How to Start an Online Store (7 Steps, No Experience Required) Image by Bold Commerce Editors Bold Writer Published on: March 18, 2020 Banner showing a woman working on her computer in her online store The key to running a successful Shopify store is making every transaction count. It’s one thing to get traffic and sell products, but are you getting the most out of every sale? Here are 5 easy ways to optimize your business today:
- Add upsells to your store to increase your Average Order Value (AOV)
- Add a subscription offer for recurring revenue
- Run dynamic discounts across the store in time for BFCM
- Run a bundle deal or BOGO (buy one get one free)
Whether this is your first time setting up a small business or you've been in the game for a while, this guide will teach you how to start an online store in 7 simple steps.
Our goal is to have your storefront up and running, including products, today. You could even make your first sale!
Step 1: Decide your niche
This basically means what you're going to sell and who you're going to sell it to. Some first-time entrepreneurs don't give much thought to their niche.
Your niche impacts many things, including:
Your sales figures How much effort you'll need to put into customer support Whether or not you'll have repeat customers That's why it's important to take some time to think about a strategic niche. Need help deciding? Check out these 10 foolproof strategies for choosing an ecommerce niche.
Your niche is divided 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, more people are likely to buy, but your Average Order Value (AOV) will be lower.
If you sell more expensive items, people are less likely to buy, but your AOV will be higher.
Okay, where do I draw the line? Is there a minimum price to consider?
While there's no hard and fast rule, try to price your items at $100 or more.
Here's the reason behind this:
After accounting for operating, warehousing, and marketing costs, most e-commerce store owners end up with a profit margin of 20-30%.
Let's say you're making 20% on all the products you sell.
If you are selling an item of that sale, where if you are selling an item of
Think of it this way:
The amount of time and energy you spend processing and fulfilling your order is the same regardless of whether you are selling items from
Wouldn't it be better to get more bang for your buck (or in this case, money for your time), right?
In addition to that, there is also brand loyalty, popularity, and longevity to consider.
Let's start with brand loyalty.
Simply put, you want to avoid niches that are already dominated by household names.
Here is an example:
Let's say your headphones break and you need to buy a new pair.
You'll either pull out your phone and go to Sony's (or Bose, Beats, or Sennheiser's) website or stop by one of their stores (if you're particular about trying products before buying).
Compare that to this other scenario:
Let's say you're redecorating and decide a chandelier is exactly what you need to liven up your living room.
You'll probably pull out your phone and search for "buy chandeliers online" or "chandeliers with free shipping."
Do you see the difference in behavior?
In niches dominated by a few brands, consumers don't even think about alternatives.
Their brand loyalty comes into play, and they head straight for the brands that are at the forefront of their consciousness.
Check out the stats:
Image via themthdegree.com
Obviously, this does not bode well for newcomers to established markets.
So avoid these like the plague and stick with niche products that don't evoke much brand loyalty or brands that are already in the mind of a certain type of product.
Next, let's talk about popularity.
Now, I'm not saying you need to restrict yourself to selling "trendy" products.
(In fact, it's probably a bad idea, because you might find your sales stagnate once the excitement dies down.)
Instead, you should try to identify a niche or product that is slowly but steadily growing in popularity.
To help you, here's a useful tool: Google Trends.
Simply enter your keyword and you'll be able to see how many people are searching for the term (either worldwide or within a specific country).
For example, if you look at the term "air fryer," you'll see a nice upward trend over the last 5 years.
Screenshot of Google Trends showing the growth in search relevance for airfryer
The graph has spikes each year around December (maybe air fryers are a popular Christmas gift?), but that's okay.
It would be hard to find a product or niche that shows a smooth trajectory, but as long as the overall trend is positive, that'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's important to have that foresight when you're starting a business.
After making your first sale and getting your operations running smoothly, the next natural step is to work on generating more revenue.
How do you do that? Many entrepreneurs try to increase their Customer Lifetime Value (LTV or CLTV) and develop strategies to retarget and continue selling to their existing customers.
Here's the tricky part:
Certain niches are absolutely horrible for customer longevity.
It pays to be aware of these in advance, so you don't find yourself in a bind six months into your business trying to figure out how to increase your CLV.
An example? The wedding niche.
People automatically assume that the wedding niche is very profitable because, well, people are willing to splurge on their big day.
