New to eCommerce. Just a few questions.

by t3c1992

Posted: 11 years ago 10 replies

ECOMMERCE

Hi, I would like to start out thanking this site and the community for all the knowledge I have learned over the passed few years. I just have few questions about starting in the eCommerce business if you don't mind!

I will be drop-shipping and using WordPress with WooCommerce.

1. Should I start a business checking account with my bank or wait till I have a stable amount of revenue coming in?

2. When I do create a business account with my bank should I come up with alternative, name instead of my eCommerce website name, so I can use the same bank account in the future with multiple sites?

3. How do you go about using a phone number for your sites? Is there a software you use or do you outsource it to a customer service team?

4. I acquired my EIN but not an LLC yet. It's not likely that I will get sued strait away from some bazaar coincidence as long as my policies and terms are OK, right?

5. Do you outsource your policy, terms, about, etc. pages?

6. I have few to no knowledge on tax besides the sales tax is different in each state. Is there anything else I should know or read on?

#ecommerce #questions

srselfdefense 11 years ago

Welcome to the world of ecommerce! I'm relatively new to it myself.

In regards to your questions:

1. When opening a business you should always have a business checking account (and if you have the credit, a business credit card as well). The money's gotta go somewhere, right? Also, the thing about an LLC is that it is structured a lot differently than a sole proprietorship (SP). Unlike an SP, you cannot just take money out of your LLC whenever you please. You are legally bound to treat it like a corporate structure, basically "paying" yourself within a set time period.

2. Whatever name you're planning on using for your LLC, use that. But first, you should probably register the LLC before opening up a bank account in its name. You could just come up with a central name that serves as the basis for your other businesses or websites. You could then file a "Doing Business As" (DBA) under the LLC, starting a new business. It would essentially be a subsidiary of the parent business (the LLC). Doing it that way makes it a lot easier in case you want to branch out into something else later on. Just have the money all come to one place (keep in mind your accounting requirements though).

3. For my ecommerce store I simply registered a free (local) number with Google Voice. Not the best (it takes forever to reach the voicemail) service, but its free. If you want something more sophisticated I would recommend going with a paid service and getting a toll-free number.

4. It depends on how much risk your business has. For mine (self defense products), I started an LLC right away and established my terms of service and policies in order to prevent myself from getting sued (in case someone buys a product and uses it as a weapon against someone else, for example).

5. Look for competitors in your industry and see how they have their policies set up. I mimicked mine like that, and tweaked them to fit my needs. If you don't have the time or don't feel like coming up with those policies yourself, you could always hire a lawyer to do it if you have the money.

6. Well, from my understanding the new tax law that is going to be implemented forces businesses to comply with tax laws in every state it does business in (sells to), but this only applies if you have over $1 million in annual revenue. I would only concern myself with taxes within your own state, as that is most likely the only place you have business operations in.

Good luck! It's a tough road.
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dave_hermansen 11 years ago

Great answers by srselfdefense, he hit the nail on the head for the most part on pretty much everything.

There are only a couple things I would add to what he said:

#2 - If you plan to do more than 1 web store it makes sense to get a more generic business name. For example, if you were opening a dog house site and registered the name Dog Houses Now LLC you wouldn't be able to use that business name for your Ceiling Fans Unlimited web store later on down the road. It's best to get a more generic name like HERMANSEN SOLUTIONS LLC that can be all encompassing and naturally "house" all the web stores.

#5 - In my opinion the best approach is matching the policies of your STRICTEST supplier. That way you aren't left "holding the bag" when a customer is fickle and tries to really push the limit on your policies.
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iove234lifee 11 years ago

I would start with market research in your case, I have been in the same situation as you time and time again and always seem to come back to market research on a product.
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t3c1992

11 years ago

Thanks for all the informative replies! Also should I target people in my state or from all over the us? Would that cause tax issues?

Thanks

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anne785

11 years ago

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kaizenify

11 years ago

Originally Posted by anne785

All these info are of great use for me.

Honestly these are all a waste of time until you have customers therefore an actual business ... i have made this mistake before. it's a waste of time ... prove you can make money first. None of it is necessary. Start with paypal and start talking to your potential customers ... so yeah in saying that the phone point might be ok.

The worrying part is all your questions were admin issues ... that's the easy part

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t3c1992

11 years ago

Waste of time? Knoledge is not important? It's not a waste if you don't know what you are doing. You wouldn't make a sale without any knowledge.

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kaizenify 11 years ago

Originally Posted by t3c1992

Waste of time? Knoledge is not important? It's not a waste if you don't know what you are doing. You wouldn't make a sale without any knowledge.

Lean startup my friend .. learn and do only enough to be able to ship a minimal viable product ... the rest is a waste of time UNTIL you prove the model / demand.
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mrultra

Banned 11 years ago

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t3c1992

11 years ago

Originally Posted by mrultra

Reading is fundamental. He didn't say they were a waste of time, he said they were a waste of time UNTIL you've proven it will make money. And he's right. Far too many people waste money they don't have in the beginning on things that aren't necessary....like getting an LLC. Find an idea, get a supplier, build the site and then see if you can get traffic to it before wasting money on an LLC that makes no money. What good is an LLC if your site is getting 5 visits a month and no sales? Good for nothing, that's what. That's money you could have used on something important....like GETTING TRAFFIC AND CUSTOMERS.

Well, you have to have spend money to make money, and I never said i'm getting an LLC. I was wondering if its required to start out. I would not have known that with out asking and that's why knowledge is important! I am going to have traffic coming from adwords so I will get customers. You don't expect everyone to start out spending the right amount of money do you? Some people even become in debt from starting out and redeeming their self later after the knowledge and experience they have learned, but I am not going to take that route of course. I am just saying I'm not going to jump in without research.

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CellGuru

11 years ago

I would second kaizenify's views.. test the niche/product first before setting up and store and spending huge money on it .. I know theres a good and long term potential if things are built right from scratch.

But why dont you start by piggy banking on other sites traffic? Why dont you start doing ecommerce as a marketplace-seller.. selling on Amazon, eBay, Sears, Buy.com, etsy etc .. you dont need a website to sell here .. most importantly you can test new product lines, niche etc before deciding on building an entire site for a market .. But once you do you already have a list of customers will come back and order from you..

Just my 2 cents..