How to Start an Online Store (Product Selection, Hosting, Payment Processors, Shipping)

Starting an online store is a popular strategy to get into the world of eCommerce. This article guides you through 15 steps to starting your own online store, from initial concept to your shop’s official launch.

We cover critical topics such as identifying your target audience, choosing products, and deciding on the best hosting platform for your needs. We also explain logistics of setting up a shopping cart, payment processing, and shipping. You’ll soon be ready to make your first sale.

1. Identify Your Target Audience

The first step to starting an online store is to identify your target audience. A target audience consists of potential customers who are most likely to buy your products and services. These individuals share common characteristics such as age, gender, income level, and interests. Understanding your target audience allows you to tailor your marketing efforts to reach the demographics most interested in what you offer.

A helpful strategy for identifying your target audience is to create a buyer persona. A buyer persona is a detailed, research-based profile of a business’s ideal customer. It includes demographic information, behavior patterns, motivations, goals, and challenges.

2. Choose a Product to Sell

The second step is to choose a product to sell. This decision should be guided by understanding what your audience wants or needs based on the step before. Products that solve a problem and fulfill a desire for your target market have a higher chance of success.

There are two broad categories of products to sell legally on an online store: physical and digital products.

Physical products include items like clothing, crafts, and merchandise. These are tangible items that require inventory and shipping. Merchandise works great when sold by creators and influencers because it leverages their brand and community.

Digital products encompass a wide range of items such as online courses, eBooks, digital art, and templates. These products are delivered electronically which eliminates the need for physical inventory and shipping. Common categories include educational materials and creative works that entertain or enhance other digital projects, like digital brushes, themes and music.

3. Register Your Business

The third step is to register your business. Business registration formalizes your business in the eyes of the government and the public. It provides legal protection for your business name and helps protect you from personal liability in case the business incurs debt or is sued. A registered business is also seen as more credible by customers, suppliers, and potential investors. Registration also enables you to file for tax returns, claim deductions, and potentially benefit from lower tax rates.

There are 3 types of business structures to choose from.

The first business structure is sole proprietorship. This is the simplest form of business ownership where the business is owned and run by one individual. The second is a partnership. A partnership involves two or more people who agree to share the profits and losses of a business. The third is a Limited Liability Corporation (LLC). An LLC combines the tax efficiencies of a partnership with the liability protection of a corporation. Owners of an LLC are protected from personal liability for business debts and claims.

4. Name Your Online Store

The fourth step is to name your online store. Choosing the right name for your online store significantly influences your brand’s identity and market appeal. There are 3 key criteria to consider when naming your online store.

The first criteria is memorability. The name should be easy to remember, pronounce, and spell. A name that sticks in customers’ minds makes it easier for them to recall and recommend your store to others.

The second criteria is relevance. Your store’s name should reflect the products you sell or the market niche you occupy. This relevance helps potential customers immediately understand what your business is about.

The third criteria is distinctiveness. A unique name helps your store stand out in a crowded online marketplace. Avoid names that are too similar to existing businesses, especially within your niche. It also increases your chances of securing a domain name and social media handles that contain your online store name.

Consider using a business name generator for generating naming ideas. These online tools provide creative and industry-specific suggestions based on keywords related to your products, services and niche.

5. Host Your Online Store

The fifth step is to host your online store. You need to secure a hosting service that stores all your online store’s data and ensure it is accessible to customers globally.

You have two main choices for hosting your online store: a web host or an eCommerce platform. Both options provide the tools needed to host and create your online store from scratch, but they cater to different needs and levels of technical involvement.

A web host is a specialized service that provides the server technologies and services needed for your website to be viewed on the Internet. Many online store owners combine web hosts with CMSs (Content Management Systems) such as WordPress. A CMS is a software that allows you to create, manage, and modify content on your website without the need for specialized technical knowledge. WordPress is a highly versatile CMS for building an online store using the addition of eCommerce WordPress plugins like WooCommerce.

An eCommerce platform is a comprehensive all-in-one software solution that allows you to easily build, manage, and scale an online store. Most eCommerce platforms include integrated website builders, which makes it easy to design your store without coding knowledge. These platforms are specifically tailored for online sales, and offer features like product listings, shopping carts, payment processing, and inventory management.

