The 10 Best States for Ecommerce Business

New research from Omnisend, a leading email and SMS marketing platform for ecommerce brands, ranked every U.S. state based on factors relevant to ecommerce entrepreneurs and found that for an average ecommerce brand earning $1 million yearly and selling primarily out of state, the top three scores belong to South Dakota, Wyoming, and North Dakota. Notably, these three states combine zero corporate income tax, lean regulations, and above average household purchasing power.

At the other end of the spectrum, the non-contiguous states of Hawaii (50th) and Alaska (49th) consistently rank lowest on the Index. Among mainland states, California (48th) and Louisiana (47th) perform worst for an average company – though for different reasons. California's steep tax and cost burdens add up quickly, while Louisiana struggles with poor infrastructure and one of the most complex tax systems in the country.

Omnisend's Ecommerce Opportunity Index ranks every state on ten factors, including taxes, purchasing power, infrastructure quality, red tape, regional opportunities, and more, to pinpoint the best places to base an online retail business.

"The ideal home base for an online store isn't the same for every company — what works for a startup selling within state might restrict a bigger brand shipping nationwide," said Marty Bauer, ecommerce expert at Omnisend. "But once you match those company specifics against each state's taxes, buying power, broadband, and logistics, a handful come out on top, while high-cost or infrastructure-poor states sink."

 From coasts to the Midwest – ecommerce success shifts with scale

The Index tells a different story for coastal states. New Jersey ranks #1 for a business earning $100 thousand in-state, thanks to strong infrastructure and dense customer base. But as revenue grows to $1 million and sales shift out-of-state, NJ drops to 45th due to steep progressive taxes and low purchasing power. California shows a similar pattern – ranking 11th at lower revenue but falling to 48th as costs surge with scale and expansion.

Reality backs the numbers. From 2025 New Jersey's top marginal tax rate is 11.5% – the highest corporate tax rate in the nation by far. Whereas California posted the largest net domestic-migration loss in 2024 – 239,575 residents – and holds the record for 17 headquarters departures in one year.

Texas and Florida sit in the Index's broad middle. Each offers clear strengths – competitive taxes in Florida, a giant home market in Texas – but none delivers the across-the-board advantages the top-ranked Plains states do.

For stability, you can't go wrong with Rust Belt states Ohio, Indiana and Pennsylvania, which stay in the index's top half across almost all scenarios thanks to moderate taxes, decent purchasing power, and great regional connections.

"While the Rust Belt is often seen as past its prime, the states offer manageable taxes, solid infrastructure, and easy reach to half the U.S. market in a day's drive. That said, early-stage brands can still benefit from the talent, capital, and connections found in places like California and New Jersey. The smartest founders launch where momentum is easiest and scale where it's sustainable," says Marty Bauer.

If you want to find out more about other states, visit the full report: https://www.omnisend.com/ecommerce-index/