If you've got great business ideas but don't have the capital to start a brick-and-mortar shop, you should consider creating an online store. A well-run e-commerce store can be extremely profitable and easy to maintain.
Shopify is one of the best e-commerce platforms and sales channels for hosting an online business. This guide will give you a step-by-step rundown on how you can simply and efficiently open up a quality business on Shopify. We'll go over everything you need to get started, how to register your business with your state, and give you some marketing tips.
You don't need any formal education or training to open a store on Shopify, but having knowledge of business, web design, and marketing will help you be successful. By visiting the Shopify Partner Academy, you can take courses from Shopify experts on concepts like developing, designing, and running your store.
To make sales on your Shopify business, you'll need to drive traffic to your website and lure potential customers down a sales funnel. You can take a course or tutorial on search engine optimization (SEO), conversion rate optimization (CRO), and Google Analytics on sites like HubSpot and Coursera for a low price or even free.
Strategizing to Open Your Shopify Store
The first thing you need to do is decide what type of products you'll sell in your Shopify store. This will have an impact on who your target market is. For example, if you're selling cat toys, your target market will be cat owners.
Do some research to decide the pricing for your products. This will depend on the type of products or services you sell. Shopify's Partner Academy has courses that can help choose appropriate prices for your products or services.
Will you be doing your own manufacturing and shipping, or will you be dropshipping? You can use certain Shopify applications to manufacture and ship products. For example, you can use a Shopify app like Printify to customize and ship things like T-shirts and hats, and Shopify has integrated fulfillment services for people who sell things on Amazon.
Shopify offers several plans, from a basic plan for $29 a month to an advanced plan for $299 a month. The company charges a percentage fee of 2.4% to 2.9% on sales. There may also be other fees for using payment methods like credit cards or using a different payment provider like PayPal instead of Shopify's own payment gateway.
You can also purchase a domain name on the site starting at around $11 a year. Other costs will depend on your products or services. If you don't purchase a domain name, your URL will have the words "myshopify.com" in it, making you appear less professional and hurt your search engine results pages (SERPs) ranking. Here are some other costs you might have to cover:
- Your inventory
- Shipping materials or a service to handle shipping
- Shipping rates for shipping through Shopify (U.S. Postal Service)
- Applications for integrating things like marketing plans
- Cost for premium website design templates
- Credit card fees
You don't necessarily have to have insurance to add products to a Shopify store, but it can help you protect your assets if you get sued or have financial issues. Here are a few types of insurances you might consider getting:
- General liability insurance protects you if you get sued by a third party you have a business contract with.
- Professional liability insurance protects you from mistakes if you have a service business.
- Cyber liability insurance protects you if you accidentally leak customer information like credit cards or get hacked.
If you plan on finding investors for your Shopify store, a good business plan can show them what your business is all about and encourage them to fund it. A business plan can also help you organize your ideas. Here's a list of things your Shopify plan should have:
- A brief executive summary of the rest of your business plan
- A company description
- A description of your market share
- An index of every stakeholder and manager
- Your ideas and strategies for making a profit
- Your funding needs and how you will use capital
Making Your Store Legitimate
Registering your store can help you do things like secure business loans and, in some cases, protect your personal assets. In the next few sections, we'll go over how you can legally register your Shopify store. Also, some states have regulations that require you to register your Shopify store.
Legally Setting Up Your Shopify Store
Generally, you don't have to legally register your Shopify store until you reach a certain sales threshold. In most states, when a business sells around $100,000 in products or makes 200 sales in that state, the business is considered to have an "economic nexus" there.
If your business has an "economic nexus" in a state, you have to collect sales tax there. To collect sales tax, you need an employer identification number (EIN) from the Internal Revenue Service (IRS). An EIN is like a Social Security number for your business.
To get an EIN, you'll need a business license. Usually, you can get a state business license by visiting the website for the Secretary of State in your area. When you're ready to collect sales tax, you can set up your Shopify account to automatically accept sales tax for certain states. Until you reach "economic nexus," you can simply claim business taxes on your personal tax return.
To register your business, you'll have to decide which type of business entity you want your store to be. The four types of businesses you can choose from are:
- Sole proprietorship
- limited liability company (LLC)
If you have a sole proprietorship or partnership, your business will be no different (legally) than you on a tax return. LLCs and corporations, on the other hand, offer some asset protection. Corporations give you the most asset protection, but they are double-taxed.
Getting a business bank account and credit card will further help you protect your assets. A business line of credit also helps you do things like secure business loans with lower interest rates. To get one, you'll need to provide your EIN and fill out a few documents about your business.
Your business name needs to be unique while representing your brand. You also want a matching custom domain. You can use Shopify's store name generator to find an original title and domain name you can use. You may also want to register your name federally with the United States Patent and Trademark Office (USPTO) to make sure no other companies use it in the future.
There might also be other licenses you have to get in your state or for your particular type of business. Visit the U.S. Small Business Administration (SBA) to learn what federal rules apply to your business type. Contact the SBA office nearest you to see regulations in your state.
Marketing Your Shopify Store
When you have a Shopify theme store, your website is your business. Shopify lets you design websites without coding, but you can also hire an independent professional to develop your site using a platform like Upwork.
Think about your shop's functionality and its design. Include features like drop-down menus so that customers can easily choose products (like clothes of different sizes). Feature high-resolution images and comprehensive product descriptions on the homepage and product pages along with checkout options or buy buttons so that customers can easily buy the products they see. The Shopify platform also has plugins like Blog Studio that let you make content to market your products.
As a first-time online business, you should have a presence on social media. Be active on sites like Pinterest and Facebook. Use high-quality, relevant product images and videos to really encapsulate and spread your brand. Social media platforms are also a great place for you to interact with your target consumers.
In addition to a great Shopify theme, your online business needs a great logo that customers can remember it by. Shopify has its own logo maker. You can also use a company like Tailor Brands to put together a distinctive emblem. To make sure no one can steal your design, trademark it using the USPTO website.
Even a Shopify store needs testimonials. Make it easy for customers to give you positive reviews and endorsements. You can use a Shopify application like Credens to collect reviews from customers. The app even lets them add their picture for a personal touch. Feature positive testimonials on your website, social media pages, and email marketing campaigns.
Sites like Yelp and Google My Business can be powerful tools for getting feedback on your products, services, or customer service. Respond to both positive and negative reviews and try to solve all customer issues.
Finally, always give your customers a way to reach you. Feature your business number, email, and any other ways to get in contact with your company wherever you can.
Completing Administrative and Accounting Tasks
Just like any other business, your Shopify store will require you to keep accurate accounting records to make money. Depending on your products or services, you may have to make documents like invoices, bids, receipts, and estimates.
Skynova has free, printable templates that make creating professional-looking accounting documents a breeze. Skynova's accounting software can also help you keep track of things like billing, deposits, and all your other Shopify admin tasks.
Let Skynova Make Accounting for Your Shopify Store Simple
Opening up an online business can be a great alternative to being a store owner with a physical storefront. It can still be very lucrative, but it doesn't require nearly the amount of seed money to get started. As a bonus, Shopify has free themes that make it easy to put together your business so that you can start making sales. It also has a 14-day trial so that you can test the site out. A well-thought-out, well-managed Shopify store can bring in big profits.
It takes a good deal of planning and focus to set up Shopify e-commerce businesses. You don't want to waste too much of your energy worrying about administration. See how Skynova's software products can make your administrative and accounting tasks way less difficult and way less stressful.