How to Start Selling Online

How do you start selling online?

Before you can start selling online, you have to devise a plan for how you’re going to do it well. The quickest way to fizzle out is to throw random products on a website or online marketplace and hope for the best.

“A good e-commerce business is a cross section of two disciplines,” said Mike Nunez, founder of Tilde Enterprises. “You are passionate about it and are really good at it.” 

Nunez pointed to Beverages Direct, an online merchant that specializes in root beer and hard-to-find beverages, as a good example. The owner had a real love for root beer and was able to bring a level of expertise to his shop that others couldn’t. “Find the differentiator, and find the thing you love – that’s a business,” Nunez said.

Once you know what product or products you want to sell, you can get busy setting up your e-commerce business. Follow these steps to start selling online:

1. Name your business and your domain.

The names of your website and domain are almost as important as the products you sell. You want it to be easy for potential customers to find you online, and you don’t want them to mess up the spelling in search queries or pronounce it incorrectly to voice assistants such as Alexa. If you already have a brick-and-mortar store, your online business should have an identical name. Ideally, the website name and domain name (URL) will match.

2. Choose your venue.

Selling a product online is easier when you use an e-commerce platform or an online marketplace such as Etsy or Amazon Marketplace, which help small businesses set up shop and begin selling their products. There are also stand-alone online stores you can create on your own website.

3. Decide which payments to accept.

Accepting payments through your online store can be easy or complicated, depending on how much work you’re willing to do.

If you’re operating your own website and want to process payments, you can work with one of the best payment processors to add a shopping cart, a payment page or a payment form. A processor is a third party that handles the payment transaction when a customer makes a purchase online. In seconds, the payment processor communicates between your store and the customer’s bank to ensure there are enough funds to complete the purchase. It also employs security measures to ensure a fraudulent payment method is not being used.

If you have a physical store where you already accept credit cards, your existing payment processor should be able to support your online sales. And if you signed a contract, you may be contractually obligated to use that company as your online processor. Popular payment processors for online businesses include Square, Stripe and PayPal. [Find out more in our complete Square review.]

If you use an e-commerce platform such as Shopify, payments are usually built in. Some platforms allow you to work with a third-party payment processor, but they may charge an extra fee.

The more payment methods your e-commerce store accepts, the better. You absolutely must accept credit and debit cards, but you should also accept digital payments such as Apple Pay and Google Pay. 

When running an online store, “you need to accept more than credit cards,” said Tory Brunker, senior director of commerce product marketing at Adobe. “We recommend PayPal and some of the other broadly used payment methods.”

4. Figure out the shipping.

Amazon has made free shipping and speedy delivery commonplace, but not every e-commerce store can afford to offer the vendor’s services. Before you advertise rates, it’s important to figure out shipping costs and the impact they’ll have on your profits. It’s a balancing act: You don’t want to lose a sale because shipping is too expensive, but you don’t want to lose money because you gave everyone free shipping.

“You have to find a way to deliver value and consistently exceed expectations,” Brunker said. “Capturing and keeping customers is absolutely critical, particularly right now as people value speed and convenience above all else.” [Read related article: Common E-Commerce Challenges Businesses Face]

5. Get the word out about your online store.

You can have the best e-commerce website in the world, but if nobody knows about it, it’s worthless. Social media sites are great platforms for building awareness about your store, as brand building plays a big part in successful online selling. You can learn how to use Twitter for business, see our guide for using Pinterest, get an overview of using Instagram, and find out everything you need to know about the biggest platform of them all in our Facebook business guide.

Which platforms are best for selling online?

Options abound for online selling. You can join an online marketplace, use an e-commerce platform, or add a shopping cart feature to your website. The right choice for you may depend on the number of years you’ve been in business and your goals for your enterprise.

“There are plenty of marketplaces to choose from when you’re not ready to become a small business,” said Meghan Stabler, senior vice president at BigCommerce. “Once you’re a small business and have a unique set of products you want to sell online, you can pick an e-commerce platform.”

Established retailers that already have websites can also set up a web store on their site using a shopping cart, but if time is of the essence, an e-commerce platform will have you up and running more quickly. Or, you could choose two or more options; for instance, sell products on your own website and use an online marketplace.

What are popular e-commerce marketplaces?

There are several e-commerce marketplaces where you can sell your products. Here are three of the most popular options.

Amazon Marketplace

Amazon runs an e-commerce marketplace that enables businesses to sell products to its 147 million U.S.-based Prime customers. In exchange for that access, Amazon charges you a monthly fee and also tacks on a per-item referral fee. Online shops can pay extra for Amazon to handle shipping.

• Amazon’s Professional selling plan costs $39.99 a month.
• The Individual selling plan is 99 cents per unit sold. 
• There’s also a per-item referral fee, which is based on the product category.

Etsy

Geared toward sellers of crafts, jewelry and other homemade items, Etsy has become a huge marketplace, providing sellers with access to more than 40 million consumers.

• Etsy charges a listing fee of 20 cents per item. Listings remain live for four months or until they sell.
• There is also a 6.5% transaction fee and, in the U.S., a payment processing fee of 3% plus 25 cents. Other countries’ payment processing fees differ.
• If you make a sale from one of Etsy’s off-site ads, they take a cut. This cut is 15% if you’ve made under $10,000 through Etsy sales in the previous 365 days. The percentage drops to 12% if your sales in the previous 365 days have exceeded $10,000.

