How to Start an Online Business in Texas

Introduction

This article covers: choosing a platform, registering your business, sales tax and accounting specifics for Texas, product sourcing and fulfillment options, a launch timeline, pricing comparisons, and a hands-on checklist. You will get concrete examples with platform costs, expected timelines (weeks), and tools you can plug in immediately. The goal is actionable steps you can follow in the next 30 to 90 days to start receiving orders and tracking profit.

Read this if you are a solo founder, small team, or brick-and-mortar business adding online sales. No fluff, just the core steps and decisions that actually move revenue.

Start an Online Business in Texas

Overview

Texas-friendly advantages: no state personal income tax, large population centers (Houston, Dallas-Fort Worth, Austin, San Antonio), and significant logistics infrastructure for fast shipping. Primary hurdles are sales tax registration, marketplace tax rules, and local business registrations or assumed names.

Key legal and tax items to complete before selling:

Obtain an EIN (Employer Identification Number) from the IRS (free).
Register for a Texas Sales and Use Tax Permit with the Texas Comptroller (required to collect sales tax).
Form a business entity if you want liability protection (Texas LLC filing fee $300 as of 2024).
Register an Assumed Name Certificate (DBA) at county clerk if operating under a name different from your legal name for sole proprietors.

Example timeline to be compliant:

Day 0-3: Decide entity (sole proprietor vs LLC) and get EIN online (IRS.gov).
Day 3-10: File Texas LLC with the Secretary of State or file DBA with county clerk.
Day 7-14: Register for Sales and Use Tax Permit (online with Texas Comptroller) and set up a sales tax collection method in your ecommerce platform.
Day 7-21: Open a business bank account and apply for business credit card.

Why this matters: Payment processors and marketplaces will often require tax and bank info to activate payouts. Missed sales tax registration can lead to back taxes and penalties. Marketplace facilitator laws mean platforms like Amazon and Etsy may collect tax for you, but you still need records and potentially a permit.

Choose the Right Ecommerce Platform:

what to pick and why

Platform selection is the single biggest operational decision for first 6-12 months. Choose according to product type, expected order volume, and how much control you want.

Platform categories and when to use them

Hosted SaaS platforms (Shopify, BigCommerce, Wix, Squarespace)
Best if you want quick setup, integrated payments, app marketplaces, and minimal hosting maintenance.
Example: Shopify typically works well for stores selling physical products, subscription boxes, or branded goods.
Marketplace sellers (Amazon, Etsy, eBay)
Best for category-first sellers, higher initial traffic, and those who want to outsource fulfillment.
Example: Handcrafted goods often sell faster on Etsy; commodity goods often match Amazon.
Self-hosted (WooCommerce on WordPress)
Best if you need full customization, lower transaction cost potential, and control over hosting.
Example: Businesses with content marketing strategies and complex product catalogs.

Pricing and direct cost comparison (typical starting costs)

Shopify: starts around $29 per month for basic plan; transaction fees vary if not using Shopify Payments.
BigCommerce: starting plans from about $29.95 per month.
Wix eCommerce: from about $27 per month for business plans.
Squarespace Commerce: from about $23 per month for basic commerce.
WooCommerce: plugin free, but hosting $5-$30 per month, theme $0-$100, plus developer time.
Amazon Seller Central: individual $0.99 per item plus referral fees, professional $39.99 per month plus referral fees.

Payment processing fees (typical)

Stripe, PayPal, Square: about 2.9% + $0.30 per domestic transaction.
In-person Square rates differ, but for card-not-present online transactions expect similar rates.

Actionable decision matrix (pick one)

If you want fastest path to brand store and recurring subscriptions: start with Shopify.
If you want discovery and volume fast: use Amazon or Etsy while you build your own site.
If you have a content-first strategy and developer access: use WooCommerce.

Example setup timeline to build platform presence:

Days 1-7: Choose platform and register. Get domain name ($10-$20/year) and email accounts.
Days 7-21: Set up product pages (20 SKUs could take 1-2 weeks), payment processors, sales tax settings, shipping profiles.
Days 21-35: Launch beta, test transactions, and refine product descriptions and images.
Days 35-60: Ramp up marketing and paid ads.

Product Sourcing, Pricing, and Fulfillment Strategies for Texas Sellers

Sourcing options and lead times

Domestic manufacturers or wholesalers: lead times 2-6 weeks. Better quality control, lower shipping unpredictability.
Overseas (China, Vietnam, India): lead times 6-12+ weeks including production and international shipping. Economical per unit when ordering in bulk.
Dropshipping: near-instant start, no inventory risk, but lower margins and less control over fulfillment (typical supplier shipping 7-21 days).
Print-on-demand: no inventory, but margins often 20-40% after fees.

Example cost math for a physical product:

Unit cost from manufacturer: $8.00
Shipping to warehouse (per unit): $1.50
Packaging per unit: $0.75
Amazon FBA or 3PL fulfillment: $3.50
Payment processing (2.9% + $0.30) on a $29 sale: $1.14
Total COGS (cost of goods sold): $15.89
Gross margin on $29 price: $13.11 (45%)

Pricing strategy basics

Cost-plus: multiply total COGS by 2-3x to cover marketing and overhead.
Market-based: match competitor pricing and undercut by 5-15% if customer acquisition cost (CAC) allows.
Value-based: charge premium if you offer unique features or brand position.

