Your 10 Point Checklist to Starting an Ecommerce Business

Starting an Ecommerce Business

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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 isn’t available, try something similar like

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.

checklist starting an ecommerce business

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.

checklist starting an ecommerce business

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.

checklist starting an ecommerce business

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.

1. Start With Your Business NameChoose a unique and memorable business name that's not already in use. Conduct a corporate name search to ensure availability. Register the name accordingly.
2. Secure Your Domain Name and WebsiteIdeally, get your business name as the domain name. Choose an easy-to-remember URL related to your business if the desired domain is unavailable.
3. Select The Best Business Structure and Register Your BusinessDecide on a suitable business structure (Sole Proprietor, Partnership, LLC, or Corporation) and complete the necessary registration process.
4. Get Your Employer Identification Number (EIN)Obtain an EIN for your business, which is crucial for opening a business bank account and fulfilling tax obligations.
5. Apply for Business Licenses and PermitsCheck and secure any required sales tax licenses or home business permits from city, county, and state authorities before starting operations.
6. Find the Right VendorsResearch and identify vendors offering quality products at competitive prices to ensure a steady supply for your eCommerce store.
7. Start Marketing EarlyCreate social media profiles and blog content in advance to build anticipation. Set up a "coming soon" page on your website to capture visitor interest.
8. Get More Productive with the Right SoftwareUtilize customer relationship management, accounting, project management, and email marketing software to enhance business efficiency.
9. Stock Your InventoryEnsure sufficient inventory to meet initial demand. Monitor sales to make informed decisions on future inventory orders and prevent stockouts.
10. Make Sure Your Business Stays CompliantAfter launching, adhere to annual reporting and business permit requirements to stay compliant with legal regulations and deadlines.

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

Frequently Asked Questions

checklist starting an ecommerce business

What should be the first step when starting an eCommerce business?

Choose a unique and memorable business name that aligns with your products. Register the name to protect your brand identity.

How can I secure a domain name and website for my business?

Ideally, get your business name as the domain name. If unavailable, choose a related and easy-to-remember URL. Design a visually appealing and functional eCommerce website using platforms like Shopify.

What are the business structure options, and how can I register my business?

Business structure options include sole proprietorship, partnership, LLC, and corporation. Register your chosen structure by filing appropriate paperwork with the IRS, or hire a business filing company to assist you.

Do I need an Employer Identification Number (EIN) for my eCommerce business?

Yes, obtaining an EIN is essential for opening a business bank account and filing taxes. It acts as a unique identifier for your business.

Are there any licenses and permits required for an eCommerce business?

Yes, you may need sales tax licenses or home business licenses. Check with your city, county, and state authorities to ensure compliance.

How can I find the right vendors for my products?

Research and compare vendors to find the best quality and pricing for your products or materials.

When should I start marketing my eCommerce business?

Start marketing early by setting up social media profiles and writing blog content. Create a “coming soon” page on your website for interested visitors to sign up for updates.

What software can I use to improve productivity for my eCommerce business?

Utilize customer relationship management, accounting, project management, and email marketing software to streamline your operations.

How can I ensure I have enough inventory for the launch?

Stock your inventory adequately, aiming to have more rather than less. Monitor sales patterns to make informed decisions for future orders.

How can I stay compliant with legal requirements for my eCommerce business?

Stay organized by filing annual reports for your business structure and paying the required fees for permits. Set reminders to meet deadlines and stay on track.

Completing this checklist will ensure you’re well-prepared to launch your eCommerce business and thrive in the ever-growing online marketplace.

eCommerce Website Photo via Shutterstock

CorpNet offers business formations, filings, state tax registrations, and corporate compliance services in all 50 states. Express and 24 hour rush filing services available upon request. Click here to learn more.

Nellie Akalp Nellie Akalp is a passionate entrepreneur, recognized business expert and mother of four. She is the CEO of CorpNet, the smartest way to start a business, register for payroll taxes, and maintain business compliance across the United States.