How to Start an Online Retail Business in 12 Easy Steps [2023]

You can launch an online shop even if you have no previous experience. Our in-depth guide explains everything you need to know to get started in no time.

Starting an online retail business can be a financially rewarding and all-around fulfilling experience. The right product, price, and distribution mix can take you from a small startup to a multi-million dollar company. But setting up an online store can be challenging and overwhelming. There’s a lot of information out there and so much to consider.  Everything from registering your business to inventory, logistics, customer support, and all the way to creating a website. If you’re thinking of starting an online retail business but aren’t sure where to begin, this post is for you.

Find a market gap & identify your business opportunity

One of the first and most important steps when starting an online business is identifying the niche or industry you want to be in and finding a gap in the market. Spotting a gap in the market can be potentially lucrative if there is a high demand from consumers. However, identifying such a gap requires quite a bit of effort on your behalf. One of the best ways to get started is to conduct online research to see what other companies are doing in the particular market you have chosen. To really understand where the potential business opportunities lie, you’ll need to read annual market research reports, market studies, industry insights, and even competitors’ annual reports. 

Determine the products you want to sell

Once you’ve put together a list of potential products you want to sell, it’s time to do some customer research. You’ll want to ​​reach out to as many potential customers as possible to determine their needs, wants, and how much they would be willing to pay for such products. You’ll also need to establish whether to make the products yourself or source products from a third-party vendor. Your business likely won’t be able to produce everything on its own - especially at the start, so you’ll probably need to locate a supplier right away or find a way to distribute your products through reselling or drop shipping.  

Find your USP

At its core, a USP should answer a potential customer’s most immediate question: “What makes you different from the competition? Having the ability to articulate and answer this question will help you differentiate your business and make it a whole lot easier for you to attract customers. It will also help guide your branding, product, and marketing decisions and keep your marketing strategy focused. One of the best ways to create a USP is to think about the benefits of your product and the problem it solves. Your USP should be clear, concise, avoid vagueness, and not be based on a feature. One sentence that identifies an issue and offers a solution is all that's needed. 

Research your target audience

It’s important to have a thorough understanding of who your target audience is so you can market your business to them accordingly. When you have a detailed picture of your ideal customer, it’s easier to develop a marketing strategy that will reach and attract the type of people who will be most interested in buying your product or service. To know who your customers are, you must first understand their behavior. A ton of information online will help you learn more about your potential customers’ habits, interests, pain points, needs, and much more. You can use Google Analytics, Facebook Insights, and conduct email surveys or just interact with your target audience in online forums.  

Write your business plan

A business plan is a written document that helps you organize your thoughts, goals, and strategy. It ​​provides your business with direction, especially in the early stages. It also enables you to build a framework to evaluate your progress, stay focused on the most critical aspects of your business, and ensure that you are making intelligent decisions rather than taking unnecessary risks. According to a Bplans and University of Oregon study, entrepreneurs that develop a business plan are 129% more likely to grow beyond the startup phase. 

Executive summary

The executive summary includes basic information and a concise overview of the main focus of your business, the products or services offered, and your future plans.

Company description

Here you will find all the key information about your business, including its registered name, address of any physical locations, and what the company does.

Business structure

The legal structure of your business is typically listed in this section and the names of key employees, executives, and owners. It’s also important to include the level of each owner’s involvement in the company. 

Business model

The business model is the driving force behind your company’s strategy and is the framework for the business plan. A good business model describes how your business creates, delivers, and captures value to enable profitability in the long term. Common types of business models include distributor, wholesaler, direct to consumer, subscription, and franchise.

Marketing and sales plan

It’s not enough to have a great business model or product or service. You also need to figure out how to sell it in the market. This is why you will need to create a marketing and sales plan that will help you in the whole process. Your marketing and sales plan should consist of your company’s mission and vision and the strategies and tactics needed to achieve your company’s goals. It should also include a description of what you sell and how you sell it, an analysis of the competition, the strengths and weaknesses of your product/service, and potential market opportunities.

Financial forecast

A financial forecast is a statement of your expectations for your business’s sales, costs, and expenses over the next 12 months. It provides you with an overview of your business’s current position, what it expects in the future, and how you plan to get there.

Determine online retail startup costs

If you have an unrealistic expectation of how much it will cost to start your online business, you could be setting yourself up for failure. The good news is that starting an online business doesn’t have to be expensive, but that doesn’t mean you don’t have to accurately estimate your costs before you begin. While costs will vary depending on the type and structure of your business, there are initial start-up costs that all online businesses need to consider. These include domain names, hosting for your website, web development, and any other technology-related costs. Additionally, there are also business registration, advertising, promotion, as well as office and employee expenses.    

