How to start, plan, and launch an online store

Whether you’re looking to expand your business beyond craft fairs or create an e-commerce empire from the ground up, starting an online store is the first step to transforming your entrepreneurial vision into reality.

Why start an online store?

Starting an online store offers unique opportunities for both personal and financial growth. You’ll have the ability to tap into the $6.3 trillion e-commerce market while enjoying flexibility beyond the confines of a nine-to-five gig.¹

Some common types of online stores include:

• Handcrafted goods: Ideal for artisans looking to sell their handmade creations.

• Dropshipping: For those who prefer not to hold inventory.

• Print-on-demand: Suitable for artists and designers who want to sell custom-made products.

Planning your business

It's all too easy to get carried away by an exciting idea for a new business. However, taking the time to plan a business idea thoroughly before officially starting your business can prevent wasted time, startup costs, and headaches in the long run – especially if you have a well-crafted business plan that provides clarity, direction, and a framework for measuring progress.

Already know how to open an online store and are primarily seeking tips on how to take it to the next level? Feel free to skip to the next section.

Decide what to sell – find a profitable product

The first step before launching your online store is deciding what you’re selling. Perhaps you already have products in mind, or maybe you're transitioning a brick-and-mortar store online or turning a beloved hobby into a side hustle.

However, if you're starting from scratch and wondering how to decide what to sell online, it's time for some in-depth research to identify a profitable product. Consider these approaches to building online stores:

• Leverage your expertise. Do you have professional experience or a passion for a particular niche? Selling items you're knowledgeable about can give you an edge in terms of product selection, marketing, and customer service.

• Solve a problem. Identify a common pain point or unmet need in the market. Can you offer a product that provides a solution?

• Ride the trends. Tap into current market trends by exploring social media hashtags, using keyword research tools, and analyzing Google Trends. What products are gaining popularity? How can you put a unique spin on a trending item?

As you brainstorm potential product ideas, consider the potential profit margins. Production costs, shipping fees, and marketplace commissions can quickly add up for large, heavy, or complex products – nobody wants to run an online store that’s financially unviable.

Product sourcing and inventory considerations

Once you've decided on what to sell, it's time to tackle the logistical side of your online store – establishing a reliable supply chain and managing your inventory.

Here are some essential steps to keep in mind when starting an online store:

• Sourcing inventory. Whether you're manufacturing products yourself or partnering with suppliers, make sure to secure reliable sources for your goods. The last thing you need is for your business operations to grind to a standstill because of supply chain issues.

• Storage. Your products need a temporary home while awaiting their new owners. If you have the space and resources, you may want to store inventory yourself. Wondering how to set up an online store without inventory? Consider a dropshipping business instead – this model allows you to sell products without holding any inventory, eliminating the need for storage and upfront investment.

• Inventory management. Even with dropshipping, effective inventory management is crucial. Determine how you'll track stock levels, reorder products, and handle returns. Choose an inventory setup that suits your business size and complexity. You might start with simple spreadsheets, then upgrade to dedicated inventory management software as your business expands.

Learn more about how to choose a manufacturer.

Find your target audience

Forget the 'build it and they will come' mentality. In the world of ecommerce, success hinges on knowing your customer. Even before launching your site, invest time in understanding who you're selling to.

This means:

• Analyzing the competition. Study the customer base of businesses offering similar or adjacent products. What are their demographics, interests, and pain points?

• Exploring online communities. Where do your target customers spend time online? Which social media platforms, forums, or blogs do they routinely engage with?

• Leveraging social media insights. Social media analytics tools can reveal insights into user demographics, interests, and behaviors.

• Employing keyword research. Use keyword research tools to uncover the search terms and phrases your target audience is using.

Once you've gathered data on your potential customers, consider using customer segmentation to divide them into distinct groups based on shared characteristics, behaviors, or needs. This will allow you to create targeted marketing campaigns and personalize the shopping experience for different customers.

Utilize competitive research

With over 14 million e-commerce sites in the United States alone, you're bound to encounter competition.² To thrive, it's essential to conduct thorough competitive research and gain a deep understanding of your rivals before creating an online store.

Competitive analysis can provide invaluable insights into:

• Market positioning. What are your competitors’ unique selling propositions? Use this insight to differentiate your own brand and carve out a distinct space in the market.

• Pricing strategies. Evaluate your competitors' pricing models and identify opportunities to offer competitive pricing or premium value propositions.

• Marketing and promotional activities. Analyze their marketing channels, social media presence, and advertising campaigns. This helps you identify effective tactics and discover untapped opportunities.

