How to start an online store in 2023 – full guide

BusinessCategory
25 min read
Stacey Hartman

In this step-by-step guide, we’ll walk you through the entire process of how to start an online store for your website - from product ideation to planning, launching and promoting your own online store.

With the high growth trajectory of India’s e-commerce industry, opportunities are aplenty for you to start your e-commerce business in India. According to Invest India, the Indian e-commerce market was estimated to be worth over $55 billion in Gross Merchandise Value in 2021. By 2030, it is expected to have an annual gross merchandise value of $350 billion.

With an expected 907 million internet users by 2023, the growth of ecommerce in India is also fuelled by the increase in internet users.

Before we begin, if you have a business idea and are looking to start an online business from scratch, please check out this guide on how to start your online business in India.

If an online store is the way ahead for your chosen online business, let’s jump right in.

Related: How to write a business plan

In this guide, we’ll walk you through the entire process of how to start an online store for your website - from product ideation to planning, launching and promoting your online store.

Define your target customers

Without a properly defined target market, your sales and promotional efforts will suffer. There are a couple of things to consider as you classify your target audience and potential customers.

Identify key demographics

Start by gathering statistical data related to your audience: age, gender, marital status, education level, household income, and geographic location.

If you’re selling a business-related product, you might also want to profile your customers’ professional details, like the types of jobs they do and which markets they serve.

Gather customer psychographics

It’s also important to learn your prospective customers’ lifestyles, goals, interests, and hobbies. Understanding these qualities helps you effectively target your products to their needs.

Again, an online survey tool can be helpful in gathering this data, along with free market research from organizations like eMarketer, Comscore, Pew Research, Nielsen IQ, and Think With Google Research Tools.

Finally, map out consumer buying behaviors and key influences. Do your customers research on mobile or desktop? Do their friends’ recommendations on social media sway their purchase decisions?

Look at how your target consumers interact across all possible sales channels and touchpoints, including mobile apps, messaging platforms, and email.

The more you learn about what makes your audience unique and ideal, the more targeted and effective your content will be.

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Research and choose products

Selling a unique product that stands out from all the rest is important. But how do you know if people actually need or want to buy it? Start by asking people that you know, such as family and friends.

Here’s what to ask when gathering insights from people you know:

  • Do they love your idea? If so, find out what features would be most appealing to them.
  • Is there anything about your product idea they would change?
  • Ask about their ideal customer experience. What services would make it shine?
  • Would they be willing to pay full price for your product? What do they think it’s actually worth?
  • Have they bought similar products elsewhere? What did they like or dislike about both the product and buying experience?

Gathering this level of feedback is an excellent way to refine your product before selling it online.

You can conduct casual research by speaking with friends and family in person to gather qualitative insights, or by setting up a quick online survey.

SurveyMonkey has a monthly subscription service that you can use to survey friends and family, along with visitors to your website, to better understand who would or is buying your products right now. Google Docs enables you to set up survey forms, as well.

It is important to understand what your potential customers are looking for before you decide on what to sell.

Where will you get the products for your online store?

Once you’ve narrowed down the products that you’ll be selling, you need to know which products you’re going to sell, and how you’re going to source and physically store them. There are many options of business model for first-time ecommerce entrepreneurs.

Sell existing inventory online

If you own a retail brick-and-mortar store, you can use it as a place to store inventory until your ecommerce business grows.

Use dropshipping to start without inventory

Many first-time ecommerce entrepreneurs start their careers with no physical inventory. Through a process called dropshipping, you can act as a wholesaler of products that you curate on your site, then purchase directly from the manufacturer to ship to your customers.

Create and ship your unique products on-demand

If you currently sell crafts, custom t-shirts, or artwork on sites like Etsy, consider driving those customers to your own site after your first sale. Include a business card or coupon in their parcel that promotes your site’s URL, and offers a discount on their next purchase.

That way, you keep one hundred percent of the future profits from repeat buyers. It also enables you to build a stronger relationship with those customers.

The beauty of these businesses is that you only need to create and ship what you sell in advance. Be sure to indicate how long a customer can expect to wait for the product, though, before they make their purchase decision.

Offer a monthly subscription service

Another way to manage your product inventory as a new ecommerce business is to sell a subscription-based service. You only need to store and ship the units you’ve already sold in advance each month or quarter — depending on your business development model.

