Here’s a quick quiz. Think of a product you recently bought. Now, how did you purchase it?
If your answer was #3, online, you’re in pretty good company. As many as 69% of people in the U.S. have shopped online this year. Estimates have that number ballooning to 91% by 2023.
Given that, the internet is not only a popular place to buy products — it also can be a great place to sell them.
While that may seem like a simple and obvious idea, learning how to successfully sell products online involves a bit of planning and preparation.
Not to worry. We can walk you through the steps and show you how to set up an online store.
Have you ever watched a figure skater deliver a winning performance, a chef prepare your meal tableside, or a stand-up comedian make you laugh so hard it hurt? They all usually have one thing in common: They make it look easy.
The same is true with a good online buying experience. From the moment you start your search to the time that box arrives on your doorstep, it all looks and feels almost effortless.
The truth is, it probably took a lot of work and planning by the online seller to make that experience go so smoothly for you.
A good deal of that work often takes place well before a website goes live or a post hits social media.
But if you’ve always had a burning desire to start your own business, doing it online can be a faster, less expensive way than traditional approaches.
OK, let’s get your business started.
As a writer, I've learned that the hardest thing about writing is knowing what to write. As you’re thinking about how to sell products online, the hardest part may be knowing what products to sell.
Most products fall into one of two categories: They’re often either a commodity or a specialty.
Commodity products — These are the items that just about everyone buys. Paper towels, bread, underwear. A great thing about commodity products is that many people need them and buy them fairly regularly.
The not-so-great thing about commodity products is that we tend to buy them based on price. If you’re selling commodity products, you’ll have a lot of buyers and a lot of competitors. And it’s usually the seller with the lowest price who wins, which can take a bite out of your profit.
Specialty products — These are also known as niche products. They’re made for a specific buyer or they’re unique. Beekeeping supplies, dollhouse furniture, and custom jewelry are a few specialty examples.
While the number of potential buyers is generally smaller than with commodity products, you’re also likely to see fewer competitors. If you can find an audience that needs a particular product or service — and there are few sellers offering it — that could be a good niche to sell to.
Commodity & specialty products — Another option to consider is selling both types of products. If you’re selling to model train enthusiasts, you could stock trains, track, and accessories from well-known manufacturers (commodities). You also could offer custom-made scenery pieces built to a customer’s specifications (specialty).
Being aware of what’s popular can be a key part of how to sell products online. One way is to look at what products people are buying.
You can start by going where a lot of people are shopping. For one, check out the bestseller lists on other e-commerce sites. You also can pick up on trending products by monitoring your social channels.
Be aware that those “hot” products are already being sold by other online sellers. That’s why it’s best to spot a trend early in order to grab some market share before the online gold rush starts.
Another way to use trends is to look at the market rather than the product.
For example, if home gym equipment is in demand, it may be a sign that fitness is a profitable market. Think about what products those customers might also be interested in: rubber gym flooring, weight racks, wall mirrors, muscle massagers, and health and wellness products.
For your business to be successful, you need to attract new customers. It can be just as important (and as profitable) to keep selling to your current customers.
When considering a product, think about how often a customer might need it. That’s one of the benefits of selling a commodity. A specialty HO steam locomotive might be a once-in-a-lifetime purchase for a model railroader, but paper towels are something they’ll need on a regular basis.
At the same time, if you have a unique product line that appeals to a particular audience, or you can offer hard-to-find products that they want, you may become a trusted resource they return to again and again.
If you want to have a successful online business, spend a few seconds staring at this word:
The online part might make it faster, easier, and less expensive to launch your business. But much like launching a mission to the moon, if you don’t have a good plan, your business could spiral off-course and be lost in the deep, dark space of the internet.
It has been reported that more than 90% of all internet business start-ups fail within the first 120 days. So there are quite a few of those online ventures floating around in cyberspace.
A good way to avoid that void is to start with a business plan.
A business plan can serve as a roadmap. And like a map, it can help your business move in the right direction and stay on track. It also can include important milestones to help measure how well your business is doing. A business plan can help in other ways as well, such as when you're applying for a business loan or trying to attract investors.
