Online selling through your website, Etsy, Amazon, or eBay can give your company an additional revenue stream.
Opening an online store may not be the right decision for every business. Use this checklist to decide if your company is ready to start selling online.
Consider Square Footage
If you choose to sell a physical product, you need space to store, package and ship goods.
Think about whether you have room to store inventory, a packing area, and space for returns before you commit to an online channel.
If you expect to offer packaging or shipping services you may want to review Mail Box and Packaging Store Insurance for insurance considerations specific to those operations.
Purchase Inventory
To run a successful online store, you’ll need to purchase inventory and then store, count, and track it.
Plan for unsold items, seasonal demand, and how you will liquidate slow-moving products so inventory costs don’t hurt your cash flow.
Determine Manpower
A successful online store requires enough employees to handle order processing, customer service, returns, and website maintenance.
Evaluate whether current staff have capacity and the right skills, or whether you need to hire or contract help to run the store well.
Know your Customers
Create a picture of your ideal customer based on current customers’ needs, interests, and buying behavior.
Use that profile to guide product selection and to choose the best platform — for example, sell handmade pottery or vintage furniture on a marketplace that attracts craft and vintage buyers, and choose a different platform for other product types.
If your product mix includes printed materials or books, consider insurance issues described in Book Binding and Printing Supplies Stores — Insurance Risks and Coverages.
Choose Complementary Products
Choose products that match your brand and are complementary to what you already sell.
For example, a salon could add retail hair care products to an online shop, while unrelated product lines may confuse customers and dilute your brand.
If you plan to expand into specialty retail categories, you can also review category-specific considerations like those in Fuel Oil/Appliance Store (Sales) Insurance to understand niche exposures.
Calculate Profit Margin
Work with your accountant before you start selling products online to calculate profit margins after fees, shipping, and returns.
Include marketplace fees, payment processing, packaging, shipping, and any additional labor in your cost calculations to confirm the venture will be profitable.
Purchase Insurance
You may need to purchase additional commercial liability or business property insurance to cover inventory and online operations.
You can discuss with an insurance agent to determine any coverage gaps and whether a policy endorsement or separate policy is needed.
Do It Well
If you’re ready to launch an online store, move forward only when you can support it properly.
Ensure you have sufficient time, staff, and systems to run the store and protect your brand; otherwise, delay until you can do it well.
Selling online can boost sales and increase brand visibility for your small business. Use this checklist to decide whether selling online is right for your company.
Frequently Asked Questions
How much space do I need to start selling physical products online?
Space needs depend on your product size and sales volume; most small sellers start with a dedicated closet or garage area and scale up as sales grow.
Do I need special insurance to sell online?
You may need additional liability or property coverage for inventory and shipping exposure, so review options with an insurance professional.
What are common hidden costs of an online store?
Hidden costs include marketplace fees, payment processing, returns handling, packaging materials, and increased shipping costs during peak periods.
How should I handle unsold inventory?
Options include discounts, bundles, clearance sales, consignments, or returns to suppliers, depending on the product and supplier agreements.