Find suppliers

Finding suitable suppliers is essential for setting up your online business and getting your products to market, yet it is often overlooked. One of the best ways to find suppliers is to look on sites like Alibaba, Aliexpress, or IndiaMart that connect businesses with suppliers. You can also seek out suppliers or product sources in different countries all over the world. Whichever route you decide to take, it’s always critical to secure backup product suppliers in case something goes wrong with one of your primary suppliers. Ideally, you’ll want a reliable pool of suppliers to choose from.

Hire a supply manager

If you’ve got room in your budget, hiring a supply manager to deal with inventory and supplies can help you free up a lot of your time. Supply managers are generally responsible for ordering supplies, tracking inventory levels, and monitoring costs. A good supply manager will know how to manage the flow of products through your business, often through multiple vendors, and will play a big part in keeping your business running smoothly. They will also save you lots of money in the long run! 

Register your business

Registering a business is about more than just filling in a few forms and choosing a name. You'll also need to consider what type of entity you are forming. A business can be created in various ways, as an individual proprietorship, partnership, corporation, or limited liability company. Of course, the specific processes involved in registering a business are different depending on what country you plan to register in. Check out these step-by-step guides on registering a business in the UK, US, and EU for more detailed information.

Choosing a location

Many new business owners don’t realise that you do not necessarily need to register your business in your current location. In fact, it might be a big mistake! With that said, choosing the country to register your business is one of the most important considerations you’ll have to make. It’s a decision that will significantly influence your business’s profitability, stability, and growth potential, so it needs to be made with due care and attention. Key factors to consider when determining which country to set up your business include - the ease of registering a business, residency requirements, reporting and other company filing requirements, tax implications, and access to skilled talent.

Choosing your business name

Naming your new venture is an integral part of starting a business. Your business name is the first impression you make on customers, vendors, employees, and partners. It will appear on your website and social media and help form your brand identity. It will also set the tone for your marketing and web presence. A good name should be easy to remember, spell and pronounce. It should be unique and different from your competitors and be wide-ranging enough to give your business room to grow. When deciding on a name, always remember that you’ll need to consider domain name availability and test the name in online searches to ensure it’s not closely associated with something else.

Set up your business bank account

Opening a business bank account is one of the first tangible steps on the road to making your business a reality. Your new business will be reliant on this account for its financial transactions, so you must find the right bank for your needs. It’s also vital that you do everything you can to ensure the security of your account so that your business doesn’t fall foul of any fraudulent activity or banking mistakes. While you can use the same bank you use for your personal bank account, you’ll also want to look into other options. Some banks are better suited for businesses than others and offer business owners incentives, like discounts, lower transaction fees, and better access to business loans. When you’ve compared the different options and you’re ready to open an account at the bank you have chosen, be sure to read the small print to double-check there are no nasty surprise fees or terms. 

Set up your ecommerce store

The good news is that it’s not rocket science to get your own ecommerce store up and running. While you have to understand a few technical aspects, the basics of setting up your store and putting your products online are relatively simple.  

Get a domain name

You need to register your domain name to get your website online. It's important to register a domain name before you set up your website because when you're finished, you'll be able to launch your site quickly and easily. Here are a few other important considerations when buying a domain name.

  1. Buy a domain name from a reliable domain registrar
  2. Use a domain availability checker to check whether the name you want is available.
  3. Purchase your domain and complete registration.
  4. Verify ownership of your domain.


  • Make sure your domain name is memorable and easy to spell. Try to avoid using numbers and special characters such as hyphens.
  • Choose the right domain extension - '.com' is considered the best as it is the most familiar and widely used.
  • Make sure your domain name isn't too long. Search engines usually give preference to short, easily understandable and simple domain names.

Site pages

With the stakes so high, ecommerce sites need to walk a fine line between easy navigation and customer satisfaction. Plus, it's crucial to focus on conversions and driving purchases. You shouldn't just create product pages and a checkout page. You need to have the right content in the right place to keep potential customers engaged and comfortable to make a purchase. The most important pages to include are:

  • Homepage
  • About us
  • FAQ
  • Privacy policy & terms of service
  • Product detail pages
  • Product listing pages
  • Shopping cart or basket pages. 
  • Checkout
  • Thank you pages

Of course, as an ecommerce website, your product pages are your bread and butter. The more time your customers spend on your product pages, the more they are likely to buy, so you’ll need to spend considerable time testing and optimising these pages.

