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How to Start an Online Business From Scratch

The internet has made it possible for anyone with the gusto and skills necessary to start a business, even with limited capital. It also allows people to start businesses in areas where they have expertise or passion.

The number of online business models is very diverse as well, with some choosing to sell info products, leads, physical products, or services just to name a few. This is a field in which people from all walks of life can strive in and make an actual full-time income. Let’s take a look at how to start an online business from scratch.

Choose the Right Business Model

You first have to choose which business model works best for you. For instance, some people just prefer the idea of selling physical products over digital ones. These people will usually tend to gravitate towards things such as Amazon FBA, e-commerce sites, and dropshipping.

Others might prefer the idea of selling services, and this is one of the best and easiest ways to start making money online. This is also a great way to start if you have little to no money to start with. This can be anything from advertising and SEO, copywriting, graphic design, and any other service you can deliver through the internet.

Then you have the possibility of selling your own info products or promoting someone else’s. This is not always the easiest way to break out, but this is one of the most potentially lucrative.

The Pros and Cons of Each Model

When you’re dealing with physical products, one of the biggest issues is inventory and returns. With a regular e-commerce store, you will usually have to deal with this yourself. With a dropshipping operation, you might have to as well, unless you have an agreement with your provider.

Amazon is another option but it is very competitive. However, one of the benefits of Amazon FBA is that they will handle all the returns for you. But, in order to succeed, you will usually need a product that is very unique and in high demand or a product you can make a significant margin on. This is not always easy, especially when you have tons of competitors trying to undercut your prices.

One of the ways you can mitigate that, however, is by using repricing software. This kind of software will allow you to identify your competition and readjust your pricing strategy automatically using a variety of parameters. A high performing repricing software will be able to reprice items up and down, adjust to all sorts of situations, and sometimes be able to make decisions for you. This is one way to get a competitive edge and get visibility on the platform.

When it comes to selling services, know that you’re still selling your time for money. So, it could feel like a tough job at times. But, as you grow your list of clients, you could eventually have the means to hire and start outsourcing work. The issue, however, is that you have to keep your churn rates at a manageable level, which makes services not the most scalable model.

When it comes to selling info products, you’ll have to deal with the possibility that your product won’t stick with the marketplace. That could be a lot of time and money wasted. But, when a product works, you are basically getting paid over and over without having to do much work besides advertising.

Things You Should Know Before you Start

Whatever you do, you still have to treat your business like an actual business if you want to operate within the confines of the law. That means choosing a business structure, the state you want to incorporate your business in, and a legal business name.

You will then need to find a domain name for your business if you’re going to be operating your own website. You will also need to file all documents necessary to the entity that handles business filings in your state. Then you’ll be able to get a tax ID number from the IRS. However, note that single-owner LLCs and sole proprietors can use their social security numbers.

The next step is getting a bank account for your business. You will also need to consider a payment processing service, with PayPal being an obvious choice. If you decide to sell goods online, you will need to get familiar with sales taxes in your state.

This is why it’s very important that you have the legal part down before you start. We strongly suggest you consult with an accountant and a business lawyer before you start selling anything online, so you’ll get a better idea of how much margin you’ll actually be able to make and the legal pitfalls to avoid.


So, now that you know a bit more about how to start a business online, you can start looking into different business ideas and find one that works for you. Make sure that you understand the requirements of each, what you can expect, and how easy these are to enter before you make the jump.

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