How to start an online business in Australia

A step-by-step guide to starting an online business in Australia: choosing an idea, getting an ABN and business name, GST, building an online store, payments, consumer law, customer service and startup costs.

Choosing to start a business online can be intimidating. The good news is starting a new online business isn’t as hard or scary as you might think. Starting an online business in Australia boils down to 3 main tasks:

• Choose something to sell
• Apply for an ABN and register a business name (do the paperwork)
• Build an online store and tell people it exists!

The paperwork takes a few hours and you can be selling online within a week.

This guide covers how to start an online business in Australia step by step, with the fees, tricks, rules and the mistakes to avoid. The steps to starting an online business are the same whether you want a side-hustle style income or a full-time home-based business.

The appeal of ecommerce is simple: an online business trades while you sleep. A recent study showed that 58.6% of shopper chats on Australian online stores came in outside of business hours or on weekends. A shopfront can't serve these buyers, but an online store can!

Nine steps to starting an online business in Australia

1. Choose an online business idea

If you’re asking yourself, “what business should I start in Australia?”, begin with what you know!

Like any business, the best online business to start is one where you understand the product or the customer better than most people do. The most profitable business to start in Australia is rarely the trendiest one. It’s the one with healthy margins and customers who come back. Boring businesses tend to win!

The most common online business ideas in Australia are:

Your own products: clothing, homewares, food, baby products or handmade goods.

Dropshipping: a supplier ships each order, so you hold no stock. Dropshipping in Australia has low startup costs and thin margins. What products are trending on social media? See if you can find a supplier!

Digital products: templates, courses, ebooks, pdfs, etc. These are great because you do the work once and they continue to earn.

Services: online coaching, tutoring, freelancing, or virtual assistant work. What are you an expert in? Can you sell this knowledge to others?

These small online business ideas need little cash upfront and almost all of them can run as an online business from home. Each of these online business opportunities can also start as a side hustle and grow from there.

2. Do your market research

Most advice on how to start a business online skips this step and it’s arguably the most important one.

Before you spend a single dollar, search for your product the way a customer would. Note who sells it, what they charge and what their reviews complain about. Then write a one-page business plan: what you sell, who buys it, what each sale costs you and what you keep.

If the numbers don't work on paper, they won't work online. Be honest with yourself here. You might waste months if you’re not careful.

3. Choose a business structure

Most people starting an online business in Australia choose between two structures:

Sole trader: the simplest, cheapest and fastest to get started. You and the business are legally the same, so its debts are yours

Company (Pty Ltd): a separate legal entity that limits your personal liability. Registering one with ASIC $636 AUD and brings more paperwork each year

A sole trader can become a company later, so it’s a reasonable place to begin. An accountant can tell you when to switch. If you get to that stage, it’s a great problem to have!

4. Apply for an ABN and register your business name

Apply for an ABN (Australian business number) through the Australian Business Register. It’s free, then register a business name with ASIC. That costs AU$47 for one year or AU$108 for three.

Buy your domain name on the same day. A .com.au address is reserved for Australian businesses and the registrar (like GoDaddy or Hostinger) will ask for your ABN or ACN when you register. Expect to pay around $20 for a .com.au domain name.

5. Sort out GST, banking and insurance

This is the step most guides on how to start an online business in Australia rush through. You must register for GST once your turnover reaches AU$75,000 a year and the ATO gives you 21 days to do it. Below that, registering is optional.

Open a separate business bank account from day one and connect it to accounting software. If you keep stock at home, ask your insurer about home business insurance.

6. Choose an ecommerce platform and build your online store

This is the step most people mean when they ask how to start an online store or how to start an ecommerce business. If you are working out how to sell online in Australia, business.gov.au lists three main ways:

• Your own ecommerce store. Ecommerce platforms such as Shopify, BigCommerce, and WooCommerce handle the cart, payments and orders. Shopify's Basic plan is AU$56 a month. Ecommerce stores are a great solution an make everything easy if you’re not the most savvy computer user.
• Online marketplaces such as eBay, Amazon and Etsy. These online selling platforms bring customers, but they charge higher fees and set the rules. I personally wouldn’t recommend this path unless it’s part of your early market research.
• Social media shops, which mostly send buyers to your website to pay.

When starting an online store be sure to use a clean template, real photos and detailed product descriptions that answer what a shopper would ask in person.

7. Set up payments, shipping and returns

Accept cards, PayPal, Apple Pay and Google Pay. Businesses in Australia can no longer add a surcharge to eftpos, Mastercard or Visa payments, online or in store, so build card fees into your prices!

Work out postage before you launch and publish your delivery times. Under the Australian Consumer Law, customers are entitled to a repair, replacement or refund when a product is faulty and a "no refunds" policy is illegal. Change-of-mind returns are your choice. Write the returns policy in plain words and link to it from every page from the website’s footer.

8. Answer customers quickly

Shoppers buy when their questions get answered. Will it fit? When will it arrive? Can I return it? A chatbot for your website can answer from your own product and policy pages at any hour, then pass anything it can't answer to you. They can also be used for support tickets, returns and other repetitive work that starts to add up as your store grows.

9. Launch and get found

Tell everyone you know, then build three habits:

• Search: write your product pages around the words shoppers type into Google. Learn some basic SEO, add your website to Google Search Console, Install a Google Analytics tag on your site. Consider using a tool like Ahrefs for keyword research.
• Short video: film the product in use. Keep it simple. You can get some incredible results simply by using your phone alongside free digital assets such as background music, sound effects and some stock images or b-roll.
• Email: collect addresses from your first sale and only email people who agreed to hear from you. Add some kind of email lead-magnet to the website. 10% is a great deal most people will give up their email address for.
• Social media: If your customer live on social media, then so should you! Check our Instagram, Facebook, TikTok, YouTube, Pinterest, X and other social sites. Start building a following from day one.

Compared to marketing, starting an online business is the easy part! Plan your marketing strategy early and don’t forget about the importance of getting found!

How much does it cost to start an online business in Australia?

Cost is the first thing people ask when they look up how to start an online business in Australia and the answer is less than AU$150. Typical startup costs are:

ABN: free

Business name: AU$47 a year

Domain name: AU$10 to AU$25 a year

Ecommerce platform: AU$56 a month on Shopify Basic

Support tool: free to about AU$150 a month. This comparison of the best Aussie chatbots lists current prices

Stock, packaging and postage: depends on what you sell

So is AU$5,000 enough to start a business? For most online businesses, yes. The setup above comes to under AU$130 in the first month, which leaves nearly all of it for stock and marketing.

Do you need an ABN if you earn less than AU$75,000?

The AU$75,000 threshold is for GST, not the ABN. You don't have to register for GST below it, but get an ABN from the start anyway. It is free and you will be asked for one when you register a business name or a .com.au domain.

Can you start an online business from home?

Yes. Starting a business from home is how most online stores begin and how to start a business in Australia from home follows the same nine steps. Business.gov.au adds two extra checks if you start a small business from home: ask your council whether you need approval and tell your home insurer, because standard home policies often do not cover business activities.

The bottom line

That is how to start an online business in Australia: an idea you understand, an ABN, a name, a store and a way to answer customers. Setting up an online business is cheap and quick. Building an online business that lasts is harder and running an online business well comes down to the same thing as any shop: be there when the customer has a question.

Matt Duffin is the founder of Matey, an Australian business that builds bespoke AI agents and tools for online stores and service businesses.