Top ways to start a product-based business online

Dreaming of selling your own products online? It’s easier than ever. With low startup costs and flexible ways to launch, you’ve got options to start a successful online business.

But not all online business ideas deliver the same profit, control, or scale. Let’s break down the top options, walk you through how to start an online business, and help you choose the model that fits your goals.

Why start a product-based business online?

Starting a product-based business online is one of the most accessible and scalable ways to earn. Here’s why:

• Market growth: The global eCommerce market will reach $3.66 trillion by the end of 2025 and $4.96 trillion by 2030

• Low barriers: You don’t need upfront inventory or a physical storefront

• Global reach: Sell online 24/7 to customers worldwide

• Scalable models: From a dropshipping business to Print on Demand, your store can grow as demand increases

Top ways to start a product-based online business

Before we walk you through how to launch, let’s break down the five best online business ideas. Each business model has its own pros, cons, and profit factors. 

In this section, we’ll outline the steps to start your online business, no matter which model you choose.

Way 1: Start a dropshipping business

Dropshipping is one of the easiest ways to start an online business without ever touching inventory. When a customer orders on your website, a third-party supplier ships the product directly to them. You handle the marketing, product selection, and customer service – no storage or fulfillment needed.

Beginner tip: Don’t confuse dropshipping with Print on Demand (POD). With dropshipping, you resell ready-made products (like phone cases or pet gadgets). With POD, you sell your custom designs printed or embroidered on blank items (like t-shirts or mugs).

Pros and cons of dropshipping:

Profitability tips:

• Focus on problem-solving products (e.g., car organizers, ergonomic chairs, pet safety gear)

• Check Amazon Best Sellers and TikTok Trends to spot demand

• Increase order value with bundles (“Buy 2, Save 20%”)
  
  

Is dropshipping right for you? Choose dropshipping if:

• You want to start fast with minimal cost

• You’re good at marketing or learning ad platforms

• You’re okay with slim margins in exchange for low risk
  
  

It’s ideal for side hustlers, creators, or test-driven entrepreneurs who want to learn eCommerce without a big investment.

Way 2: Launch a print-on-demand store

Print on Demand (POD) lets you sell custom-designed products, like t-shirts, mugs, or tote bags, without buying inventory upfront. When someone buys from your store, a POD company (like Printful) prints or embroiders your design on the item and ships it directly to the customer.

This business idea combines the low-risk setup of dropshipping with control over brand experience. You focus on design, niche selection, and marketing – while the provider handles fulfillment, packing, and shipping.

Read more: 16 Best print-on-demand companies in 2025

Beginner tip: Unlike dropshipping, you’re not reselling generic items – you’re selling customized products with your own designs. With a POD partner like Printful, you can also add branding.

Read more: How to start an online store with Printful

Pros and cons of Print on Demand:

Profitability tips:

• Target hyper-specific niches (e.g., plant moms, funny math teachers, left-handed drummers)

• Stick to products with high demand and low print costs (tees, mugs, stickers)

• Run seasonal or limited-edition drops to build urgency

Read more: How to start a print-on-demand business in 2025 (8 steps)

Is Print on Demand right for you? Choose POD if:

• You’re a creator who wants to build a brand

• You don’t want to deal with inventory or shipping

• You’re comfortable with lower margins in exchange for design freedom

It’s ideal for designers, content creators, or niche-focused entrepreneurs who want a hands-off way to turn ideas into income.

Way 3: Sell handmade or custom products online

If you make physical goods – like jewelry, candles, art, or woodwork – turn your craft into a small business. Handmade products are created by you (or a small team) and often have a personal, artisanal, or customizable touch.

Sell through online marketplaces like Etsy or build your own store using platforms like Shopify or Squarespace. The key difference: you’re making the product yourself, not outsourcing it.

Beginner tip: Handmade doesn’t have to be 100% from scratch. Even assembling parts or customizing items counts – think engraved gifts, personalized prints, or color-mixed candles.

Pros and cons of handmade online business ideas:

Profitability tips:

• Price using the (materials + labor hours) × hourly rate + margin formula

• Offer personalization (e.g., names, dates, custom colors) to charge premium prices

• Batch similar items to reduce time spent per product

Is selling handmade products right for you? Choose this model if:

• You enjoy crafting or making things by hand

• You want to sell unique, meaningful items

• You’re okay trading time for higher margins

It’s a great online business idea for artists, hobbyists, and creators who want to turn a passion into a premium product line.

Way 4: Private label or manufacture your own products

Private labeling means taking an existing product from a manufacturer and selling it under your own brand. You customize the packaging, name, and marketing – but don’t have to create the product from scratch.

You can also go a step further and manufacture your own product with unique features or designs. This gives you more control but requires a bigger investment.

Beginner tip: Private label ≠ invention. Most private label products are tweaks of existing items – like a water bottle with a better lid, or skincare with premium packaging.

