How to Start an Online Business: From an Idea to Sales in 8 Steps

Did you know that, on average, people spend a staggering 6 hours and 35 minutes online daily? That’s over a quarter of our lives lived on the Internet. With so much of our time spent online, it’s no wonder this is where we do a lot of our shopping too. Global ecommerce sales have been growing steadily, especially during the pandemic years, and they’re expected to cross the $8 billion mark by 2027.

These statistics mean that if you’ve been thinking of launching an online business, your timing is right. Although there’s quite a way to go from an idea to an actual store making sales, the process is manageable if you go through it gradually and take advantage of the available ecommerce tools.

So read on as we explain how to start an online business, breaking down the journey into 8 steps.

How to start an online business in 8 steps

Let’s go through the actions that’ll take you from forming an online business idea to a profitable store.

Step 1: Identify a niche and come up with a business idea

The foundation of any successful business—online or otherwise—is a strong business premise that appeals to the right audience. So, formulating a good online business idea and finding your ideal target audience should be your first step.

For many online business owners, the idea for their store comes from their own experience, so think about the fields you’re an expert in first. If you see a gap in the market, you can fill it with your unique product or service. You can use your hobbies, passions, and interests as a starting point for your research. Familiarity with your target audience will also help you when you have to work on marketing strategies.

Take a look at the business strategy of the pet portrait store Crown & Paw. They target a specific niche (pet owners) and sell a unique product (custom portraits of animals in various styles). They know that people love their pets, want to share that love with others, and, most importantly, are ready to splurge on custom items. When you combine all these ingredients, you end up with a successful ecommerce business.

Source: Crown & Paw

If you’re not immediately sure what you want to sell, take your time and explore what’s already on the market. Look up trending products, compare bestsellers in different categories, and check out crowdfunding sites like Kickstarter for product inspiration.

Remember that you’re not limited to physical goods—you can also sell digital products (a design, pattern, ebook, online course, etc.) or services.

When you’ve formulated the basis for your online store, it’s time to explore what’s already on the market to see how you can fit in with your business plan.

Step 2: Conduct product and market research

Even the best online business ideas have to be validated, so once you have your idea, the next step is conducting thorough research into your market and competitors. You want to check if no one else has come up with the same idea before you, see the specifics potential customers look for, and get a general idea of how to price products on your ecommerce store.

Where to begin your online market research? Turn to good old search engines first. Enter keywords relevant to your online business and see what comes up. Use search engine optimization tools to expand your search and see what else people look up in the related fields. You should also research what’s buzzing on social media platforms your potential customers prefer.

Another vital area to research for product-based online businesses is marketplaces. Depending on the items you want to sell, these might be Amazon, Etsy, eBay, or other specialized online marketplaces. Search for products in your niche and compare prices, designs, reviews, etc.

For example, Etsy is a must-check marketplace if you want to sell printed t-shirts. You can see the types of designs already available and figure out how you can offer something new or improve on what’s already out there.

Study your competitors’ sales methods, designs, pricing, and how they talk to customers. You can borrow some of their best practices and adapt them to your business or learn from their mistakes.

Once you’ve narrowed down what you want to sell and who your target audience is, it’s time to source the products for your online store.

Step 3: Source products to sell online

There are 3 options for getting items to sell on your ecommerce store:

1. Make them yourself

2. Order products in bulk from a wholesaler

3. Work with a dropshipping business

Each method has pros and cons. You can make your own products if you want to sell highly customized or unique items and have the necessary equipment and skills. You can price your items as handmade premium products, and you control the entire production process.

However, this approach requires considerable capital to get your store off the ground, which can be a problem if you’re a small business owner. It’s also more time-consuming than the other methods, especially since you’re responsible for packing and shipping each order too.

The second option is purchasing items in bulk from wholesalers. This lowers the per-item cost, but you still need to invest a considerable amount of money upfront. You’ll also need enough space to store your items, and you’re responsible for each order’s fulfillment. This means less time to spend on marketing, customer care, and other activities related to running your online business.

That leaves dropshipping, which is a particularly friendly business model for a new business. In dropshipping, you work with a supplier that fulfills and ships orders made on your store. You don’t have to store and pre-purchase any stock because your fulfillment partner charges you only when an order is made.

Even though your profit margins per item are lower, so are the costs to start an online business. You also have a lot more time to devote to other activities on your store that help generate revenue.

Dropshipping companies work with many other sellers like you, so if you want to stand out in the crowd and offer custom items, a great option is working with a print-on-demand partner like Printful. The method for how to make money with print-on-demand is similar to other dropshipping partners, but you can add a unique touch to the products by creating your own print or embroidery designs.

When you’ve chosen your products, it’s time to perfect your brand identity.

