How to Start an Online Store in Canada

The Canadian online store is one of the most forgiving businesses to start: no lease, no fit-out, and the whole shop fits in a laptop. It is also a business where the unglamorous setup — registration, tax configuration, and store policies — decides whether the first month is profitable or a cleanup project. This guide takes the start path in order: product, registration, platform, tax, policies, launch.

Step 1: Pick the product and the fulfilment model

Everything downstream follows this choice. "Things people buy online" is not a product — one tight line with a real buyer is. The fulfilment model then decides the cost structure:

• Hold inventory. Highest margin, most control, most capital tied up. Works when the product is compact, repeatable, and you can predict demand.
• Dropshipping. No inventory and no shipping, but thin margins and the supplier controls quality and delivery time. Your advantage is marketing, not product.
• Handmade or made-to-order. Built-in differentiation, marketplace-friendly (Etsy exists for exactly this), and labour-limited instead of capital-limited.
• Print-on-demand. A variant of dropshipping for custom apparel and goods — zero inventory, per-unit cost higher than bulk printing.

The model changes your costs, your platform choice, and your risk — but it does not change your tax obligations. GST/HST cares about your sales, not how the goods move (see Step 4).

Step 2: Register the business

Start as a sole proprietorship: cheap, simple, losses offset your other income in the early months. Incorporation can be revisited when the income justifies it — our federal-vs-provincial incorporation guide covers that comparison.

The registrations are mechanical:

• Register the business name. Under your own legal name, most provinces require nothing. Under any other name, register it with the province: about $60 for five years through the Ontario Business Registry, with each province running its own system. The Ontario and BC registration guides on this site walk both systems step by step.
• Get the CRA business number. Free, issued on screen through Business Registration Online, and the root identifier for everything tax-related the store does.
• Check your municipality. Provinces do not issue general business licences, but your city might — a home-based business clearance is the one paper most spare-bedroom stores forget.
• Open a business bank account. Keep the store's money separate from day one: it makes the first tax filing survivable.

Step 3: Choose the platform

Four routes cover nearly every Canadian seller. Pick by how you sell, not by what looks modern:

• Shopify. The Ottawa-based Canadian platform and the default choice for sellers who want to launch fast. The storefront, checkout, hosting, and payment setup come as one package; you trade some control for speed. Verified 2026 CAD pricing: Basic at $49 per month billed monthly ($37 billed yearly), Grow at $132 ($99 yearly), Advanced at $517 ($389 yearly), with card-processing fees on top. Almost every new Canadian store starts on Basic.
• WooCommerce. A free plugin that turns a WordPress site into a store. You pick the hosting, you own the code, and you handle updates, backups, and security yourself. The right call when the business already runs on WordPress or needs a custom checkout flow.
• Etsy. Built-in customers and a category built for handmade, vintage, and craft goods — marketplace fees and limited branding control are the trade. Strong fit for handmade sellers; weaker as a primary home for everything else.
• Amazon.ca. Built-in traffic at scale, fees on every sale, and the customer is Amazon's, not yours. Useful as a sales channel alongside your own store, not as the store itself.

The honest pattern: start where your buyer already shops, and graduate to your own storefront as the brand grows.

Step 4: Set the tax right before the first sale

This is the step that sinks first-year stores, because it has to be right before the money moves — the CRA backdates the obligation, not your planning.

• The $30,000 threshold. Registration becomes mandatory once gross revenue crosses $30,000 in a single calendar quarter or over four consecutive quarters. Selling online does not change this: the CRA is explicit that goods and services sold online within Canada are taxable supplies. Register through Business Registration Online, by phone at 1-800-959-5525, or by mail with Form RC1.
• Charge the customer's province. Under place-of-supply rules, the buyer's location sets the rate: 14% HST in Nova Scotia (cut from 15% on April 1, 2025), 15% HST in New Brunswick, Newfoundland and Labrador, and PEI, 13% HST in Ontario, 5% GST across the rest. Add the separate provincial layer where it exists: BC, Saskatchewan, and Manitoba levy their own PST on top of GST, and Quebec's QST runs through Revenu Québec. Configure this in your platform's tax settings before launch.
• Exports are zero-rated. Sales shipped outside Canada are taxed at 0%, but you can still claim input tax credits on your costs. Domestic sales still count toward the $30,000 threshold.
• Register early if the costs come first. Many sellers register voluntarily before the threshold to recover the GST/HST paid on inventory, software, and equipment as input tax credits. The trade: once registered, you charge tax from the effective date and file returns even for quiet periods.
• PST and QST provinces. Each runs its own regime. Out-of-province sellers who solicit orders and ship goods into a province can trigger provincial registration — check the province's rules or confirm with an accountant before you start shipping into it.

