How to start an online store

What it costs to start

No primary US source publishes an ecommerce-specific startup cost range, and the most-cited figures (a '$40,000 first year' number in particular) trace to vendor blog posts rather than a published study; the credible anchor is the Census Annual Business Survey distribution showing 24.1% of new US employer businesses started with under $5,000 and 50.9% under $25,000, with inventory, paid customer acquisition and, since 2025, import tariffs being the costs that actually dominate an online store rather than the storefront software.

Source: 1, 2, 3

What you have to file

Licensing is set by state, county and city, so this is what the category tends to require rather than a list for where you live. The state pages below carry the filing detail for each of the 50.

• Business entity registration with the state Secretary of State, or a DBA / assumed-name filing
• IRS Employer Identification Number (EIN)
• State seller's permit / sales tax registration in your home state, plus a resale certificate to buy inventory without paying sales tax
• SALES TAX NEXUS REGISTRATION: after South Dakota v. Wayfair (2018) states can require sellers to collect and remit sales or use tax on sales delivered into the state 'regardless of physical presence'. Registration is required in every state where a seller crosses that state's economic nexus threshold; thresholds and the sales measure used (gross sales, retail sales, or taxable sales only) differ state by state. The Streamlined Sales Tax Registration System (SSTRS) registers you across member states at no cost
• Marketplace facilitator rules, where you sell through a marketplace, the platform may be required to collect and remit on your behalf, but this does not automatically remove your own registration obligations
• FTC Mail, Internet, or Telephone Order Merchandise Rule (16 CFR Part 435, the '30-day Rule'): ship within your stated time or, absent a stated time, within 30 days of a properly completed order; otherwise send a delay notice with a revised date and a simple way to cancel, and refund within 7 working days for cash/cheque/money-order payments or one billing cycle for credit sales
• FTC Made in USA Labeling Rule (16 CFR Part 323), unqualified 'Made in USA' claims require the product to be 'all or virtually all' made in the US, and unqualified false labels now carry civil penalty exposure
• FTC Rule on the Use of Consumer Reviews and Testimonials (16 CFR Part 465, final August 2024), bans fake and AI-generated reviews, buying positive or negative reviews, undisclosed insider reviews, fake independent review sites, review suppression by threat, and buying or selling fake followers or views
• FTC Act Section 5, all advertising claims must be truthful and substantiated
• CPSC obligations for physical goods: a Children's Product Certificate (CPC) based on third-party testing at a CPSC-accepted lab for children's products, retested and reissued at least every 12 months; a General Certificate of Conformity for other regulated products; 5-year record retention; a bar on selling recalled products; and Section 15(b) reporting of substantial product hazards
• CAN-SPAM Act compliance for marketing email, accurate headers and subject lines, ad identification, a valid physical postal address, a clear opt-out honoured within 10 business days; maximum civil penalty $53,088 per violating email
• Import obligations if you source overseas: US Customs and Border Protection importer of record number and, commonly, a customs bond; plus FDA, USDA or FCC clearance depending on product category
• State consumer-privacy law compliance (for example the California Consumer Privacy Act as amended) once you cross that state's applicability thresholds
• PCI DSS, a card-brand contractual requirement rather than a law, but effectively mandatory if you touch cardholder data
• Insurance: general liability, product liability, commercial property (for stock), cyber liability, plus workers' compensation and unemployment insurance if you hire employees

Source: 1, 2, 3

What the margins look like

There is no primary public source for ecommerce-specific net margins. The closest primary figure is IRS Statistics of Income for Tax Year 2022 nonfarm sole proprietorships, where the whole Retail trade sector reported $13,450,504 thousand of net income on $211,839,978 thousand of business receipts, a 6.3% net margin, the lowest of the five business types here and well under the 19.7% average across all nonfarm sole proprietorships. Note this covers all retail sole proprietors, not online sellers specifically, and includes the owner's own compensation.

Source: 1, 2, 3

Whether demand is growing

Growing

Growing, and taking share: Census Bureau data show ecommerce growing 12.2% year over year in Q2 2026 versus 6.7% for total retail, lifting online sales to 17.1% of all US retail, but the Census nonemployer data also show retail-trade nonemployer businesses shrinking 8.4% between 2021 and 2022, so the channel is growing while the number of small independent sellers is not.

Source: 1, 2, 3

How big the market is

US retail ecommerce sales were $340.2 billion in the second quarter of 2026, 17.1% of all US retail sales, up 12.2% year over year while total retail sales grew 6.7%.

Source: 1, 2, 3

The part that ends most of them

Customer acquisition cost against rising input costs. The Federal Reserve's 2026 Report on Employer Firms found 'reaching customers and growing sales' was the most common operational challenge for small employer firms, rising costs of goods, services and wages was the most common financial challenge, and 69% of RETAIL firms specifically reported increased tariff-related costs as a financial challenge, the highest of any industry in the survey.

Source: 1, 2, 3

Before you start

• What it will cost you, since the numbers above are the category and not your version of it
• Sole proprietor, LLC or S corp, what actually differs, with no recommendation
• What your state wants filed, read from the state's own pages
• What you have to sell to break even, which decides whether the margin above matters
• Which way you actually work, if the choice between these is really a choice about you

A different business

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