How to Start an Online Retail Business - YouTube

hey it's patti scharf CPA and co-founder of catching clouds the leader in

e-commerce accounting today we're going to talk about how to start an online

retail business and I want you to stick around to the end because I've got

something that I want to give you that has lots of resources and will help give

you kind of a step-by-step on how to get started I'm going to go through the

topics here pretty quickly because nobody wants to sit around and listen to

me talk for 45 minutes about all the steps you need to take all right so I'm

gonna do a really condensed version I'm going to tell you what I'm not going to

do is I am NOT going to talk about sourcing products I'm not going to talk

about marketing I'm not going to talk about lead generation or any of that

kind of stuff because that has been covered ad nauseam

on YouTube to date and I'm gonna focus on the stuff that I really know the most

about and that is the back office business side of things all right so

let's just jump in and get started

all right the first thing that you need is a foundation so your foundation you

need to go talk to a CPA and an attorney either one can probably fill in for the

other in a pinch but really it's good to have one of each of those because you're

gonna need somebody in your court down the road but if you meet with them right

up front even if you don't have any money they're not going to charge you

that much for an hour consultation to help you pick your entity type and to

help just kind of tell you what pitfalls are coming up that you can avoid all

right it's the this is one of those times where you it's much more expensive

to have to fix something that you screwed up then to find out the right

way to do things right up front all right

so find a CPA find an attorney consult with them you're gonna pick your legal

entity type you're gonna picture pick your tax entity type whatever is best

for your situation you need to register your business with the IRS you're gonna

need to register your business with the Secretary of State if you have a trade

name or something like that that you want to use that's different from your

legal name then you want to register that you're going to open up a business

checking account because you do not want to be combining your business and

personal finances those need to be separate and so that you can have clean

information for both all right as soon as you have something worth protecting

make sure you go get some business insurance talk to an insurance agent

they're like a hundred billion different types of insurance I didn't even know

until like I don't know seven years ago when we got it that's such a thing as

cyber liability insurance existed go talk to an ins an insurance agent see

what kind of protection you need because the last thing you want to do is spend

all this time and energy to create this amazing business just to lose it through

no fault of your own the last thing is if you need to collect sales tax and

remit it to your state make sure you register for a sales tax license it is

illegal to collect sales tax when you don't have a license so make

sure you register if you're going to get one if you don't know about all the

sales tax rules talk to a CPA you can actually get started there there's some

changes recently that came down the pike on sales tax

I mean and when I say recently I mean like two weeks ago and you can check out

this video here it'll give you some more information about what kind of

implications there are for you alright so the next thing you're going to set up

your operational systems you're going to find out what shopping cart or

marketplace you're going to sell on chances are you already kind of

suspected what you were gonna be doing in advance before you even really got

this far but whether you're selling on Amazon shopify bigcommerce Magento on

your own site or on or on a marketplace like eBay or something like that figure

out which platforms you're going to use you're gonna need to vet some of the

payment processors and get at least two because you don't want to have just one

payment processor and then you forget to pay your monthly bill or like your

credit card expires that has that monthly bill attached to it and so

you've got three hundred thousand dollars a month coming in on Shopify but

you forgot to pay your thirty nine dollar bill and so they just turned off

your payment processor and now you can't collect any money from your customers

that's not a good thing so get to payment processors one is your normal

one and one is a backup one just to protect yourself in case something gets

hacked or anything else alright once you have your shopping carts you have your

payment processors go into your shopping carts and make sure that you have set

the sales tax settings appropriately for your business if you do not have a sales

tax license somewhere go in and make sure that they are not collecting sales

tax if you do have sales tax license go login and make sure that you are set

you've set it up to collect sales taxes and make sure you're collecting it

everywhere so if you're collecting on Amazon in 23 States you need to be

collecting in 23 states also on Shopify eBay and all the other places next

you're going to set up your accounting systems

one of the most important ones for you as an online retailer is going to be

especially if you're selling on multiple different platforms is going to be cloud

inventory system I've got a whole nother video on cloud inventory go check that

out but it's it's really great for

operational efficiencies for an e-commerce seller the next thing you

want to take a look at is setting up an accounting system because you want to

make sure that you're keeping track of all this stuff that you're doing so we

love zero I know a lot of people like QuickBooks Online also I've got another

video that compares the two if you don't know where to start

regardless of the system you use you want to be careful about pushing in each

individual transaction it can crush your system it can be impossible to reconcile

and if you want more information about that watch this Shopify video where I

talk about all the ins and outs of that if you are collecting sales tax and

remitting it I highly recommend you get a tool like taksa fight ax gr Avalara

that will help you manage your sales tax manage the payments and manage the sales

tax filings that you need to do to stay on top of all the states and compliance

for sales tax okay so after you've set up all those basics basically all you do

is you go out and you sell sell sell sell sell so you can watch all those

other videos that I was talking about before to find out how to optimize your

sales and things like that but you're going to want to check out different

tools that will help optimize your performance and you want to keep track

of how things are doing so some ways that you can do that your cloud

inventory tool is going to have some great analytics that will help you keep

track of profitability by SKU profitability by order you'll take a

look at things like reprice errs feedback tools you'll want to make sure

that you're keeping an eye on your cash flow because if you've got too much

money going out for inventory and you don't have enough coming back in you

could really get into a cash crunch we'll talk more about that on another

video another time okay so once you have all those basic set up and it just

starts becoming a running business all you really need to do is

just keep learning just keep your ear to the ground and see

what's new out there keep expanding your knowledge about the things that you

don't know about if you're unfamiliar with some of the more financial aspects

of it I highly encourage you to read simple numbers straight talk big profits

I encourage you to read profit first I encourage you to read the e-myth

revisited and making money is ruining your business so I hope this helped if I

went really too fast for you or I didn't have enough information please look down

below because there's a link there that'll take you to our ebook that we

put together called ecommerce startup how to start your own online business

and it's got lots of information about all the information I talked about and

more and I hope you like this video if you did please like comment and share if

you haven't already please subscribe and I will catch you later

you