How to Create an Online Store in India – Everything You Need to Know

The online market is growing rapidly and this might be the right time to start an online store in India. In this article, we are talking about the basic knowledge of an online store which will help you with starting in a step-by-step process. Let’s dive into it.

What is an Online Store?

‘An online store is a website, which is used to sell products and services to online shoppers who visit your website looking to buy products and services.’

This website can be an e-commerce website, a retail store, a third-party website like eBay or a B2B website.

In online stores, all the transactions of a sell-purchase process happen via electronic mediums, except for the delivery of goods. Online shopping is a convenient way for online shoppers to place an order for any goods and get doorstep delivery within a time frame.

Necessary Components of an Online Store

To make an online store work, there are few necessary components of the online store:

components of an online store

1. Website Domain

For starting an online store, a merchant should have a website domain related to his product category or his physical shop name or whatever name he wants his online store to go buy.

Before deciding on the store name, check availability of domain name related to store name. To check the availability of domain names, you can visit GoDaddy.

2. Shopping Cart

The mechanism of a shopping cart for an online store is mostly the same as the physical store. The online shopper moves through the catalog and decides on buying something from there.

In the next step, the shopper adds the desired products in a virtual cart on the website. Usually, the call-to-action button for this process is “Add to cart” on the website, below the product listing.

To finally checkout, the shoppers go to the cart and make the final payment for the purchase. Adding to the cart helps the customer buy multiple products with a single payment.

3. Order Management System

When the online shoppers place an order on your website, the order management system on the back end begins it’s processing.

The order management system is responsible to send order placement notices to the merchant on the back end. It generates order Id and tracks the progress of the shipment.

It works together with shopping carts, online payment, shipping and inventory management systems to manage orders.

4. Payment Gateway Integration System

For online shopping, users usually prefer to make an online payment for their purchases. Having a cash on delivery option is definitely recommended, but prepayment saves the merchant from fraud purchases.

To make online payment available on your online store, you need to integrate a payment gateway. Payment gateways are used to authorize online payments using credit/ debit cards, internet banking, UPI transactions and mobile wallet transactions.

It is important to have a secure and fast serving payment gateway for an online store to accept online payments. Because online shoppers are already afraid of credit card frauds, they will trust you only if you provide them the security in online payments.

5. Shipping System

Proper shipment management is key to success in online stores. Many merchants use third-party shipping services, while others develop their own shipment system. It totally depends on the size and scale of your online store. 

If you are just starting with the online store for your products, it is advised to go with the third-party shipping system. When you grow and scale a business, you can develop your own shipping system.

To find a reliable third-party shipment service in India is a difficult task. Some well-known shipping services in India are Shiprocket, Blue Dart, DHL, Delhivery and E-kart. 

6. Return Process

A proper return and refund strategy in place can save your online store from a major set back. It is important to set up a return/replacement policy for online orders.

Make sure your online shoppers are able to see these policies very clearly. Be true to your customers about your return services, honesty is still an appreciated virtue.

How does Online Store work?

When a customer lands on your online store looking to buy something, he/she will see a catalog. This catalog can be divided into multiple categories.

The customer then sees a product s/he likes and clicks on it. This takes them to the product page, where they find product images, descriptions, prices, offers, reviews, and ratings, etc.

They will also see call-to-action buttons that state ‘Add to cart’ and ‘buy now’. By clicking on the ‘add to cart’ button, the product will be added to the virtual shopping cart and they can go looking for other products they want to buy. 

how an online store works

If a customer is interested in only one product, then he/she can click ‘ Buy now’ and will be directly sent to the check out page. Check out page takes necessary information related to shipping like address, contact and other.

After this, the customer is directed to the payment page, where he/she makes the payment for order using a debit card, credit card, net banking, mobile wallets or UPI transaction.

Once the order is placed successfully it is notified to the merchant on the backend and details of the shipment are forwarded to the shipping partner.

The shipment tracking keeps both the seller and the customer about the status of shipment. If the customer is not satisfied with the product, it is returned to the seller once the return process is initiated.

Steps to Start an Online Store in India

Starting an online store in India can be a lengthy process, which would be difficult to comprehend in one article. So, in this article we are just highlighting the most important steps you will need to take in order to set-up an online store. Use these steps as a checklist that you can use to do in-depth research.

Steps to start an online store

1. Identify your niche and products

The very first step to starting an online store is to identify your niche. Not only in India, anywhere in the world identification of targeted niche and audience is one of the most important parts of any business and marketing strategy.

