E-commerce is part of the fastest-growing electronic business (e-business) industry. People are spending more money online than ever before, and it's not just teenagers buying stuff from Amazon. More people are starting their own businesses every day, and they're making a lot of money doing so. 

If you've been thinking about getting into the e-commerce game but have never started your own business before, this blog post has everything you need to know to get started. You don't have to be an expert at anything related to e-commerce either! 

We'll cover how to pick a niche that will make sense for you and your audience, as well as how much it costs (hint: pretty cheap) and what kind of tools we recommend using. 

What is an e-commerce business?

E-commerce is a term used to describe retail business conducted over the internet. The e-commerce industry has grown exponentially in recent years, with many brick and mortar businesses shifting their focus online. E-commerce websites can range from small startups like Etsy who only sell handmade products, to major retailers such as Amazon, which sells everything from books and DVDs to electronics and household goods.

E-Commerce businesses are designed for customers who want ease of use when shopping online, whether on their smartphones, tablets, laptops, or other devices. The business model allows people with busy lives to shop at any time of day or night without having to drive around town looking for stores open on Sunday evenings.

What are the 4 types of e-commerce?

Four types of e-commerce market segments can describe the online transactions made between businesses and consumers:

  1. Business to Consumer (B2C): The B2C model refers to sales of goods and services from a business to consumers. 

  2. Business to Business (B2B): B2B refers to the direct sales transaction between businesses. 

  3. Consumer to Consumer (C2C): C2C refers to sales between consumers. For example, you sell your furniture to someone on Marketplace or eBay.

  4. Consumer to Business (C2B): C2B means that consumers are selling their own products or services to a business. For example, an artist selling a landscape painting to display in an office space.

Do you have to register an e-commerce business UK?

It is a requirement to register a business with the HMRC within three months of trading. When your e-commerce business’s taxable turnover is more than £85,000 throughout 12 months, it is compulsory to register it for VAT. Even if you don’t have a taxable turnover of £85,000, registering for VAT provides your e-commerce company with credibility, a concentration of business growth, and your VAT can be backdated.  

The whole registration process will only cost you £12, which can be paid by credit or debit card, and you’ll then be up and running within 24 hours. You’ll also receive a ‘certificate of incorporation’, which indicates that your company legally exists. Congratulations! 

If you have the extra money to spend, consider trademarking your business name for £170. This trademark protects your business from rip off merchants and prevents people from using your brand or logo for ten years. 

Legal status for your e-commerce business

You can either register as a sole trader, a limited company, or a partnership when you register your business. 

A sole trader simply means that you are the person who is responsible for company debts, and you also have some accounting responsibilities. Registering as a limited company means that your business finances are separate from your personal finances. Whereas a partnership is two or more people opening a business together and taking responsibility for finances.

What are the requirements for an e-commerce business?

Rules and regulations set out by the UK requirement e-commerce include:

  • Making it clear that a user has to make a payment online
  • Create reasonable steps that allow customers to correct errors when purchasing
  • Display payment and delivery information clearly
  • Provide an email address and contact details
  • Provide the total price and how it is calculated

*For more requirements, visit gov.uk. 

How to start an e-commerce business UK

While your thought process might only include simply setting up a website and uploading your products online, there are a lot of steps towards starting an e-commerce business that goes unnoticed by the common eye. 

Step 1: Research, research and more research

Put your thinking cap on and get a thorough understanding of the product you intend to sell, your target audience, and as importantly, your competitors. What can you offer your customers? What will help you stand out from the crowds? Establish a buyer persona. 

Research involves understanding the e-commerce business model that most relates to your business. This will also indicate what you are passionate about and help define your values as a business. 

Step 2: Establish an e-commerce business plan

Create a business blueprint that outlines your ideas, goals and any future plans that’ll be important to establish the e-commerce business.

Some brainstorming ideas for your business plan:

  • What are your missions?
  • How are you going to receive finances?
  • Short-term goals
  • Long-term goals
  • Filter your ideas
  • Jot down business names
  • Have a solid plan before sharing ideas

Step 3: Establish the legal status of your business

As we mentioned earlier, you need to register your company to determine where funds will be flowing and who will be taking responsibility for debt and the inevitable tax. 

Will your company be registered as a sole proprietorship, partnership, or limited company?

Step 4: Register your company

Once you have your business name and logo, you can officially register your company and become a legal entity. This involves a little bit of admin, such as gathering personal information, address, national insurance number, and passport number. 

Nonetheless, £12 is all you’ll need to have a legal business in just 24 hours. 

Step 5: Creating your online business

Building your online store is a crucial step in establishing your e-commerce store. And if you’re new to the world of e-commerce, it can be daunting to imagine the idea of having to lock yourself in a dark room and master the art of coding. 

But fear not, there are incredible e-commerce website builders that can get the job done for you. An e-commerce builder like Shopify is one of the best tools for creating a professional online presence. With drag and drop features, you have plenty of room to design a website that reflects your ideologies. 

Themes can range from an average of £0 to £54/month, with the option of adding hundreds of nifty plugins that can elevate your websites. 

But we do get it; starting an e-commerce website can be tricky. This is why we offer website builds. Feel free to get in touch with us so that we can help you build an e-commerce website of your dreams.

Alternatively, you can build your own website on a CMS (Content Management System) like WordPress or code the site yourself with the help of a developer

Step 6: Set up payment methods

To start taking payments on your site, you need to set up a merchant account. A merchant account is a type of business account that enables you to accept payments through credit cards, debit cards, and checks. 

It's important for any business owner to have access to this type of account in order to accept payments from clients who want the convenience of using their credit or debit card (or checks), but it can also be helpful for small businesses when they need an extra line of funding. 

Step 7: Market your e-commerce website

If you have an e-commerce website, it's important to market your site so that customers will find you. You can do this by social media marketing, blogging about new products or services, and having a newsletter sign up form on the homepage of your site. 

Want to soar above your competitors?

CVO is the way to do it. As CVO and Shopify experts, we work with large eCommerce brands like yours, increasing their metrics and revenue. Enquire today to find out how we can help you.