Creating a business plan doesn’t have to be complicated or mysterious. We have an easy-to-use template designed specifically for small business owners.
It will help you cover many important areas related to your business without taking up a lot of your time.
One of the first important decisions you’ll need to make as part of your business plan is how to structure your online selling operation. The structure you choose can affect important issues, such as taxes, asset protection, and liability.
As with any big business decision, it’s a good idea to consult with an attorney or business advisor about how to structure your business.
It also can be helpful to have a basic understanding of business structures, so here’s a brief rundown of the most common ones.
Sole proprietorship — If you want fast and easy, a sole proprietorship may be the way to go. It’s typically owned and run by one person (although you may have employees), and it often requires less paperwork and lower start-up fees.
At the same time, a sole proprietorship doesn’t create a separate entity for your business. From a legal perspective, you and your business are the same. So if your business can’t meet its debts, losses, or liabilities, your personal assets (house, car, savings) could be at risk to cover them.
Partnership — This type of structure is similar to a sole proprietorship, although some partnerships do not require registration, while others may. A key difference is that a partnership is a business that’s owned and sometimes run by two or more people or entities. Each partner gets a share of any profits, but they’re also responsible for any losses.
Limited liability corporation (LLC) — Unlike a sole proprietorship or partnership, an LLC is a separate business entity. That means it can provide more protection for your personal assets. At the same time, an LLC can often be more expensive to set up and operate.
Corporation — If you’re looking for stronger protection from personal liability, a corporation may be the way to go. While it offers great protection for your personal assets, it also can be more expensive to set up.
With this type of business structure, there’s greater emphasis on the “structure.” A corporation generally requires that you keep and maintain more extensive records, operational processes, and reports.
An EIN is an employer identification number that’s available for free from the IRS once you’ve registered your business. It can make tax reporting easier and it will definitely be needed if you hire employees or independent contractors.
An EIN is also often required to open a business bank account. Depending on the business structure you choose, a business account may be required. Even if it’s not, it still can be a good idea to have it.
If you’re looking for some help on how to choose the best bank account for your business, we’ve got some tips here.
A business bank account may also allow you to accept credit card payments, which is vital if you’re thinking about how to set up an online store. It also can make tax reporting easier and help build a credit history for your business.
While being online enables you to sell almost anywhere in the world, your business is often subject to the rules and laws of where it’s based.
As a result, there are a variety of licenses and permits you may need in order to sell online. These can often vary by the state you’re operating in, so it’s a good idea to check with your local government agencies and offices.
When you do some research into licenses and permits, you’re likely to run into a wide variety of them. Here are some of the most common types and a brief overview of what they typically cover.
You’ll most likely need a business license. Federal, state, and local authorities may require and issue business licenses. Which ones you’ll need often depends on where your business is based and what types of products you’re going to sell.
Federal business license — If you sell products that are heavily regulated, such as animal products, alcoholic beverages, and explosives, you may need a federal business license.
State business license — License requirements vary among states, based on your type of business and what you sell. We’ve got some helpful information about state business licenses here, but you also should check with your local business agency or department of commerce.
There’s a good chance that the products you sell online could be subject to sales tax. As a result, most states require you to obtain a seller’s permit so you can collect sales tax and forward it to your state government.
On the plus side, some seller’s permits also allow you to buy products from suppliers without having to pay sales tax. Rules for seller’s permits can differ from state to state, so that’s another requirement to make sure to check out in your area.
If you operate in multiple states or jurisdictions, you also may need seller’s permits for those locations. Also, if your business is in one state and your inventory is located in another state, you may need licenses and permits for both states.
You may be required to have a permit if you’re running a business out of your home, especially If you’re shipping products from there. Again, check with your local and state government, as the rules can vary.
When you form an unregistered business, like a sole proprietorship or general partnership, the legal name defaults to the name of the person or entity that owns the business. This is generally not a major concern for many businesses, but when you’re looking at how to set up an online store, you may want to give it some thought.