A note on unit economics

Ensure that whatever products you choose to sell will be profitable for your business, and evaluate your unit economics, meaning your direct costs versus the revenue you’ll generate on a per-unit basis. If the costs per unit are too high or the profit margins are too thin, then start with products that have a higher profit margin.

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Choose a business type

Before launching your business, it’s important that you select the type of legal entity that you’d like your company to be. Establishing your business from the outset as a legal entity will save you trouble in the long run, as it’ll help you with the following:

  • Protects your personal assets.
  • Lowers your potential taxes.
  • Allows you to more easily secure business loans/funding.
  • Keeps your business and personal credit scores separate.

Not sure what type of business structure will fit your business? Here are some of the more common options:

Sole proprietorship

A sole proprietorship is an unincorporated business with a single owner who pays personal income tax on profits earned from the business. This tends to be where most small businesses start, since the start-up costs are relatively low (and it’s fairly easy to change your legal structure later). The owner is also able to keep all of the profits for themselves.

Some of the disadvantages that you’ll want to be aware of include being fully (personally) liable for your business debts, it’s more difficult to get business credit/financing, and it can be more difficult to sell your business.

Partnership

There are several sub-categories to this legal entity type, including general partnership, limited partnership, and limited liability partnership. Partnerships are beneficial for new businesses, as it helps spread the costs, and pool skills and resources.

However, be aware that partners are liable for both the profits and the debts of the business. It’s also easy for business partnerships to fall apart, so you’ll want to ensure that you’ve prepared for this possibility before opting for this option.

Limited liability corporation (LLC)

A limited liability company (LLC) is a type of private limited company. It’s a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

The advantage to an LLC is that it limits your personal liability. This means that your personal assets are protected from business-related debts. It also allows the business to be taxed as a pass-through entity, which avoids corporate-level taxes.

Downsides to an LLC include self-employment taxes, the possibility of personal liability if personal and business transactions aren’t kept separate, and the rules guiding LLCs can vary by state (as well as the taxes involved).

Related: Check out GoDaddy's guide on How to start an LLC

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Build your online store

At a minimum, you need to launch your online store using a hosting platform, custom domain name, unique site design, and compelling brand copy and imagery.

How much you spend on these items depends on your budget and your comfort level with doing some of the work yourself. For example, GoDaddy’s Online Store Builder allows you to get your store up and running for you to sell online with an easy, flexible store setup.

Select and purchase a domain and business name

When choosing your ecommerce business name, consider something that is short, memorable, and marketable. Our domain name generator can also help you find the right name for your ecommerce store.

Consider using .shop or .store for general ecommerce, or get more specific with .jewelry, .clothing, .coffee and more.

Invest in a hosting and design template platform or use a website builder

Most platforms that host your website will also offer a variety of design templates that you can access for free or for a monthly fee.

A templated ecommerce website package comes in one quick install. It typically includes a website template/theme, product pages, shopping cart, payment processing feature, and hosting for your site.

If you prefer customizations and are prepared to enlist professional help, platforms such as WooCommerce are like blank canvases, but you might need a developer to help you with setting it up and maintaining it.

Note: Interested in a full guide on how to successfully implement these features? Check out this guide for more information. 

Budget for additional creative costs or the time to do it yourself

Consumers want to see what your product looks like, and understand its benefits, before clicking “add to cart.” So be sure to include detailed website copy, product descriptions, and photos to your site.

Whether you choose to hire professional copywriters and photographers or do it yourself, you must budget for the time and/or money. Get a quote from a few service providers and request customer testimonials to ensure their services will meet your needs and budget.

Interested in seeing how easy GoDaddy’s Online Store is to set up and launch? Take a look at this quick walkthrough for more information.

Develop your pricing profile

When budgeting for the launch of your site, be sure to include all costs to get to your bottom line, then set your product pricing accordingly.

Your costs will include:

  • Securing your site for payments (a secure sockets layer protocol or SSL)
  • Hosting and platform fees
  • Domain registration
  • Business email account
  • Themes, plugins, extensions, and modules add-ons
  • Payment gateways and credit card processing fees,
  • Advertising
  • Inventory management
  • Shipping fees
  • Packaging supplies

Now that you’ve identified your customers, your products, and the type of business structure you’ll use, it’s time to move on to building out your online store.

