This post is a comprehensive tutorial that will teach you how to start an online store in 6 simple steps.

If you’re tired of devoting the majority of your time to your day job and you’d rather set your own hours and be your own boss, the best way to escape from the rat race is to start your own business online.

Years ago when my wife became pregnant with our first child, she decided that she wanted to spend more time at home. So she quit her job and together we started an online shop over at Bumblebee Linens.

In just one year, we were running a profitable ecommerce store that generated over $100,000 in profits. Today, Bumblebee Linens is a 7 figure business and my wife works from home for much of the day which allows her to focus on our family and do what she loves to do.

Have you ever wanted to start your own online store but were too intimidated by the process? With the latest advances in technology, it’s now easier than ever to set up a profitable online store.

For example, when my wife and I first started in ecommerce over a decade ago, designing a website was a manual process which required coding.

However today, there are hundreds of ecommerce solutions and platforms that you can quickly setup at the push of a button.

In fact, you can launch a brand new online business for as low as $3 per month!

Here are some advantages of starting your own online store.

Low start-up cost – Depending on the ecommerce business model you choose (more below), you can get started for as little as $3.

– Depending on the ecommerce business model you choose (more below), you can get started for as little as $3. You don’t have to physically be present to make money – Your computer will handle most of the heavy lifting for you.

– Your computer will handle most of the heavy lifting for you. It costs almost nothing to maintain your site – Maintaining your own website can cost as little as $3/month.

– Maintaining your own website can cost as little as $3/month. Ecommerce software is readily available – You just need to customize your website with your own messaging and imagery.

In this monster 8000 word guide (complete with step by step videos), I will teach you how to open a profitable online store in just six simple steps.

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Is Starting An Online Store For You?

Before we begin with the tutorial, I want to make it clear that the methodology described in this article is not a get rich quick scheme.

It’s also not about randomly picking and privately labeling products to sell on Amazon or Ebay.

And most definitely, it’s not about giving yourself another job where you must work 100 hours per week.

Instead, the concepts described in this post will teach you how to create a long-term branded business that suits your lifestyle.

With these strategies, you’ll have more time to spend doing what you love, set your own schedule, and run a successful business that doesn’t require a large staff or inventory.

Overall, this tutorial is for you if:

You are interested in starting your own ecommerce store.

in starting your own ecommerce store. You are currently selling on Amazon but want your own brand.

on Amazon but want your own brand. You need a push to get started.

to get started. You want to be in control of your own destiny.

in control of your own destiny. You want to make money within a year.

money within a year. You have at least 5 hours per week available to work on your business.

Why Not Focus On Selling On Amazon?

One of the most common questions I get asked is why bother starting your own online store when you can sell on Amazon? After all, Amazon commands a 50% market share in the ecommerce space.

But even though Amazon owns 50%, the remaining 50% of customers find their products on Google, shop at big box and department stores, and support their local businesses.

In fact, the most important reason to sell on your own website is because you own your customer list which allows you to attract repeat business.

Have you ever heard the saying that getting a repeat customer is infinitely cheaper and easier than acquiring a brand new customer? This statement is 100% true.

In fact, repeat business makes up over 36% of our annual revenues for our ecommerce store. Whenever I want to generate instant sales for my shop, I simply send out an email or an SMS message to my list.

When you sell on Amazon however, you have no such list because Amazon hides all of your customers from you.

Overall, Amazon’s primary downsides are that you can not…

Establish your own brand – People who shop on Amazon have no idea that they are buying from a 3rd party.

– People who shop on Amazon have no idea that they are buying from a 3rd party. Maintain business stability – Amazon can ban you at any time, raise prices or reduce the visibility of your products.

– Amazon can ban you at any time, raise prices or reduce the visibility of your products. Build a list of customers – Amazon does not allow you to contact your existing customers at all and even hides their name and mailing address.

In contrast, with your own shop you can…

Create and build an email list of customers for repeat business.

an email list of customers for repeat business. Run third-party ads and create custom audiences.

and create custom audiences. Explore a variety of different sales channels.

of different sales channels. Establish your own brand and be your own boss.

and be your own boss. Future-proof your business.

your business. Stand out from your competitors with a unique design.

Even though Amazon has its disadvantages, it doesn’t necessarily mean that you shouldn’t be selling there. Amazon is actually a great way to validate your products before you launch but owning your own online shop is where you eventually want to end up.