• Customer experience. Assess their website usability, customer service, and overall shopping experience. How can you provide a superior experience for your own customers?

Remember: Understanding your competition is not about copying their every move but about learning from their successes and failures to chart your own path to success.

Decide business structure

Next, take the time to establish a solid legal foundation for your business. Your business structure will impact various aspects of your operations, including taxes, liability, and ownership.

Some popular business structures include:

• Sole proprietorship. This is the most common structure, where you, the owner, are personally liable for all business debts and obligations.

• Partnership. A partnership involves two or more individuals sharing ownership and responsibility for the business.

• Corporation: A corporation is a separate legal entity from its owners, offering limited liability protection but also entailing more complex regulations and formalities.

• Limited liability company (LLC). An LLC combines the limited liability protection of a corporation with the flexibility and pass-through taxation of a partnership.

While sole proprietorships are the easiest to set up, it's worth considering whether an LLC might be a more advantageous option for your online store. An LLC can shield your personal assets from business debts and lawsuits. Additionally, an LLC may offer tax advantages compared to a sole proprietorship.

Consulting with a legal or financial advisor can help you evaluate the pros and cons of each structure and make an informed decision that aligns with your long-term business goals.

Choose a business name

Obviously, your online store needs a name, but don't underestimate the importance of this step. Choosing a business name that represents your vision and values can contribute significantly to brand recognition and memorability.

Here are some crucial considerations when deciding how to choose a business name:

• Availability. Ensure the name isn't already trademarked or in use by another business, especially within your industry. Conduct a thorough search online and with the U.S. Patent and Trademark Office.

• Uniqueness. Your name should stand out from the crowd and capture the spirit of your brand. Avoid generic terms or overly complicated names that might be difficult to remember or pronounce; instead, make it easy for customers to find you online.

• Brand image. Consider the image you want to project. Is it playful and quirky or sophisticated and professional? Your business name should embody your brand identity.

• Domain name availability. Check if a corresponding domain name is available for your chosen business name. A matching domain name enhances your online presence.

Build your brand

When it comes to e-commerce, your brand is your online store's virtual storefront, creating the first impression and setting the tone for customer interactions. That said, branding goes beyond just a name and logo; it encompasses the personality, values, and overall experience you want to convey to your audience.

Here are some key aspects to consider when building a brand for your online store:

• Conduct thorough research. Utilize the insights gained from your target audience and competitive research to inform your branding decisions. What resonates with your ideal customers? How can you differentiate yourself from competitors?

• Develop a brand identity. Define the characteristics and traits that embody your brand. Is it friendly and approachable, or sophisticated and luxurious? This identity should be reflected in your visuals, messaging, and overall customer experience.

• Craft a brand voice. Establish a consistent tone and style for your written and verbal communication. Whether it's witty and informal or authoritative and informative, your brand voice should align with your brand personality.

• Tell your brand story. Share the narrative behind your brand – its origins, mission, and values. A compelling brand story can foster an emotional connection with customers while helping with building your brand loyalty.

Setting up your online store

With your business plan firmly in place, it's time to roll up your sleeves and bring your online store to life. Setting up an online store marks the exciting transition from planning to execution, where your vision begins to take tangible shape.

Read on as we explore how to set up an online store, from choosing the right ecommerce platform to finding the best payments provider.

Choose the right ecommerce platform

An ecommerce platform is the backbone of any online store. Essentially, it's the software that powers it, providing the tools to list products, process payments, manage inventory, and handle shipping.

When reviewing your options, consider ease of use and customization options. Also, evaluate its integration capabilities with solutions like the PayPal Commerce Platform to help you build a trustworthy and secure payments experience.

Check out more tips on choosing an e-commerce platform.

Choose a hosting solution

Hosting services store and serve your website, directly impacting its accessibility and speed. Your hosting service may also offer SSL certificates, which secure online transactions and protect customer data.

Depending on the e-commerce platform you choose, a hosting solution might already be integrated. This can simplify setup and management. However, it's worth considering whether the integrated solution meets your specific needs or if a more bespoke web hosting solution might be beneficial.

In most cases, starting with the integrated and cheapest option is advisable, especially for new online stores. You can always upgrade later if your traffic grows or you require more advanced features. That said, if you anticipate high traffic from the outset or need specific hosting capabilities, exploring dedicated hosting providers might be worthwhile.

So, how to choose a hosting solution? Consider the following factors:

• Price. Compare pricing plans from different providers, but don't compromise on quality for the sake of cost savings.