Unless your name is closely related to what you sell (e.g., Levi’s jeans), people likely won’t use it as part of their online search. Consequently, you may want to operate under a name that’s more descriptive of what you sell (e.g., All-Star Knockout Jeans).
To do that, you’ll likely need a DBA license. This will enable you to legally open bank accounts and conduct other business activities using that name.
OK, you’ve chosen your product, you’ve written your plan, and you got your permits. Now there’s one more “P” to take care of: Protection.
More specifically, protection from financial risk.
When it comes to how to sell products online, the internet can open up the world to what you have to sell, it also can open up a number of hazards for your online store.
Here are a few examples of common risks that online business owners may face:
When good products go bad. If something you sell causes damage or harm, you could be sued.
For instance, let’s say you sold a lava lamp and the gooey substance inside leaked out and damaged a laptop on a desk. Or maybe your blend of stress-relief tea causes a customer to break out in a rash.
In either case, you could find yourself the subject of a lawsuit.
Homeowners insurance that doesn’t cover a business owner. Running an online store from your home may feel safe and sound, but your homeowners insurance likely won’t cover any business-related accidents that occur there.
Advertising injury. Whether you’re an online seller or an online shopper, you know there’s a lot of competition out there. Trying to differentiate yourself from other sellers is a good idea, but it also comes with risks.
Let’s say you compare your product with one from a competitor and, in the process, claim their product is unsafe to use. Turns out it really isn’t. News travels fast on the internet, and your competitor responds with a lawsuit for libel.
Advertising injury also can occur even from a seemingly innocent action. For instance, you use a customer’s full name alongside their glowing review of your product without their permission. They then sue you for violating their privacy.
It can help cover the cost of claims resulting from defective products, advertising injury, or business-related accidents in your home.
If you find yourself in court, it can help cover the legal fees you might face defending yourself against a claim.
It also may be a requirement from your landlord if you want to rent or lease a space for your business, such as an office or warehouse.
It also may be required if you’re selling on certain e-commerce sites.
If you’re looking at how to set up an online store, we like to think that’s a pretty good list of product features. And we can make it fast and easy to get your online store covered.
Spend 10 minutes online, and we can find coverage options for you from some of the nation’s leading insurers.
We can do the same thing on the phone as well. Our licensed insurance agents are available Monday through Friday, 8 a.m. to 8 p.m. ET. Just call 844-654-7272.
Whichever way you choose, we can often find general liability policies for e-commerce sellers for as low as $22.50/month.*
When you’re online, there are not only a good number of risks lying in wait for you — there also are some bad actors who may directly threaten your online business.
Putting firewalls and anti-virus software in place are both good ideas, but they’re not foolproof. All it takes is one successful attack and you could be looking at financial damage that amounts to tens of thousands of dollars.
That’s why you also may want to consider adding cyber insurance to your shopping cart. And just like general liability, we make it fast, easy, and affordable to get protected.
You can start right now and get a quote in under 60 seconds. Hackers aren't the only ones online who can work quickly.
I was grabbing coffee at a local donut shop one day when I happened to hear the manager telling his staff, “If you want to sell coffee, you have to make coffee.”
Whether you’re brewing Sumatra Mandheling behind the counter or selling German stainless steel chef’s knives, when it comes to how to sell products online, you need the product on your actual or virtual shelves.
There are three basic ways to get your inventory:
Is what you’re selling highly specialized, such as custom dollhouse furniture? Is it unique or something only you can make, like your grandmother’s chocolate chip cookies? If so, you may want to handle the manufacturing yourself.
This allows you to control the quality of your product and have up-to-the-minute information about what’s in stock and how much is available to sell.
It also may minimize your risk. If you’re just starting out with dollhouse furniture, investing in commercial saws, lathes, and a garage full of wood can mean a large outlay of cash.
You may find yourself having to sell a lot of miniature armoires to recoup your investment.
If you’re making just a few pieces at a time, you may not need all that go-fast equipment and piles of lumber. Plus, you’ll likely be able to sense what the market is like for your line of colonial miniatures.