Fulfillment options and rough costs

Fulfill from home: low fixed cost, high time cost. Good for <100 orders/month.
Third-party logistics (3PL): storage + pick-pack + shipping. Typical 3PL pick-pack $2-$5 per order plus storage $10-$40 per pallet/month.
Amazon FBA: fulfillment fees depend on size/weight. Small standard-size item example $3-$6 per unit, plus storage fees that rise during October-December.
Regional fulfillment hubs (Texas-based): using hubs in Dallas or Houston can cut 1-2 day ground transit to large Texas metros.

Texas shipping examples and savings

Use regional carriers or negotiated UPS/USPS rates to reduce cost. For a 2 lb parcel: retail USPS Priority Mail $8-$12; negotiated UPS or USPS commercial rates may be $6-$9.
Example: If average shipping cost is $8 and you include it in product price, your margin must absorb that cost.

Taxes and accounting for product sellers

Sales tax: Texas state rate 6.25% plus local up to 2% (max 8.25%). Set up tax collection in platform and audit rates for mixed products and shipping rules.
Nexus: if you store inventory in Texas or have employees, you have nexus. Marketplace facilitator laws often shift collection responsibilities to the marketplace, but you still need the permit and records.
Accounting software: QuickBooks Online or Xero. Connect via integrations to import sales and fees daily.

Marketing Channels, Customer Acquisition, and Budgets

Channels with practical budgets and expected KPIs

Paid search (Google Ads)
Typical CPC (cost-per-click) for ecommerce keywords: $0.50-$2.50 depending on niche.
Budget example: $1,000/mo could deliver 400-2,000 clicks; with 2% conversion and $50 AOV (average order value), that yields 16 orders or $800 revenue; require optimization to be profitable.
Facebook/Meta ads and Instagram
Effective for lifestyle or visual products. Cost-per-click $0.20-$1.50.
ROAS (return on ad spend) target practical baseline: 2x-4x depending on margins.
Amazon Sponsored Products
Good for direct conversion. Bid-based CPC often $0.20-$2+.
Plan at least $500-$2,000/mo for testing keywords and ASIN optimization.
Organic SEO and content
Low direct spend but long time to scale. Allocate 3-6 months to see traffic gains.
Example: spend $300-$1,200/mo on content or hire freelancer to build category pages, guides, and blog posts.
Email marketing
Cost-effective: Klaviyo starts free for small lists; paid tiers based on subscribers.
Conversion: cart recovery campaigns often recover 5-10% of abandoned carts.

Sample 90-day marketing budget for a first-year ecommerce test

Month 1: $200 domain + design templates; $500 initial paid ads; $50 email platform = $750
Month 2: $1,500 paid ads; $300 influencer or UGC content; $50 email platform = $1,850
Month 3: $2,500 paid ads; $500 content/SEO; $50 email platform = $3,050
Total 90-day spend: $5,650 - expect to start generating repeat customers if product-market fit is solid.

Customer acquisition metrics to track

Conversion rate (storewide)
Average order value (AOV)
Customer acquisition cost (CAC)
Customer lifetime value (CLTV)
Cart abandonment rate

Actionable growth tip: Run a small Facebook or search ad test with $200-$500 per channel, track ROAS, and double down on highest performing creative and audience. Use a promo code with limited-time shipping discount to measure immediate conversion lift.

Tools and Resources

Platforms and tools with pricing and availability

Ecommerce platforms

Shopify: hosted ecommerce with app ecosystem. Starting plans typically around $29 per month.
BigCommerce: comparable hosted platform starting near $29.95 per month.
WooCommerce: open-source plugin for WordPress. Software free; hosting $5-$30 per month typical with providers like Bluehost, SiteGround.
Wix eCommerce: site builder with commerce plans starting around $27 per month.
Squarespace Commerce: commerce templates and hosting from roughly $23 per month.

Payment processors

Stripe: online payments, simple API, fees around 2.9% + $0.30 per transaction.
PayPal: widely used, similar fees and buyer protection.
Square: payments and POS with integrated invoicing; online rates similar to Stripe.

Fulfillment and shipping

ShipStation: multi-carrier shipping software, plans start at around $9 per month.
Shippo: pay-as-you-go label rates with no monthly minimum.
Amazon FBA: fee structure based on size/weight and storage; good for national reach.
Regional 3PLs in Texas: ShipMonk, Red Stag, or local independent 3PLs; pricing varies by SKU volume.

Accounting and legal

QuickBooks Online: small business accounting starting around $20-$40 per month.
Bench or pilot: outsourced bookkeeping for $200-$600 per month depending on volume.
LegalZoom or IncFile: formation services starting at $0-$79 + state filing fees; Texas LLC filing fee $300.
Texas Comptroller website: online Sales and Use Tax Permit registration (no fee).