Walmart Marketplace

Geared toward more established merchants, Walmart Marketplace puts your products in front of millions of potential customers. Walmart screens businesses before including them in the marketplace and, just like Amazon, offers fulfillment services.

• Walmart Marketplace charges a referral fee per product. The fee varies based on the product category. 
• Walmart takes a 15% cut on apparel, accessories, baby items, beauty products and books. Cell phones, cameras and consumer electronics have an 8% fee.

What are popular e-commerce platforms?

E-commerce platforms help business owners set up an online shop in little time. These platform operators also help merchants list and sell their products, manage inventory and accept payments. Here are two popular options:

Shopify

Used by more than 1 million businesses, Shopify is a top e-commerce platform that offers a full suite of services. Merchants can create an online store; sell products on social media and marketplaces; and manage product inventory, payments and shipping. Shopify charges a monthly subscription fee.

• The Lite plan costs $9 a month, but it’s designed to be used with an existing website. For the full platform experience, you’ll need the Basic plan or higher.
• The Basic plan costs $29 per month, followed by a midtier offering simply called Shopify, which is $79 a month.
• The Advanced package costs $299 per month.

BigCommerce

BigCommerce is another leading platform for online selling; it allows you to create an appealing online store and even run your social media marketing. Its pricing is comparable to Shopify’s.

• The entry-level Standard plan is $29.95 per month, the midlevel Plus plan costs $79.95 per month, and the high-end Pro plan is $299.95 per month.
• All plans have unlimited storage, bandwidth and staff accounts, and there are no transaction fees.

Which types of products are profitable to sell online?

Not every online merchant has a passion for the products they sell; many take advantage of a trend or sell ancillary items for a popular item. Some money-making opportunities are seasonal, while other profitable products have to do with current events.

Consider the COVID-19 pandemic, which has increased the popularity of certain product categories because many people are still working at home and are worried about their health. “Medical goods and loungewear are really hot right now,” Brunker said. “We’re [seeing] a surge in convenience goods and things that make people comfortable at home.”

Brunker said there’s also an increased demand for housewares, particularly decor; workout gear and equipment; and home improvement materials. 

What are the benefits of selling online?

In today’s market, having an online presence is a requirement for retailers of all sizes.

“It’s absolutely essential that small businesses get online,” Stabler said. “To not only survive but thrive, you have to reach your shoppers wherever they may be. There’s an opportunity for small businesses to go global in a way they never did before.”

There are plenty of other reasons to take your business online. Here’s a look at nine of the most important ones.

1. Cheaper startup costs

Anyone who runs a physical store knows the costs associated with operations, including rent, utilities and wages. But when you set up your store online, you don’t have to worry about dealing with a landlord; paying an electric bill; or hiring staff to collect cash, stock the shelves or manage operations.

Sure, you have to spend the money to set up a website and accept payments online, but it’s typically a lot cheaper than brick-and-mortar costs.

2. Freedom to move (or stay)

When you sell products online, you aren’t stuck in a specific location. Your e-commerce operation allows you to sell to customers nationwide and even across the world. For instance, you can sell surfboards from your warehouse in Indiana; you aren’t required to set up shop on the coast. All you need is access to the internet, email and phones to keep business going.

3. Larger customer reach

There are no barriers to shopping when you’re doing it online. That presents a big opportunity for a small business owner to reach a whole new set of customers. It may cost more to ship products internationally, but selling online can boost your reach and thus sales.

4. Scalability

The internet is nimble, and so is an online store. Because e-commerce is digital, it’s very easy to track which items are sold, decide which ones are doing well, and then add and remove products in real time.

5. 24/7 selling

The internet is on all the time, which means you’re always open for business. Even as you sleep, orders can come in. That can expand your sales and improve your profits because there’s no downtime for customers.

6. Better margins

Without the overhead associated with a physical store, you can offer your products online at a lower price and still make a profit. When you sell online, your margins tend to improve because the cost of doing business is lower.

7. Sales and shipment tracking

Thanks to analytics software, inventory management and logistics tools, it’s easy to track your online sales. That can inform your decision about what to sell and how to improve customer relations, price your products and track delivery rates, all of which will improve efficiency and your bottom line.

8. Increasingly prevalent sales channel

Perhaps in part due to the COVID-19 pandemic, the e-commerce market grew to constitute 21% of sales in 2021, compared with 15% in 2019, according to Morgan Stanley. The e-commerce market is predicted to grow from $3.3 trillion in 2022 to $5.4 trillion in 2026. This forecast indicates people are increasingly shopping online, so a sizable, growing audience is yet another advantage of selling on the web.

9. Easier transition from ads to shopping

Let’s say a shopper encounters an ad for a nearby storefront in their local paper or on a local TV channel. That consumer then has to make time to visit that store at some point when it’s open. Selling online removes that inconvenience. You’ll mainly advertise online since you’re selling there, and shoppers can immediately land on your website when they click your ads. That means you can draw in shoppers before they decide to shop elsewhere – or not at all.

Selling online isn’t just easy – it’s becoming the default

It doesn’t take much work to set up an online store, and after that initial process, you’ll likely find e-commerce incredibly beneficial. You can do it all from home, and reach anybody, anywhere, at any time. This convenience is a big reason online shopping is increasingly becoming the default mode for many shoppers. When you sell online, you meet customers exactly where they’re looking for you and can take your business to the next level. Just make sure you brush up on these online business laws first.

Max Freedman contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.