So you labor away and turn out beautiful loveseats, coffee tables, and Chippendale-style chests. Next thing you know, hobbyists can’t get enough of your dollhouse furniture.
Demand for your miniatures is maxing out. Unfortunately, so are you. It may be time to bring in some help.
If you’re not ready to hire employees and start your own miniature furniture mill, you may want to look to an outside manufacturer or on-demand provider.
Along with helping you keep up with your orders, using an outside manufacturer can free you up to handle marketing, billing, shipping, and designing new pieces of miniature home furnishings.
When choosing a manufacturer, there are a number of considerations: cost, quality, and delivery time, just to name a few. As with many big business decisions, it helps to do some research and crunch some numbers.
If what you’re selling isn’t something you’ve invented, created, or doesn’t exist anywhere else, you may want to consider working with a supplier.
Suppliers can include distributors, wholesalers, or dropshippers. Distributors usually help manufacturers sell their products to wholesalers. Wholesalers work to find retailers (you, for instance) and sell them products in bulk at a discounted price.
Dropshipping suppliers ship products directly to the end customer on behalf of a retailer. A big advantage here is that you don’t have to buy, stock, and store products yourself. You can learn more about dropshipping in this handy guide.
As you plan on how to set up an online store, it also can make sense to use both approaches to create your inventory. For instance, you may want to focus on making miniature furniture yourself, but also work with suppliers to offer the dollhouses.
It can be a way to increase your sales and provide customers with more of what they may want.
Congratulations. You’ve done a great job of preparation. Now it’s time to find a place to introduce the world to your wonderful lineup of products and your special brand of online shopping.
There are two primary options for where your store will live. One is putting your store in an online marketplace. The other is building your own online store using an e-commerce platform.
Online marketplaces — If you’ve ever shopped on Amazon, Etsy, or eBay, you’ve been to an online marketplace. Much like a bazaar, these sites host many sellers across a wide variety of product categories.
E-commerce platforms — With this approach, you build and run your own website. You can think of this as an online version of opening your own brick-and-mortar store downtown.
Both approaches can work for your business. The right choice often depends on what may work best for your business and for you as a business owner.
If you want to get your store in front of millions of shoppers, a marketplace could be a good choice. Just remember, you’ll have a lot of company, as you’ll likely be competing with many other sellers.
With an e-commerce site, you’ll have a lot more control of your site’s look and feel, which can help you stand out from competitors. At the same time, you’ll likely have to do a lot more work to attract buyers.
There are some other pros and cons of each to consider. We’ll run through a few of them here.
You can get up and running quickly and easily — Much of the work is already done for you. There are templates and guides to help you create your store, add images and descriptions, and organize your inventory.
The marketplace also handles the transactions, which can simplify part of the selling process.
Many marketplaces are household names — As we mentioned earlier, marketplaces can attract a lot of potential customers. They’re also a known commodity to many buyers, so people are generally comfortable buying there.
There’s a lot of competition — There’s a good chance that whatever you’re selling, someone else is as well. That can make it harder for buyers to find your store. And if they do, they might not buy if they can get the same product for less money at another online store.
Your competitors can easily find you — It’s not unusual for more sophisticated competitors to place ads for their store on your pages to try to lure your customers away.
Reduced access to your buyers — Marketplaces often do not let sellers have access to buyers’ email addresses and other contact information. This can make it hard to share special offers and new product announcements with your customers.
And that can be a big deal, as it can cost five times as much to land a new customer than to keep an existing one.
You can better build and control your brand — With an e-commerce site, you’re building your store from the ground up. This can be a big advantage for creating a unique style and personality for your store.
Remember, you want to stand out among all the other stores out there.
You can control the shopping experience — Think about your favorite shopping sites. Are they easy to navigate? Is the checkout process smooth and fast?
Many e-commerce platforms offer much more flexibility than marketplaces, so you can make it easy and enjoyable for customers to buy.
Access to your buyers — As we mentioned above, being able to stay in touch with your customers can help open up opportunities for more sales and better customer service. This can be a big plus.