Analytics and marketing

Google Analytics 4: free, essential for traffic and conversion analytics.
Klaviyo: email marketing optimized for ecommerce; free tier available for small lists.
Canva: design tool for product images and ads; free plan and paid subscriptions.

Developer and support resources

Upwork or Fiverr: freelance designers/developers for store builds; small shop builds $500-$3,000 depending on complexity.
Agencies: ecomm agencies for full builds typically $5,000-$25,000.

Common Mistakes and How to Avoid Them

Skipping sales tax registration

Problem: Sellers assume marketplaces handle everything.
Avoidance: Register for Texas Sales and Use Tax Permit before or immediately after first sale and configure your platform. Keep records even if marketplace collects tax.

Launching with poor product listings

Problem: Low-quality images, sparse descriptions, and missing specs reduce conversion.
Avoidance: Invest in 5-12 professional photos per SKU, use 3-5 benefits-driven bullet points, and add one SEO-optimized product description.

Underpricing or ignoring total landed cost

Problem: Focusing only on unit cost and ignoring packaging, returns, and fulfillment leads to negative margins.
Avoidance: Build a full Cost of Goods Sold (COGS) model including shipping, fees, and returns; target at least 30-50% gross margin initially.

Not testing shipping and returns process

Problem: Surprise costs and slow delivery reduce repeat purchase rates.
Avoidance: Do end-to-end test orders from checkout to delivery and returns. Post a clear returns policy.

Waiting too long to measure CAC vs CLTV

Problem: Excessive ad spend on low-value customers.
Avoidance: Track Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV) monthly; cap ad spend until LTV is proven.

FAQ

Do I Need to Register for a Texas Sales Tax Permit Before Selling?

Yes. Texas requires sellers to obtain a Sales and Use Tax Permit to collect sales tax. Register online with the Texas Comptroller and configure your platform to collect and remit the correct rates.

Should I Form an LLC to Sell Online in Texas?

Forming a Limited Liability Company (LLC) provides liability protection and credibility. The Texas LLC filing fee is $300 as of 2024; consider forming an LLC if you have significant inventory, employees, or personal liability exposure.

What Ecommerce Platform is Best for Beginners?

For most beginners selling physical products, Shopify is the fastest and most supported option. If you want marketplace traffic, add Amazon or Etsy in parallel. WooCommerce is best if you want full control and already use WordPress.

Do Marketplaces Like Amazon Collect Sales Tax for Texas Sellers?

Many marketplaces act as marketplace facilitators and automatically collect and remit sales tax in Texas. However, you still need a Sales and Use Tax Permit and must keep accurate records of marketplace transactions.

How Much Do I Need to Start an Online Store in Texas?

A lean launch budget can be $1,500-$5,000 covering legal setup, platform, initial inventory or dropshipping tests, basic marketing, and product photography. Budgets scale widely depending on inventory and marketing ambitions.

How Long Until I Start Getting Orders?

If you launch on a marketplace, you can get orders within days. On your own site expect 4-12 weeks for meaningful organic traffic; paid ads can accelerate that within 7-30 days if optimized.

Next Steps

Complete legal registrations (0-14 days)

Get an EIN from the IRS (free, immediate online).
File Texas LLC (if desired) or file an Assumed Name Certificate (DBA) with your county.
Register for the Texas Sales and Use Tax Permit.

Choose platform and build MVP store (7-30 days)

Pick Shopify or WooCommerce and set up payment processing and shipping profiles.
Add 10-30 SKUs with professional images and full descriptions.

Run a small paid acquisition test (30-60 days)

Allocate $500-$2,000 to search and social ads, track CAC, and measure conversion rate and AOV.
Set up email capture and automated cart abandonment flows.

Set up analytics and accounting (before launch)

Connect Google Analytics, enable e-commerce tracking, and integrate QuickBooks or Xero for daily sales imports.
Confirm tax settings and reconcile platform fees weekly.

Pre-Launch and Launch Checklists

Pre-launch checklist

Business name and domain secured.
EIN and Texas Sales and Use Tax Permit obtained.
Business bank account and payment processor set up.
Product photos, descriptions, and SKU structure complete.
Shipping rates and return policy defined.
Analytics and attribution set up (Google Analytics + UTM tracking).

Launch day checklist

Run 3 test transactions with different payment methods.
Verify sales tax is applied correctly in checkout.
Verify shipping labels print and carrier pickup works.
Send launch email to initial list and run a small $200 ad burst.

Post-launch 30/60/90 day checklist

Weekly: reconcile sales, fees, and returns; update inventory.
Monthly: review CAC, ROAS, CLTV, and adjust marketing spend.
Quarterly: evaluate platform costs and consider scaling to additional channels (Amazon, wholesale, retail).

Final note: follow these steps with consistent measurement. Prioritize legal compliance (sales tax and registration) and a solid product listing. With a 30- to 90-day plan that includes platform setup, basic marketing tests, and fulfillment reliability, you can move from idea to recurring orders without unnecessary risk.