That's true, but what they don't realize is that the "lifespan" of each customer is incredibly short.
You may have 100 customers today, but those 100 customers will have left within 3 months, and they will never come back.
While other e-commerce stores may work on customer retention and selling to their existing customers, it's a different story for you.
To scale your business, you'll need to spend aggressively on advertising and other forms of marketing.
You'd be trapped in an endless cycle of customer acquisition. And once you stop, your sales would decline as well.
Pretty scary thought, right?
Okay, before we move on to the next section, here's a quick recap:
Unprofitable niches are typically associated with lower-priced products, evoke a lot of brand loyalty, aren't growing in popularity, or don't have customer longevity.
Profitable niches, on the other hand, are associated with more expensive products, do not evoke brand loyalty, are growing in popularity, and have customer longevity.
One final thing:
I recommend not blindly entering a niche that you know absolutely nothing about.
If you find a niche that fits the above criteria but is new to you, take your time to do some market research.
At the end of the day, the more you understand your competitors and how the niche or industry works, the better your chances of building a successful online store.
Step 2: Choose between dropshipping or having your own products.
The next step in starting an online business? Decide whether you want to dropship or make your own products!
Dropshipping has become super popular, but like anything else, it comes with its own set of challenges.
In this section, I'll walk you through the pros and cons of dropshipping versus owning your own products so you can make an informed decision about the best option for you.
Let's start with dropshipping.
Image from Linkedin.com
In some ways, dropshipping may seem like the ultimate e-commerce store gimmick.
You have no inventory, which means:
You don't need capital to purchase your items You can list more items on your eCommerce store, risk-free No storage costs No picking and packing activities Basically, dropshipping levels the playing field.
With dropshipping, virtually anyone can enter the e-commerce industry.
Even a kid who's too broke to move out of his parents' basement.
Even a high school student who still receives his allowance from mom and dad.
Any.
But here are the not-so-good things about dropshipping:
First, you have zero control over the performance.
Sure, the idea of putting your feet up while a third-party company handles your fulfillment is quite tempting.
But here's the problem.
When they make mistakes (and they will, at some point or another), your customers will point the finger at you.
For e-commerce stores that handle fulfillment internally, it's easy enough to apologize, rectify the problem, and move on.
But dropshippers who have to communicate with manufacturers in a different city, or even a different continent...
Obviously, not that easy.
In addition, product returns are also problematic.
Most sellers on AliExpress (which is the most popular dropshipping platform out there) do not accept returns.
And even if they do, it will take you forever to send your customer's defective product back to the manufacturer, get the replacement from them, and send it back to your customer.
So you have two options:
- Indicate in your store policy that you do not accept returns at all.
- Allow returns and absorb the cost. If you're starting out on a budget, you might be tempted to eliminate returns altogether.
But don't do that. Bad!
You're a new brand that no one has heard of, and you need to build trust with your customers.
Brand loyalty image via: mission3media.com
So if you have a strict no-return policy, it will likely discourage potential customers from purchasing from your store.
Here's what I recommend:
It offers returns, but only for defective items, and states that the item must be shipped back to you within a shorter time period (maybe 7 days?) to qualify.
At the same time, keep track of the returns you receive.
If a manufacturer is consistently shipping defective products, stop working with them and look for a different manufacturer instead.
Okay, let's move on to the last disadvantage of dropshipping: the lack of branding.
So here's the thing:
You can ask your supplier not to include any promotional materials inside the packages they send to your customers, making it less obvious that you're dropshipping.
But you probably won't be able to get them to use any kind of custom packaging with your company name or logo.
This means your customers won't have the best unboxing experience.
Basically, they'll receive a nondescript box with some shipping labels attached.
There will be nothing on the box, or inside the box, to indicate that it is from your store.
If you're just trying to make a quick buck with e-commerce, that's fine.
But if you want to build a brand, this is a big obstacle.
You may be able to get your suppliers to put your materials in the box, but that's rare and will likely cost you a pretty penny.
Now that we've covered everything there is to know about dropshipping, let's move on to having your own products.
The disadvantages are obvious:
Buying inventory costs money Storing inventory costs money Picking and packing costs time and/or money Basically, owning your own products is more expensive and a pain all around.
With dropshipping, you can outsource certain aspects of e-commerce.
But when you have your own products, you're responsible for everything, and there are many more pieces of the puzzle that have to fit together.
