A Beginners Guide to Selling Your Products Online
You have a viable idea, a catchy brand name, and a fleshed-out business plan. Now what? The internet has made it possible for small business owners to turn their passion into profit. Selling your product or service online is a more accessible and lower-cost alternative to the logistical hurdles and high up-front costs that a brick-and-mortar business demands.
However, as with any business, you need to establish a strong foundation before launching your digital storefront. Follow the steps below to help your new online venture hit the ground running.
Step 1: Decide your business structure
Claiming the proper business structure is important because it dictates the legal and tax requirements you need to satisfy. Most small business owners either file as a sole proprietorship or an LLC.
Do your research before making a decision, and if you have additional questions, we recommend consulting with an attorney to determine the best business structure for your online store. Because each business structure also comes with varying tax requirements, you should also reach out to your local tax professional to field any questions.
Step 2: Get the proper permits and licenses
Wait, you need a license even if you're running your business online? Yes! And depending on where you live and operate your business, you may need to obtain several business licenses.
Getting the proper e-commerce business licenses and permits is crucial to ensuring your online business operates within the law. Don't stress, though. Most of these licenses are easy to obtain.
The good news is that you don't need many business licenses, and the ones you do need are relatively easy to acquire. Again, licensing requirements can vary by state, so check with your state's licensing boards to ensure you're applying for the appropriate licenses. Some of the most common online business licenses include:
Business Operation License
Employer Identification Number (EIN)
Doing Business As (DBA) License
Sales Tax License
Home Occupation Permit
Step 3: Choose the right platform to sell your products on
Small businesses' shift to e-commerce has exploded in growth over the last several years. Nowadays, 63% of shopping journeys start online, making online shops an increasingly lucrative option for selling your products. When it comes to sales channels, you have a few options to choose from.
Option 1: Create your own store
Many popular online storefronts include a fully-customized page builder to create your own store within minutes. These stores offer an all-in-one package deal; website, blog, SSL certificate, third-party app integrations, social media sales channels, and many other tools.
Option 2: Sell on marketplaces
If you’re not quite ready to launch your online storefront just yet, there are plenty of online marketplaces to choose from to help get your online business off the ground. There are several e-commerce marketplaces where you can sell your products. Some marketplaces cater to niches, while others are generalists. Some of the most well-reputed online marketplaces include:
Option 3: Sell on social media
Currently, you can list, sell, and promote your goods on Facebook and Instagram. You’ll need a Facebook business page and Instagram business account to get started, but both platforms offer comprehensive guides on how to get your shop set up in no time!
Step 4: Determine what payments you’ll accept
There are several ways to get your products into customers' hands. You can sell through an online marketplace, social media or add a shopping cart to your own website by integrating a payment processor app.
When it comes to the number of payment methods your online store should accept, the more the merrier! Beyond credit and debit cards, don't forget to consider accepting digital payment methods like Apple Pay and Google Pay.
Step 5: Decide how you’ll ship your product
Depending on what you sell, you'll need to set up a supply and inventory management method and determine how to deliver your product to your customer. Before you list your shipping rates, it's necessary to estimate your costs and their impact on profits.
Not surprisingly, 96% of customers report that free shipping impacts their purchase decision, and 25% are more likely to abandon their cart if shipping costs are too high. But higher fulfillment costs will drill into your bottom line. That's why it's essential to calculate the most competitive carrier pricing and shipping options for your online business.
Step 6: Spread the word
While you're working through the previous steps, you'll also want to drum up excitement for your online business's official launch. Your pre-launch and overall marketing strategy should be outlined in your business plan, but if you're still struggling to determine the best way to reach your target market, we have some guidance to help get your product in front of the right people. By building up audience excitement and anticipation through social media and various advertising methods, you'll set your business on the fast track for a successful launch.
Getting your online business off the ground doesn't have to be an overwhelming experience. Covering your bases and completing the steps on this list means spending more time doing (and getting paid for) what you love!
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