How to Sell Products Online: Just Follow Our Easy Step-by-Step Guide

Here’s a quick quiz. Think of a product you recently bought. Now, how did you purchase it?

1. With a phone call
2. In a store
3. Online

If your answer was #3, you’re in pretty good company: more and more people are shopping online.

The internet is not only a popular place to buy products — it also can be a great place to sell them.

We can walk you through the steps and show you how to set up an online store.

Need Ideas? These Product Ideas Could Get You Started

Most products fall into one of two categories: They’re often either a commodity or a specialty.

Commodity products — These are the items that just about everyone buys. Paper towels, bread, underwear. A great thing about commodity products is that many people need them and buy them fairly regularly.

The not-so-great thing about commodity products is that we tend to buy them based on price. If you’re selling commodity products, you’ll have a lot of buyers and a lot of competitors. And it’s usually the seller with the lowest price who wins, which can take a bite out of your profit.

Specialty products — These are also known as niche products. They’re made for a specific buyer or they’re unique. Beekeeping supplies, dollhouse furniture, and custom jewelry are a few specialty examples.

While the number of potential buyers is generally smaller than with commodity products, you’re also likely to see fewer competitors. If you can find an audience that needs a particular product or service — and there are few sellers offering it — that could be a good niche to sell to.

Commodity & specialty products — Another option to consider is selling both types of products. If you’re selling to model train enthusiasts, you could stock trains, track, and accessories from well-known manufacturers (commodities). You also could offer custom-made scenery pieces built to a customer’s specifications (specialty).

Keep an eye on trends.

Being aware of what’s popular can be a key part of how to sell products online. One way is to look at what products people are buying.

You can start by going where a lot of people are shopping. For one, check out the bestseller lists on other e-commerce sites. You also can pick up on trending products by monitoring your social channels.

Be aware that those “hot” products are already being sold by other online sellers. That’s why it’s best to spot a trend early in order to grab some market share before the online gold rush starts.

Another way to use trends is to look at the market rather than the product.

For example, if home gym equipment is in demand, it may be a sign that fitness is a profitable market. Think about what other products those customers might be interested in: rubber gym flooring, weight racks, wall mirrors, muscle massagers, and health and wellness products.

Think about repeat business.

For your business to be successful, you need to attract new customers. It can be just as important (and as profitable) to keep selling to your current customers.

When considering a product, think about how often a customer might need it. That’s one of the benefits of selling a commodity. A specialty HO steam locomotive might be a once-in-a-lifetime purchase for a model railroader, but paper towels are something they’ll need on a regular basis.

How to Sell Products Online: Your Step-by-Step Guide

1. Put a good business plan in place.

A business plan can serve as a roadmap. And like a map, it can help your business move in the right direction and stay on track. It also can include important milestones to help measure how well your business is doing. A business plan can help in other ways as well, such as when you’re applying for a business loan or trying to attract investors.

Creating a business plan doesn’t have to be complicated or mysterious. We have an easy-to-use template designed specifically for small business owners.

2. Choose the right structure for your business.

One of the first important decisions you’ll need to make as part of your business plan is how to structure your online selling operation. The structure you choose can affect important issues, such as taxes, asset protection, and liability.

As with any big business decision, it’s a good idea to consult with an attorney or business advisor about how to structure your business.

It also can be helpful to have a basic understanding of business structures, so here’s a brief rundown of the most common ones.

Sole proprietorship — If you want fast and easy, a sole proprietorship may be the way to go. It’s typically owned and run by one person (although you may have employees), and it often requires less paperwork and lower start-up fees.

From a legal perspective, you and your business are the same. So if your business can’t meet its debts, losses, or liabilities, your personal assets (house, car, savings) could be at risk to cover them.

Partnership — This type of structure is similar to a sole proprietorship, although some partnerships do not require registration, while others may. A key difference is that a partnership is a business that’s owned and sometimes run by two or more people or entities. Each partner gets a share of any profits, but they’re also responsible for any losses.

Limited liability corporation (LLC) — Unlike a sole proprietorship or partnership, an LLC is a separate business entity. That means it can provide more protection for your personal assets. At the same time, an LLC can often be more expensive to set up and operate.

Corporation — If you’re looking for stronger protection from personal liability, a corporation may be the way to go (1). While it offers great protection for your personal assets, it also can be more expensive to set up.

With this type of business structure, there’s greater emphasis on the “structure.” A corporation generally requires that you keep and maintain more extensive records, operational processes, and reports.

3. Get an EIN and open a business bank account.

An EIN is an employer identification number that’s available for free from the IRS once you’ve registered your business. It can make tax reporting easier and it will definitely be needed if you hire employees or independent contractors.

An EIN is also often required to open a business bank account. When it’s not, it still can be a good idea to have a business account.