It can be more time-consuming — Getting your store up and running is often not as simple and turnkey as it is with a marketplace.
In many cases, you’re responsible for hosting your site, setting up the purchasing processes, and other technical requirements. While many e-commerce platforms make it relatively easy to get these things done, they can take up more of your time.
After you build it, you need to get them to come — Unlike the marketplace, you don’t have an established flow of customer traffic. You’ll have to shout your name from the rooftops a lot louder to attract customers.
Bringing customers in is part of any business, so it’s not an impossible task. And we’ve got some tips to help that we’ll tell you about in just a bit.
If you want to learn more about some of the best marketplaces and platforms, we’ve done some of the leg work for you with this article.
Whether you’re using a marketplace or building your own store on an e-commerce platform, you’ll need to create the actual site where you’ll sell your products.
As we mentioned a bit earlier, it’s often easier and faster to get this done if you’re using an online marketplace. Much of the infrastructure is already done, which can save you time and effort. But it also may mean you have less opportunity to make your site stand out.
If you’re going with an e-commerce platform, there’s a bit more work to do, but you don’t have to be a coding genius to create an attractive and professional-looking online store.
There are several good online store builders that can help you put your site together. They come with a variety of features for online selling. And they offer a number of price options, including free plans and monthly subscription fees.
With just a little research, there’s a good chance you can find one that meets your business needs and fits your budget. To help you get started, we put together a list of some of the ones we like best in this article.
If you want to know how to sell products online, your website can be your best salesperson. While it’s important to differentiate your brand as much as possible, there are some best practices you may want to consider to make shopping on your site good for your customers and better for your sales numbers.
A good user experience — Also known as “UX,” this refers to how easy and intuitive it is for customers to find what they’re looking for, understand its features and benefits, get it into their shopping cart, and purchase.
This includes making call-to-action buttons (Like “Buy” or “Add to cart”) easy to see without requiring a lot of scrolling.
Make sure it works for mobile — With mobile devices accounting for nearly half of all web traffic, if your site isn’t optimized for smartphones and tablets, you could be losing out on a lot of sales. Many website builders and marketplaces automatically adjust your site to work well on mobile devices, but it’s a good idea to check for this feature.
Add your logo — Creating a strong visual identity is another way to stand out from the crowd online. A logo is an element you can use on your site, your packaging, your emails, and many other places.
Don’t have a logo? Not a problem. There are a number of online resources, like Fiverr and Canva, that can help you build a logo for your store without spending a lot of cash.
Write your own product descriptions — If you’re getting your products from a distributor or manufacturer, they may provide descriptions, bullet points, and other product information.
While it’s easier to just copy and paste them onto your product pages, keep in mind that those products may appear in other stores with the same wording.
This can be a great area to differentiate your store. Rather than just saying your chef’s knife is made from German steel, you may want to add, “It will hold a sharp edge longer than many other brands of knives.”
When writing product descriptions, show customers a benefit (staying sharper longer) as well as the feature (German steel).
Optimize for SEO — Along with being descriptive, you also want to think about the search process that customers may use to find your site. Search engine optimization (SEO) deals with where your store name appears when someone is looking for, say, dollhouse furniture or kitchen knives.
When you think about your own online shopping habits, how often do you look beyond the first page of search results before clicking on a link? Probably not often.
That’s why it’s important to rank on the first page of results (and as close to the top, too).
If you’re looking at how to sell products online, include keywords in your product copy. If you’re selling dollhouse furniture, consider using words such as “dollhouse” and “furniture.” Also think about other search terms a customer may use, such as:
There are a number of steps you can take to boost your ranking, and many website builders and e-commerce platforms offer tools to help, as we do with this article.
Create your own product images — Much like prewritten descriptions, many products also come with images. And the same advice to differentiate applies.
While it’s harder to create a new image of a product than it is to change its description, there are some applications that can help you alter an existing image to help it look different.