On the plus side, the benefits of owning your own products are incredible:
First, you can ensure your customer's experience is seamless.
Here's why this is important:
Statistics show that most dissatisfied customers won't actually tell you they're dissatisfied—they'll simply become forgotten and never patronize your store again.
Image via: HelpScount.net
If you're just doing enough to get by, you're inadvertently hurting your own customer retention rates (and revenue!)
To ensure you don't unintentionally throw that revenue down the drain, you need to put more effort into customer service.
We're talking about...
Shorter delivery times, well-designed packaging, knowing your products inside and out, and, of course, solving problems as soon as they arise. Still not convinced?
Consider this:
When you make mistakes, your customers tend to talk about it more.
Image via: HelpScount.net
Who hasn't posted an angry Facebook status or complained to a friend about a business that had poor customer service?
You don't want to be talked down to for the wrong reasons, so make sure you nail your customer experience.
The second benefit of having your own products is better profit margins.
When you purchase products from a manufacturer, you typically adhere to a Minimum Order Quantity (MOQ).
Because you are buying in bulk, you will get a discounted rate.
You can keep your margin higher or pass the discount on to your customers, which will drive more sales.
Either way, this means more revenue for your store!
Last but not least, having your own products allows you to nail your brand.
We talked about how important it is to have your branding on your packaging and/or products if you're in this for the long haul.
But it's not just about consumers recognizing your brand.
Products delivered in well-designed and branded packaging are perceived as more desirable and attractive.
If you received a battered, unmarked cardboard box (except for a shipping label in a language you don't understand), how would you feel?
Probably like you just bought something on the black market. Or maybe some guy in his basement trying to scam you.
But if you receive the same product in beautifully designed packaging, you'll be a little more excited. There's a reason people film unboxing experiences!
Image from Nashvillewrapscommunity.com
One final point about branding:
Impressive branding and packaging also encourage consumers to share your product on social media.
You can even include a call to action on your packaging and tell consumers to use your branded hashtag when posting about their purchase on social media. (Organifi does this VERY well.)
Clever, right?
Now, before we move on to the next step, let's briefly talk about the subscription box model, which is very popular right now.
With this business model, your customer specifies whether they want a 3, 6, or 12-month subscription (or any other option you offer).
The great thing about this model is that it maintains customer longevity. Your customers keep paying every month (assuming you're amazing, which I'm sure you are!).
If you're excited about the idea of recurring monthly revenue (you should be! It's the holy grail of business), read our guide to creating a subscription box business plan.
So a quick recap:
Dropshipping requires no capital and is the easiest method to get started, but it has the lowest profit margin and poor branding. Buying wholesale requires more upfront capital and the need for packaging and shipping, but it gives you a higher profit margin and better branding. Subscription box stores can be either, and they're simply amazing.
Once you've chosen a business model to work with, it's time for the fun part: coming up with your business name and registering a domain.
Step 3: Think of a business name and register your domain name.
Your business name isn't as crucial as the niche you choose, but it's still super important.
But if you're not careful, it could stop your online store from getting off the ground.
People get so obsessed with choosing a name, I know I've done it. My advice is to give yourself a fixed deadline of 1-2 weeks to choose a name if you're really stuck. Otherwise, you'll spend months trying to figure it out and never take the step to start.
Now, some do's and don'ts to help you choose a name:
✅ DO choose a name that's easy to pronounce. Spelling is tricky, people! So make the name SOUNDS like it's spelled and easy to pronounce. Otherwise, people might go to the wrong URL.
✅ DO choose a name with some meaning. If it's related to your niche, it makes it easier for people to "get" your business. If it has a deeper, more personal meaning, it'll be a great backstory for media pitches.
✅ YES, be as original as possible. A Kentucky-based entrepreneur, Victor Moseley, opened a lingerie store called "Victor's Secret." Victoria's Secret immediately filed a lawsuit against them.
✅ DO choose a name with an available .com domain. Although .co domains and other domain endings are becoming more popular, people will still instinctively type .com. You want to make it as easy as possible for your customers to find you!
❌ Don't choose a name that's too long. Your business name should be 1 to 3 words, MAX! I would strongly advise sticking to one or two words. Again, the easier a name is to pronounce and spell, the more people will remember it.