Step #1: Choose the Right Ecommerce Business Model For You

Before you launch your online store, you first need to pick an ecommerce business model that works for you.

And this will largely depend on your budget, your tolerance for risk and how quickly you want to start making money.

A common misconception with starting an online store is that you have to carry inventory when you sell physical products online.

But did you know that you can run an ecommerce store without ever having to touch or ship a single product?

Overall, there are 4 main ecommerce business models to choose that each have their own pros and cons.

As mentioned earlier, the right model for you depends primarily on the following factors.

How much you are willing to invest

you are willing to invest Whether you want to deal with inventory

to deal with inventory Your tolerance for risk

for risk How quickly you want to make money

Ecommerce Business Model #1: Start An Affiliate Store

Affiliate marketing is when you partner with a retail store and act as a virtual salesperson for their products.

In other words, instead of listing your own products for purchase, you list your partner’s products and then redirect customers to their website using affiliate links.

For every sale you refer, you get paid a commission.

For example, Amazon Associates is one of the largest affiliate networks out there and it gives you instant access to millions of physical and digital products.

For every product that a customer buys within 24 hours (e.g. entire basket of their products), you take a cut of the profit.

Overall, the affiliate model is the easiest way to make money with the least amount of upfront cost. But unfortunately, it also carries the lowest profit percentage.

Affiliate Store Advantages:

You don’t have to worry about inventory or customer support.

about inventory or customer support. You can get started for less than $3.

for less than $3. You can run an affiliate store from anywhere.

an affiliate store from anywhere. Your sales will scale well with traffic.

well with traffic. You can use your store to research which products you may eventually want to sell.

to research which products you may eventually want to sell. You can instantly stock thousands of items.

Affiliate Store Disadvantages:

The Commission payout is low (~1-4%).

is low (~1-4%). The shopping experience is awkward because you are sending people away from your site.

is awkward because you are sending people away from your site. Payments are delayed until 30 to 60 days after the sale.

until 30 to 60 days after the sale. You must create content to build traffic. Low margins prevent you from advertising.

Is An Affiliate Store Right For You?

If you are on an extremely low budget, you should consider this business model. It’s a great way to get a feel for the market and instantly carry thousands of products in your online store.

A common path for affiliate store owners is to start out as an affiliate and then carry inventory for your bestselling products to make more money.

But overall, the affiliate store model carries the least amount of margin and the ramp up time can be long.

Ecommerce Business Model #2: Start A Dropshipping Store

Dropshipping is when you take orders on your website and your supplier fulfills and ships the product to the end customer on your behalf.

Depending on the dropship supplier, the packaging and shipping label can be marked with your logo and brand name making it appear as if the product came from your shop.

Dropshipping is one of the easiest ways to get started with an online store without having to worry about carrying inventory.

Once you make arrangements with a dropship distributor, you just need to set up your online store and start taking orders and the distributor will deliver the actual goods to the customer.

Overall, the profit you make is the difference between your selling price and the wholesale price you’ve negotiated with your supplier.

Dropshipped Store Advantages:

You can get started for less than $100.

for less than $100. There’s no inventory required.

inventory required. Your business is location independent.

location independent. You don’t have to worry about product fulfillment.

worry about product fulfillment. Dropshipping scales well with traffic.

well with traffic. You can instantly stock 100s or 1,000s of items.

Dropshipped Store Disadvantages:

The margins are low . Typical margins are 10-30% + dropship fees.

. Typical margins are 10-30% + dropship fees. A bad or unreliable supplier can tank your business.

can tank your business. You are selling other people’s products.

other people’s products. You have to handle customer support and keep your customers happy.

Dropshipping also presents the following additional challenges:

Low margins make it difficult to run profitable ads.

make it difficult to run profitable ads. You must rely on search engine optimization and social media to drive traffic.

on search engine optimization and social media to drive traffic. Comparison shopping will drive down your prices.

Is Dropshipping Right For You?

Dropshipping offers many of the same advantages as affiliate marketing. You can get started with very little money and it’s also a great way to instantly carry hundreds or thousands of products.

You can also start out dropshipping and then carry inventory for your bestselling products to boost your margins.

The biggest downside with this business model is that there’s a much slower ramp up to significant profit. In addition, price erosion can be a problem because there will be many other vendors selling the exact same products.