Set up product or service descriptions

A product description is used to describe what the product is and explain the benefits. Writing such descriptions is a difficult task. It’s hard to give a product description just enough information without being too fluffy or too technical. Too much detail could turn customers off from making a purchase while being too light on the details can result in customers feeling unsure about making a purchase. When developing your product descriptions, keep them nice and short and think about basic details of the product, who the product is for, when and where the product is used, why the product is useful, and how it works. Remember that if you’re not able to communicate your product benefits effectively, few people will take the leap to purchasing.

Take product pictures 

As consumers, we’ve become accustomed to seeing high-quality images of products online. It’s almost expected that the pictures you get when you shop online are going to be crisp, well-lit, and show off the product’s best features from different angles. The reality is that if you want to sell a lot of products, then your product photos need to be up to scratch. You wouldn’t buy a new shirt without looking at the label, so why would you buy an item of clothing without having a good look at the photo? Your product images are your shop front. They are a big part of a customer’s decision-making process and are a core driver of conversion rates. If they’re terrible, no one’s going to want to make a purchase. What’s more, bad-quality product pictures reflect negatively on your overall brand image. Clean, crisp, white background, product-only images always work well. In-context pictures showing a product being used in its intended environment are also a good option. 

Include “you may also like” algorithm

The highest priority for any ecommerce business is to increase sales. However, one of the main obstacles to achieving this is how customers choose and search for products. The “you may also like” algorithm is a feature that recommends products based on a customer’s search history or previous visits to the website. Adding this algorithm is a great way to direct your customers to additional products they may need or want, which ultimately helps you to boost your sales.

Set up prices

Setting prices for your products is one of the most challenging tasks in the world of ecommerce. Here are four of the most commonly used pricing strategies that will help you maximize profits while keeping your products attractive to customers. 

Cost-based pricing

With this strategy, you start with your costs to produce or deliver one unit of your product or service. Then you add your desired profit margin, and that’s your price.

Competitor-based pricing

This strategy allows you to determine your prices based on the prices set by your competitors for similar products. While this is a relatively quick and simple way to price your products, your competitors might be wrong with their prices leading you to lose potential profits.

Value-based pricing

Value-based pricing is a technique to determine how much a product or service is worth in the market by identifying the value it provides to a buyer. It involves setting prices for products and services based on what the client is willing to pay rather than on costs and profit.

Dynamic pricing

Dynamic pricing is a practice used to determine a product or service price based on external factors such as demand, supply, competitors, and other factors. 

Work on the “About us” page

An About Us page tells website visitors who your business is, your values, and how you can help them. A well-crafted page can help build trust with potential customers and increase conversions. The About Us page should be viewed as an online resume for your company. It is a great way to tell people about your company, its history, and its background story.

Include terms and conditions information

The terms and conditions page helps protect your business and educates your customers to know what they can expect while using your site and transacting with your business.

Policies and warranties

A standard website policy and warranty page are a must-have for every online business. The page should provide customers with detailed information on your terms and conditions, the site's acceptable use, and details of any warranties on products. 

Returns and refunds 

Your return policy should be clear and easy to understand. It needs to include detailed information regarding time frames for returns, conditions, requirements for accepting returns, and whether you provide partial or full refunds. With a good return policy, you can increase the trust of your customers and boost their confidence.

Choose and set up an e-commerce payment system

Payments are the lifeblood of all ecommerce businesses - that’s why it’s imperative to have an effective payment system in place. It’s essential to make sure you’re using a flexible platform that will meet your needs while simplifying your business operations and making it as easy and safe as possible for your customers to make a purchase. It’s in these areas that really excels. With, you can get up and running in minutes and experience a lightning-speed gateway service with complete control over customizing checkout pages, a/b testing features, fraud prevention filters, payment methods, and much more.

Include different payment methods

It’s vital to ensure that your gateway of choice can easily integrate and support the different forms of payments that your customers will use. After all, if you have 100 customers who are willing to pay with PayPal, but you only accept credit cards on your site, you’re missing out on some serious revenue. If you’re selling to customers worldwide, you’ll want to offer the most popular and trusted local payment methods for each region in which you operate. 

Send a test purchase

Every online business should send a test order before they start accepting purchases from real customers. Test orders ensure your store is set up correctly and can catch any issues that may arise during payment processing, inventory, shipping, and even things like email notifications. A test should also be conducted to ensure the security and reliability of the payment gateway you are using.

Launch your site

Your website is one of the key assets you have in your e-commerce business. That is why you need to take extra care before launching it to consistently deliver the best possible experiences. Here’s a pre-launch checklist to run through before you go live.  

  • Create a backup for your website
  • Set up analytics for your website
  • Ensure your social media pages are ready to go.
  • Check links and all contact information is accurate
  • Proofread content and optimise images

Create a brand, marketing strategy, and promotional plan

Creating an effective brand, marketing strategy, and promotional plan for your business takes time. But the payoff in terms of sales growth is tremendous when you spend the time to make them right. Use these tips to jump start your own plan.