❌ DO NOT choose a business name that is a combination of words and numbers. This is obvious, but I had to add it. That is, unless you're trying to look suspicious and unprofessional.
❌ DO NOT choose a name that refers to a specific product or product line. You might be tempted to do this if you're planning to focus your efforts on selling just one (amazing!) innovative product. But what happens when you decide to diversify in the future? You'll be tied to that one product.
If you need more help coming up with a name, check out Shopify's Business Name Generator!
Step 4: Choose products to sell.
You've chosen a niche. You have a business name and URL. Now...
How do you figure out what the heck to sell?
Easy: looking at social proof.
Head to Amazon's best-seller list and check out the most well-received items in your niche.
Amazon's Best Sellers
Do the same with eBay's best sellers list.
And the list of AliExpress best sellers.
Keep a document or spreadsheet with all your ideas. Some things to keep in mind...
Avoid brand name goods (we talked about this before) Look for a sale price of 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 innovate on (look at reviews to see what people DON’T like about a product, then make one that’s better) Once you’ve chosen the specific items you want to sell, it’s time to find your suppliers.
There are many suppliers on both AliExpress and Alibaba, but here's the difference:
You can purchase products without adhering to MOQ on AliExpress:
Image showing the lack of MOQ values on AliExpress
But if you are on Alibaba, most of their items come with a MOQ:
Image showing the minimum order quantity on Alibaba
If international suppliers aren't your thing, SaleHoo has a Supplier Directory that lists high-quality suppliers (and is fairly inexpensive for a membership).
Their Market Research Lab is also quite helpful in finding popular products:
Image showing Salehoo's Market Research Lab
This tool allows you to compare different products and evaluate them based on sales trends, competitor ratings (i.e., whether there are a lot of other stores selling the same product), and more.
When looking for a supplier, here are some tips to keep in mind:
Communicate, communicate, communicate. The more you talk to them, the better you'll feel. And don't be afraid to talk on the phone. Avoid suppliers with excessive or strange fees. Make sure you ask questions early and often. Their customer support is your customer support, especially if you're dropshipping. For more information on finding the right supplier, check out this guide.
Continuing...
Step 5: Create your website with an online store builder
When it comes to creating an e-commerce store, there are many platforms to choose from. One of the most popular solutions for startups is Shopify.
I'll walk you through how to create an online store using Shopify.
Step 5a: Sign up for a free trial
On the Shopify homepage, you'll see an option to sign up for a free trial.
You'll need to fill in a few details, but this will only take two minutes.
Once you're done, you'll be redirected to your dashboard.
Step 5b: Choose a template/theme
Scroll down from your dashboard and click the "Customize Theme" button.
Shopify Admin Panel
This will take you to the "Themes" page.
Once there, scroll down again and click "Browse Free Themes."
Free Shopify Themes
Here you'll find around 10 free themes to choose from.
If you don't like these, you can also choose to pay for a premium theme.
Pro tip: You don't need to do this right now, but you'll definitely want to optimize your theme for conversions later. Check out these great Shopify apps: Bold Discounts and Bold Custom Pricing.
Once you've chosen a theme, it's time to enter your products.
Step 5c: Upload your products
Shopify's ecommerce website builder is pretty easy to use, so this should be a piece of cake...
Adding products to Shopify
...just click on "Products" in the left panel and then click "Add Product."
Rinse and repeat until you have all your products on top.
In addition to filling out standard information like product name, description, etc., be sure to also enter your meta description for better SEO!
For more information, see this article:
The Ultimate Guide to Product Page Design
Step 5d: Fill in your other pages
Products ready?
Great, now to fill out your other pages.
Using the same left panel, click "Online Store," which will open a secondary menu of options.
Add a page in Shopify
Click "Pages" and then "Add Page."
To start, you'll want an "About Us" page, a "Shipping & Exchanges" page, and a "Contact Us" page.
Pro tip: If you're not much of a writer, don't worry. You can automatically generate sample refund policies, privacy policies, and even terms of service statements using Shopify. But we're not lawyers—if you have legal questions, talk to a lawyer!
Here's how it's done:
Click on "Settings" (all the way at the bottom of that left panel), and "Checkout."
Scroll down...
Shopify Refund Policy
...and there you have it!
Step 5e: Review the rest of your settings
The final step before publishing is to review your settings and make sure everything is accurate.
