The first critical decision is to sell the right product. Some products are good for the web, some are not. Think about it this way. Why would somebody pay extra for shipping and wait 2 or 3 days to get your product. Even if you offer free shipping, it is really added to the retail price.
So, the product has to be something that a person cannot find at Target, or their grocery store, or hardware store. People go there every week (Or, in my case, three times on Saturday to the hardware store), ship the products home themselves in their trunk, and get it the same day.
A good product should have some kind of competitive advantage, something that makes it somewhat unique. Try to avoid nationwide commodity items - anything with a UPC code unless you have some barrier to other competition. Large chain stores can sell it for cheaper than you can buy it for. Do not try to compete on price. The best kinds of products are ideas that you came up with yourself. For example: custom designs on a tshirt, original photography, hand-made organic vegetarian food, art prints.
What do you like to do as a hobby? Do a search on the Internet to see what other people are doing. Is it feasible?
Your business should be something that you love to do anyway. You will spend time thinking about it, marketing it, promoting it, writing about it. If you love what you do, you can make money at it if you work at it.
Henry
