There is a big difference between launching an e-commerce site and "nurturing" an online store to profitability.
Building the store and loading it up with products is the easy part. Finding customers or "traffic" is not so easy. There's a statistic that gets quoted quite a bit that 95% of all e-commerce businesses fail within the first year. I believe that number is inflated a bit by the fact that starting a business in the virtual world has fewer barriers to entry than brick-and-mortar retail. Plenty of people dip their toe in the e-commerce pool because it does not necessarily require a huge upfront investment.
I hear where you're coming from, but it's important to understand that what you're planning is not easy. It will take hard work. On the plus side, you now have a blueprint to work from that that will help you sidestep the pitfalls that cause many to quit in exasperation.
I've shuttered the virtual doors of more online ventures then I now have in operation. Is that a bad thing? Not at all. I learned something from every store I opened and leveraged that knowledge to build better and more profitable e-commerce sites. Do not be afraid of failure.
Henry Ford, Walt Disney and Bill Gates are just a few of the iconic businessmen who have multiple failures and bankruptcies in their past. While I do not recommend going bankrupt as a stepping stone to success, I do encourage you to be willing to fail. Try new approaches. If you're going to fail, do it quickly and move on. The worst thing an e-commerce store owner can do is lose momentum because they are afraid of failure.
More than likely, you will stumble out of the gate. Just get up and keep going because the other 95% of people will not. That's your competitive edge.
Certificate of Formation
If you have settled on a limited partnership, LLC or corporation for your business structure you will need to file a Certificate of Formation. This is also commonly referred to as a Certificate of Authority. At the time of writing this in Texas, the cost of filing this certificate for an LLC or corporation is $ 300 and the form is available online. A limited partnership costs $ 750.
Completing the Certificate of Formation is a prerequisite for obtaining a sales tax authorization in most states if you are using one of the business structures that require this filing with the state.
EIN (Employee Identification Number)
While most of the forms you will file to get your business started are at the state level, a partnership, LLC and corporation must also obtain an EIN from the Internal Revenue Service (IRS). Again, this is a straightforward process and nothing to be concerned about, but it's still a required step along the way.
An EIN, also referred to as a Federal Tax ID because everything needs to have two names so that you are more confused, is used for tax reporting purposes. You'll need it to get your Sales Tax ID from the state. You can apply for an EIN online at irs.gov and there is no cost to do so.