Step 4: Define your brand and image

When you know what you want to sell and to whom, the next step is developing your brand image. No matter which niche or products you’ve chosen, your online store needs a clear identity and a brand story behind it.

Consider what will be essential and appeal to your audience and reflect that in your storefront, business name, logo, language, and all other elements of your store. But don’t be afraid to let your creativity flow. 

Source: Baacal

For example, look at Baacal, a fashion brand that offers apparel for women who wear sizes 10–28. The store’s homepage outlines all the main selling points, with a particular emphasis on the fit of the clothes, including a promise of free size exchange. The brand identity shines even in the invitation to subscribe to their mailing list. Becoming a “Baacal Baabe” sounds much more fun than simply signing up for a newsletter, right?

When this step seems complete, it’s time to handle technical matters.

Step 5: Register your business

An online store is just like any other business, so it needs to be officially registered, and you have to pay the required taxes, depending on your location and where you’re selling. The process and options for registering your business differ from country to country, so look into the regulations of where you will run your business. In case of any questions, consult a legal or tax expert.

Check out this guide to Printful taxes to see what taxes you may be charged when using our services.

Handling all the technicalities at this stage will help you in the long run. You’ll be able to manage your business smoothly, and having all the paperwork in order will increase the trustworthiness of your brand.

When the legal matters are done, it’s time to set up your store.

Step 6: Set up your website

To make money online with your business, you’ll need a place where your customers can get your goodies. The easiest way to do this is by choosing an ecommerce platform (Shopify, Wix, Square, or another) to build your store. These platforms offer templates and website builders to make the process as intuitive and easy as possible so you can create a unique store even if you’re not a programmer.

The storefront of an activewear brand. Source: Adanola

Printful offers direct integrations with over 20 ecommerce platforms. If you connect your ecommerce store with Printful, we’ll automatically receive and fulfill orders from your store without your manual input.

Another option is to join an online marketplace like Etsy, Amazon, etc. Although a significant advantage of marketplaces is that you get access to their vast customer bases, building brand recognition there will be more challenging. Consider what is more important to you and where your potential customers are more likely to look for the types of products you will offer.

Vintage astronomy-themed posters on Etsy. Source: Etsy

Many online businesses get the best of both worlds by creating their own stores and joining marketplaces. This means extra work since you need to maintain your presence on several platforms, but you can expand your reach and potentially get more sales.

For example, the apparel brand blonde gone rogue has a store but also sells clothing on the Wolf & Badger marketplace for independent brands.

After you’ve set up your store, there’s one more step before the big launch.

Step 7: Develop a marketing strategy

Strong marketing is a must-have ingredient in the recipe for any successful online business. No matter which digital marketing strategies you choose—email marketing, online advertising, influencer marketing, social media marketing, or a combination of them all—always keep in mind your target audience for the product and adjust your communication to suit your customers’ preferences.

Compare how the film distribution company Neon uses Instagram to promote its merch for two films: the horror film Longlegs and the family-friendly animation Robot Dreams. The image, caption, and call to action are more aggressive when addressing horror fans, whereas promoting the animated film’s merch invokes calmer imagery.

Don’t be afraid to experiment with your marketing strategies. Test what works for your online business, and over time, you’ll gain an even better understanding of your audience and how you can increase your business growth.

Now it’s time for the last step—launching your store.

Step 8: Launch your online business

With the products chosen, designs made, the store built, and a clear business model and marketing strategy, all that’s left is virtually opening your store’s doors and greeting your first customers.

Even if your online business is brand new, you can create ways to generate buzz and online sales right from the start. For example, when model and influencer Kaia Gerber launched the merch line for her online book club, Library Science, she created a limited-edition t-shirt with only 50 tees available for purchase. The product sold out in just a few hours, with shoppers rushing to get their hands on the exclusive item.

Source: Library Science

An important thing to remember is that even after you launch your business, you can return to any of the previous steps at any point and refine them. Update your business plan, adjust your target audience, change your marketing approach, etc. One of the appeals of online shopping is the ever-changing nature of the offered products, so you need to follow the trends to continue to appeal to your shoppers.

And that’s it—if you’ve completed all the steps successfully, you’re now the owner of a profitable online store!

Read next: How to Start an Ecommerce Business Without Money: A Complete Guide

Ready, set, go—get started on your online business idea now

The massive popularity of online shopping, which shows no signs of slowing down anytime soon, has opened up vast opportunities for all types of businesses to find their audiences worldwide. If you have a good idea for your own business, chances are you’ll find someone online who would be interested in getting exactly the kind of product you can offer.

Of course, running an online business requires lots of hard work, just like any other type of business. But print-on-demand and dropshipping service providers like Printful have levelled the playing field, allowing nearly everyone to sell unique, high-quality products. Once you break down the process into actionable steps, launching a store online is absolutely manageable.

So why wait? Get started with your new business right away!