How To Start An Ecommerce Business In The UK
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How To Start An Ecommerce Business In The UK

by Shivani Rajput
Estimated reading time: 20 minutes, 34 seconds

Thinking about starting an eCommerce business, but don’t know where to begin? Don’t worry, you are not alone in this. We have compiled this step-by-step guide to start an eCommerce business in the UK. Check it out and thank us later!

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Complete Guide To Start An Ecommerce Business In The UK

The idea of having an online business attracts many, mainly due to the growing potential of the Ecommerce industry. In fact, the UK’s eCommerce industry is expected to reach £91,412m by the end of 2021. So, it is the high time you should take your first step towards setting your business online. But how?

Here’s the deal, starting an eCommerce business is not very different from starting a brick-and-mortar store in the UK. However, there are several additional steps that you need to carry out. In this guide, we are providing you with each and every step you will need to perform to start your online store. So, keep reading and make sure you don’t skip any of the steps!

What's Your Business Idea?

Obviously, the first thing you need for starting a business is a revolutionising business idea. See, this is 2021, businesses from almost every industry and sector have already taken themselves online. This only means one thing — the competition is fierce!

So, you can't simply put just any random business idea in motion, especially if your goal is to make big money online. For instance, suppose if you are thinking of starting a clothing business, you'll have to compete with the existing fashion eCommerce giants like Asos, Nike, etc.

Hence, your business idea should be well-researched. It should help you stand out in the market. So, take a very practical approach and study the market and online customer behaviour to brainstorm a business idea. Whatever business you start, it should meet the customer requirements.

Here are some tips to brainstorm an outstanding business idea :

1. Think of Multiple Ideas

Think of multiple business ideas, rather than sticking to only one. This will help you have a broader view and you'll be able to select the best idea for starting an online business. So, take your time and prepare a list of unique online business ideas. Don't worry, we will filter out the best in the later steps.

2. Research for Each Idea

Once you've a list of eCommerce business ideas you like, start researching for each idea. When you do this, look for the niche, market type & size, industry performance, growth rate, customer size, scalability potential, and so on. After having all of this information, compare your business ideas and select the one with higher growth potential and relatively less competition.

3. Brainstorm In A Group

It is always better to have multiple opinions. So, ask your trusted friends or colleagues to join your brainstorming process. In this way, you'll have a bigger list of creative eCommerce business ideas to choose from.

4. Make Sure It Is Interesting

No doubt, the eCommerce industry is highly competitive and you need to have a unique approach to stay ahead of the competition. But there is no point in starting an eCommerce business you have no interest in. If you start a business that looks very promising, but it doesn't align with your interest, you will not be able to sustain it. For instance, suppose you start an online jewellery store. Neither you've any knowledge about it, nor do you've any interest in selling jewellery. In this scenario, you will never be able to understand your audience and target market, and the circumstances will force you to give up on it.

5. Ask What Are You Good At?

The simplest way to get an amazing online business idea is to find what you're good at. Think about the things you enjoy and are passionate about. For example, if you are interested in fashion and keeping up with the latest trends, then you can think of starting a fashion & apparel eCommerce business. You may ask, the fashion & apparel industry is huge, so how will I make my business stand out? Here's the catch, by being more specific — "micro-niche" is the word, folks!

So, by taking the "micro-niche" approach, you can start a kids fashion & apparel store, rather than starting a generalised fashion store. Also, this is just an example, you can do this with any online business of your choice.

6. Get Feedback

Last but not the least, get enough feedback on the eCommerce business idea you have finalised. Ask your friends, family, mentors to give you honest feedback.

Do you want to start a profitable eCommerce business?

We can help you in creating a secure eCommerce website and market your business.Get in Touch Now.

Perform Competitor Analysis

We are living in a disruptive era of eCommerce, where any product you might possibly think of, has higher chances of being already sold by someone else. So, if you want to make your eCommerce business stand out, then it is very important to perform competitor analysis and market research.

If you're still wondering why is it important to conduct a competitor analysis, then here are the reason to do so:

  • It helps in estimating the entry barrier into your target market
  • Allows you to determine baseline customer expectations
  • It helps in finding better opportunities to grow, and market gaps you can fill in
  • Help you to in identifying risks and weakness of your target niche/market

Now, the question is, how to conduct a competitor analysis? Don't worry, we've got you covered!

Below are some tips to do an effective competitor analysis:

1. Find Out Who Your Competitors Are

To win a battle, you first need to determine who you're fighting against. For an eCommerce business, you basically need to find out three types of competitors: direct competitors, indirect competitors, and replacement competitors.