• Performance. Look for a provider that offers fast loading speeds and reliable uptime to ensure a smooth user experience.

• Reliability. Your provider should have a proven track record of stability and minimal downtime.

• Scalability. As your online store expands, you’ll want a hosting solution that can handle increased traffic.

Plan your website structure

Next, it's time to architect the structure of your online store. Most e-commerce stores follow a similar structure, utilizing categories and sub-categories to organize their product offerings. For example, a clothing store might have categories like "men's," "women's," and "children's," with sub-categories such as "tops," "bottoms," and "accessories" under each main category.

When planning your website structure, put yourself in your customers' shoes. Consider how they would search for and navigate through your products. Make sure the categorization and sub-categorization feel logical and intuitive, allowing customers to easily find what they're looking for.

Keyword research tools can be invaluable during this process. By identifying the search terms and phrases your target audience is using, you can align your website structure with their search behavior.

In addition to product categories, remember to include essential pages that provide important information and build trust with your customers:

• About page. Share your brand story, mission, and values.

• Contact. Provide clear contact information, including email, phone number, and address, if applicable.

• Returns and shipping information. Clearly outline your return and shipping policies to set expectations and build customer confidence.

• Privacy policy. Explain how you collect, use, and protect customer data.

• Terms of service. Outline the rules and regulations governing the use of your website and services.

Designing your online store

When it comes to e-commerce website design, there's no one-size-fits-all solution. The approach you choose depends on your resources, technical skills, and desired level of customization.

Whether you opt for ready-made templates, hire a professional designer, or take the DIY route, prioritize a user-friendly design that uses:

• Simple navigation. Use clear categories, effective search functionality, and intuitive layouts to guide customers through your product offerings.

• Visual appeal. Select colors, fonts, and graphics that reflect your brand identity and present your products and brand in the best possible light.

• Mobile responsiveness. Ensure your site functions flawlessly across all devices, including smartphones and tablets.

Using templates

Not a tech expert nor a design guru? Don’t worry. Many e-commerce platforms offer professionally-designed, customizable online store templates. These online shop templates can significantly streamline the design process, providing a pre-built framework that you can personalize with your branding elements and product listings.

This approach to creating an online store is particularly appealing for those with budget constraints, as it eliminates the need for coding or extensive design hours. Keep in mind that templates offer limited control over the overall look and feel of your site.

Hiring designers

If you have a specific vision in mind or want a truly unique and professional online store website design, consider hiring web designers. They can translate your ideas into a visually stunning and functional online store that perfectly aligns with your brand identity.

Professional design services can be expensive. To keep costs from spiraling, you could use a template as a starting point and then hire a designer to customize it further.

Designing your own website

For those with web design skills, designing your own website offers complete creative control. However, building a website from scratch is not for the faint of heart – you’ll need technical expertise, coding knowledge, and ample time.

Design and optimize your product pages

Your product pages are the virtual shelves of your online store, showcasing your offerings and enticing customers to make a purchase. Thoughtful product page design and tactical product page optimization can enhance the overall shopping experience.

Write great product descriptions

Writing product descriptions that are compelling go beyond listing features; they paint a vivid picture of your product's benefits and value proposition. Well-crafted e-commerce product descriptions can significantly impact conversion rates by informing, engaging, and persuading potential customers.

Here are some tips on how to write product descriptions that successfully convert shoppers:

• Highlight benefits. Focus on how your product solves a problem or enhances the customer's life, rather than just listing its features.

• Use clear and concise language. Remove any jargon and technical terms that might confuse potential buyers.

• Incorporate storytelling. Weave a narrative around your product to create an emotional connection with customers.

• Include relevant keywords. Incorporate relevant keywords related to your product to boost your SEO.

• Proofread carefully. Ensure your descriptions are free of grammatical errors and typos.

Use great product photography

High-quality product photography is what captures the attention of potential buyers. While you might have access to stock images from your suppliers, investing in unique and professional e-commerce product photography can significantly elevate your brand image.

Remember, your product photos are often the first point of contact between your customers and your products. Make sure they leave a lasting impression by showcasing your products from multiple angles, highlighting their unique features, and creating a sense of desire.

For more on elevating your product photos, explore these product photography tips.

Find a payments provider to accept payments with

Your checkout page is the last hurdle to a successful sale, which means choosing a payments provider that can facilitate smooth, secure, and reliable transactions.

Learn more about how to accept payments with PayPal.

Decide on a shipping solution

Effective shipping solutions don’t just get packages from A to B; they do so in a timely and safe way that boosts customer satisfaction and loyalty.