6. Get a Domain Name for Your Online Store

The sixth step is to get a domain name for your online store. A domain name is the web address that customers type into their browser to find your online store. It’s important that this domain name matches the name of your online store to maintain brand consistency and make it easy for customers to remember and find you online.

To acquire a domain name, you have two primary options. The first option is to get a domain name through your web host or eCommerce platform. Many web hosting services and eCommerce platforms offer domain names bundled into their hosting packages. The second option is to purchase a domain name directly from a domain registrar. Domain registrars are companies that manage the reservation of domain names and the assignment of IP addresses for those domain names. This alternative gives you the flexibility to choose from a wider range of domain names such as .com, .org and .store. Popular registrars include GoDaddy, Namecheap, and Google Domains. You need to connect your domain name to your hosting service if you choose to register your domain name with a domain registrar.

7. Design Your Online Store

The seventh step is to design your online store. An intuitive, visually appealing store design significantly influences customer engagement and conversion rates. There are 5 key elements to customize for an effective online store design:

Logo

Your Logo serves as the visual symbol of your online shop’s brand identity. Place it prominently in the header and footer of your site. Also use a simplified version of your logo as a favicon, the small icon displayed in browser tabs.

Layout

The Layout of your online store should prioritize ease of navigation and simplicity. A well-organized, intuitive layout helps customers find what they’re looking for. Ensure your layout guides visitors naturally from product discovery to checkout with minimal friction.

Color Schemes

A color scheme reflects your online shop’s brand personality. Consistent use of colors improves recognition and emotional connection.

Font Styles

Font Styles play a crucial role in readability and brand expression. A general rule is to use a more expressive font for headings and a simpler, more readable font for body text.

Call-to-Actions (CTAs)

CTAs are essential for guiding users towards making a purchase. Use clear, action-oriented language for your CTAs, like “Shop Now,” “Add to Cart,” and “Buy Today.” Position them strategically on product pages and the home page.

8. Add Standard Pages for Your Online Store

The eighth step is to add standard pages for your online store. This informs and reassures customers about your business’ credibility and practices. There are 5 must-have pages to include:

Homepage

The Homepage serves as the virtual front door of your online store. It should highlight key products, special offers, and any unique selling points of your business.

About Page

The About Page tells the story of your store and team. It provides background information, your business’s mission, values, and any unique aspects that set you apart from competitors.

Contact Page

A Contact Page is essential for customer service. It offers visitors a way to reach out with questions and concerns before and after purchasing.

FAQ Page

The Frequently Asked Questions (FAQ) page addresses common queries regarding your products, services, shipping, return policies, and any other customer service topics.

Privacy Policy Page

A Privacy Policy Page is legally required if your online store collects any information from its visitors. It helps ensure compliance with data protection laws (e.g. PCI-DSS, GDPR, PIPEDA) and reassures customers about their privacy.

9. Add Products

The ninth step is to add products to your online store. This involves creating dedicated product pages for each item you intend to sell. A product page is a specific page on your site that provides detailed information about a product and encourages purchase.

There are 5 key elements that should be included on every product page:

Product Name

The Product Name is the title of the product. It should be clear, descriptive, and include any important keywords used to search for the product.

Product Images

Product Images in high-definition are crucial for showcasing the product from various angles and in different uses or settings.

Product Prices

Product Prices need to be displayed clearly. Any ongoing promotions and discounts should be highlighted near the price.

Product Description

The Product Description section provides detailed information about the product. It includes its features, benefits, specifications, and any other relevant details.

Product Variations

Product Variations like sizes, colors, materials, and models should be clearly listed and easy to navigate if your product comes in different variations.

10. Organize Products

The tenth step is to organize products into “product category pages,” also known as collection pages. A product category page groups products with similar characteristics under a relevant category. This makes it easier for customers to find what they are looking for. The primary purpose of product category pages is to improve user experience by streamlining the browsing process.

The range and type of products or catalog you offer will directly influence the categories you create. It’s important to think from the customer’s perspective about how they would search for products and what groupings make the most sense based on your inventory.

Here are 4 common product category pages:

On Sale Page

The On Sale category page highlights all products currently on sale. It allows bargain hunters to quickly find deals and discounts.

New Arrivals Page

The New Arrivals category page features the latest additions to your store. It helps repeat visitors discover new products since their last visit.

By Gender Page

The By Gender category page applies to stores selling apparel, accessories and other gender-specific products.