Create categories for your products

First, you’ll want to start out by planning your product listing pages. Start by grouping your products into easily navigable categories.

Make your products easy to find

It’s important to organize your online store’s inventory for an optimal user experience — especially if you have a large catalog of items for sale.

Begin by building an intuitive map of your product categories for easy and quick navigation. It’s similar to how you’d set up items for customers to find easily in a store.

The image below is a solid example of the categories you could include in an online clothing store.

Visit some larger brand sites, along with your competitors’ sites, to learn what they do well. Then, replicate or iterate on what you like best about those product categories.

Once that process is complete, you’ll need to convince customers using product descriptions to click on an item, add the product to their cart, and checkout.

Craft compelling product descriptions

Details can make or break a sales transaction. Since you don’t have a sales clerk to answer your customer questions on a website, start by thinking of all the questions they might ask that person in-store.

For example, what fabrics is a sweater made of? Is it organic and earth-friendly? Was it made locally? What other items might pair well with it?

Upload enticing product photos

To convert a browsing customer into a buyer, your products must have quality photos. If it’s in your budget, consider investing in a professional photographer.

Not only do you want to provide customers with beautiful shots of your products, but you also want to help them envision what the product might look like on them or in their home.

Urban Outfitters creates beautiful settings for its lifestyle products to spark its customers’ imaginations.

Select products to feature

Next, you’ll need to promote your great products on your homepage and elsewhere on your site.

Two of the most common product categories for featured items are “Bestsellers” and “New Arrivals.”

Showcasing those items on your homepage or on product category pages will help you increase sales, and draw attention to new items for returning customers. Be sure to:

  • Start with items with a large profit margin or to sell off excess inventory.
  • Gather ratings and reviews of your products for a few weeks or months, then highlight those with the highest rating or feedback.
  • Look at your site analytics to find the most popular search terms on your store. Featuring those items on the homepage will help to close those sales opportunities faster.
  • Look at your Google AdWords account and identify the most common and best-converting product search terms.

To keep your site fresh for repeat shoppers, you must change your featured products on a regular basis. If you’ve already built a GoDaddy Online Store, it’s easy to manage your featured products.

Decide where to feature those products on your site

Your online store’s home page is a good place to start when featuring hot new products. It’s often the first place that new and returning shoppers will land on your site, and it drives traffic directly to those items, without the need to search for them.

You can feature your great products vertically, horizontally, or place them in a slide show. Regardless, make sure the placement is highly visible.

You can also place featured products on category and product pages to up-sell and cross-sell.

For example, you might place a few featured pairs of jeans on a sweater product page. Or place thumbnails of more expensive handbags on the product page of a mid-priced bag to try and up-sell a customer.

You can even take advantage of your “thank you” page, which appears after a customer has completed a purchase. Experiment with different tactics to uncover the most enticing ways to get customers to click “add to cart” and check out quickly, which leads nicely into our next topic.

Define your refund and return policy

Clearly post a refund and returns policy on your website and prompt users to read it before they make a purchase.

This is essential as it will showcase your brand’s transparency while helping you avoid any costly consumer conflicts of interest in the future.

Your customers should be able to easily understand what you need them to do when returning an item and know your criteria for deciding whether a return will be accepted.

Create your privacy policy and terms of service (TOS)

Speak with a lawyer as you develop this policy, and ask them to help you to craft your terms of service, which is a legal document that outlines the terms and conditions for customers who use your products or services. It will protect you if any legal issues arise down the line.

Your privacy policy and TOS must be visibly posted on your site and should explain what you do with your customer’s information.

Be honest and state exactly how you will manage, distribute, and use customer information to build trust.

Cement your security policy

Your security policy should detail what you do to protect your customer payment information. Find an ecommerce platform that uses secure servers with SSL and explain to customers why it’s necessary. Also, be sure the platform is verified by a third-party security service.

The more information you can provide, the greater assurance you’ll give your customers that you’re being careful with their sensitive data.

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Connect a payment provider

The key to closing an online sale is to provide an intuitive and seamless checkout and payment experience.

Some platforms offer built-in checkout and payment processing tools. For example, GoDaddy Payments enables you to securely accept payments online within the Online Store — but not all service providers do.