  • Direct Competitors: Ecommerce businesses selling the same products you're planning to have in your store.
  • Indirect Competitors: Ecommerce businesses that might be selling different products, but are fulfilling the same demands of your target customers
  • Replacement Competitors: Ecommerce businesses are likely to offer replacements or substitutes for your products.

2. Perform a SWOT Analysis

SWOT (Strength, Weakness, Opportunities, Threats) test is a powerful tool that provides you with a 360° view of your competition. Once you've a list of competitors, analyse their performance based on SWOT factors. Here is a checklist:

  • Ecommerce website structure
  • Brand value
  • Customer experience
  • Sales strategies
  • Marketing strategies
  • Pricing strategies
  • Shipping strategies
  • Deals & discount strategies

3. Evaluate Competitor's Ecommerce Website & Consumer Experience

Customer experience is one of the most important factors that affect the success of an eCommerce business. Nearly a third of online customers in the UK would abandon the brand after just one bad shopping experience. That said, take a look into your competitor's website and checkout experience they are offering. Try to determine the platform they are using, the themes and features of their store, loading speed, ad placement, and so on. There are a lot of benefits of eCommerce business and it takes equal efforts to establish a successful eCommerce business.

Choose Your Business Model

You've got an amazing business idea, you have analysed your competitors, now what? It's time to choose the right business model for your online business.

A business model will decide how you're going to enter the eCommerce market. In general, there are mainly four types of business models you can choose from:

  • B2B (Business-to-business): In this model, businesses sell their services or products to other businesses, directly. Salesforce is a great example of businesses that fit into this category.
  • B2C (Business-to-consumer): In this eCommerce business model, businesses sell their offerings directly to the consumers. Amazon, ASOS are running on a B2C model.
  • C2C (Consumer-to-consumer): The C2C model involves business between one consumer and another. Paypal, eBay, and Etsy are some platforms that facilitate C2C business.
  • C2B (Consumer-to-business): Finally, there is the C2B business model, where individuals provide their services to businesses. UpWork is a good example of successful C2B businesses.

Choose a Value Delivery Option

The next thing to do is, selecting the right value delivery method. The chosen value delivery method will decide how you will connect your consumers to your products. It will take into account the complete process of sourcing, storing, managing, selling, packaging, and finally delivering the products at the doorstep of your customers.

In a nutshell, it is how you will deliver the products or services you've promised your customers when they hit that "Buy Now" button.

Below are some of the top value delivery methods you can choose from:

1. Drop Shipping

Dropshipping is one of the most popular delivery options for eCommerce businesses. It works in just three simple steps:

  • A customer places an order on your online store.
  • You transfer this order to your supplier.
  • The supplier directly ships the order to your customer.

It is one of the simplest ways to run an online store as you don't have to worry about sourcing, storing, packaging, and delivering the products. While dropshipping is easy and cost-effective, it comes with its own risks. If by any chance your supplier fails to fulfil an order, it comes to your head. Further, you don't have control over your brand and the quality you are offering to your customers.

2. Wholesaling and Warehousing

This value delivery method is more flexible and dynamic as compared to the dropshipping method. It involves managing your own warehouse. Here, you'll have the desired products shipped to your warehouse, from where you will store, manage, pack, and ship to your customers. Besides being more flexible, warehousing and wholesaling methods offer a much better profit margin.

On the downside, it requires more effort, time, and of course, investment. You need to have a physical space to run your warehouse, and a warehouse management team to keep the operations up and running. Not only that, but you'll also need to pay for transporting your inventory from the wholesaler to your warehouse.

But here is the solution, you can always rely on 3PL (third-party logistics) providers to outsource this step. It is known as order fulfilment and many growing eCommerce businesses use this approach.

3. Private Labelling

As the name suggests, a private labelling method allows you to sell your items exclusively to your customers. Here, you order your manufacturer to produce the specific products by providing them with all the product specifications. Once the products are made, you can either get them shipped to your warehouse or ask your manufacturer to ship them directly to your customers.

A private labelling solution is great for eCommerce businesses that are selling unique products but don't have means of producing themselves.

4. White Labelling

The white labelling approach involves purchasing basic products from a distributor and then re-labelling it as your brand name. This method allows you to establish your brand in a hassle-free manner.

However, there is a problem with this approach. Once you have re-labelled a large volume of products and if they aren't sold, you can't return them to the supplier.

Time For Branding

Once you're done with selecting the right business model and value delivery option, it's time for branding your eCommerce business.

Remember, branding isn't just about creating designer logos and impressive taglines. It isn't merely the naming process of your business. Instead, it is the personification of your business!

