eCommerce Lifestyle
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Name Your eCommerce Company Wisely

Name Your eCommerce Company Wisely

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It’s time to get professional and form a real company.

You want the legal protections, the tax benefits, and an asset you can sell… but what should you name it?

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Transcript

What's up everybody? Anton Kraly here and welcome back to the eCommerce Lifestyle podcast. If you're a new listener, just know that this show comes out twice a week. We have a brand new episode, every single Monday and Thursday morning, that are all designed to help e-commerce store owners to increase their revenue, automate their operations and become the authority in their niche. The show is on every major podcast player, so whichever you prefer. Hopefully it's not an apple podcasts after that last update. I think it ruins the experience for me there, but whatever podcast player you use, just search for eCommerce Lifestyle, click subscribe, and you will get notified every time a new episode goes live. With that being said, in today's episode what we're going to talk about is how to name your company wisely. Let's just say you're either in the process of building an e-commerce store from the ground up, or you've already built it, but you're doing business as a sole proprietor.

You're starting to get some traction and you realize it's time to get professional. It's time to form a real company. You want the legal protections that can come from that. You want the tax benefits and you want to have it separate, so it's a different asset that you could sell one day if you ever decide you want to sell it. But what should you name it? This is a question that's been asked a lot recently. I don't know why, it kind of came out of nowhere, but it's been popping up in our private Facebook group for members of my coaching program, Drop Ship Lifestyle. And it's typically from people just asking if they should make their company name the same as their store name. Now the short answer is no, but I want to elaborate that, obviously, and explain why and explain how to actually name your company.

So let's just say, hypothetically, you're listening to this right now and you're doing business as a sole proprietor, meaning you're doing business as yourself and you have a drop shipping store called the BounciestTrampolines.com. Okay, now you want to form the easiest type of business to form. You want to form an LLC. Should you name that LLC the BounciestTrampolines.com LLC or the Bounciest Trampolines LLC. Well, you could, but my answer is no, you definitely shouldn't. And I'll just explain why. Let's say you have that store and now it's up and it's running and it's getting traction and you start to have customers contact you and they say, hey, love the trampoline I got from you. I want to buy a bounce house. A bounce house I can just inflate in my backyard, so when my kids friends come over, they have something that they can go out and bounce on and burn out all their energy.

And let's just say, you decide to call that store the BounciestBounceHouse.com, another creative name. So now let's say you have those two stores up and running. They're doing great. And you have other customers emailing you. And they're saying, hey, I really loved that trampoline that we got from you. Do you also sell swing sets? Because now our kids are a little bit older and we want to put a huge swing set in our backyard. Loved doing business with you. Can we buy one? And you're, well, no, but you start to research that niche and you decide, I should build a swing set store. If you eventually do this, which most e-commerce store owners do, and I recommend, well, if your first company that you formed was called the BounciestTrampolines.com LLC, well, when it's time to build your bounce house store and reach out to suppliers, then do you want to form a brand new company?

Or do you want to just use your existing business info? My advice is if the stores are related, and the way that I personally define that is if there are niches where you can cross sell the customers. Again, if you sold trampolines, you might be able to make an offer to those customers for bounce houses. If you sold bounce houses, you might be able to make an offer for them to buy from your swing set store. So the same customers could be shared between these stores. On the other hand, let's just say you had another idea because you're also into tech on the side and you bought a 3D printer and you loved it and you thought 3D printing is the future, and I want to build a 3D printer site. Well, okay, go for it. But that's not related to trampolines and bounce houses and swing sets because the customer that is buying those products most likely is not going to be buying the 3D printer.

And if you send an email to your trampoline previous customers saying we now offer 3D printers, they're most likely not going to buy. So why am I telling you all this? Because when it comes to how we set up companies and how we name them, we want to make them general enough so that we can build multiple stores within them in one niche. And if we want to do something that is totally different, that is when we form a different company, not when we build a different store that would appeal to the same customer base. So let's just say in this first example, you had that website and it was called the BounciestTrampolines.com and you wanted to turn it into a company. Well, my advice would be to name that company something that is very general, maybe your initials. So for me, my initials are ALK.

So maybe I would call that company ALK Stores, something as simple as that. That way, when I'm reaching out to suppliers for my trampoline store or my bounce house store or my swing set store, and I'm filling out my supplier approval forms, the company name is going to be ALK stores. Makes sense. Nobody's going to be, what is this? Why is the bounciest trampolines applying for our swing set brands to sell our products? On my credit card statements for that company it would say ALK stores. On my tax forms, on all my business expenses, they would go through ALK stores. So I can use that one company to manage all of these related assets. That is how we do it. Now, when we're going to get into a totally different industry, we don't want to commingle the funds. We don't want everything to get mixed up.

We want to keep different businesses separate. So when it came to the 3D printers, I would simply form another company. And the name again, could be something as general as ALK Stores. If I had already formed that one, then maybe the next one that I formed would be something as simple as ALK Shops. And the point is that these aren't company names that are going to be in your URL. They're not going to be company names where your customers are constantly seeing them or anything like that. They're simply there to house the businesses. The businesses that you form, meaning the stores, will live within these companies. And that way, again, things like your supplier documents, your tax forms, your credit card statements, your business bank accounts, they will be connected to that company that has that broad name. So you can keep your related stores within that entity.

So that is how we do it. I've never named a company that I formed as a website that I own. Again, I do not recommend you do that either. I think it's best to keep related assets in the same company. And when you want to build a different type of store, build it under another company or start it as a sole proprietor and then once it gets traction, build another company for it. So that's how we do it, guys. I hope you found this episode helpful. Hope it wasn't too confusing if you're just listening to this in your car or while you're out for a run or something. But as always, if you got value from this episode, do me a favor. Leave a review on the podcast, means a lot and I read them all. And if you're listening to this and you're brand new and you want to know how to get started with building a highly profitable semi-automated store, be sure to go to dropshipwebinar.com.

I will see you there. Thanks everybody.

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