Ranking the 10 Best States to Start an Ecommerce Business
Are you thinking about launching an ecommerce business? Now might be the perfect time to do so.
According to the U.S. Census Bureau, the third quarter of 2021 saw an estimated $204.6 billion in ecommerce retail sales in the U.S., which was a 6.6% increase from the third quarter of 2020. There are no signs of this increase slowing down, either. In 2022, ecommerce sales are expected to topple $1 trillion for the first time — which is two years earlier than initially anticipated.
But what does it take to start an ecommerce business and capture a piece of the online shopping pie? Is it as simple as setting up a website and listing your goods or services for sale?
Well, not exactly.
There are several aspects to launching a successful ecommerce business. This includes choosing an ecommerce platform, establishing a rigorous digital marketing strategy, offering a unique product or service, and memorable brand experience.
But there’s one element that might fall slightly under the radar: where you launch your ecommerce business from.
Much like a brick-and-mortar storefront is influenced by the city and state it’s located in, an ecommerce business’ physical location matters. From a state’s tax climate to infrastructure concerns, several location-related factors play a role in getting your ecommerce business up and running.
Determining those factors as a new digital entrepreneur can be challenging. That’s why we’re here to make things easier for you. In this guide, we’ve definitively ranked all 50 states in the U.S. based on how conducive each one is for launching an ecommerce business.
Starting an Ecommerce Business: Top 10 U.S. States
3. North Carolina
- Limited liability companies (LLCs)
- S corporations
- Professional corporations
5. South Dakota
Complete Rankings by State
Complete Rankings by State
States with Best and Worst Tax Climate Scores
States with Best and Worst Economic Outlook Scores
- Personal Income Tax Rates
- Individual Capital Gains Tax Rates
- Individual Dividends and Interest Tax Rates
- State and Local Sales, Gross Receipts, and Excise Taxes
- Adjusted Unemployment Taxes
- State Gas Taxes
States with Best and Worst Financial Resource Scores
States with Best and Worst Infrastructure Scores
Ready to Launch Your Ecommerce Brand?
- Corporate Tax Rank
- Individual Tax Rank
- Sales Tax Rank
- Unemployment Insurance Rank
- Job Growth
- Five-year New Business Survival Rate
- Small Business Policy Index (SBPI) Rank
- Internet Access
- Power Grid Reliability
- Road Quality
- Bridge Quality
- Venture Capital Rank
- SBA Loan Availability
- The Tax Foundation (2022). “2022 State Business Tax Climate Index.”
- Seidman Research Institute, ASU W.P. Carey School of Business (2021). “Job Growth by State.”
- U.S. Bureau of Labor Statistics (2021). “Business Employment Dynamics: Establishment Age and Survival Data.”
- Small Business Policy Index (2019). “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship.”
- Federal Communications Commission (2020). “Area Comparison: Compare Broadband Availability in Different Areas.”
- U.S. Energy Information Administration (2021). “Annual Electric Power Industry Report, Form EIA-861 detailed data files.”
- TRIP: A National Transportation Research Nonprofit (2022). “Research, Resources & News: Roads.”
- U.S. Department of Transportation: Federal Highway Administration (2021). “Bridge Condition by Highway System 2021.”
- U.S. News (2019). “Business Environment Rankings.”
- Small Business Administration (2018). “SBIC Program Financing to Business by State, Fiscal Year 2014 through Fiscal Year 2018.”