Building your brand

Building a brand is one of the best ways to stand out from the crowd and drive your business growth. To create and articulate your brand, you’ll need to do some deep thinking and focus on your vision, values, and voice.


Articulating your vision can be a bit of a challenge. Your product or service is only one piece of the business puzzle. You have to make sure customers are on the same page in terms of what you want your company to look like in the future.


Your business vision is about what’s important to you and your customers. It informs everything you do and how you do it. When your business values are aligned with your customers' values, you will have a mutually beneficial relationship. Your values should be communicated to your employees, customers, and partners. 


Brand voice is your company’s personality. It’s how your company interacts with your audience. Depending on your industry and brand, your voice can be authoritative, sophisticated, serious or funny - it’s up to you! Having a unique brand voice will help you resonate with customers, differentiate from your competition, and, as a result, grab people’s attention.

Create a marketing strategy

Forming a solid marketing strategy is a great way to ensure you’re aligned with your audience and reaching them in the most effective way possible. The best way to do this is to create a plan that outlines how you will achieve your marketing goals, what marketing methods you are going to use, and what tactics you are going to implement. 

Set up social media accounts

Social media is a great way to promote your business to new audiences. It’s also an effective way to interact with customers, get feedback, and share company news. Social media can be time-consuming if you don’t have a strategy in place, so a few hours spent planning and creating content can save you hours of work in the long run. Remember, the choice of social media platform(s) is dependent on your industry, target market, and goals. 

Launch a marketing campaign

Marketing campaigns often fail to achieve their objectives because they lack a clear strategy. A good strategy is the backbone of any successful marketing campaign — you need to start with it before any content is created or paid ads run. Do your research and make sure you know your customers inside and out. Measure, evaluate and adapt your plan once it’s launched.

Prepare documents for business insurance

A comprehensive business insurance policy can protect your business in the event of damage or loss. It also covers risks like employee injuries, property damage, and product liability. A good policy will help protect your business from financial ruin in the event of an accident or catastrophe. Because you’re running an online business, you should also get a policy that includes protection against cyber-attacks.  

Plan your business growth

Your business will need to constantly grow to be truly sustainable. However, growth goes beyond just getting new customers. It’s about building a larger team, expanding your product range, and acquiring new skills, which all take planning.

Hire more staff

There’s a lot to like about having a big team, and it’s not uncommon to see a company with multiple support staff. However, there is no magic number for the correct number of people to work with. The answer is always going to depend on your budget, but the one thing you shouldn’t compromise on is the quality of your team. You’ll need to plan before hiring more staff because you may need to move offices or expand your current workspace. You’ll also need to manage the hiring process and training of new employees to ensure your business doesn’t suffer.

Offer more products 

If you’re a small business owner, then there’s a good chance that you’re already familiar with the struggles of creating and marketing a single product or service. However, there are so many upsides to expanding your product line — and this is especially true if you want to grow your business and scale it quickly. By offering more products, your business can boost market share, increase customer loyalty, and improve your brand’s overall visibility and credibility. You can also reduce your risks because there is a good chance that some of the products you currently sell will decline due to changing trends or increased competition.

Expand logistics and product delivery locations

By increasing your product delivery locations, you can expand your business and capture more revenue from a broader customer base. Of course, expanding into new markets is easier said than done. You’ll need to ensure that your logistics processes to support your operations are set up and reliable. You’ll also need to understand and comply with new regulations and requirements.


How do you start a business online?

There is no one right way to start a business, but you can follow a certain process to make things a lot easier. The most critical initial steps are to find a market gap & identify your business opportunity, determine the products you want to sell and then develop a well-researched business plan. After this, you’ll need to register your business, set up your ecommerce store, and create a marketing plan.

How to make an online business shop?

Making an online business store involves several steps, including finding a website builder, getting a domain name, customising your site and adding product descriptions and photos, setting up payment methods, testing your checkout and then launching to the world.

What do I need to start an online business?

There are some essentials that every online business owner should have. It’s always a good idea to start with a business plan. Having a website, products, and social media accounts is extremely important to start an online business.

How much does it cost to start an online business?

The answer to this question is different for everyone. You can spend as little as a few hundred dollars to set up an online business or a few million.

Meet the author
Anthony Back
Anthony is an experienced fintech analyst, content marketer, and copywriter based in Tel Aviv, Israel. With a deep understanding of payment technologies, he has worked with leading financial institutions and fintech companies worldwide.

Ready to boost revenue for your business

Contact sales