Starting an Online Business | Everything You Need to Get Started in 2020

What exactly is an online business anyway?

And what are the various types of Internet businesses? Starting an online business woman

I’m going to answer these questions and more in this complete guide to beginning and online venture.

And to be clear, I’m not talking about a simple online presence or company website.  I’m talking about websites that generate and collect revenue in some form or another.

First, here’s a quick video that I think might be helpful.  In it, James Wedmore talks about what to do first, when starting an online business.

Why Should You Consider Starting an Online Business?

There are definitely a lot of good reasons to get started in ecommerce these days.  But there are some pitfalls to watch for as well.  Here are some broad pros and cons to get started with.

Pros: The barrier to entry is low.  Rather, the cost to start an online business is very little.  Especially when compared to the cost of starting a traditional brick and mortar business.  Generally speaking, they are automated streams of income, operating 24/7.  You have access to international markets.  Overhead can be very low and profit potential very high.  And you can present yourself as an equal to much larger competitors.

Cons: A lot of time and effort will be needed to promote the site and get noticed. Interpersonal communications are much less regular than in a traditional business. Creating trust & credibility, and gaining customers can be a challenge. Customers can’t physically touch or experience your products in most cases.

Types of Online Businesses

The various types of online businesses are many, and technically, any website that involves the transfer of information over the Internet for business purposes can be considered ecommerce.  But most people think of an ecommerce business as one that sells a good or service online.  However, there are other types of businesses that generate revenue without necessarily selling a physical product or web-based service.  Let’s have a quick look at all of the options.


Online Store: A website that sells physical or digital products.  The online store lists products for sale.  The customer electronically pays for the product(s), and then the store ships the product(s) to the customer.

Software as a Service: A website that offers a web-based software solution to its customers in exchange for a fee.  Fees are usually subscription based and/or end-user license based.

Publishing (Content Creation)

Ad Revenue Model: A website that publishes free content with the intent of generating high traffic to the site, which would in turn support the ability to earn advertising revenue.

Premium Content Model: A website that publishes free content with the intent of generating interest in more detailed and in-depth (premium) content that is only available to paying customers. This premium content is typically offered in the form of training courses.


Subscriptions: Similar to the Premium Content Model, membership sites generate revenue by offering premium content to paying customers.  In some cases though, the customer may not be paying for content, but rather services.  One common example is a site that offers a “Private” or “Mastermind” group for paying members, in which one-on-one consultations, group webinars and forums are available.


As an affiliate you enter into an agreement with a merchant to promote their products, and send customers to them.  The merchant then tracks purchases and pays you a percentage of the sale.  Affiliate marketing has been around since the early days of Amazon and is a viable method of making an online income.  However, margins are generally small, which means that significant earnings are difficult to achieve without scaling your efforts and promoting products or services for many merchants.

Business to Business (B2B)

B2B refers to commerce transactions that take place between businesses.  These types of transactions are typically larger and more complex than those of the B2C variety.  Web based B2B businesses are among the most difficult types of online businesses to get in to.  However, if you have an online service, or a product that is ideally suited to certain businesses, by all means go for it.  They can be very profitable.

Which Type to Choose?

Some advice – I’m no stranger to online business and I can tell you, without a doubt, that there are a couple types of businesses that are going to be more advantageous for you to get started with.  And more importantly, they are more likely to make you money in the short term.

Those would be Affiliate and Ecommerce businesses.  Starting an affiliate website is hands down the easiest option.  Without a ton of work, you can get an affiliate site up and running in no time.  An ecommerce site takes a bit more work, but depending on the platform you choose, it too can be a quick process.  We’ll cover that more in a moment.  Basically, these two options provide the fastest way to start generating income.  However, they both require a good deal of planning, keyword research and promotion to get off the ground successfully.

What You’ll Need to Get Started

Your Idea (of course)

This is BY FAR the most important part!  And it can’t just be any random idea that you think seems cool.  You’ve got to put in the work to research niches, identify underserved needs, and ensure profit potential.  I’ve written an entire post about determining what to sell, which you can read here.  Ideally, you’ll settle on an idea (or niche) that is targeted to a specific need.  Based on your keyword research, this niche will be generating an optimal amount of search volume each month.  This niche will have the potential to solve a problem, fill a need, or ease a pain in a profitable way.  And finally, you will have proven that the competition for this niche will be weak.  I’ll be getting into all of these details in an upcoming post on finding profitable niches.

Domain Name

Once you’ve settled on an idea, it’s time to secure a domain name.

Where to Get a Domain Name

You’ll want to purchase a domain name from a reputable company (they’re called registrars) that has been around for a while.  You don’t want to register with a company that may go out of business.  Otherwise, there is no performance benefit of choosing one registrar over another.

If you’d like some very in-depth history on domain names, check this out.

Some good registrar options are:

I didn’t list intentionally.  I was a customer for a long time, but I don’t think their user-interfaces are very friendly.  They appear to be geared more toward enticing you to purchase add-ons than to help you manage your domain.

What to Name It (best practices)

If you already have a company name, and it makes sense to use this company name for your new ecommerce site, go with a domain name that closely matches your company name.  If not, here are a few tips:

  1. Get a .com domain name if at all possible.  It’s believed that Google gives more weight to .com domain names so start their first.
  2. Avoid hyphens / dashes.  These are more difficult to type, remember and explain to others.
  3. Choose a name that’s relevant to your website. It should reflect what your core niche is, and make sense to your customers.
  4. If you’re going for a highly targeted (long tail) niche, consider an Exact Match Domain (EMD).  Despite Google’s 2012 devaluing of EMD’s, they’re still proving to help with search engine results.  So if you’re targeting the silver disc sledsmarket, try to grab
  5. Get creative! It’s very hard to find just the right domain name.  If you can’t find exactly what you’re looking for, be resourceful and look for domain names that are similar.  Add a prefix or suffix, like ( or or  Consult a thesaurus for alternative words that still fit your needs.