When evaluating options, you’ll need to consider:

  • Does the platform’s merchant account accept all currencies and offer SSL certificates?
  • What forms of payment can you accept through your account? Credit cards, personal checks, wire transfers, or money orders?
  • How about PayPal or Stripe?
  • Does your platform offer a payment gateway to verify, approve, and process charges in real time?
  • Does it integrate with your website’s existing platform?
  • Do other merchants like or complain about the platform’s checkout and payment experience?

Review all your options and ask the platform provider about the associated transaction fees and processing fees.

Payment process

Next, you’re going to set up your payment options. Understanding and implementing a smooth checkout process, and using the right payment gateways, will set you apart from your competitors.

According to 99 firms, “30% of shoppers will drop the purchase if they have to fill out their credit card information again, while 25% will do so on having to re-enter shipping info.” And many of them now prefer sites that offer 1-click payment solutions that save their purchase information so they can check out faster.

Do your research to ensure the platform you’re using offers a robust set of tools. Reading ecommerce product reviews will help you to find the right platform for your business.

Here’s a handy guide to help you through your payment processing setup.

Collecting sales tax

Online sales tax laws are constantly evolving. If you aren’t following the latest requirements for your online store, you could be on the hook for paying a large sum of unexpected fees.

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Set up shipping or pickup

Next up, it’s time to set up your shipping options. As you develop your online store’s shipping solution, you’ll want to consider all of your shipping needs:

  • What carriers will you offer and what are the handling fees?
  • Will you be shipping based on weight and location or will flat rate work for you?
  • Is your shipping formula based on the type of product you sell?
  • Will you be shipping locally or nationally? Or both?

As you set shipping costs for your ecommerce site, remember that the price must be reasonable (or free, if you can afford it).

If you have a local presence for your business, you may also want to consider local delivery options or pickup, depending on the type of products that you sell.

Want more information on how to set up shipping options in GoDaddy’s Online Store? Our help guide has you covered. 

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Launch your online store

The final step before you launch your online shop is to build a strategy for keeping your customers happy and their data safe and secure.

Develop your plan of action

Once you’ve spread the word about your online store, you’ll need to budget some time for answering customer emails and phone inquiries, updating order statuses, and entering shipping details.

Here’s what to consider before you open an online store:

  • How will you send your customers their shipping confirmations?
  • How will you handle phone and email inquiries?
  • Will you have a separate business phone line?
  • When and how will you answer social media questions and comments?
  • Would it save you time to include an FAQ section on your site, along with templated email responses?

Don’t forget to test before the launch

Once your easy ecommerce site is filled with dazzling product pages, images, colors, fonts, and user-friendly functionality, you’ll want to test your site before making it live. You don’t want to launch your site, only to find that no one can find your products.

Here are a few suggestions of tests you’ll want to run before launching your store:

  • Functionality testing: This involves checking that all website features and functions work correctly, including forms, links, buttons, images and videos.
  • Cross-browser testing: Testing the website on different web browsers to ensure it works well and looks the same on different browsers.
  • Usability testing: Have friends or family test out the website's user interface and user experience to ensure it's easy to use and navigate.
  • Mobile responsiveness testing: Test your website on different mobile devices to ensure it looks and functions well on mobile devices.
  • Content testing: Check your website's content for accuracy, readability, and relevance to your target audience.

By testing these functions out, you can identify and fix any issues before launching your website, resulting in a more successful and user-friendly site.

Once everything looks good, you can launch confidently and focus on getting people to your store.

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Promote your online store

Your site is live! Now you’ll want to attract customers to your online storefront. Let’s take a look at tools that’ll help drive customers to your store.

Social media

If your brand targets Gen Zers or Millennials, it’s critical to have a social media presence to drive traffic to your website and boost your sales. One way to do this is to directly list your products on social media stores. If you’re using GoDaddy’s Online Store, Marketplaces is a great place to start.

But, listing your products via Marketplaces is only one piece of the puzzle. It’s vital to use social media content as a free way to personally connect with customers, and build buzz about your latest products. Getting it right is essential.

Whether a customer’s experiences are good or bad, your business’s social profile is a place where they can go to engage and share their feedback about the products they use. The one-on-one interaction can also give incredible insight into what you’re doing right, and what needs improvement.

Related: How to sell on Facebook Marketplace

Once you’ve created your seasonal or feature product promos, contests, and discounts, it’s helpful to drive traffic to them through online advertising. Here are some of the biggest paid marketing channels that small business owners use.

