Online shopping has skyrocketed in popularity in recent years. It’s now possible to sell products and services in several ways. As a result, many individuals in Japan have begun setting up their own personal online shops. It’s likely that more people than ever are wondering how they can start their own as well.

In this article, we explain how to start an online shop in Japan, from startup expenses to key points to consider and success tips.

What’s in this article?

• What platforms support online shops in Japan?
  
• What are the steps to open an online shop in Japan?
  
• What is the cost of opening and running an online shop in Japan?
  
• What are the advantages of operating a personal online shop?
  
• What are the disadvantages of operating a personal online shop?
  
• What to consider when opening an online shop in Japan
  
• How can a business run a successful online shop in Japan?
  
• Frequently asked questions about running an online shop in Japan
  
• What are the next steps for running an online shop in Japan?
  

What platforms support online shops in Japan?

When starting an online shop, you need to consider which platform to use. Although it’s possible to create a website from scratch, individuals opening their first online shop tend to use an existing platform.

In Japan, ecommerce malls and ecommerce website development platforms are commonly used. Here are the characteristics of each type:

Ecommerce mall

Many online shops sell their products through ecommerce malls, such as Amazon, Rakuten Ichiba, and Yahoo! Shopping. Here are a few characteristics of ecommerce malls:

• Internet traffic: Ecommerce malls tend to receive high volumes of traffic, so their shops could receive higher visibility.
  
• Fees: Online shops must pay various fees, including opening fees, sales commissions, and affiliate fees.
  
• Customization: It can be difficult to customize your shop because of the backend and templates provided by each mall.
  

Opening a shop in an ecommerce mall is the best option for individuals who want to sell on a well-known mall platform or start making sales early on.

Free ecommerce website platforms

These include free plans on ecommerce website development platforms such as BASE and STORES, which do not charge any initial or monthly fees. These are popular options for those getting started.

Here are some characteristics of free ecommerce website platforms:

• No startup fees: You can start an online shop for free.
  
• Easy launch: These platforms have a simple operations screen that allows you to open an online shop without any prior knowledge.
  
• Quick setup: There is no complicated preparation or setup of server space, so a store can be opened immediately.
  
• Customization: These platforms often offer a wide range of store templates, so customization is possible.
  

While these platforms are good resources for beginners, they do have some drawbacks, such as high transaction fees and advertisements displayed on your page.

Paid ecommerce website platforms

Although paid plans on platforms such as Color Me Shop and STORES incur a monthly fee, the wide range of features could make up for the operating costs.

Here are some qualities of paid ecommerce website platforms:

• Advanced operations: This can include using your own domain and not having to display advertisements.
  
• Flexibility: These platforms can support a large amount of varied products and a number of different payment methods.
  
• More features: These platforms offer a full range of features, such as search engine optimization (SEO), traffic analysis, and email marketing.
  
• Better customization: Your shop will be highly customizable, giving you the ability to easily present your desired brand image.
  

Although you will incur costs, paid platforms offer flexibility that could help your business grow. This makes paid platforms well suited to business owners who intend to operate a full-scale online shop.

What are the steps to open an online shop in Japan?

Starting an online shop is about more than just creating a website. You also need to be prepared to run a business. In Japan, there are many legal and tax procedures business owners need to know. Here are the steps and requirements for opening an online shop:

• Decide on the products you will sell, and secure suppliers.
  
• Select a sales platform.
  
• Register your business and file tax returns.
  
• Configure the store and initial setup.
  
• Prepare a marketing strategy.
  
• Open the store.
  

Here are more details about each step leading up to opening your store:

Products and suppliers

First, decide what products you’ll sell. Your preparation and inventory management needs will vary depending on whether you sell items you make or existing products purchased from another vendor.

Once you identify your products, solidify your target audience and branding. Do some preliminary calculations to estimate purchase prices and profit margins so you can confirm whether the business is viable.

Sales platform

Next, choose a platform. You can choose to open a store in an ecommerce mall or start your own website. Your choice will depend on factors such as budget, ability to attract customers, design flexibility, and branding requirements. It’s a good idea to test out some free tools to find the service that best suits your business. If you eventually plan on expanding into other countries, it’s important to make sure the site supports other languages.

Registration and tax returns

Even if you are operating an online shop as an individual, it’s a good idea to submit a business registration form. This form should be submitted to the Japanese tax office and will allow you to officially operate a business as a sole proprietor. Ideally, you should do this within one month of starting your business.

Also, if you wish to file a blue tax return, consider submitting a blue tax return approval application along with the business registration form. This will help you save on taxes in the future.