Pros and cons of private label online businesses

Profitability tips:

• Source low minimum order quantity (MOQ) suppliers from Alibaba or Faire

• Add unique twists – eco-friendly versions, improved features, or custom packaging

• Use strong branding to position your product as premium (colors, unboxing experience, messaging)

Read more: 8 Ways to market expensive products so they look like a steal

Is private labeling right for you? Choose this model if:

• You want to build a long-term brand

• You’re ready to invest $1,000+ upfront

• You want full control over the product and branding
  
  

This online business idea is ideal for business owners looking to scale, stand out, and build equity in their own product line.

Way 5: Sell digital or downloadable products

Digital products are files customers download instantly after purchase – like ebooks, templates, courses, music, online courses, or stock photos. You create them once, then sell them endlessly with no inventory or shipping required.

Think of it as building a product that works for you 24/7. Platforms like Gumroad, Shopify, and Etsy make it easy to sell digital files to a global audience.

Beginner tip: Don’t overthink it. A simple resume template, budgeting spreadsheet, or 5-page guide will sell online if it solves a problem or saves time. 

Pros and cons of digital products

Profitability tips:

• Create solutions people search for: resume templates, budgeting spreadsheets, meal planners, etc.

• Sell in bundles: e.g., template pack + tutorial video

• Drive traffic through search engine optimization (SEO), social media marketing, Pinterest, and tutorial content on YouTube
  
  

Is selling digital products right for you? Choose this model if:

• You want passive income with minimal overhead

• You enjoy creating, writing, or designing

• You’re comfortable marketing in a crowded space

This is ideal for creators, educators, and solopreneurs who want to earn money from their knowledge or skills without worrying about shipping or inventory.

Which product-based business model is right for you?

Quick pick guide:

• Starting a small business with no inventory? → Dropshipping or POD

• Creative with premium products? → Handmade

• Want full control and big profit margins? → Private label

• Looking for passive income and infinite scale? → Digital products

How to start your online product-based business: Step-by-step

Starting your product-based online store doesn’t have to be overwhelming. Whether you’re launching a dropshipping store, a handmade brand, or selling digital downloads, the core steps are the same.

In this section, we’ll break it down into clear actions with tools, examples, and mini-checklists so you can confidently go from an online business idea to your first sale.

Step 1: Choose your niche

Your niche is the target audience you’re creating products for. Instead of selling to everyone, you’ll stand out by targeting a focused audience with shared interests, needs, or problems. Before you start an online business, conduct market research to find out who your potential customers are, where they are, and what they want.

Think of it like this: You’re not selling mugs – you’re selling mugs for plant lovers, nurses, or cat dads who love coffee.

Read more: 17 Print-on-demand niches to watch in 2025

Ways to define a niche:

• Hobbies – yoga, gaming, or baking

• Professions – teachers, nurses, realtors

• Personality traits – introverts, overthinkers, bookworms

• Life stages – new moms, college students, retirees

Do market research on social media and marketplaces. What is your target audience raving about on TikTok, Reddit, or in Amazon reviews? Can you spot trends or micro-communities? Use tools like Google Trends, Etsy Autocomplete, and TikTok’s search bar to spot trends or micro-communities with rising demand.

Niche selection checklist:

• I’ve picked a clear audience with shared interests or identity
• I can list at least 5 product ideas they’d want
• I’ve seen people talking about this niche online (forums, TikTok, Reddit)
• There’s demand, but not so much that it’s overcrowded
• I either relate to this niche or feel excited to learn more

Step 2: Validate product demand

Before you spend time or money building your store, confirm there’s real demand for your online business idea. It’s easy to fall in love with something no one’s buying – validation prevents that.

Validation means proving people are actively searching for or purchasing similar items. That could be existing products with strong sales, people asking for them, or early interest from your audience.

Here’s how to do it:

Start with platforms where people already shop, like Etsy, Amazon, or TikTok Shop. Look for:

• Top listings with lots of reviews

• Products marked as “Bestseller” or “Popular Now”

• TikToks with lots of saves and comments

Explore Reddit or Facebook Groups. Look for posts of people asking “Where can I find ___?” or “Does anyone sell ___?”

To go deeper, create a simple waitlist page (using Carrd or ConvertKit) where people can sign up to get notified when you launch. Or run a poll on Instagram or X asking followers which version they’d buy.

Product validation checklist:

• I found similar products with strong reviews or sales
• I’ve seen real people asking for or buying this product online
• I discovered trends on TikTok, Reddit, or niche forums
• I’ve tested interest with a poll, waitlist, or post, and got positive feedback
• I’m confident there’s demand, not just personal preference

Step 3: Set up your brand

Before you start selling, secure the basics: an online business name, domain, social handles, and legal structure. This will make your online store look legit and protect you as you grow.

