Ecommerce businesses have been booming in recent years in the UK. Thanks to the rise of online shopping and easy access through mobile devices, more people than ever are making purchases online. Whether you’re looking for clothing, electronics or anything in between, there’s an eCommerce business out there that sells it.
If you’re considering starting your own eCommerce business in the UK, there are plenty of opportunities for new online shops and an ever-growing demand from consumers. The UK has one of the most advanced eCommerce marketplaces globally and in 2019 alone made £696 billion in eCommerce revenue.
Despite the growing number of online businesses, there’s still plenty of space for newcomers to start their online businesses. But it’s not as simple as setting up a website and clicking publish. You need to do a few things first to get your business set up for success. This guide will walk you through the steps you need to take to launch your eCommerce store in the UK. Let’s get started.
Starting An eCommerce Business In 7 Steps
If you’re thinking about starting your own eCommerce business in the UK, then you’re in luck.
The UK is one of the world’s leading eCommerce markets, and it’s only getting bigger. Whether you’re looking to make a little extra money on the side or build a full-time business, there are plenty of opportunities for businesses of all sizes.
Here are the seven steps you need to take to get your business up and running:
Step 1: Identify Your Niche & Choose Your Products
As an eCommerce business, it’s essential to have a focus. Trying to be everything to everyone is a recipe for disaster. That’s why it’s crucial to have a niche. A niche is a specific group of people you’re targeting with your products or services.
Try to be specific with your niche; even being too broad within a niche can mean you miss opportunities. For example, if you’re planning to sell baby products that are good for the planet, target eco-conscious new parents rather than parents as a whole.
Knowing your niche makes it much easier to choose your products. It’s also important to remember that your niche and products can change as you learn more about your business and what your customers want.
Step 2: Carry Out Market & Competitor Research
If you’ve been considering starting your own business for a while, you’ll probably already have a good idea of your niche and the products you want to sell. But it’s essential to confirm that there’s a demand for your product or service before doing anything else.
Carrying out market research is an essential step. It will help you understand your potential customers’ needs and identify any gaps in the market you could exploit. There are several ways to carry out market research, including:
- Online surveys
- Interviews
- Focus groups
- Social media monitoring.
Once you understand your target market well, you can start your competitor research. Look at their pricing structures, product range and marketing strategies. This will give you some ideas of what works well in your industry and what doesn’t.
Step 3: Choose An eCommerce Business Model
The two most common business models for eCommerce businesses are business-to-consumer (B2C) and business-to-business (B2B). Each model has its own unique set of benefits and challenges, but the products and services you offer will determine which is best for you.
Once you’ve determined your business model, you’ll need to work out your value delivery method and how you can increase your order value as much as possible. Your value delivery method is essentially how your supply chain will work, and you have several options:
- Traditional — With this method, you’ll buy and store your products and send them directly to your customers. New eCommerce businesses usually use this method.
- Dropshipping — You’ll use a dropshipper to handle your orders rather than directly store and dispatch your products. The dropshipping service will automatically ship products to your customers when you receive an order.
- Wholesale — You’ll need a warehouse or storage space for this method. By buying products in bulk, you’ll be able to potentially increase your sales make higher profit margins, but you’ll need to handle packaging and shipping.
- Subscription — Offering a subscription service is a great way to guarantee recurring orders and increase your order value. Rather than sell individual products, you’ll regularly send a product package to consumers.
- Order Fulfilment – By outsourcing this crucial process to a third-party provider or implementing effective in-house strategies, businesses can focus on core competencies like marketing and product development. As the the experts at Red Stag tell us, streamlined order fulfilment ensures timely deliveries, accurate inventory management, and enhanced customer experience, ultimately leading to higher customer retention and business growth.
Step 4: Pick A Business Name
A standout business name is essential for the success of any eCommerce business. It’s vital to choose a name that’s short, memorable, easy to spell and reflects the products or services you offer.
Picking a business name might sound like one of the most straightforward steps in starting your eCommerce company, but it can be tricky. It’s a good idea to come up with a list of potential names and mull them over. Ask your friends and family for their honest opinions on the options and take them on board.
The use of a business name generator from Looka can help you explore name ideas that align with your brand identity, getting ideas flowing if you’ve hit a bit of a wall in terms of inspiration.
Once you’ve settled on a few potential names, it’s time to do some research to ensure another business isn’t already using the name you’ve chosen. You also want to make sure that your chosen name is available as a domain name and can be used for social media and other marketing purposes.
Step 6: Create A Business Plan
Now that you’ve nailed down the critical information about your eCommerce store, it’s time to create a business plan. This may seem daunting, but it doesn’t have to be, and you’ll already have a lot of the information ready.
A business plan is a document that outlines your business goals, strategies and tactics. To write a successful business plan, you’ll need to include several key sections:
- The executive summary should concisely describe your business and its objectives.
- The market analysis section should provide an overview of your industry and target market.
- The competitive analysis section should assess the strengths and weaknesses of your competitors.
- The product or service section should describe what you’re selling and how it meets your customers’ needs.
- The marketing and sales section should outline your plans for promoting and selling your product or service.
- The financials section should include your projected income statement, balance sheet and cash flow statement.
By including all of these elements, you can create a comprehensive business plan that will give you a roadmap for success. Remember, your business plan isn’t set in stone and will evolve as your business grows.
Step 6: Choose An eCommerce Platform & Set up Your Store
With the foundation of your business in place, it’s time to choose an eCommerce platform and set up your store. There are several options out there, so it’s important to do your research and select the right platform for you. You have a choice to either set up on an existing platform like Etsy or Amazon or create your own eCommerce site.
While you can build an eCommerce site from scratch, most businesses use an eCommerce platform that makes the process as simple as possible. These are the most common eCommerce platforms:
- WooCommerce
- Squarespace
- Shopify.
Once you’ve chosen a platform, setting up your store is relatively straightforward. Most platforms will provide templates and tools to help you get started. They have drag and drop features that make designing your store easy. Depending on your skill set, you may choose to hire a web designer or marketing agency for your website as you will need to:
- Create your business logo design and branding
- Write web page copy and product descriptions
- Take high-quality product photos
- Make your site user-friendly and responsive.
Step 7: Register Your Company
The final step in setting up your eCommerce business is to register your business with Companies House and/or HMRC. As a new business, you have two main business registration options:
- Register as a limited company
- Register as a sole trader.
As a sole trader, you’ll be the only business owner and solely responsible for its debts. This can be an advantage if you want complete control over decision-making, but it also means that you’ll be personally liable for any losses incurred by the business.
On the other hand, a limited company offers limited liability protection for its shareholders. This means that you will not be held personally responsible for the company’s debts, but it can also mean that you’ll have less control over decision-making if you have other shareholders.
Most people who start their own business in the UK will begin as a sole trader and register as a limited company once the business has grown. But nothing is stopping you from registering as a limited company straight away.
Once you’ve registered your business with Companies House and HMRC, you’re ready to go. You can hit the “go live” button on your website and eagerly await your first customer.