If you’re looking for some help on how to choose the best bank account for your business, we’ve got some tips here.

4. Know which licenses and permits you’ll need.

While being online enables you to sell almost anywhere in the world, your business is often subject to the rules and laws of where it’s based.

As a result, there are a variety of licenses and permits you may need in order to sell online. These can often vary by the state you’re operating in, so it’s a good idea to check with your local government agencies and offices.

Here are some of the most common types and a brief overview of what they typically cover.

Business license.

You’ll most likely need a business license. Federal, state, and local authorities may require and issue business licenses. Which ones you’ll need often depends on where your business is based and what types of products you’re going to sell.

Federal business license — This may be required if you sell products that are heavily regulated.

State business license — License requirements vary among states, based on your type of business and what you sell. We’ve got some helpful information about state business licenses here, but you also should check with your local business agency or department of commerce.

Seller’s permit.

There’s a good chance that the products you sell online could be subject to sales tax. As a result, most states require you to obtain a seller’s permit so you can collect sales tax and forward it to your state government.

It also can allow you to buy products from suppliers without having to pay sales tax. Rules for seller’s permits can differ from state to state, so that’s another requirement to make sure to check out in your area.

Be sure to also check your local business licensing guidelines about operating in multiple states or storing your inventory in a different state.

Home occupation permit.

You may be required to have a permit if you’re running a business out of your home, especially If you’re shipping products from there. Again, check with your local and state government, as the rules can vary.

Doing Business As (DBA) license.

Unless your name is closely related to what you sell (e.g., Levi’s jeans), people likely won’t use it as part of their online search to find your business. Consequently, you may want to operate under a name that’s more descriptive of what you sell (e.g., All-Star Knockout Jeans).

To do that, you’ll likely need a DBA license (2). This will enable you to legally open bank accounts and conduct other business activities using that name.

5. Get e-commerce and cyber insurance.

OK, you’ve chosen your product, you’ve written your plan, and you got your permits. Now there’s one more “P” to take care of: Protection.

More specifically, protection that comes with business liability insurance.

E-commerce business insurance.

Having e-commerce insurance that includes general liability (GL) coverage can help cover the financial impact when things go wrong online. For example:

1. It can help cover the cost of claims resulting from defective products, advertising injury, or business-related accidents in your home.
2. If you find yourself in court, it can help cover the legal fees you might face defending yourself against a claim.
3. It also may be a requirement from your landlord if you want to rent or lease a space for your business, such as an office or warehouse.
4. It also may be required if you’re selling on certain e-commerce sites.

Spend 10 minutes online, and we can help find a business insurance quote for an e-commerce business from some of the nation’s leading insurers.

And if you have questions, our licensed insurance agents are there with answers.  Just call 844-654-7272, Monday through Friday, 8 a.m. to 8 p.m. ET.

Cyber insurance.

When you’re online, there are not only a good number of risks lying in wait for you — there also are some bad actors who may directly threaten your online business.

These cybercriminals are pretty active, too. Putting firewalls and anti-virus software in place are both good ideas, but they’re not foolproof. A successful attack and you could be costly for your business.

That’s why you also may want to consider adding cyber insurance to your e-commerce insurance coverage. And just like general liability, we make it fast, easy, and affordable to get protected.

You can start right now and get a quote in under 60 seconds. 

6. Stock the shelves.

Whether you’re selling Sumatra Mandheling coffee or German stainless steel chef’s knives, when it comes to how to sell products online, you need the product on your actual or virtual shelves.

There are three basic ways to get your inventory:

• You can make what you sell
• You can find a source for what you sell
• You can do both

Make what you sell.

Is what you’re selling highly specialized, such as custom dollhouse furniture? Is it unique or something only you can make, like your grandmother’s chocolate chip cookies? If so, you may want to handle the manufacturing yourself.

This allows you to control the quality of your product and have up-to-the-minute information about what’s in stock and how much is available to sell.

It also may minimize your risk. If you’re just starting out with dollhouse furniture, investing in commercial saws, lathes, and a garage full of wood can mean a large outlay of cash.

Find a source for what you sell.

If what you’re selling isn’t something you’ve invented, created, or doesn’t exist anywhere else, you may want to consider working with a supplier.

Suppliers can include distributors, wholesalers, or dropshippers, and typically sell products to sellers like you in bulk for a reduced price.

Dropshipping suppliers ship products directly to the end customer on behalf of a retailer. A big advantage here is that you don’t have to buy, stock, and store products yourself. You can learn more about dropshipping in this handy guide.

Make and sell.

As you plan on how to set up an online store, it also can make sense to use both approaches to create your inventory. For instance, you may want to focus on making miniature furniture yourself, but also work with suppliers to offer the dollhouses.

