The internet has completely revolutionised the way we shop. Back in the day, your only options were to browse the shops on the high street or leaf through a catalogue. Today, you can instantly search thousands of online shops for the product you want.
Not only is this great news for shoppers, it’s also fantastic to budding entrepreneurs like you. Setting up an online e-commerce store is fast, simple and can be done on a budget.
To help you get started, we’ve put together this guide.
#1 Identify your product and your market
The first step with any retail business is to work out what you’re going to sell and who’s going to buy it. You might already have a clear idea about these things – in which case, you can skip straight past this step.
Finding a gap in the market or a niche that’s relatively untapped is a good way to start. But with millions of different online stores catering for every possible market, it can be tricky.
If you can’t think of a completely unique idea, think about what’s already available and whether you can improve on it. What can you do that will add value over your competitors?
If you’re struggling to think of something, Shopify have published 14 chapters on how to find a product to sell online which is well worth a look.
Once you know what you want to sell, you need to think about your target market – who’s actually going to buy your products? You can do this with a bit of market research. There are tonnes of guides on how to do this online, including this one from Inc.com.
#2 Create a brand
So you’ve got your product and you know which market you want to go for. Your next step should be to create a brand. With a strong brand, you’ll find it a lot easier to appeal to your target market.
You can also add value to your product – think about how desirable iPhones are, in part because of the Apple brand.
A brand also helps you to stand out from your competitors. You might be selling exactly the same product, but that doesn’t mean you have to have the same brand.
Branding covers everything about your store and your company, such as:
- The logo
- The colour palette you use for your website and marketing
- The tone of voice you use in your copy
- The kind of products you sell
- And a lot more
Marketing Donut have got an excellent guide on how you can create a brand for your small business.
#3 Choose an e-commerce platform
If you had to build an online shop from scratch, you’d need a lot of money, a team of very skilled web developments and plenty of time. Fortunately, you can pick a ready-made e-commerce platform off the shelf and have it up and running in a matter of minutes.
Every platform has its advantages and disadvantages so have a look around and compare to find the one that’s right for you.
Personally, I love WooCommerce, which works as a plugin to WordPress, a popular content management system. WooCommerce is completely free, and can be upgraded with a wealth of paid and free add-ons.
Some of the most popular e-commerce platforms are:
- BigCommerce (how to get started)
- Magento (how to get started)
- Shopify (how to get started)
- WooCommerce (how to get started)
Whichever platform you choose, it’s bound to come with lots of resources and help guides explaining what you need to do to get everything set up.
#4 Choose a payment provider
Your online store is nothing if your customers can’t pay for their products quickly and easily online. When it comes to payment providers – often called payment gateways – you have plenty of options to choose from.
For me, PayPal is my favourite choice. It’s free to sign-up for a business account and you only pay small fees for each transaction (at the moment, you pay 3.4% + 20p on each transaction you take through PayPal Business).
You’re probably also already familiar with the way PayPal works, especially if you shop online.
Other alternatives include:
As with e-commerce platforms, each provider has their pros and cons. So it’s important that you look around and do your research.
Make sure you find out what the transaction fees are, and don’t forget to check if there’s a monthly or annual fee to pay on top of that.
Once you’ve picked a provider, it should be simple to plug it in to your e-commerce platform. Most providers will come with step-by-step guides.
Be aware that the provider you choose will probably ask to see proof of your identity and information about your business. They do this as part of their due diligence, to make sure you’re going to use their platform responsibly and won’t be laundering money or avoiding tax.
#5 Add your products
Once you’ve set-up your e-commerce platform and plugged a payment gateway into it, you’ll need to start adding your products.
The way to do this will vary depending on the platform you’ve picked. Again, you should be able to find step-by-step guides which will help.
For example, this guide covers how to add products to WooCommerce.
It’s a good idea to plan out how you’re going to present your products before you add them to your site. In particular, have a think about how you’re going to organise them.
Most e-commerce platforms let you organise your products into categories – and sometimes tags too. The goal is to make it as easy as possible for your customers to find what they’re looking for.
For example, if you’ll be selling shoes, you might decide to split your products into the following categories:
- Flat shoes
If you’re stuck on how to organise your products, have a look at your competitor’s websites and see how they’ve laid them out.
As well as organising your products into logical categories, think about what you’re going to name them.
This is important for your customers and for SEO (more about this later) – if neither your customers nor search engines know what your products actually are, it’s unlikely anyone will buy them!
Another important thing to think about are photos for your products. No one’s going to buy a product if they can’t see what it looks like first.
Think about getting some professional photos done so they look as appealing as possible. If this isn’t an option, it’s certainly possible to take some nice photos with your phone or camera instead.
#6 Work out your fulfilment
Before you open your shop to the public, you should think about how you’re going to handle the fulfilment process – how will you physically send the products to your customers?
Fulfilment can be one of the trickiest parts of running an online business. It might be manageable at first but if your business gets more and more popular, it can quickly become unfeasible.
To start off with, you’ll need:
- Appropriate packaging for your products
- Postage labels
- A printer
With Royal Mail’s Click & Drop platform, you can pay for, generate and print your own postage labels at home. It’s free to sign up for an account, and most e-commerce platforms can plug in to Click & Drop to import your orders as they come in.