Again, make one thing crystal clear, a brand isn't built overnight. Nor is it something you can purchase. The value of your brand will come from the quality and experience you will provide your customers.

But for starters, begin with selecting a unique name, an authentic logo, and a catchy tagline for your business. Your name, as well as logo, should be such that it can represent your business among your audience. Not only that, but it should also tell the story and aim of your business.

Here are some useful branding tips that will help you in the process:

1. Decide a Name

Sounds basic? Yes, but it is still one of the most important things for starting a business. Your business name should be very unique yet meaningful. It should be able to tell the purpose or aim of your business. For instance, "Pizza Hut" is a basic name, but on hearing it, anyone can tell that it is some pizza place. Here are some tips to select a proper name for your online business

  • Make sure it is easy to understand and meaningful.
  • Ensure that it is easy to pronounce.
  • Make sure it is authentic and unique; avoid copying other brands.
  • Keep it short and simple.
  • Try to include one or two keywords in your business name.

3. Create Tagline

What comes to your mind when you hear the words, "I'm Lovin' It", or "Just Do It", the delicious burger you had at McDonald's and your favourite pair of Nike shoes, isn't it?

Basically, taglines are the short catchy and unique phrases that accompany the logo. Although taglines are not mandatory, they work excellently for marketing. They make your brand more impactful and impressive. Additionally, they also create a sense of familiarity among your target audience. So, it's a good idea to add a nice tagline to your business.

4. Trademark Your Logo and Name

Lastly, ensure the authenticity of your business name and logo by filing a trademark. It is a simple and straightforward process, you just need to file an online application on the Intellectual Property UK website.

As we have already discussed, branding is much more than selecting a cool name and creating a logo. It is a comprehensive process that needs a fine-tuned approach towards making your business familiar to your target audience. So, it is always better to work with a reliable branding agency, like RVS Media.

Meanwhile, you can also check out our article on how branding can maximise the growth of your eCommerce business.


Do you want to start a profitable eCommerce business?

We can help you in creating a secure eCommerce website and market your business.Get in Touch Now.

Select an Ecommerce Platform

It's time to officially become an eCommerce business owner — build your online store!

Building an online store is not very different from building a physical shop. Just like you would select the right location or place to open your physical store, you need to select the right platform to build your digital store.

In fact, the platform on which your eCommerce store is built plays a key role in deciding the success of your business. The reason is simple, each eCommerce platform has its own features and functionalities which impact the performance of your business in many different ways.

However, selecting the right eCommerce platform can be a daunting task looking at the hoard of features and factors you need to consider while choosing the suitable one. These factors include the design, loading speed, eCommerce features, pricing, SEO tools, hosting, security, free trial and many more.

But don't worry, we have already handpicked some of the best eCommerce platforms for you.

Shopify

Shopify is the first name that appears on the search results when you search for the best eCommerce platform for building an eCommerce store. It rightfully deserves all the reputation and fame.

In general, Shopify is the most recommended eCommerce platform for beginners as it is easy to use and offers amazing features within your budget. You get access to thousands of free themes and templates, as well as great eCommerce features for as low as $29/ month.

Pros Cons
Easy to use Not suitable for large businesses.
Great for beginners
Suitable for small stores
Affordable

Magento

Magento is another eCommerce platform you can consider building your store on. It is a great option if you're really serious about your business and want to grow and expand it in the near future.

Magento is mostly recommended for medium to large businesses and enterprises as it offers advanced features and is capable of handling large volumes of traffic. One thing to note about Magento is, it's a technically advanced platform, hence, using it can be a bit challenging for beginners. Another thing is, it is slightly more expensive than other eCommerce platforms.

Pros Cons
Advanced eCommerce features Can be expensive for small stores
Best for medium to large eCommerce businesses
Highly secure

BigCommerce

BigCommerce is another great eCommerce platform for the new store builders and business owners. It is easy to use and comes with a plethora of eCommerce features to support your store. What's more? It is cost-effective and comes with a free-trial as well.

Pros Cons
Best for hobbyists and beginners Not ideal for expanding businesses
Easy to set up
Affordable pricing

Integrate Payment Gateway

Once your online store is live, the next thing you need to do is integrate a reliable payment gateway. This will allow you to accept payment from your customers in a convenient, secure and flexible way.

Having the right payment gateway is going to be highly beneficial for you as well as your customers. While your customers will enjoy the freedom of paying via their favourite payment methods in a secure way, you will get the advantage of running your payment processing system smoothly and efficiently.

But looking at hundreds of available payment gateways in the market, selecting the right one for your eCommerce store can be challenging. Say no more!