It can be a way to increase your sales and provide customers with more of what they may want.

7. Let’s set up shop.

Congratulations. You’ve done a great job of preparation. Now it’s time to find a place to introduce the world to your wonderful lineup of products and your special brand of online shopping.

Your online store.

There are two primary options for where your store will live. One is putting your store in an online marketplace. The other is building your own online store using an e-commerce platform. Checkout this article for more information about e-commerce platforms,

8. Let’s build your site.

Whether you’re using a marketplace or building your own store on an e-commerce platform, you’ll need to create the actual site where you’ll sell your products.

As we mentioned a bit earlier, it’s often easier and faster to get this done if you’re using an online marketplace. 

If you’re going with an e-commerce platform, there’s a bit more work to do, but you don’t have to be a coding genius to create an attractive and professional-looking online store. We have a guide to help here.

Six ways to optimize your online store.

While it’s important to differentiate your brand as much as possible, there are some best practices you may want to consider to make shopping on your site good for your customers and better for your sales numbers.

1. A good user experience — Also known as “UX,” this refers to how easy and intuitive it is for customers to find what they’re looking for, understand its features and benefits, get it into their shopping cart, and purchase. This includes making call-to-action buttons (Like “Buy” or “Add to cart”) easy to see without requiring a lot of scrolling.

2. Make sure it works for mobile — If your site isn’t optimized for smartphones and tablets, you could be losing out on a lot of sales. Many website builders and marketplaces automatically adjust your site to work well on mobile devices, but it’s a good idea to check for this feature.

3. Add your logo — Creating a strong visual identity is another way to stand out from the crowd online. A logo is an element you can use on your site, your packaging, your emails, and many other places.

4. Write your own product descriptions — If you’re getting your products from a distributor or manufacturer, they may provide descriptions, bullet points, and other product information. When writing product descriptions, show customers a benefit (staying sharper longer) as well as the feature (German steel).

5. Optimize for SEO — Along with being descriptive, you also want to think about the search process that customers may use to find your site. Search engine optimization (SEO) deals with where your store name appears when someone is looking for, say, dollhouse furniture or kitchen knives.

If you’re looking at how to sell products online, include keywords in your product copy. If you’re selling dollhouse furniture, consider using words such as “dollhouse” and “furniture.” Also think about other search terms a customer may use, such as:

• Miniature furniture
• Colonial furniture for dollhouses
• Dollhouse furnishings
• Custom dollhouse furniture
• Collectible furniture for dollhouses
• Best dollhouse furniture

There are a number of steps you can take to boost your ranking, and many website builders and e-commerce platforms offer tools to help, as we do with this article.

6. Create your own product images — Much like prewritten descriptions, many products also come with images. And the same advice to differentiate applies. While it’s harder to create a new image of a product than it is to change its description, there are some applications that can help you alter an existing image to help it look different.

It also can be helpful to use images that show the product in action or in an environment where it may be typically used. This not only adds variety to your site — it helps a customer understand how they might use it and how big it is.

9. Let’s bring in the buyers.

Here are some ways you can create awareness for your online store and attract more customers.

Get your business on social: Do you have friends on Facebook? Followers on Instagram? A profile on Pinterest? These can be great places to get the word out about your online store.

Your social channels should drive traffic to your website, but don’t forget to add links to your social channels on your website. It can be a good way to increase your following on all your social channels.

Facebook and Google Ads: In addition to posts on your social channels, these two platforms let you buy and place ads for your business.

Facebook ads can be a great way to get in front of niche audiences, such as hobbyists and cooking enthusiasts.

Google Ads let you bid on keywords so you can show up higher in search engine results pages.

Both platforms also offer analytics and results so you can see which ads may be working and how much bang you’re getting for your buck.

These types of ads often can be an easy way to get your message out there without spending a lot of cash.

We’ve got a handy article to help you get started with Google Ads here. We’ve got another one to help you build your business Facebook page here.

Don’t forget email: Marketing emails can be an effective and budget-friendly way to let current or potential customers know about new products, special offers, or helpful content on your site.

There are a number of online resources that can help with email templates (including several free ones), as well as email services that automate and help organize your email marketing campaigns. We have more helpful tips in this guide. 

Time to Open for Business

If you’re thinking about how to set up an online store, the major barriers of location and capital often don’t come into play. Which means all you may need are that desire, vision, and hard work to make your dream a reality.

Looking for more information about starting and running an ecommerce business? 

Check out these helpful guides:

The Complete Guide for Building an Online E-commerce Business

The 8 Best Ecommerce Platforms for Small Business Owners

6 Biggest Benefits of Ecommerce Business Insurance

(1) Learn more about this at www.sba.gov

(2) Learn more about this at www.sba.gov