Set Up an Online Ecommerce Business in the UK
3E Accounting offers insightful advice on how to set up an online e-commerce business in the UK.
Ecommerce is very much a part of our global retail landscape, driven by digitalisation and technological evolution. As a multi-trillion-dollar industry, e-commerce had more than two billion online shoppers in 2020. In the UK, during the first quarter of 2020, it accounted for 30.7% of all sales. Online business is booming, and savvy entrepreneurs need to know how to set up an online e-commerce business in the UK.
Online and in Demand
If you’re a newbie to e-commerce but are excited by its prospect, then due diligence is in order. A quick online search will throw up plenty of reading material. However, as with any business, you should always start with research and a business plan. Whilst writing up a brilliant business plan, spend some time checking out the variety of e-commerce business models available. These include, amongst others:
- Dropshipping and affiliate marketing.
- White labelling and subscription services.
- Printing on demand.
- SaaS (Software as a Service).
Also, bear in mind that there are millions of e-commerce websites out there. To stand out requires that you find a product or service niche. To be successful, your online e-commerce business needs to be both unique and super productive.
An important step is to consider registering your business. Online e-commerce is more than just a laptop and website selling things. It’s a huge industry growing exponentially, and registering as a limited company can give you added benefits. These include limited liability and better access to funding. However, operating as a sole trader or partnership is also perfectly viable. The flexibility and control afforded by these business structures might be just what you are looking for.
Regardless of which type of business entity you choose, registering with HMRC is compulsory. This must be done within three months of starting your online business. Depending on annual turnover, you will need to register for corporation tax, value-added tax (VAT) and file annual returns.
The type of licensing and permits required will depend on several factors. One of these is location, i.e., whether you are selling online within the UK itself or abroad. Selling restricted goods such as alcohol will require a licence and approval from your local council.
Your online e-commerce business might also be considered a distance selling activity. Distance selling occurs where a sale is via mobile or text messages, digital televisions, etc. There is a range of rules, regulations and exceptions that must be followed as listed on the Government website. However, post-Brexit changes will affect these, and it is best to keep updated to ensure full compliance.
The key to having a successful online e-commerce business is being able to monetise traffic. That means driving plenty of organic traffic onto your website and raising the conversion rate. As such, having a top-notch website is important, and this includes:
- Website design and development.
- Platform with e-commerce capability.
- The domain name and URL registration.
- Logo and branding.
- Secure and easy to use e-payment gateways.
- SEO (search engine optimised) blogs, news and articles.
As an online store, this is where a large part of the expenditure and hard work needs to be spent. Ensure that your e-commerce software and automation is the right one for your business. Leverage on email marketing, Facebook page and events, influencer reviews, SEO blogs, etc., to create exposure for your business. If you have the budget for it, investing in paid advertisements is also a good way to drive traffic to your site.
3E Accounting provides customisable business solution packages that can ease the company formation process. Our experts offer complete assistance on how to set up an online e-commerce business in the UK, including website hosting and designing. Contact 3E Accounting today for all your bespoke business solution needs and requirements.