-commerce sales in the United States totaled $154.5 billion in the third quarter of 2024, accounting for 11.2 percent of total retail sales in the country.
We’ll walk you through the process of starting an e-commerce business in five simple steps, so you have all the information you need to get your online business up and running in no time.
How to Launch an E-Commerce Company
Although there are significant differences between starting an e-commerce business and starting a brick-and-mortar business, there are also several similarities. As we’ll see below, many of the planning and legal steps you’ll need to take will be the same (or similar) as any other business. However, once you get started, you’ll realize how different starting an e-commerce business can be.
Step 1: Research the e-commerce market and identify your niche.
The first step in learning how to start an e-commerce business is to conduct research with the help of a digital marketing agency. You’ll want to investigate the e-commerce area you’re interested in and make some decisions about your specific business, just as you would if you were starting a restaurant and looking into different locations, food options, and themes.
Step 2: Choose a business name and a legal structure.
After you’ve decided on a name for your e-commerce venture, the next step is to come up with one. Like any other business, you’ll want to choose a name that is distinct while also clearly indicating what your company is or does. You should check the website development with SEO services of your local secretary of state and the United States Patent and Trademark Office to ensure that you are not selecting a business name that is already in use by another company.
Step 3: Obtain an EIN
Following that, you should apply for an EIN, or employer identification number, for your e-commerce services. Although not all business entities are required to have an EIN, this nine-digit number can assist you in keeping your personal and business finances separate. Furthermore, you can obtain an EIN from the IRS for free, either online, by mail, fax, or phone. Because you’re learning how to start an e-commerce business, you’ll almost certainly want to apply for this business tax ID online, and you’ll receive your number immediately.
Step 4: Obtain all necessary permits and licenses for your business.
After obtaining your EIN, you’ll need to obtain any business licenses or permits required to operate legally in your city and state. As previously stated, if you’ve formed your e-commerce company as a sole proprietorship or general partnership, you don’t need to register it with the state unless you’re filing a DBA to legally operate under a specific business name. However, for the other business entity types, you must register your company with your state and obtain a general operating license. Depending on where your company is located, you may also need to obtain a local operating license.
Step 5: Select an e-commerce platform and build your website.
You’ve finished the paperwork needed to register and legally launch your e-commerce business. As a result, the majority of our steps thus far have mirrored the process of launching a physical business. Instead of looking for a location and preparing to open your physical store, you’ll now start working on your website development with a digital marketing agency and SEO services and online store.