In the ecommerce world, knowing your business category is crucial for compliance, market analysis, and strategy. The North American Industry Classification System (NAICS) is a key tool for this. NAICS codes define and identify businesses by their economic activities—essential for ecommerce entrepreneurs in a competitive and regulated environment.
NAICS offers a standardized method to categorize businesses across North America. For ecommerce, selecting the right NAICS code affects tax reporting, contracts, and market trend analysis.
Whether you're selling handmade crafts on Etsy, a retailer on Amazon, or running a custom storefront on Shopify, knowing your NAICS code is essential. We’ll cover what NAICS codes are, why they matter, and how to determine the best code for your ecommerce business, so you can position your ecommerce business for growth and compliance in the digital marketplace.
What is the NAICS Code for Ecommerce Businesses?
The NAICS code for ecommerce is 454110. This code covers ecommerce business and everyone that sells merchandise online or via mail order. As such, this ecommerce NAICS code covers industries like online retailers, dropshipping businesses, amazon shops, online marketplace and more.
The NAICS code for Amazon sellers and other online retailers is 454110, which falls under the category of "Electronic Shopping and Mail-Order Houses." This code is used for businesses that sell all types of merchandise through non-store means such as the internet, catalogs, toll-free numbers, and electronic media.
This includes a broad range of online retail and ecommerce businesses, online retailers, dropshipping businesses, amazon shops, online marketplaces and more. The type of product you sell would not impact the code you use, as long as it fits into the category mentioned above.
Some related codes include 454390 for "Other Direct Selling Establishments,” 425110 for B2B electronic markets, and 519130 for internet publishing. For most online retailers selling to consumers, however, 454110 is the appropriate code. Currently, companies in this industry classification include Amazon, eBay, QVC, Macy's.com and Wayfair.
Each NAICS code has six digits. Here’s a breakdown of what each digit represents:
- First two digits — Economic sector
- Third digit — Subsector
- Fourth digit — Industry group
- Fifth digit — Specific industry
- Sixth digit — National industry
For example, for online stores, the relevant NAICS code is 454110. Here's the breakdown:
- 45: Retail Trade sector
- 454: Nonstore Retailers
- 4541: Electronic Shopping and Mail-Order Houses
- 454110: Electronic Shopping
So in summary, if you generate your revenue by selling products online directly to customers, either through your own website or platform or via a marketplace like Amazon, NAICS code 454110 is the main industry classification that applies to your business. In the US, an estimated 534,983 people work in this sector, with an estimated revenue of over 522 billion dollars per year.
If you’re unsure what code your business is categorized under, use the official NAICS code lookup tool to identify the correct code.
When Do You Need Your NAICS Code?
Your NAICS code (North American Industry Classification System) is essential for businesses across various sectors. It's a standard used by federal agencies to classify business establishments for collecting, analyzing, and publishing statistical data related to the U.S. business economy. Here’s when you need to use your NAICS code:
1. Applying for Government Contracts and Grants - Government agencies use NAICS codes to identify businesses eligible for contracts or grants in specific industries. When you apply, you’ll need your NAICS code to show that your business operates in the relevant industry. Small businesses in construction, healthcare, and IT often need their NAICS code for government projects.
2. Filing Taxes - When filing business taxes, the IRS requires your NAICS code to classify your business activities. This ensures your business is taxed appropriately. Accurate classification can help you find industry-specific tax incentives and credits. Correctly classified industries may benefit from specific deductions that can lead to significant tax savings.
3. Market Research and Competitive Analysis - Businesses use NAICS codes for market research to understand the competitive landscape, customer bases, and identify trends. By analyzing data categorized by NAICS codes, companies can benchmark their performance against industry standards and find new target market opportunities. For example, using industry-specific data from firms such as IBISWorld can lead to significant boosts in market strategy efficiency.
4. Regulatory Compliance - Certain industries have specific regulatory requirements identified by NAICS codes. Regulatory bodies use these codes to ensure businesses comply with industry-specific laws. For instance, environmental regulations may apply differently to manufacturing than to service-based industries, and your NAICS code helps clarify which regulations are relevant.