To start operating your online shop with peace of mind, you can use the National Tax Agency’s website and free consultations. These consultations and resources can help you make sure you’re fulfilling all requirements.

Store creation and initial setup

Next, you should actually create the store:

• Choose a store name and logo.
  
• Select a design template.
  
• Register your products.
  
• Set the payment and delivery methods.
  

It’s important to consider the impression your store provides from a branding perspective. Consider your site’s SEO, and intentionally incorporate keywords that are easy to search when describing your products. This can help attract more customers.

Paid services—such as Shopify and Color Me Shop—also allow integration with external payment services such as Stripe. This enables fee optimization and allows you to establish flexible payment flows that are tailored to your brand. For example, Stripe Payments allows you to offer a variety of payment methods suitable for the Japanese market, such as credit cards, Konbini payments, carrier payments, cashless payments, and bank transfers, enabling you to provide a convenient purchasing experience for your customers.

By increasing the number of options, you could help prevent abandoned carts and improve conversion rates.

Marketing strategy

The process doesn’t end once you’ve created your online store—in fact, you’ve only just begun. Consider creating a social media strategy to get your message out, and you can use blogs or YouTube to create collaborations. In Japan, word of mouth and reviews are influential. At the same time, when you’re just starting out, it’s important to avoid controversy and gain customer trust.

Store opening

Once all the preparations are complete, it’s time to decide when to open your virtual doors. After you open, you can use the marketing efforts you prepared in the previous step to attract customers. By organizing the necessary steps for starting a business into stages in advance, you can more easily launch your online shop.

What is the cost of opening and running an online shop in Japan?

Оpening an online shop is often preferable to opening a physical shop, as it can be started at a fraction of the cost. However, it isn’t completely free. You’ll still need to estimate the initial and monthly operating costs. Here, we explain the approximate costs involved in starting an online shop as an individual in Japan.

Initial costs

The initial expenses for launching an online shop vary depending on the platform you choose and the size of your business. The following is a general guideline based on a typical individual startup model:

If you use the free plans offered by BASE or STORES and create images yourself, you can get started without incurring any initial expenses. On the other hand, if you’re spending time creating a customized website or purchasing and storing an inventory of products to sell, you should expect initial costs of several thousand to hundreds of thousands of yen.

Running costs

Before opening the store, it’s important to consider ongoing expenses. The following are the main monthly expenses for an online shop:

These ongoing operating costs include expenses incurred even when no sales are made. Before opening, it’s a good idea to calculate what you expect to spend each month after the shop has launched. This will allow you to manage your budget and spend effectively, particularly with advertising and attracting new customers.

With a solid plan, you could operate your business smoothly without the risk of running out of money. It’s important to use free or low-cost options and invest gradually.

What are the advantages of operating a personal online shop?

It isn’t necessary to form a corporation to start and run an online shop. In Japan, it’s common for individuals to start online shops as sole proprietors. Here are some of the main advantages of running an online shop as an individual:

Low starting costs

Operating an online store as a sole proprietor has lower startup and operating costs compared to operating as a corporation.

For example, forming a corporation requires registration fees and expenses associated with drafting articles of incorporation. In contrast, as a sole proprietor, you can start on your own online store without relying on legal professionals.

Adaptability

Personal online shops give owners the ability to respond quickly to trends and customer feedback because the owner makes all the decisions. For example, you can respond quickly to challenges—such as new product suggestions and changes in shipping costs—without having to coordinate with others.

Flexibility

Starting an online shop as an individual means you don’t need to hire employees. This allows you to operate the shop while working at your own pace and with your own unique work style. For example, you can operate the business from home, working for just a few hours a month, or you can start your business on weekends while working full time during the week. For those who are trying to run a business for the first time, it is possible to control risk by gradually expanding in scale.

What are the disadvantages of operating a personal online shop?

There are several advantages to operating an online shop as an individual, but it’s also important to be aware of the disadvantages.

Significant responsibility

When operating a business on your own, all business operations are your responsibility. That includes product selection, purchasing, operations, customer support, shipping, and marketing. When you first start out, you can expect a wide range of issues to arise, which could become a burden. Once you establish the business, focus on efficient task management. Eventually, you can also consider outsourcing this work.

Difficulty getting credit

When compared to large corporations, sole proprietors are at a disadvantage with obtaining credit. It could be challenging to obtain loans from banks and could take time to establish a line of credit with business partners.