It also can be helpful to use images that show the product in action or in an environment where it may be typically used. This not only adds variety to your site — it helps a customer understand how they might use it and how big it is.
Here are some other tips for using product images:
Go for high quality — The image should help the product look its best.
Check the size — Make sure the images are the same size. Some website builders let you crop and resize your images.
Take your own shots — Many of the latest smartphones can capture near-professional-looking images without any or a lot of other equipment.
Give them a look around — Consider providing a 360-degree option. This may make more sense with some products (that miniature Chippendale-style dresser) than others (a kitchen paring knife).
Show the variations — If your product comes in different styles and colors, make it easy for buyers to see them all.
Allow for close inspection — A zoom feature can help show off product details.
Optimize the image — Keeping the file size of your images as small as possible without compromising quality can improve your site speed, which can make for a better shopper experience.
There are a number of other ways to build a better website for your products. If you’re looking for more insight and tips, we have another handy guide you can check out:
I have a recurring dream where I’m hosting a party. I've got the food ready, the music playing, everything is all set for people to arrive at 8 o’clock, but by 9, no one is there.
Turns out I forgot to send out invitations.
How does that relate to how to set up an online store? You could be living through a similar experience for your online store if you don’t do any promotion or marketing before throwing open your virtual doors.
Here are some ways you can create awareness for your online store and attract more customers.
Get your business on social: Do you have friends on Facebook? Followers on Instagram? A profile on Pinterest? These can be great places to get the word out about your online store.
Even if most of your followers aren’t into dollhouse furniture or gourmet cooking utensils, they may know people who are. Getting them to like and share your store can help you reach more people than you could on your own.
A good way to start is to create accounts for your business. Facebook, Instagram, and Pinterest all offer help to set up a business account.
Your business social accounts can help you promote special offers (50% off a set of steak knives with the purchase of a 12-inch carving knife), provide helpful information (how to arrange furniture in your dollhouse), and showcase new products.
Your social channels should drive traffic to your website, but don’t forget to add links to your social channels on your website. It can be a good way to increase your following on all your social channels.
Facebook and Google Ads: In addition to posts on your social channels, these two platforms let you buy and place ads for your business.
Facebook ads are targeted to users based on their location, demographic, and profile information. This can be a great way to get in front of niche audiences, such as hobbyists and cooking enthusiasts.
Google Ads let you bid on keywords so you can show up higher in search engine results pages.
Both platforms also offer analytics and results so you can see which ads may be working and how much bang you’re getting for your buck.
These types of ads often can be an easy way to get your message out there without spending a lot of cash.
We’ve got a handy article to help you get started with Google Ads here. We’ve got another one to help with Facebook advertising here.
Don’t forget email: This is an often overlooked tool that may help your marketing. For one thing, it could be very a cost-effective way to let current or potential customers know about new products, special offers, or helpful content on your site.
There are a number of online resources that can help with email templates (including several free ones), as well as email services that automate and help organize your email marketing campaigns.
If you’re using an e-commerce platform, consider one that offers a plugin for email marketing tools and allows your customers to opt in to receiving emails from you.
With all the options out there, marketing your online store may feel like a full-time job in itself, and if you’re running an online store, you undoubtedly have enough to do.
We’re here to help with how to set up an online store. We have some information that can take some of the complexity out of marketing your business and could help you get more buyers to your site.
Here are a few articles to get you started:
Before the internet, opening a store of your own took a lot more than desire, vision, and hard work. Along with securing permits, sourcing products, and advertising your business, you first had to find a good brick-and-mortar location. Ideally, in an area where many people came to shop.
Even if you did find a great location, you most likely would need some start-up money to cover rent, utilities, and other expenses.
If you didn’t find the right spot or if you didn’t have access to a pile of cash, opening your doors to the world of commerce could be quite a challenge.
If you’re thinking about how to set up an online store, the major barriers of location and capital often don’t come into play. Which means all you may need are that desire, vision, and hard work to make your dream a reality.
And when you consider that, it may be time to open for business.
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on August 2021 data of 43% of our total policies sold.
As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing for small business owners.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.