On your Checkout page (which you used to create your policies), you can specify whether you want your customers to checkout as guests or if they'll need to create an account before paying. (Choose guests, and make checkout as frictionless as possible.)
On your Payment Providers page, you can enable different payment methods. (PayPal and credit cards are a good idea! Bitcoin might not be a bad idea either. Check out this article for more information.)
On your Shipping page, you can set shipping rates for different zones. We have a comprehensive guide on everything related to shipping that you should check out for this.
On your Notifications page, you can customize the emails your customers will receive when they complete an order.
And you're done with your website! Great job.
Step 6: Set up a business and get a sales tax ID
Once you have your website, suppliers, and products, it's time to think about setting up a business entity.
The main benefit of this is that your business will operate as a separate entity from you, the owner.
Essentially, this means you are not personally responsible for what happens to your business, and your personal assets are protected from any liability your business may have.
You don't necessarily need to join right away.
While incorporating your business protects your personal assets, you can start as a sole proprietorship without any official paperwork. However, you'll be taking a risk by doing so.
My advice is to wait until you're earning a certain amount (say, $1,000 per month) before incorporating. That way, the business can pay for its own incorporation, and you know you'll be in it for the long haul.
Read this article to learn more about incorporation and make sure you're doing everything legally.
Again, we're not lawyers: if you have questions about what to do, consult a business lawyer. Take our advice with a grain of salt.
Now let's talk about sales tax for online businesses. Here's what you need to know:
Once you create your own online store, you'll have sales tax nexus in any state where you have a physical presence (including property, employees, and inventory).
Let's say you're from Michigan, and your office (or garage), employees, and inventory are all contained within Michigan.
This means you only have nexus in one state. You only have to pay sales tax on orders placed by customers in Michigan.
Fast forward a couple of years, and let's say your headquarters are still in Michigan, but you now also have warehouses in Texas.
This means that you have ties in two states.
While you can collect sales tax in all states where you have nexus, you must obtain a sales tax permit before doing so.
How do you register for a sales tax permit?
Simple: Go to your state's Department of Revenue website and register there.
Some state sales tax permits are free, and others will cost you a nominal fee.
Once you've registered for your permit, the state will provide you with instructions on when and how often your payments are due (either monthly, quarterly, or annually).
It's a bit of a hassle to go through the paperwork, but don't put it off! It's illegal to collect sales tax without a permit in most states, and you don't want to get in trouble with the law.
Step 7: Market your new online store!
Hang in there, you've reached the final section of this guide on how to start an online store.
Now you know how to start a business, how to set up your website, and how to comply with your online business sales tax requirements.
All that's left is to create a marketing plan for your online store, which we'll discuss in this section.
Content Marketing and SEO
You probably already know this, but Search Engine Optimization (SEO) is awesome.
You can have two online stores selling exactly the same things, but you'll see phenomenally different results if only one store is optimized for search, and the other isn't.
At the end of the day, selling things 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. That's where content marketing and SEO come in: high-quality content helps you rank, drives traffic to your store, and builds trust with your visitors, which increases sales.
Social Media Marketing
A golden rule of marketing: you want to be present where your consumers are hanging out.
So make sure you keep your social media pages updated and active!
I recommend setting goals for your various social media channels because if you're clear about what you want to achieve, you can reverse the steps to get there.
I recommend creating a content calendar.
You can create and schedule your posts in advance and ensure you always have something planned for major holidays.
If this sounds like a lot, don't worry.
Simply choose ONE channel you want to focus on first and start small.
Plus: Connect your social media to your store by learning how to add your Facebook pixel to Shopify (plus 5 easy tips to maximize it).
Pay-per-click (PPC) advertising
Most first-time entrepreneurs are reluctant to try PPC (because they're worried they'll end up breaking their budgets).
I always get the same question:
How much should I spend on PPC? Is it expensive to run these ads?
To which my response is:
It depends: I know some e-commerce stores that spend $10k more per month.
For someone who is not familiar 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
That $10k ad spend doesn't sound so absurd now, does it?
Well, here's some good news:
According to Google's Economic Impact Report, companies earn an average of
So even if you're not a PPC wizard and your ads are mediocre, you can still make a decent profit from them.
To get started, read this guide to PPC competitive analysis.
Also, don't forget that PPC isn't just limited to AdWords: you also have Facebook ads.