How to Start an Online Store

Starting an online store has two halves: setting up the business and setting up the shop. This guide covers both in order. It is general information, not legal or tax advice, and it points to our free tools and to official sources.

Step 1: Decide what you will sell

Start with a product or product category, who buys it, and how much it costs you to source or make. Our markup calculator and profit margin calculator help you set prices that cover your costs, and our break-even calculator shows how many sales you need.

Step 2: Set up your business

The SBA’s launch checklist starts with choosing a business structure before you register with the state, then getting tax ID numbers and any licenses and permits you need. Many sellers form an LLC; see how to start an LLC and our LLC cost by state calculator. The IRS issues an EIN online for free, and it says you never have to pay a fee for one.

Step 3: Open a business bank account

Keep business money separate from personal money. See Best business bank accounts for a comparison built from published terms.

Step 4: Choose a platform

An ecommerce platform hosts your store and takes orders. Compare published pricing, what is included and how you will get paid. Shopify’s published plan prices and third-party transaction fees are on our Shopify fees page, and our Shopify review lists the features Shopify publishes for each plan. Look at the total monthly cost, not only the headline price.

Step 5: Set up payments

Decide how customers will pay. Platforms usually offer their own payment service or let you connect another processor, and some add a fee when you use an outside one. Compare effective rates with our credit card processing fee calculator and read the individual fee guides for Stripe, Square and PayPal.

Step 6: Shipping, taxes and policies

Work out shipping costs and carriers, and add clear shipping, return and privacy policies. Sales tax rules vary by state and by where your customers are, so check your state’s department of revenue. If you sell barcoded retail products, remember that a scannable retail UPC needs a GS1 company prefix; see our UPC code generator for what it can and cannot do.

Step 7: Launch and keep improving

Test checkout end to end, place a real order, and check that emails, taxes and shipping work. Then track your costs against your sales. Re-run the numbers as your volume grows: fee structures can make a different plan or provider cheaper at a different scale.