How Much Does it Cost to Start Your Own Online Business?

by Jonathan Lister ; Updated September 26, 2017

Starting an online business can allow you the freedom to work from home and be your own boss. The start-up costs for an online business can vary depending on what services your company intends to provide or what products it wishes to sell. You may also be required to formally register your business with the state you're living in, which typically requires paying some additional fees.

Equipment Costs

To start an online business you need at least a personal computer and a reliable Internet connection. A serviceable computer or laptop can be purchased for about $500, as of 2011. A dial-up connection may be the cheapest means to reach the Internet, but it is by no means reliable. The size of modern web pages eclipses a dial-up Internet connection's ability to lead content quickly and on the first try. A dial-up Internet connection also ties up an existing phone line, which could otherwise be used for business calls. A cable modem Internet connection costs about $45 a month and can provide you with the reliability and speed necessary to handle modern online business needs.

Business License and Fees

Each state has its own laws for registering and managing online businesses. You may be required to register your business with your state's department of commerce and obtain a business license. The application fee for a business license is relatively inexpensive and, as of 2001 can cost anywhere from $15 to $50 depending on your state. You may also be required to obtain a tax identification number from the IRS and a permit to collect state sales tax. There is no fee for a tax identification number, but your state may charge you a fee for the sales tax license.

Marketing and Promotion

Marketing your online business using social media can be completely free if you use only free social networking sites to establish your business' online presence. You may want to invest in advertising with other, more popular websites and pay larger search engines for premium placement on search results. This can ensure consumers searching for keywords matching your business' products and services see your business at the top of search results.

Inventory and Shipping

The biggest cost for you in starting your own online business is related to your company's inventory and shipping. If your company is selling goods you must make certain you have enough product to meet potential customer demand. You must also have enough shipping materials, including boxes, packaging tape and labels, to ship all of your sold products. If you wish to ship products internationally your shipping costs will increase because it costs more to ship products overseas than it does domestically. You can obtain an estimation of your shipping costs by visiting the website of the United States Postal Service and taking advantage of the site's cost calculator by weight and destination.

About the Author

Jonathan Lister has been a writer and content marketer since 2003. His latest book publication, "Bullet, a Demos City Novel" is forthcoming from J Taylor Publishing in June 2014. He holds a Bachelor of Arts in English from Shippensburg University and a Master of Fine Arts in writing and poetics from Naropa University.