By Brand Page

The By Brand Category products by brand appeals to customers who have brand loyalty or prefer shopping from specific brands.

11. Set Up a Shopping Cart

The eleventh step is to set up a shopping cart. A shopping cart is a software function that allows users to add products to a virtual “cart” as they browse through an online store. It temporarily holds items a customer has chosen until they are ready to make the purchase.

The shopping cart should be easily accessible on every page of the online store for optimal user experience. This accessibility ensures that customers quickly view and modify their selected items at any point during their shopping journey, without the need to navigate away from the current page they are viewing.

12. Set Up Payment Processor

The twelfth step is to set up a payment processor so that you are able to accept payments for goods and services sold.

A payment processor is a service that handles credit card and online payment transactions on behalf of a merchant. Payment processors support major credit cards like VISA, Mastercard, and American Express as well as online payment systems such as Apple Pay and Google Pay. They charge a transaction fee for each payment processed, which is a small percentage of the sale amount plus a fixed fee. Many also offer features like automatic tax collection. Well-known payment processors include Stripe, PayPal, and Adyen.

Some eCommerce platforms also come with their own built-in payment processors. Shopify provides Shopify Payments. Weebly partners with Square to offer an integrated payment solution.

13. Set Up Shipping

The thirteenth step is to set up shipping. Shipping encompasses how products are delivered to your customers after purchase. It includes two main components: the shipping policy and shipping solutions.

A shipping policy outlines how you manage shipping. It details delivery times (like N-day shipping), free shipping offers versus shipping fees, and ship-to locations (domestic, international and specific regions). A well-defined shipping policy sets clear customer expectations regarding shipping costs, delivery timelines, and location restrictions.

Choosing a shipping solution involves selecting the logistics partners and carriers for delivering your products. Common carriers include USPS, FedEx, UPS, and DHL. Many eCommerce platforms also provide integrated shipping solutions to simplify logistics. For example, Shopify offers discounted rates with certain carriers, and tools for printing shipping labels directly from your store’s platform.

14. Test and Review Your Online Store

The fourteenth step is to test and review your online store. Conducting thorough testing and review is essential to ensure a smooth and secure shopping experience for your customers. Here are 3 key tasks to complete during this phase.

The first is to test your users’ journey. This includes navigating the site, browsing products, adding items to the cart, and going through the checkout process. Test on different devices (e.g. smartphones, tablets, and desktop computers) and browsers (e.g. Chrome, Firefox, Safari, and Edge).

The second is to test order processing and fulfillment, which involves running through the entire order process from start to finish. This means placing orders, processing them through your backend, and executing the fulfillment and shipping steps.

The third is to ensure that your site has an SSL certificate installed. An SSL (Secure Sockets Layer) certificate encrypts data transmitted between the user’s browser and your website. This includes credit card numbers and personal data. Confirm that your SSL certificate is properly installed and active before you launch.

15. Launch Your Online Store

The fifteenth and final step is to launch your online store. The work does not stop after launching as you need to share your online store with as many audiences as possible through all the online channels available, like Instagram and Facebook. Also, do not forget to promote your online store offline too.

What Is an Online Store?

An online store is a type of eCommerce website that allows businesses to sell goods and services to customers over the internet. Consumers browse, select, and purchase products or services on an online store from the comfort of home or on the go.

Many sellers are drawn to set up an online store because of the low barriers to entry and the fact there is no need to rent physical retail space. This makes online stores the most popular type of eCommerce website.

What Types of Online Store Can I Start?

There are 5 types of online stores you can create. They are clothing stores, cosmetic stores, craft stores, artwork stores and pet goods stores.

Clothing Store

Online Clothing Stores focused on clothing cater to a wide range of styles, sizes, and demographics. They specialize in specific types such as casual wear, formal attire, and niche markets like vintage and sustainable fashion. Check our in-depth guide on starting online boutiques.

Cosmetics Store

Online Cosmetic Stores offer beauty products, including makeup, skincare, haircare, and fragrances. They either appeal to a broad audience or focus on niche areas like organic or cruelty-free products.

Craft Store

Online Craft Stores specialize in handmade and artisan products. This category includes anything from jewelry, home decor, personalized gifts, to DIY kits. They ultimately appeal to customers looking for unique and personalized items.

Artwork Store

Online Artwork Stores provide a platform for artists to reach a global audience. These stores feature paintings, prints, sculptures, and digital art, which cater to art collectors and enthusiasts.