As your business grows, you could also consider getting a Royal Mail business account, which gives you discounted postage costs and the option of regular collections from your home or premises.
You’ll also need to work out what kind of postage your products will need. Most e-commerce platforms will automatically work out the postage for you, using the size and weight of the items (which you can enter for each product).
Shopify have put together a thorough guide to shipping and fulfilment that’s well worth a read for more information.
#7 Get the word out
You could have the most amazing products and the greatest online store in the world. But if no one can find it, you won’t make any money! This is where you need to start marketing your business to get the word out.
You don’t have to be a professional to do marketing – especially these days, with social media and online advertising being so accessible.
Here are some of the ways you can go about marketing your online store:
- Social media – This is probably the easiest option, particularly if you already use social media. If you haven’t already, create a Facebook page, Twitter account and Instagram feed for your business. You can then go about sharing content about your products and engaging with the market you want to target. Ask your friends and family to help you share your content, and think about getting in touch with influencers in your market.
- Online advertising – Online advertising includes a number of different channels, but the main one is PPC (pay-per-click ads) on Google. PPC ads work by “bidding” on keywords and creating ads which will appear to people who search for those keywords. Those ads will then appear at the top of the search results pages for those keywords, and you’ll pay each time someone clicks on the ad to visit your site. The best place to start would be this guide from Google.
- SEO – SEO stands for search engine optimisation. It’s basically the practice of optimising your site so you appear high up in the organic (non-paid) search results list when people search for keywords related to your business online. We’ve written an in-depth guide on getting started with SEO which should help.
- Email – Email is a great way to build an audience and keep them engaged. You’ll need to do a bit of work to get people to sign-up to your mailing list initially. But once they’re there, you can send them targeted emails with offers and promotions to get them to buy. There are a number of email platforms out there including Mailchimp and MailJet. This article from Lyfe Marketing has a number of great tips for building an email list.
#8 Check the law and taxes
If you want to start a business and sell products online, you’ll need to register with HMRC and possibly Companies House too. There are also certain laws and regulations you’ll need to adhere to, particularly if you’re importing or exporting goods.
Here are a few of the main things you should consider:
Your first step will be to decide what legal structure you want your business to take. Each structure has different pros and cons.
The main options are:
- Sole trader – The simplest arrangement, for when one person will own and control the business. Bear in mind that you’ll be personally liable for your business including its debts and contractual obligations.
- Partnership – Similar to sole trader but for two people or more. Again, the individuals in the partnership will be personally liable for the business’s activities.
- Limited company – With a limited company, you’ll need to register with Companies House and submit annual returns on your business’s accounts. Limited companies are subject to more regulation, but it will exist as a separate legal entity – meaning you won’t be personally liable for its activities.
You can read a more detailed breakdown of the different legal entity types here.
One very important aspect of online retail is VAT (value added tax). If your annual turnover is more than £85,000, you must register for VAT with HMRC. Once you’re registered, you’ll need to charge VAT on the items you sell (unless they’re exempt), pay VAT due to HMRC, submit VAT returns and keep VAT records.
While your annual turnover is less than £85,000, you don’t need to charge VAT or register for VAT with HMRC.
You can find out more about how VAT registration works on the GOV.UK website.
Hire an accountant
While you can do all your own taxes, it’s probably a good idea to appoint an accountant to help you out. Costs for accountants can vary but usually cost a few hundred pounds a year (this will be higher if you decide to incorporate as a limited company).
(PS: Please don’t rely on us for legal advice – we’re not solicitors! Consult with a solicitor if you’re unsure about your legal situation.)
#9 Finishing touches
If you’ve reached this point, you’ve probably done all you need to do, and your store is hopefully already starting to earn you money. But you should never rest on your laurels – there’s always room for improvement.
Here are a few extra ideas for how you can build up your online store:
- Start blogging – Blogging can help you build an engaged audience including past and potential customers. Your blog should obviously be relevant to your products. For example, if you’re selling shoes, you could write about the latest footwear trends or how-to guides on looking after your leather boots. Blog posts will also give you something to share on social media to help you expand your audience and reach new people.
- Conversion rate optimisation – This might sound complicated but it’s actually very simple – it’s all about making sure more of the people who hit your website actually buy something. You can also work on increasing the average amount your customers spend. Some of the ways you can do this include:
- Highlight special offers and deals
- Make the buying process as simple as possible
- Cross-sell related products based on what customers add to their basket
- Up-sell to higher value products
- Test messaging and different calls-to-action to see what works best
- Add testimonials and reviews – When it comes to online shopping, reviews and testimonials can be invaluable. Ask your previous customers to review the products they bought and you can add these to your website. This will then help increase your conversion rate and average order value. Most e-commerce platforms include this functionality already. You can ask your customers to review your business on an independent review site like Trustpilot.
Creating an online store isn’t easy, but nor is it impossible. Creating a business of your own and watching it grow and develop can be one of the most satisfying things you’ll ever do. And with so many great resources online to help you, there’s no excuse not to get started!
Have we missed something?
We’ve done our best to make this guide as comprehensive as possible (without making it too complicated). But is there something we’ve missed? Let us know – you can find us on Facebook, Twitter and LinkedIn.