Managing customer support is also a huge challenge with dropshipping. You must choose a reliable manufacturer to work with or else customer service will be a nightmare.

Overall, in order to run a successful dropshipping business, you must be mentally tough and have a solid content strategy in place.

Ecommerce Business Model #3: Selling Other People’s Products With Inventory

Selling other people’s products and carrying inventory as a retailer is the most common way to start on online store.

With this business model, you buy products at low prices from wholesale distributors and ship orders directly to the end customer.

Compared to dropshipping and affiliate marketing, the profit margins are significantly higher. As a result, the traditional online store route is a much faster way to make money in a shorter amount of time.

Traditional Online Store Advantages:

Your margins are higher at ~50%.

are higher at ~50%. Higher margins means that advertising is viable.

means that advertising is viable. Faster ramp up to profits.

to profits. You have full control over customer support and fulfillment.

Traditional Online Store Disadvantages:

You must carry inventory or use a third-party fulfillment house.

or use a third-party fulfillment house. Requires money upfront to purchase inventory.

to purchase inventory. The inventory minimums are typically low(~$100 – $200).

are typically low(~$100 – $200). Customers will comparison shop which will drive down prices.

Is Opening A Traditional Store Right For You?

Starting a traditional online store requires an initial investment in inventory. As a result, there’s a greater up front cost with this business model.

But the good news is that most wholesalers have low minimum order requirements on the order of $100-$200.

Overall, the starting investment for a traditional ecommerce store can be less than $500 (approximately $100 + initial inventory).

What’s nice is that you can combine this strategy with dropshipping. Use a dropship supplier to fill out your store and then carry inventory for your best sellers.

The higher margins will allow you to pay for traffic and ramp up sales much faster.

Ecommerce Business Model #4: Sell Your Own Private Label Products

Not everyone has the starting budget to sell their own branded goods, but those who do usually make the most profits of them all.

Selling your own private label products gives you complete control over every aspect of your business. You can manufacture products to your own specifications and apply your unique brand label that no one else can copy.

When it comes to private label selling, there’s a common misconception that you need to be a designer or an inventor to create a product from scratch.

But in reality, you don’t need to be an artist or have any design skills whatsoever. In fact, most private sellers rarely create anything from scratch.

By working with a factory, you can place your brand on an existing product (called white labeling) or make slight modifications to an existing product to make it your own.

For example, if you want to sell a handbag, you can easily work with a manufacturer to make small modifications like adding an additional pocket. No design skills are required!

Private Label Advantages:

You can command high margins over 66%.

high margins over 66%. High margins means that advertising is an option.

that advertising is an option. Much faster ramp up to profits.

to profits. Full control over your product and customer support.

your product and customer support. High margins allows you to sell on marketplaces like Amazon/Ebay.

to sell on marketplaces like Amazon/Ebay. You own your own brand and no one else can sell your exact products.

Private Label Disadvantages:

You must carry inventory or use a third-party fulfillment house.

or use a third-party fulfillment house. You must have more money upfront to purchase inventory and buy in bulk.

upfront to purchase inventory and buy in bulk. Your factories will likely reside overseas which will require a freight forwarder

Is Selling Private Label Products Right For You?

Selling your own private label products is the ecommerce business model that I recommend for long term success and the fastest ramp up to significant profit.

You are the boss of your own brand and no one else can price match you.

If you have the budget to invest in a private label product ($1-2K minimum), selling your own goods is always the way to go. Private label selling offers the most flexibility and the highest profit margins.

Even though it costs more to get started, you can sell on Amazon and Ebay while simultaneously building your own branded shop and quickly recoup your costs.

Which Ecommerce Business Model Should You Go With?

As with everything in life, there’s a direct correlation between the effort that you put in and the amount of profit that you can make.

Greater risks always carry more rewards.

The cheapest way to get started in ecommerce is with an Amazon affiliate store but it will take a long time before you see a significant profit.

The good news is that all of these ecommerce business models are not mutually exclusive. You can combine some or all of these models together instead of choosing just one.

For example, some of the students in my Create A Profitable Online Store course start out with dropshipping or domestic wholesale and then private label their best selling products.

To help you decide where to begin, I put together this handy table for your review. Ultimately, your decision should always be based on your own unique situation and capabilities.

