It’s no secret that Ecommerce businesses are booming across the globe. The US Ecommerce industry alone is expected to hit a value of $500 million by 2022. New business owners and entrepreneurs who wish to participate in this industry can set up their own Ecommerce business relatively quickly by following the right procedures.
This guide will discuss the steps for starting an Ecommerce business in the USA.
Step 1: Market Research
It is vital to understand the current Ecommerce market before starting a business in this industry. There are hundreds of millions of Ecommerce customers in the USA, so business owners and entrepreneurs must ensure they understand their target audience well.
One of the first steps before opening any Ecommerce business is to determine what products or services you will be offering. For example, if you intend to sell products, you should understand what type they are and whether there is a target market for them.
You will also need to determine how you will source these products and what type of business model to follow. Some Ecommerce businesses sell single products, while others focus on packages or subscriptions. Each of these offers distinct advantages, so you should ensure your chosen business model fits with the product or service you are offering.
Step 2: Choose the Business Name and Website
The next step is to select a suitable name for your business. This name should indicate what your business does. However, it should also be unique and memorable for branding purposes.
You can look up whether other businesses are already using your chosen name by visiting your state’s Secretary of State website. You can also consult the U.S. Patent and Trademark Office.
Next, you can look up available domain names for your Ecommerce business’s website. Most business owners and entrepreneurs strive to get websites with “.com” domain names such as exampleecommercehub.com. However, such domain names are in high demand. If a “.com” domain isn’t available, consider going for a similar one such as “.co”.
Step 3: Choose a Legal Structure
Once you have chosen a suitable business name, you will need to select an appropriate business structure. The most common business structures include LLCs, corporations, general partnerships, and sole proprietorships. Each of these offers distinct advantages and drawbacks, so you should learn about each one prior to choosing your legal structure.
For example, starting a general partnership or sole proprietorship in the United States means you won’t need to register in your state. This also means the business will be under your individual name. Business owners and entrepreneurs who wish to operate under a different name will need to file a “doing business as” application with their local government.
Step 4: Apply for an Employer Identification Number (EIN)
The next step in the Ecommerce business setup process is to apply for an employer identification (EIN) via the IRS. An EIN isn’t necessary for all businesses in the United States. However, it helps separate your business finances from your personal finances.
There are no fees or charges associated with acquiring an EIN. It can be done online, over the phone, or via mail or fax.
Step 5: Licenses and Business Permits
Businesses in the United States require licenses and permits to legally operate within their city or state. This requirement exists for all business structures including general partnerships and sole proprietorships.
New business owners and entrepreneurs can apply for a general operating license once they have registered their business with the state. You may also need to apply for a local operating license depending on the city or state you will be operating in.
Other permits and licenses include:
- Sales tax permits
- Signage permits
- Professional or trade licenses
- Safety, health, and environmental permits
Step 6: Select an Ecommerce Platform and Build a Website
Once you have acquired the appropriate licenses and permits, it’s time to choose an Ecommerce platform. There are dozens of great platforms to pick from. This includes major ones such as Squarespace, WooCommerce, and Shopify.
These platforms may differ in their charges, store features, and the level of assistance they’re willing to provide for business. New business owners and entrepreneurs should research the various Ecommerce platforms out there prior to choosing one for their Ecommerce business.
The next step is to build a website. This is a crucial step because your website will likely be the first point of contact that customers make with your brand. For this reason, you should ensure your website looks attractive and is easy to navigate. You will also need to focus on search engine optimization (SEO) to improve your website’s ranking in search engine results.
Step 7: Product Sourcing
Next, you will need to source the products you intend to sell at your Ecommerce store. This is important whether you are creating your own products, sourcing them from distributors, or are offering services. New business owners and entrepreneurs will need to consider the inventory they will be starting out with and the challenges they will face when restocking or adding items.
Step 8: Marketing
The final step in setting up your Ecommerce business is marketing. You can promote your business organically by optimizing your website for SEO. It is also possible to draw in potential customers using Google ads, ads on social media, or influencers. It is important to note that marketing is an on-going process and that you will likely run several marketing campaigns as your business grows.
Final Thoughts
As you can see, there are many steps involved with setting up an Ecommerce business in the United States. If you want to set up an online business in Europe, have a look at how to set up an Ecommerce business in Germany. You can make the setup process easier by seeking assistance from company formation experts such as Open a European Company.
At Open a European Company, we have assisted numerous business owners and entrepreneurs in opening Ecommerce stores in the United States. Please get in touch with us to learn more about our company formation services.