Pick a name that’s:

• Easy to spell

• Memorable

• Related to your niche (but not too narrow)

Once you have a few ideas, check:

• Domain availability (Hostinger, Namecheap, or Google Domains)

• Social media handles (Instagram, TikTok, Pinterest, and YouTube)

• Trademark conflicts (USPTO.gov if you’re in the US)

Choose a legal structure:

• LLC = liability protection, higher cost

• Sole proprietorship = simpler, cheaper, less protection

To file quickly, use sites like ZenBusiness, Tailor Brands, or your state’s official website.

Once your name is set, claim:

• Domain name

• Social media profiles (even if you won’t use them all yet)

• A professional email address (Google Workspace or Zoho)

This creates consistency across platforms and helps your brand look polished from day one.

Brand setup checklist:

• Pick a brand name that’s unique, relevant, and easy to remember
• Check and secure the domain and social handles
• Eliminate trademark conflicts
• Choose a legal structure (LLC or sole proprietorship) and register it
• Set up a brand email

Step 4: Source or create your product

Now it’s time to prepare your product (or service). Whether you’re making it yourself, designing it, or finding a supplier, you need something you can confidently sell or test before launch.

There are 2 main paths here:

1. You’re creating the product yourself
This includes handmade goods, digital products, or anything you personally design.

• Digital products: Use tools like Canva, Notion, Figma, or Google Docs to create files.

• Handmade products: Buy materials in small batches, make prototypes, test production times, and take clear photos.

• Print on Demand: Use services like Printful or Printify to upload your designs, and they’ll handle printing and shipping. 

2. You’re sourcing from a supplier
This applies to dropshipping or private label.

• Dropshipping: Use platforms like Alibaba, Zendrop, or Spocket. Choose products with strong reviews, fast shipping, and reliable supplier ratings.

• Private label: Use Faire or Thomasnet to find manufacturers. Request samples and negotiate minimum order quantities (MOQs).

Whichever model you choose, your goal is to get a working version of the product (sample, prototype, or mockup) in your hands so you can test quality, take photos, and confirm it meets your standards.

Product sourcing checklist:

• Decide whether I’m creating or sourcing my product
• Pick the tools or platforms for my business model (e.g., Canva, Printful, Alibaba)
• Order a sample or create a test version to review quality
• Take product photos or create realistic mockups
• Ensure I can fulfill an order if someone buys today

Step 5: Build and launch your store

It’s time to open your online store. Whether you’re selling physical or digital products, the setup is similar: choose a platform, add your products, and prepare for customers.

Pick the right platform based on your product type and goals:

• Shopify – best online business platform, all-in-one for physical products

• Etsy – great for handmade or POD with built-in traffic

• Gumroad – easiest for digital products

• WooCommerce – flexible if you’re using WordPress

• Squarespace – good for visual brands and artists

Read more: Marketplace vs. eCommerce platform: Which is the best?

If you’re using Print on Demand or dropshipping, sync your product catalog with apps like Printful, DSers, or Spocket so orders flow automatically.

Before launch, don’t skip:

• Payment processing – use Stripe, PayPal, or Shopify Payments

• Shipping options – set realistic timelines and costs

• Store policies – add pages for shipping, returns, and FAQs

• Mobile preview – ensure your store looks good on phones

Store setup checklist:

• Choose a selling platform that fits my product type
• Add at least one product with clear titles, descriptions, and images
• Set up payment processing (Stripe, PayPal, etc.)
• Create shipping and return policy pages
• Test checkout (bonus: placed a test order)
• Check if the store looks clean and works well on mobile

Step 6: Market your products online

Time to get eyes on your new business! You don’t need a big budget or advanced marketing strategies at first. Start with social media and simple digital marketing where your potential customers are, then scale as you grow.

Start with 1-2 platforms based on your product and target audience:

• TikTok, Instagram, Pinterest → visual or lifestyle products

• YouTube or LinkedIn → digital goods or professional tools

Create simple, scroll-stopping content on your social media accounts: show your product in use, a “before and after,” or a quick “how it’s made”. Keep it real – relatable content performs better than over-polished posts.

Email is still gold. Offer a small incentive (discount code or free printable) for signups. Use free tools like MailerLite, ConvertKit, or Shopify Email to collect and send emails.

Marketing launch checklist:

• Set up 1-2 social media platforms my audience uses
• Post content showing my product in use or solving a problem
• Test a small paid ad ($5-$10/day) to check interest
• Start collecting emails with a freebie or discount
• Share my store with a small group for early feedback

Conclusion

You don’t need a warehouse, a big team, or years of experience to make money with a product-based business online. The tools to sell your product or service are already available – and this guide gives you the roadmap.

Whether you’re selling designs, handmade goods, or downloadable files, there’s a business model that fits your time, budget, and creativity. Good luck!