Facebook and Instagram ads

Facebook and Instagram offer a host of image-based and video-based ad placements that you can target to your customers’ demographics, geo-location, and psychographic interests. The ads can be bought on a pay-per-click or cost-per-thousand (CPM) basis, as well.

Visit the advertising solutions pages for Facebook and Instagram to learn how to get started.

Google Ads, Network, and YouTube

Google Ads is a pay-per-click advertising platform that businesses use to target people who search on Google. You need to specify the search terms you want your ad to show up for and write ads that will appear on those search engine results pages (SERPs).

Ads on Google’s ad network and on YouTube can be targeted in a similar fashion. You can also place display (image) or video ads on these sites as well.

Ad pixels

To track your ad campaigns in your website analytics tool, and via an advertising platform like Google, Facebook, or Instagram, you’ll need to install an ad pixel on your ecommerce website.

It’s basically a tiny snippet of code that you add to your site to track customer sales conversions, help you optimize your advertising efforts, and enable you to re-target a customer after they’ve seen one of your ads on a specific site in an ad network or social media platform. Here’s an overview from Facebook to give you an idea of how to do it yourself.

Search engine optimization (SEO)

Search engines are still one of the leading sources of traffic for any ecommerce website. That’s why optimizing your site for search is critical. To make sure your online store is easily found in search engines, review this comprehensive SEO beginner’s guide.

Email marketing

Whether your website is garnering traffic from first time visitors or being revisited by your customers, it is important to think of how you can continue to engage them beyond this single web visit.

Among several channels that marketers have used to take their brands to the customer, email marketing is perhaps one of the oldest in the digital world. Email marketing, when used in effective conjunction with other channels such as social media marketing, can drive customer engagement, thereby affording more opportunity to increase conversion rates. Regardless, in this fast-moving digital world, the focus should be on the customer and her journey, instead of choosing email or social.

Related: 5 email marketing templates you can plug and play 

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Summing it all up

Once you’ve planned everything from customer targeting to finding the right hosting and online store-building platform, your marketing strategies, as well as customer privacy and security policies, you can launch your online store with confidence.

Be sure to stay on top of sales tax collection laws wherever your products are sold and shipped. Likewise, regularly update your homepage and product pages with seasonal or hot new products to keep your site fresh for returning shoppers.

When you engage with customers on social media and on product review pages, be helpful and respectful of their product complaints and needs. We wish you great success as you launch your new online store, and invite you to come back to this blog whenever you need helpful tips on how to grow your business.

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FAQ

How much does it cost to start an online store?

The price to start an online store will vary greatly depending on the type of company that you own. A small business can expect to spend anywhere between $1000 to $10,000 to launch their store, depending on the complexity of their business. An online store through GoDaddy starts at $16.99 per month.

Is creating an online store worth it?

Creating an online store can be a great way to start a business, but whether it's worth it or not depends on several factors. Let’s take a look at some of those below:

Some benefits of creating an online store include:

  • Increased reach: An online store allows you to reach a wider audience beyond your local area, potentially increasing sales.
  • Lower overhead costs: An online store can be cheaper to run than a brick-and-mortar store, as it doesn't require rent, utilities, or staffing costs.
  • 24/7 availability: An online store is open 24/7, allowing customers to shop whenever they want, which can lead to increased sales.
  • Easier to scale: An online store can be easier to scale than a physical store, as you can add new products, categories, or features with relative ease.

However, creating an online store also comes with some challenges, including:

  • Competition: With so many online stores out there, it can be challenging to stand out and attract customers.
  • Technical expertise: Building and maintaining an online store requires some technical expertise, which can be a barrier to entry for some business owners.
  • Marketing costs: To attract customers, you'll need to invest in marketing and advertising, which can be expensive.
  • Shipping and logistics: If you sell physical products, you'll need to figure out shipping and logistics, which can be complex and time-consuming.

What is the average ecommerce store profit?

Generally, a 10% net profit is considered to be an average profit for ecommerce stores.

How can I create my online store?

To create an online store, you’ll first need to set up your online store platform (like GoDaddy’s Online Store), add your products, create your product pages, customize your ecommerce site template and features, configure your tax settings, setup your payment and shipping options, test your site, then launch your online store.