More than 200 million shoppers are going to be spending money online this year. There’s never going to be a better time to start that new ecommerce business you’ve been thinking about. If you want to start an ecommerce business and sell products online, this checklist will guide you through it.
1. Decide on a Business Name
After you’ve decided what it is that you are going to be selling, you need to settle on a business name that is memorable and unique. This is what consumers want in an ecommerce site, and it helps them remember you. To ensure your ideal business name is not already in use, we recommend that you perform a corporate name search. Then, register your new business name quickly once you’ve got one. If you register your business as a corporation or limited liability company (LLC), this will be done automatically.
2. Grab the Domain Name for Your Ecommerce Business
The ideal situation is that your business name is available as a domain name. If it is not, you can either buy the domain name from whomever owns it, or you can use another memorable domain that relates to your business.
For example, if your business was called John’s Amazing Coffee, you would grab the domain name JohnsAmazingCoffee.com or try something similar if that was unavailable.
One of your biggest expenses in starting your ecommerce business will likely be web design. Having a website that is both functional and appealing to consumers is essential. There are some out-of-the-box solutions, like Shopify, to help you get your feet wet, but these are not good long-term options. You will likely need (and want) something a little more capable.
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3. Register Your Ecommerce Business and Decide on a Business Structure
In the US, if you decide not to register as an LLC or corporation, the IRS will automatically see you as either a sole proprietor or a partnership. It is important to know that when you operate as a sole proprietor, your personal assets may be at risk if your company gets sued. That’s because the courts can seize your personal assets if your business can’t cover its debts. An LLC or corporation will set your business apart from your assets and protect them. At the same time, it will give you other tax benefits as well.
It is possible to register on your own by filling out the necessary paperwork from the IRS. It is also easy to hire a business filing company or lawyer such as IRS EIN Tax ID to do it for you. For most small business, however, a lawyer is likely overkill.
4. Get an Employer Identification Number
An employer identification number (EIN) is what allows you to open a bank account for your ecommerce business and file business taxes. Oftentimes the EIN of a business is compared to the Social Security number of a person. The reason for that is that the EIN is a unique number that identifies your business explicitly. Despite the fact that it’s called an employer identification number, you will need one whether or not you have employees.
5. Obtain Your Permits and Licenses
Just because you’re running an ecommerce business doesn’t mean you are excluded from the permit and license requirements in your area. Do your research and find out what is needed in your city, state, and country. This will allow you to see if you need any home business or sales tax licenses before you start operating.
6. Find the Best Vendors
The internet is filled with competition. It is essential that you get the most reliable and consistent products to sell. Do some research and shop around until you find the provider best suited for your needs.