When you carefully choose your niche and its related products and create a focused strategy for marketing and promotion, success becomes inevitable in the Online world. 

When a focused niche is decided, it becomes easier to focus on digital marketing efforts like SEO, SMO, and PPC towards relevant audiences. Facebook ads are good examples of targeted ads. The need for audience profiling for digital marketing can’t be ignored.

2. Decide on a domain name for website

Deciding on a domain name can be a tedious task, as a brand name is really important for marketing strategy. The name should reflect the niche, the vision and the UVP (Unique Value Proposition) of the brand.

Sometimes unconventional brand names become viral because it sounds rebellious to the young audience. Keep the niche audience and their sentiments in check when you choose a brand name for your store. 

You can choose a domain name that is related to your brand name or the exact brand name, it totally depends on you. For an online store keep the domain name length in between 5 to 8 letters. It helps in Search Engine Optimization and keyword targeting.

3. Build online store and set up inventory

Deciding on a niche and a domain name will help you choose, the theme for your online store and its design. The next step is to actually build an online store.

If you aren’t an IT expert, you can outsource this task to freelancers. There are websites, which can help you find a freelancer who can work according to your requirements and budget. 

Meanwhile, you can work on setting up inventory for your products. If you are starting on a small scale, you can take help of third party warehouse service providers. These service providers will provide you storage space and handle inventory management tasks for you.

This way you will save a lot of money in investment inventory setup. If you scale your online store in the future, you can build your own inventory according to your needs.

4. Set-up Shipment Process

If you are starting an online store on a tight budget, then the suggestion is that you outsource your shipment process to a third party service provider. This would save you a huge amount of investment and a lot of overhead.

But the catch is that you will have to choose a shipment partner who is reliable. This could be a difficult task, but be smart and talk to already online store owners about service providers they are using. 

You can also research online about shipment service providers. Most service providers will also provide packaging along with shipping services. This would make shipment handling much easier for you. 

The alternative is to use a dropshipper for this purpose. This way you won’t have any extra overhead to manufacture, store, pack and ship products. Your dropshipping partner will handle everything for you.

Learn more about dropshipping and how it works here.

5. Register your company

Once you have set up your store and inventory, now it’s time to register your online store legally. The suggested kind of company registration for an online store is Private Limited Company registration or LLP Registration. Before any step towards registration, please take legal advice.

6. Promote your brand with digital marketing

The real work is done for an online store, in online promotional activities. In online business, the marketing efforts are largely targeted towards digital media using digital marketing techniques. There are different aspects of digital marketing efforts like:

  1. Search Engine Optimization
  2. Social Media Promotions
  3. Digital PR Campaigns
  4. Digital Branding Methods
  5. Paid Advertisements

7. Provide customer support

Most business owners take this aspect of starting an online business very lightly. But to be a huge brand in the online market, you should be known for your customer-centric approach.

Put your customer’s needs first. Provide them support in their issues. Set-up a customer support system in place. Be available to your customers. Connect with them using social media and engage with them.

If you take care of this aspect, you will see that it won’t take you too long to establish your online store as a sensational brand in the digital world.


  • An online store is a virtual shop-front, where online shoppers come and buy products, which is then delivered to their doorsteps within a time frame.
  • The basic components of an online store are:
  1. The website domain
  2. Shopping cart
  3. Payment system
  4. Order Management
  5. Shipping System
  6. Return Process
  • The basic steps for starting an online store are following. Use them as a checklist to conduct research before you plan to start an online store:
  1. Choose a niche and its products
  2. Decide on a brand and domain name
  3. Build an online store and set up an inventory.
  4. Set up a shipping and return process in place
  5. Plan and strategize online promotions and marketing
  6. Build a customer support system

How can I increase traffic in my online store?

There are many ways to increase traffic in an online store. First of all, identify your target audience. Then list the related keywords to your niche and create content on your website that’s focused on those keywords. Now, find out where your audience is engaged in social media. Create a profile there and interact with your audience by providing them entertaining and educational content. Once you have their attention, redirect them towards your online store. You can use Facebook paid ads and Instagram’s shoppable tags as well.

How do I find vendors/suppliers for my online store?

There are many ways to find vendors and suppliers for online stores. You can google search on yellow pages for them. Or you can directly go Amazon, eBay or Flipkart. Find the products you want to sell, and look for their suppliers. Directly contact them and see if they can supply you with the products for your online store.

How many products should I start an online store with?

There is no definitive answer to this question but you should start an online store with 5-7 products at least. Then you can increase the number as you scale your business further. Plan this according to your investments. Starting with less number of products helps in focused marketing strategies.