Come up with a domain name for your business. To do this, you really need to come up with a name that has an available.com domain. There are a few tools that are useful for this, such as: wordoid.com (for coming up with creative names), or instantdomainsearch.com (for testing name availability). Once you've come up with a name you're happy with, register it with a registrar such as godaddy. Do not buy hosting however! This should cost you $8.
Create your logo and business card now. Go to vectorstock.com and find a vector logo that you like. Also buy any other vectors that you think will be useful in the design of your website. This should cost you $20. Then go to fontspace.com and find a nice free font that matches your logo, for your business name. Then you'll need a designer to create some nice graphics for your business card and website using the font and vector you purchased. Most of us have a designer friend these days, but if you don't, you can find one on sortfolio.com who can help you with this. You can then get your business cards printed for free (!) through vistaprint.com.au, or you can pay to get nicer ones printed.
Now lets design your website. Do a web search for 'free css templates' and browse the various sites until you find a free template you like. Find a web designer (hopefully a friend can do this for free, or cheaply, or you can find one through sortfolio.com) and get them to integrate your logo into the template, and make the minor adjustments necessary to make the template visually suitable for a shopping cart (as most templates are designed for blogs, but can be adjusted to suit).
Next you'll need a programmer to integrate a shopping cart into your website design. Again, you may be able to find a friend to do this, or you may need to pay someone from sortfolio.com to do this. They will need to know how you expect to receive payments. For a beginning website, your best bet is PayPal's express checkout or (preferably, if available in your country) website payments pro, as these options do not have a monthly charge, unlike most payment hosts. To do this, set up a PayPal business account, and work with your programmer to integrate the cart (they'll want an API key, and will be able to help with that).
Web hosting will depend on the programming language that the programmer used for your shopping cart. Most often, they will use PHP, in which case bluehost.com is a very good option. However, if they used Ruby, heroku.com is a great option and has a free hosting plan which is great while your traffic is low.
Now you have a website live, you need products for it! A great place to buy items to sell is the bulk buy section of eBay, or aliexpress.com makes buying from suppliers in china incredibly simple. Just be careful not to spend too much (eg more than $200) in any one purchase. Spread your purchases into smaller orders, so that if you get scammed on one order, it is not a huge loss. You'll need to be more patient with things like that when buying wholesale, but persistence brings success.
When your products arrive, you'll have to take photos of your items and upload them to your shopping cart so that people can see what they are buying. For this, borrow a friends digital SLR camera (we all know someone with one!) and take photos of the items against a neutral background, such as a denim jacket, or sheet. Pay attention to lighting, you want your photos to look professional. Once you have your pictures, you can create your products in your shopping cart and begin selling!
Next up, you need to do promotion. Start a Google AdWords campaign, open a stall at local marjets and sell your items and give out business cards, start a page for your business on Facebook, basically do all you can to get people to visit your site.
When the orders start coming in, get in touch with your buyers via email and be friendly, ask if they can suggest other things they wish you could sell, and try to connect with them in any way you can. This way they will be impressed by your levels of customer service and will hopefully return. And ensure you send out your products in the mail as soon as possible, with registered post so you don't have to worry about things being lost in the mail. And have fun! This could be a great way to supplement your income. Viva entrepreneurialism!
Hi, I'm Chris - I just helped my wife start her small online business. Please check it out! It's at http://littleorchard.com.au. I found the process of setting up her website quite fun, so I thought I'd share some of the tips i learned along the way. There's a contact form on her site you can use to get in touch, I'd love to help other people set up their sites too.