We have already compiled a guide to the best online payment gateway for small business uk. All you need to do is, check it out!


Get Your Ecommerce Business Registered

To own a business in the UK, you need to apply for an EIN (Employer Identification Number) and get your business registered. While not every type of business requires an EIN, this number can be very helpful in keeping your business and personal finances separate. Further, you can easily apply for your EIN online, via phone, mail, or Fax, from the IRS.

Once you're done applying for EIN, you will need to obtain the necessary license and permits needed to operate the eCommerce business within your state or city.

Generally, most eCommerce businesses don't require any license as they are mostly home-based. However, if you're also planning to operate locally, then you have to register yourself as per the guidelines of your state government.

Market Your Business

Congratulations!!

You've successfully set up your online store in the UK. Now, the last thing you need to do is market your business to gain more and more customers.

It doesn't matter how attractive your eCommerce store is, how amazing your product range is if no customers are visiting your site. And this is why it is very important to work on your marketing strategies.

The right marketing strategies and approach allow you to expose your brand or business to the right target audience and generate more sales and conversions.

Below are some great ways to take your business to the market:

Gear Up With SEO

Search Engine Optimisation is the most crucial factor that affects the performance of an eCommerce business. Hence, it should be the main part of your online marketing arsenal. The best SEO practices will not only help you rank on the top of search engines but will also drive higher volumes of traffic to your store. If you want to attract local traffic to your eCommerce store, then this local SEO guide can help you a lot.

Also, SEO needs a fine-tuned approach, which can only be provided by an experienced SEO expert. So, either work with an SEO agency or hire the right professional.

Leverage The Power of Social Media Marketing

Today, social media is the most powerful marketing tool. It has a huge pool of worldwide audiences, which can be very helpful for your business. Just by creating an online presence on popular social media platforms like Instagram, Twitter, and Facebook, you can target the right audience and convert them into your high-paying customers.

Get In Touch With Influencers

The increasing popularity of social media has given birth to "influencer marketing". This is another powerful marketing strategy as social media influencers have a great influence on their followers. By getting your business or products advertised by them, you can gain a good number of customers. So, find the right influencers on the social networking platforms and collaborate with them.

Invest in Ad Campaigns

Don't shy away from investing in paid advertisements. No doubt, organic traffic is great, but paid ads can drive huge traffic to your website. So, hire the right marketing agency and plan and devise high-yielding marketing campaigns.

Work With A PR Agency

Lastly, if you've got a good budget and are planning for a great market /industry exposure, then hire a PR agency. The right professional service will help you expose your business by publishing articles, magazines, press releases and so on.

And voila!!

We are done here. We have discussed all the necessary steps you will need to perform to start an online business in the UK. But if you find this process very challenging, then contact RVS Media as your trusted eCommerce development agency in the UK. We can help you get your online store up and running in the most efficient and cost-effective way. So, feel free to contact us!

Also, if you still have any doubts hovering in your mind, then don't worry. We've taken care of that as well. Below are the answers to some of the most commonly asked questions, check them out!

FAQs

How Much Will It Cost To Start An Ecommerce Business In The UK?


There is no fixed cost of starting an online business in the UK. It can be anywhere from £2,000 to £20,000, depending on the size and type of your eCommerce business. There are a lot of factors that need to be considered when deciding a budget for opening an online store. Some of these factors include the cost of the eCommerce platform and payment gateway, hosting, website maintenance, SEO, SSL certificates, marketing, trademark & patents, and so on.

Here is an important piece of advice, always keep your budget flexible, regardless of the type and size of your business. Also, don't compromise on the quality of service because of your fear of outgrowing a fixed budget.

With a combination of a flexible budget and the right planning, you can set up your business in the most convenient and hassle-free way.

When Will I Start Earning From My Ecommerce Store?


Another common question that disturbs most of the new business owners — when will I start earning from my store?

Remember, just like a seed takes time to grow into a tree and bear sweet fruits, your business will also take time to offer good returns on your investments. Till then, you need to put all your hard work and passion into nourishing and thriving your business.

Moreover, don't worry if you don't generate the sales and conversions you've expected. Just be patient and continue with your business strategies. You'll start earning desired profits eventually in a couple of years.

When Should I Scale My Ecommerce Store?


The most common mistake most online business owners make is scaling their business as soon as they hit their first milestone. This sometimes results in the downfall of the business due to poor efficiency and instability.

So, plan your expansion only when your business becomes stable and gains a continuous flow of revenue. Moreover, when you do so, don't expand very quickly. Instead, keep your expansion slow and steady. A good idea is to add one product line at a time.

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