Step 5: Configure payments, shipping, and policies

• Payments. The platform's built-in processor is the path of least resistance: it is pre-integrated with checkout and handles PCI compliance for you. Shopify Payments is the default on Shopify; Stripe and PayPal work across platforms. Budget the processing fee into your prices from day one.
• Shipping. Real carrier rates beat flat-rate guessing once volume grows: connect a carrier in the platform, decide who pays shipping, and write the returns policy before the first order forces you to improvise one. Free shipping thresholds convert; free shipping everywhere usually just hides the cost.
• Store policies. A privacy policy, terms of service, and returns policy cover nearly everything. The privacy policy is the one with teeth: federal PIPEDA rules require businesses to obtain consent for collecting personal information and to handle it responsibly — your checkout collects exactly that data. Most platforms ship templates you customize.
• Email marketing. If you send newsletters or promos, Canada's anti-spam law (CASL) requires express consent first. Build the signup with a clear consent checkbox, not a pre-ticked one.

Step 6: Launch and get the first orders

A store with no traffic is a very organized warehouse. The first orders almost always come from channels you already have:

1. Your own network. Launch to the people who already know you — the first ten orders are usually friends, former colleagues, and your social following.
2. The marketplace channel. List a few products on Etsy or Amazon.ca alongside your store if the product fits: built-in traffic while your own site's search presence grows.
3. Niche content. The product's category is a content opportunity: the gift guide, the comparison, the how-to that the buyer searches before purchasing.
4. Paid tests, small. A capped budget on one channel, run as an experiment with a stop rule — never as an open tab.

Then run the numbers weekly: traffic, conversion rate, average order value, and the true cost per order (product, processing, shipping, ads). The store that knows its cost per order survives the first year; the store that guesses does not.

Related guides

• How to Start Selling to Other Provinces in Canada, the next step after the first sale: tax by delivery province, separate PST/QST registrations, extra-provincial registration, licensing, and Quebec French labelling.
• How to Charge GST/HST in Canada — the place-of-supply rules and provincial rate table from Step 4, in full detail.
• How to File a GST/HST Return in Canada — what happens after registration: frequencies, deadlines, and input tax credits.
• How to Register a Business in Ontario — the $60 name registration through the Ontario Business Registry from Step 2.
• How to Register a Business in British Columbia — BC's approval and registration system, the second-biggest provincial system.
• How to Get a Business Number in Canada — the free CRA registration from Step 2: the RC/RT/RP/RZ program accounts and BRO vs phone vs mail timing.
• Do You Need a GST Number as a Sole Proprietor in Canada? — the $30,000 threshold in detail, and why registering early suits sellers with inventory costs.
• How to Incorporate Federally vs Provincially in Canada — the structure decision Step 2 defers: federal vs provincial comparison.
• How to Start a Consulting Business in Canada — the same start path applied to a services business: registration, the GST/HST threshold, contracts, and pricing.

Sources

• Canada.ca — GST/HST registration transcript: goods and services sold online within Canada are subject to GST/HST; $30,000 small-supplier threshold; registration via Business Registration Online
• TurboTax — When to register and start charging GST/HST in Canada: the $30,000 quarterly/four-quarter rule, effective-date rules, charging without registration prohibited
• SNF Accounting — Do you need to register for GST/HST in Canada? 2026: voluntary registration benefits, input tax credits, exports zero-rated, registration routes (online BRO, 1-800-959-5525, RC1)
• Shopify Help — Canadian tax liability: place-of-supply rules, per-province registration, voluntary GST/HST registration for input tax credits
• Webloped — Shopify cost in Canada 2026: plan names and CAD pricing (Starter/Basic/Grow/Advanced), yearly-vs-monthly billing
• Maple Web Design — Shopify vs WooCommerce Canada 2026: Basic C$49 monthly / C$37 yearly-equivalent, Grow C$132/C$99, Advanced C$517/C$389, checked against Shopify's Canadian pricing page
• Our guide on charging GST/HST in Canada: place-of-supply rules and the provincial rate table
• Our guide on filing a GST/HST return in Canada: filing frequencies, deadlines, input tax credits