5. Business Development and Networking - NAICS codes are useful for networking and business development. Industry associations and business directories categorize members and services by NAICS codes, making it easier to find potential partners, suppliers, and customers within your industry. This enhances your visibility and credibility within your sector.
NAICS Breakdown for Ecommerce Businesses
Now that we know all about what NAICS codes are and how to leverage them, let’s look at the details of NAICS for each major category of ecommerce business.
NAICS Code for Amazon Sellers
If you generate your revenue by selling products online directly to customers, either through your own website/platform or via a marketplace like Amazon, NAICS code 454110 is the main industry classification that applies to your business.
NAICS Code for Online Stores
Similar to the above, if you generate your revenue by selling products online directly to customers, either through your own website/platform or via a marketplace like Amazon, NAICS code 454110 is the main industry classification that applies to your business.
NAICS Code for Dropshipping Companies
If you generate revenue through a dropshipping business model by selling products online, NAICS code 454110 is the main industry classification that applies to your company.
NAICS Code for Shopify Stores
Same as Amazon sellers, online stores, and dropshipping companies, The NAICS code for Shopify companies and other online retailers is 454110. This is the code used for businesses that sell all types of merchandise through non-store means such as the internet, catalogs, and electronic media.
NAICS Code for CPG Companies
CPG is a broad industry encompassing manufacturers of food, beverages, household products and more—most of which fall under fall under the manufacturing sector, which is classified as NAICS 31-33. The specific 4-6 digit codes within manufacturing drill down to classify companies based on their primary products.
Some key codes include:
- 311 - Food Manufacturing
- 3121 - Beverage Manufacturing
- 3256 - Soap, Cleaning Compound, and Toilet Preparation Manufacturing
- 3222 - Converted Paper Product Manufacturing
In general, CPG encompasses a wide range of products, so companies can be classified under different manufacturing subsectors like food, beverages, personal care products, cleaning products, and more. According to McKinsey, there has been a 20-40% increase in intent to shop online across all categories since COVID-19 first hit in 2020, making it a highly promising sector for growth despite historically low profit margins.
Top CPG companies that have many product lines, like Procter & Gamble, Unilever, Nestlé, PepsiCo, and Kraft Heinz, have manufacturing operations spanning multiple NAICS categories. While CPG companies are primarily manufacturers, they may have additional establishments classified under other NAICS sectors for activities like warehousing, distribution, and headquarters operations.
NAICS Code for Clothing Companies
Clothing retailers, whether specializing in men's, women's or other apparel, are classified under the 448 NAICS codes. They are separated into different categories as follows:
- 448110 - Men's Clothing Stores: Establishments primarily engaged in retailing a general line of new men's and boys' clothing.
- 448120 - Women's Clothing Stores: Establishments primarily engaged in retailing a general line of new women's and juniors' clothing, including maternity wear.
- 448190 - Other Clothing Stores: Establishments primarily engaged in retailing specialized lines of new clothing, such as bridal gowns, costumes, uniforms, leather coats, fur apparel, and swimwear.
Stores are classified based on the specific products they primarily sell. For example, a store selling mostly women's clothing would use 448120, even if it also sells some men's clothing.
The difference between whether you should use a 448 or 454 NAICS code depends on whether you have a brick and mortar store. If you are an online-only clothing retailer, you would use the code 454110 for Electronic Shopping. On the other hand, physical stores that also sell online still use the clothing store codes.
One detail to call out is that custom clothing and apparel manufacturing have different codes under 315 - Apparel Manufacturing.
According to Statista, in 2022, U.S. clothing and clothing accessories store sales, classified as companies retailing clothing and accessories from fixed point-of-sale locations, amounted to about 312.4 billion U.S. dollars. Leading retailers, such as TJX and Macy’s each bring in over 20 billion U.S. dollars in sales.
Furthermore, in 2023, retail e-commerce revenues from apparel and accessories sales in the United States clocked in at 134.5 billion U.S. dollars, and the Statista Digital Market Outlook estimates that market revenue will increase to 219.3 billion U.S. dollars by 2029.
Grow Your Ecommerce Store With Replo
Once you have the NAICS code for your ecommerce business nailed down, use Replo to start applying the insights of your market research and competitive analyses to your ecommerce website.
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