Store Type Effort Level 1-10(easiest) Profitability Scale 1-10 (best) Dropshipping 7 3 Traditional Store 4 7 Selling Your Own Goods 1 10 Affiliate Sales 10 1

Step #2: Choose the Best Products to Sell Online

Once you’ve selected your business model, it’s time to brainstorm products to sell online. In fact, more than half the battle of starting a successful online store is finding the right products to sell.

Overall, there are 3 types of products you can sell online and you need to think about what purpose your product serves.

Are You Selling Candy?

A “candy-like” product is a product that doesn’t solve an identified problem. It’s a nice-to-have.

People enjoy buying “candy” because candy brings immediate pleasure. And selling candy can be super profitable if you catch the wave of a trend.

For example, fidget spinners were a popular “candy” and they sold millions of units worldwide in a short period of time before sales eventually plummeted.

The biggest disadvantage with “candy” products is that they can quickly go out of style. You can ride the wave while it lasts but don’t expect long-term gains with this type of product.

Are You Selling Vitamins?

A “vitamin” is a product that solves an emotional need but the benefits are difficult to quantify.

For example, I take Airborne when I’m sick, but I have no idea if it actually does anything. All I know is that it makes me feel better. As a result, I continue to buy this product.

A good “vitamin like” product fulfills a psychological need and generates recurring revenue.

Are You Selling Painkillers?

Painkillers solve a problem and are the best types of products to sell online.

For example, Abby, a student in my Create A Profitable Online Store Course makes millions of dollars every year selling special insoles for women’s high-heeled shoes.

Her insoles solves an immediate need for women everywhere who experience foot pain from wearing high-heeled shoes.

My friend Kevin sells a laser hair growth product for men and makes millions of dollars every year. When you have a hair loss problem, you’ll spend whatever it takes to get it back.

While painkillers are the best type of product to sell, it’s perfectly fine to sell vitamins and candy as long as you have the proper expectations.

In the end, you can make money no matter what type of product you choose if you execute properly.

To help you brainstorm different products to sell, here are the tools and platforms I use to quickly find profitable products to sell.

Leverage Amazon Sales Data To Find A Good Product To Sell

With businesses across the country shut down because of the pandemic, Amazon has become the staple for online shopping. More people than ever are turning to Amazon to fulfill their shopping needs quickly.

As mentioned earlier, Amazon holds the largest ecommerce market share of any single company. For this reason, sales data derived from Amazon is a great representation of overall demand.

Now it’s not obvious how you can derive actual sales numbers from Amazon but I’ll show you how below.

Every item sold on Amazon is assigned a best seller rank (BSR). This number is used by Amazon to rank how well a product is selling compared to others within the same category.

Here’s an example of a BSR rating for silicon baking mats on Amazon:

Based on this product’s BSR, you can make an educated guess on how many units are sold per day.

The sales chart above was given to me by my friend Greg Mercer. And based on a BSR of 7,228, this silicone baking mat listing generates about 10 sales per day.

By paying attention to the BSR, you can analyze thousands of products and get an approximation of sales. With persistence and hard work, eventually you’ll land on a profitable niche to pursue.

Amazon Product Research Tool: Jungle Scout

While using the BSR method is great, it can be tedious and time-consuming. This is why I prefer to use a tool called Jungle Scout to help me quickly gather Amazon product data.

Jungle Scout assembles all products on Amazon into a clean, digestible table. It can also collate products on Amazon that match your specific criteria.

For example, I can have Jungle Scout pull all products under the Kitchen & Dining category that make at least $5,000 per month and have less than 100 reviews. This is extremely powerful!

Here is a 5-minute video demo on how I use Jungle Scout to do product research. If you want to follow along with the video step by step, then download the tool at a discounted price.

Amazon Keyword Research Tool: Viral Launch

I also use Viral Launch, an Amazon tool that helps me find profitable keywords that people are searching for on Amazon.

Every keyword is assigned a star rating (5 being the highest), which allows you to quickly determine what search terms have high demand and low competition.

Below is a 5 minute video demo on how I use Viral Launch to do product research. If you want to follow along with the video step by step, then download the tool at a discounted price.

Click Here To Save 15% Lifetime On The Viral Launch Keyword Tool

General Guidelines For Finding A Product To Sell On Amazon

If you are looking for a product to sell for Amazon specifically, here’s some criteria to pay attention to.