Little time off

When operating a business as an individual, you have a lot of responsibilities. As a result, you could work too much and not have much leisure time. While this type of business provides some flexibility with work hours, this is offset by the difficulty of taking time off.

What to consider when opening an online shop in Japan

Online shops are easy to start when it comes to the initial cost, but there are several points to keep in mind before launching. Before opening your business, be sure to consider the following factors so you can be adequately prepared for the responsibility of operating an online shop in Japan:

Business acumen

Free platforms are available, allowing you to get started at a low cost. Therefore, some people might open an online store without much planning, just to give it a try. If you’re opening an online store as a hobby and don’t mind not making a profit, you are free to do so. However, if you want to grow your business and make a profit, you need to treat it like a real business.

You can avoid many issues by fulfilling your legal responsibilities, such as registering the business and paying taxes. Adopting a business-focused perspective could also help you discover the approach to goals and strategies that works best for you.

Marketing

Before opening an online store, you need to plan a marketing strategy that will help potential customers encounter your site. You could consider various methods for attracting customers through digital marketing, such as social media and blogs.

Laws and regulations

When selling products online in Japan, you must observe many laws and regulations, such as the Act on Specified Commercial Transactions and the Copyright Act.

Legally required information must be included, such as product return policies, sale prices, and statements regarding a product’s cooling-off period (or lack thereof). Additionally, there have been many cases where businesses have unknowingly violated copyright and trademark laws by reposting images or featuring brand-name products. It’s important to check these details in advance and follow the rules when running your business.

How can a business run a successful online shop in Japan?

To ensure that your business is successful, you need to be aware of various trends in ecommerce and make consistent improvements to your shop, all while continuing to do the day-to-day work of running a business. Here are three practical tips for success:

Customer-oriented site design

In Japan, the percentage of online customers using smartphones is high, so site layouts must be adaptable for smartphone browsers. Additionally, it’s important to improve the shopping experience by providing easy-to-understand product descriptions and a simple path to purchase.

Analysis and improvement

When running an online shop, it is important to understand which products are selling well and why some products are not selling. Use Google Analytics, heat map tools, and others to understand which pages customers view the most and at which point customers leave the site. By analyzing this data, you can identify areas for improvement. Periodically analyzing and improving your online store could result in increased sales.

Trust and relationship with customers

New online shops must attract new customers. But to improve customer trust, it’s also important to have a rapport with return customers. Business owners should make efforts to improve the usability of their store and provide excellent customer service. This includes focusing on interactions with customers and building relationships that help turn them into repeat customers.

Frequently asked questions about running an online shop in Japan

Here are some of the most common questions about operating an online shop in Japan:

What is the success rate of online shops?

According to the results of a 2024 survey of direct-to-consumer online retailers conducted by Tokyo Shoko Research, bankruptcies in the online shopping sector—which experienced rapid growth during the COVID-19 pandemic—are increasing. More than 60% of online shops that operated for less than 10 years have gone bankrupt. This mostly includes small, newly established shops with owners who have little business experience. This impacted the business’s ability to stand out among competitors through product development, product range, and brand strategy. These shops were also unable to compete with larger businesses.

There is, however, an opportunity for sole proprietors to succeed by operating steadily and focusing on building customer relationships.

What is the difference between an online shop and reselling?

Reselling is a business model where a business owner purchases products at a low price and resells them. The profit is the difference between the purchase price and selling price. In contrast, an online store focuses more on building a website and communicating the value of your brand and products.

The business style and goals of these two types are very different. In reselling, the most important factors are trends and speed. With an online store, the focus is on branding and building a relationship of trust with customers.

How are the products for an online shop sourced?

Here are some general methods for sourcing products that sole proprietors often use:

• Use wholesale sites, such as NETSEA and TopSeller.
  
• Use overseas sites, such as Alibaba and AliExpress.
  
• Work with manufacturers to produce products under your own brand name.
  
• Sell products you make.
  

What are the next steps for running an online shop in Japan?

Starting an online shop is a popular business model in Japan because they are easy to start. However, it’s not as easy to make them successful. There are many points to consider, such as choosing between an ecommerce mall or a personal website, making startup preparations, paying expenses, and managing day-to-day operations.

Choosing which payment methods to offer is also important. Payments can affect customer confidence and sales stability. Therefore, you should plan to have a solid payment system in place from the beginning.

By choosing a service such as Stripe Payments, which offers high security standards and the flexibility to meet the payment needs of Japanese customers, you can provide your customers with a secure shopping experience. Even if this is your first online store, it is important to have a reliable payment method in place so you can continue to operate with peace of mind.