Pet Goods Store

Pet Goods Stores offer products for pets, including food, toys, clothing, and accessories. They cater to pet owners looking for quality items for their pets’ health, entertainment, and comfort.

What Do I Need to Create an Online Store?

You need three things to create an online store: a domain name, hosting service, and an eCommerce platform. A domain name serves as your store’s web address, a hosting service makes your site accessible on the internet, and an eCommerce platform allows you to manage and operate your online business. Those who want to create a blog for their online store will need the help of a CMS. This either comes as a built-in feature within your chosen eCommerce platform, or requires adding a separate software tool that works alongside your eCommerce platform.

How Much Does It Cost to Start an Online Store?

The cost to start an online store ranges from RM36000 to RM112500. There are 7 main factors that greatly influence the final cost:

Can I Start an Online Store without Money?

Yes, you can start an online store without money by utilizing free services such as free web hosting platforms combined with WordPress, or free versions of website builders designed for eCommerce. These services let you set up a store, list products, and offer limited customization at no cost.

Keep in mind that free services have downsides. They limit how much data you use, don’t come with free SSL certificates, and also show ads on your site. Most free services also don’t allow you to customize your own domain name, which makes your store appear less professional. Starting for free is feasible, but investing in paid services is advisable for more customization and to better support business expansion of your store.

Can I Start an Online Store without Inventory?

Yes, you can start an online store without holding any inventory through a retail fulfillment method known as dropshipping. Dropshipping is a business model where the store owner sells products to customers but does not keep the goods sold in stock. When a store sells a product using the dropshipping model, it purchases the item from a third party (usually a wholesaler or manufacturer) and has it shipped directly to the customer.

What Is the Best Way to Start an Online Store?

The best way to start an online store is by using a combination of web hosting, WordPress, and WooCommerce. This is recommended for 4 reasons.

The first reason is that this combination gives you higher scalability. Using web hosting with WordPress means you simply upgrade your hosting plan as your business grows, rather than migrating your store to a new platform. The second reason is that this combination gives you more flexibility. WooCommerce offers many options of different payment gateways, shipping methods, and tax settings.

The third reason is that it enables easier design customization. WordPress ofters a library of themes that let you customize your store’s appearance to match your online store brand identity. The final reason is that it unlocks more functionality. WordPress plugins let you easily add SEO tools, security enhancements, marketing integrations, and customer relationship management systems.

What Type of Hosting Is Recommended for Online Stores?

VPS (Virtual Private Server) and cloud hosting are recommended for online stores due to their reliability, scalability, and performance capabilities.

VPS hosting provides a virtualized server environment where your online store operates independently with its own dedicated resources (CPU, RAM, disk space). It’s suitable for online stores that need power and reliability. Cloud hosting involves hosting websites on a network of virtual servers. This allows you to easily adjust resources (like bandwidth and storage) in real time. This is ideal for online stores with high and fluctuating traffic. Many cloud hosts also offer pay as you go (PAYG) models, which means that store owners only pay for what they use.

The most suitable hosting providers for online stores offer these types of hosting as well as round-the-clock customer support and a 99.9% uptime guarantee.

Is Shopify Recommended for Starting an Online Store?

Yes, Shopify is recommended for starting an online store, especially for beginners. It is a complete eCommerce platform that offers an integrated drag-and-drop website builder, which makes it easy to create and manage your store. Shopify also supports various payment gateways, provides robust security features, and integrates with a wide range of apps and services. Learn more about Shopify store building with our in-depth guide.

How Do I Enhance My Online Store User Experience?

You enhance your online store user experience by extending the store’s functionality in 4 key areas:

Search Functionality

Implementing an advanced search functionality helps customers quickly find specific products they’re looking for.

Product Filters

Adding product filters allows customers to narrow down their search based on specific criteria such as size, color, price and category.

Order Tracking

Providing customers with order tracking abilities instills confidence and transparency. Offer real-time updates on order status, from processing to delivery, to inform and reassure customers about their purchase.

User Account

Enabling customers to create user accounts on your online store significantly enhances their shopping experience. Accounts offer the ability to create wishlists, save favorites, and provide easy access to order history.

Where Can I Learn More on Building Online Stores?

You can learn more on building online stores by checking out Bitcatcha‘s comprehensive guides and brand reviews.