Just as the digital camera has revolutionized the photography industry, the tablet and ebook reader have transformed bookselling. Ebooks today command a major section of the publishing industry. In the United States alone, 335 million ebooks are sold each year for a revenue of $1.94 billion.
Ebook businesses sell ebooks to readers. With low startup costs and a huge market, this is a promising business opportunity that many have taken advantage of.
You may also be interested in additional online business ideas.
Ready to form your LLC? Check out the Top LLC Formation Services.
Learn how to start your own Ebook Store and whether it is the right fit for you.
Start an ebook store by following these 10 steps:
- Plan your Ebook Store
- Form your Ebook Store into a Legal Entity
- Register your Ebook Store for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Ebook Store
- Get the Necessary Permits & Licenses for your Ebook Store
- Get Ebook Store Insurance
- Define your Ebook Store Brand
- Create your Ebook Store Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your ebook store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an ebook store?
The startup costs for opening an ebook store business are minimal because business owners usually write their books themselves. The Write Life interviewed three authors on the expenses they did pay when publishing their first ebook. The authors paid for:
- professional editing ($60 to $1,500)
- cover design ($0 to $240)
- formatting ($0 to $299)
Business owners who have limited capital can do each of these themselves or ask a talented friend to assist them. Many people are willing to help someone they know get a book published.
Some ebook store businesses also choose to set up a website, which can be done inexpensively (or free).
What are the ongoing expenses for an ebook store?
The ongoing expenses for an ebook store business are identical to the startup costs. They include web hosting fees, and editing, cover design and formatting costs for new books. Continuing to sell already published books usually costs nothing.
Who is the target market?
Ebooks appeal to almost everyone, including people of both genders and of all ages. The genre that’s chosen will determine the particular demographic that a business targets, but there are genres for every interest and every person.
How does an ebook store make money?
An ebook store makes money by selling copies of ebooks. Ebooks are usually sold through an existing platform, which may be a business owner’s website, Amazon, Barnes and Noble, iTunes or another platform.
How much can you charge customers?
Most ebooks sell for anywhere from $0.99 to $9.99. The most popular price range is between $2.99 and $9.99, for publishing platforms frequently offer higher royalties at these price points. (This discounts ebooks that are given away for free to grow readership).
How much profit can an ebook store make?
An ebook store business can be a highly profitable venture, but success is far from guaranteed. One survey found that the average income of self-published authors was $10,000, and half of self-published authors earned less than $500 in a year. Some businesses, however, earn much more. Hugh Howey earns six-figure sums in a month, and Amanda Hocking has over $2.5 million in sales. (These sums aren’t only from ebook sales, but ebooks account for a large portion of these figures.)
How can you make your business more profitable?
An ebook store business can increase revenue by offering print books through a print-on-demand service and audio books. Once a book a written, it’s easy to convert it from an ebook to either of these other formats.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Ebook Store Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your ebook store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a ebook business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an ebook store
One of the most popular and effective ebook marketing strategies is specifically for Amazon, which is the largest seller of ebooks. Amazon offers a program that lets business owners discount their books or offer the books for free. The discount lasts for a limited time, but downloads often increase during this time. The increase in downloads can help a book rank in Amazon’s searches and pages, which can lead to more sales after the promotional period.
How to keep customers coming back
An ebook store business can keep customers coming back and purchasing new titles by running an email newsletter. A newsletter gives business owners a way to connect with their readers on another level, and it provides an opportunity to share when new books are being released.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Ebook Store in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
Anyone who enjoys writing may be well-suited for running an ebook business. This business model requires a lot of writing, but business owners are free to write on most any topic. There are ebooks on all manner of subjects.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an ebook store?
Most of the time spent running an ebook store business is devoted to writing ebooks, which includes researching, actually writing and editing books. When not writing ebooks, business owners may spend time working with editors and cover designers, and marketing their business.
What are some skills and experiences that will help you build a successful ebook store?
In order to run an ebook store business, business owners must know how to write a book and have the technical expertise to publish their work as an ebook.
Business owners who don’t have writing experience can learn by reading grammar manuals and taking one or more writing classes. The Elements of Style is a classic grammar book. For a writing class, business owners can check the offerings at their local community college or enroll in an online course. Stanford and Gotham Writers both have online writing courses.
To publish an ebook, business owners will have to convert their book to a .mobi (for Amazon) or .epub (for other platforms) format. Most ebook platforms have guides on how to publish through their platform. For instance, Amazon, Apple and Barnes and Noble all have guides for their respective platforms.
What is the growth potential for an ebook store?
An ebook store business is an easy business to scale. With just a click, business owners can have an ebook available in multiple countries. How many books they’re able to offer depends on how quickly they can write. Some business owners have just one or two books available, while others have many titles. For example, Hugh Howey and Amanda Hocking both have over 30 books for sale.
Not sure if an ebook store is right for you? Try our free Business Idea Generator and find your perfect idea.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an ebook store?
The cover design of an ebook is often the only part of the book that customers actually see before they purchase it. Therefore, the cover must capture potential reader’s attention and show them that the book is professionally done.
To maximize ongoing sales, business owners frequently write series of books. In fiction, the first book in a series might be offered for free. Customers who like the first book will usually pay for the sequels. In nonfiction, business owners frequently write several books on similar topics to reduce the research they need to do and maximize their writing output.
How and when to build a team
Most ebook store businesses are run by just one person. A few business owners who are highly successful may grow their business by hiring writers to produce books for them. Only a small number of ebook store business owners take this approach, though.