As you evaluate different carriers, consider factors like cost, speed, and geographic reach. Also, review their tracking capabilities and reliability to help a smooth delivery process.

Visit the PayPal Shipping hub for more on finding the right method.

Launching and marketing your store

Before you unveil your online store to the world, take these steps to ensure a smooth and successful launch:

• Conduct thorough testing. Leave no stone unturned. Test every nook and cranny of your store, from product pages and the checkout process to navigation and mobile responsiveness. Iron out any glitches or inconsistencies to deliver a seamless user experience from the get-go.

• Implement analytics tools. Knowledge is power, and tools like Google Analytics can help you track visitor behavior, sales data, and other key metrics. This valuable information will guide your future marketing strategies and help you make informed decisions to optimize your store's performance.

• Create open communication channels. Make sure your customers can reach you easily, whether through email, live chat, or phone support. Swift and helpful communication fosters trust and builds customer loyalty.

Most importantly, don't let your launch go unnoticed! Here are some marketing ideas to generate buzz and attract your first customers.

Social media marketing

With billions of active users across various platforms, social media marketing offers a unique opportunity to connect with potential customers, build brand awareness, and drive traffic to your online store.

While organic social media marketing, such as creating engaging content and fostering community interaction, can be incredibly effective, paid advertising can help you reach a wider audience quickly, especially when launching a new business.

Here are some key social media marketing tips for new businesses:

• Choose the right platforms. Focus your efforts on channels where your target audience is most active. Don't spread yourself too thin by trying to be everywhere at once.

• Prioritize visuals. Captivating images and videos are essential for grabbing attention and stopping the scroll on social media.

• Engage with your audience. Respond to comments, messages, and mentions promptly and authentically. Foster a sense of community and build relationships with your followers.

• Diversify your content. Experiment with different content formats, such as photos, videos, live streams, polls, and stories, to keep your audience engaged.

Search engine marketing (paid search and SEO)

Search engines like Google and Bing are often the primary gateway for customers discovering new products and stores. Search engine marketing (SEM) encompasses strategies to increase your visibility in search engine results pages (SERPs) and drive traffic to your website.

SEM consists of two main components:

• Organic search engine optimization (SEO). SEO involves optimizing your website's content, structure, and technical SEO elements to improve its ranking in organic search results. It’s a long-term strategy that requires ongoing effort but can lead to better visibility and traffic.

• Paid search advertising. Paid search ads, such as Google Ads, allow you to bid on specific keywords and display your ads prominently in search results. This can be a quick way to generate traffic and leads, especially when launching a new store or promoting specific products.

While SEO marketing is essential to long-term visibility and establishing your brand's authority in search results, it can take time and effort, particularly in competitive markets. Paid search advertising can complement your SEO efforts by providing immediate visibility and driving targeted traffic to your online store.

Digital PR

Digital PR involves strategically building relationships with online influencers, journalists, and bloggers to earn media coverage and generate positive brand mentions online.

Some benefits of digital PR for new online stores include:

• Increased brand awareness. Positive media coverage can introduce your brand to a wider audience and establish credibility.

• Improved SEO. Backlinks from reputable websites can boost your search engine rankings, driving organic traffic to your store.

• Enhanced brand reputation. Positive reviews and endorsements from influencers and media outlets can build trust and credibility.

• Cost-effective marketing. Compared to traditional advertising, digital PR can be a more affordable way to reach a large audience.

However, establishing connections with influencers and journalists takes time and effort. Securing media placements will also require compelling stories and newsworthy angles, which may not be easy to come by.

Customer service

Exceptional customer service is paramount for any online store, especially a new one without a trove of existing five-star reviews. Some key considerations for excellent customer service include:

• Clear contact information. Display your contact details prominently on your website, including email address, phone number, and social media handles.

• Responsive communication. Aim to respond to customer service messages within 24 hours, if not sooner.

• Helpful and knowledgeable staff. Train your customer service team to be friendly, knowledgeable, and empowered to resolve issues efficiently.

• Proactive communication. Keep customers informed about order status, shipping updates, and any potential delays.

Remember, positive customer experiences lead to repeat business and glowing reviews, while negative experiences can quickly tarnish your brand reputation.

Setting your online store in motion

Learning how to start an online store is an exciting journey filled with endless possibilities – from what you’re selling to how you’re selling it. By following these steps, you'll be well-equipped to navigate the e-commerce landscape and turn your entrepreneurial dreams into reality.

Don’t wait to turn your passion into profit. Explore more tips on how to promote your new business.