Your 10 Point Checklist to Starting an Ecommerce Business

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.)

The choice of a business name is a critical step in forming your brand identity. It’s more than just a label; it reflects your business’s values, target audience, and niche. A memorable and impactful name can significantly influence customer perception.

When brainstorming, consider names that are easily pronounceable, memorable, and give an insight into what your business is about. Tools like business name generators can spark ideas, and checking for domain availability simultaneously is a practical step.

2. Secure Your Domain Name and Website

Your domain name is your digital address and plays a key role in search engine optimization (SEO). It should be concise, easy to spell, and reflective of your brand. When choosing a hosting service, look for reliability, customer support, and scalability options.

Given the growing number of mobile users, ensuring that your website is mobile-friendly is also crucial. Additionally, consider the user experience in website design, making navigation intuitive and the checkout process straightforward.

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

Choosing the right business structure (Sole Proprietorship, Partnership, LLC, or Corporation) has significant implications for liability, taxes, and operational flexibility.

Sole Proprietorships and Partnerships offer simplicity but less personal liability protection, while LLCs and Corporations provide more protection but come with additional regulations and potential tax benefits.

Consult with a legal or financial advisor to understand which structure aligns best with your business goals.

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

An EIN is essential for various business activities, including opening a bank account and hiring employees. The process of obtaining an EIN is straightforward and can be done online through the IRS website.

This unique number is crucial for separating your personal and business finances and is a requirement even for businesses without employees.

5. Apply for Business Licenses and Permits

Depending on your product range and location, various licenses and permits may be required. This could include a general business license, sales tax license, or home occupation permit. Research local and state regulations thoroughly to ensure compliance.

Failing to obtain the necessary licenses can result in fines and legal issues.

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

Your choice of vendors can impact product quality, pricing, and supply chain reliability. Develop criteria for selecting vendors, such as quality standards, pricing, and delivery schedules.

Building a good relationship with your suppliers can lead to better terms and reliability, which is crucial for your business’s reputation and customer satisfaction.

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

Developing a marketing strategy before launch helps build anticipation and a customer base. Utilize social media platforms to create buzz and engage with potential customers.

Creating a blog can establish authority in your niche. A “coming soon” page on your website is an excellent way to start building your email list, enabling you to hit the ground running on launch day.

You can even 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

Investing in the right software from the start can save time and streamline operations. Customer Relationship Management (CRM) software helps manage customer interactions, while accounting software aids in tracking finances and taxes.

Project management tools keep your team organized, and email marketing software is crucial for engaging with customers and driving sales.

9. Stock Your Inventory

Effective inventory management is key to avoiding stockouts or overstocking. Start by estimating demand and keep an eye on sales trends to adjust your inventory accordingly. Consider using inventory management software to track stock levels, sales patterns, and reorder times.

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

Staying compliant with legal requirements is crucial. This includes filing annual reports, renewing permits, and staying abreast of changes in laws that affect your business. Setting reminders for these deadlines can prevent costly oversights. Regularly consulting with a legal advisor can help you navigate these requirements efficiently.

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.

Completing this comprehensive checklist will lay a strong foundation for your eCommerce business, setting you up for success in the competitive online marketplace.