Pro Tip – buy an existing domain with PR.  What’s PR?  Page Rank.  It’s one of many factors that help determine a website’s longevity, popularity, authority, quality, etc.  If you can find an expired domain name with a PR of 3 or higher, which still meets some of the guidelines explained above, go for it.  This will give your site an extra boost in search rankings right out of the gate.  The higher the PR, the more you may have to pay.  Some places to scout expired domain names are: | |

Web Hosting

You’re going to need a web host.  No, you can’t just install WordPress on your home PC and host the website from your living room!  Well, you could, but if you want to do that, please leave my site now and don’t come back! Really! You can’t host a decent website from your spare bedroom!  Seriously though, you need a reliable host with fast servers and lots of bandwidth.  Web hosting is cheap and is a necessary barrier to entry in this game.

What You Really Need from a Web Host
Don’t get too caught up in GBs of storage space or bandwidth per-month charges.  Most of the top web hosts now offer standard packages with unlimited bandwidth, and storage space.  And the best ones throw in unlimited emails, and domains as well.  What you really need from a web hosting company is speed, reliability, and great customer service.  You want a host that’s been around for a while, has strong customer support and raving fans.

You’ll also want a host with features that compliment your needs as an ecommerce website.  Some of your needs would include SSL, merchant processing integration, WordPress support, etc.

Your Ecommerce Hosting Options

One of the biggest decisions you’ll have to make in the process of setting up an ecommerce business is whether to go with a hosted solution or a self-hosted solution.  Here’s a quick breakdown of each:

Hosted Ecommerce Solution: This is a sort of all-in-one solution that encompasses all of your web hosting and ecommerce functionality.  You’ll pay a monthly or yearly fee which will include your web hosting, ecommerce system, payment processing and support.

Pros – It’s all done for you, ready to go.  Good services like BigCommerce (my favorite) and Shopify make it really easy to get your ecommerce site set up, designed and operational.
Cons – Typically, higher monthly costs.  Adding additional, non-ecommerce functionality to your site (like a WordPress blog) may not be possible.  Customization and design options are limited, albeit pretty darn acceptable in most cases.

Self-Hosted Ecommerce Solution: This is defined as an ecommerce site that is hosted on your own web hosting account.  No, I don’t mean on your home computer (you guys were supposed to leave!).  I mean, you buy web hosting from a good web host like HostGator, Bluehost, etc.  The, you install ecommerce software on that hosting account.  Typically this would be open-source ecommerce software like Magento (my favorite) or OS Commerce.  A good web host has tight integration with these open source solutions and makes it pretty easy to set them up.

Pros – Typically, lower monthly costs…you’re just paying for hosting and merchant fees.  Integration with additional website functionality like a blog is more seamless, customization and design options are pretty much wide open.  Only limited by your skills and/or budget.
Cons – This is a steeper learning curve.  You have to set up everything yourself or pay someone to do it.  Despite a good host making initial setup a breeze, further customization can be challenging.  Support for the ecommerce platform may be limited to forums or wikis.

My Recommendations

For folks who want to go the self-hosted route, or host any other general website, I always recommend HostGator.  They offer some great ecommerce perks with their Business Plan account.  It includes free private SSL (that is a secure url – ie –, and a free Toll-free number!  Something I recommend for building trust on an ecommerce website.

If you think a hosted solution is more for you, I recommend BigCommerce.  Their user interface is super intuitive.  It’s like they’ve thought of everything.  Setting up a site is easy.  And, they have some nice theming options to make your site look great and give it a unique brand.

Ability to Accept Payments Online

What you Really Need

To be a true ecommerce site, you need to be able to accept payments from your customers.  However, there are several ways to accomplish this.  Some payment processors offer hosted solutions, with which your checkout/payment process is hosted on their site.  Others offer fully integrated solutions that allow you to keep your customers on your own site through the entire purchase process

Your Options

There are a slew of options.  Too many to get into on this post.  But in general, if you need to keep costs low, and setup headaches to a minimum, you can use a third party hosted payment processor like PayPal’s “Payments Standard”, or Amazon Simple Pay.  As mentioned previously, these services offer a hosted checkout process.

Pros – Little to no setup or monthly cost.  Comparatively easy setup & implementation.
Cons – Higher per-transaction fees and a less seamless checkout experience for your customers. (higher abandonment rates for sure)

For a truly integrated checkout experience you’ll want to use a fully integrated payment processor/merchant account.  A couple of the most popular services are and First Data.

Pros – Fully integrated / seamless checkout process.  Your customer never has to leave your site.  Lower per-transaction fees.
Cons – Higher setup and monthly fees.  More difficult setup & implementation.

Final thoughts

Okay, so now you have a pretty good understanding of the basics of starting an online business, and even more specifics with respect to starting an online store.  I really hope this helps you get a grasp of the core concepts of online business and more importantly, the confidence to take the next step and start one of your own!

If you found this post useful, I’d be grateful if you’d share it with your friends.

It’s my goal to help as many people as possible launch and grow their online businesses, and I need help from readers like you to get the word out.  So big thanks to you!

Lastly, I’d LOVE to know what you think about this post.  Contact me if you have questions or thoughts.

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