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How to Set Up an Online Store in the UK

How to Set Up an Online Store in the UK

Setting up an online store may be a little intimidating, especially if you’re not tech-savvy. Whether you’ve already established your own brick-and-mortar shop, or you’re trying to launch your first store in the eCommerce world, you probably have dozens of questions in your head.

For example, you’re probably wondering if there’s a perfect platform to create an online store, how much it will cost you, and whether you need to look into any licenses to get your business up and running.

In this article, we’ll walk you through an easy guide for setting up an online store in the UK and help you calculate how much it’ll cost. 

Without further ado, here are five simple steps to building an eCommerce website.

1. Check if You Need a Business License

In the UK, most small businesses can operate without a license. However, companies that sell restricted goods, such as alcoholic beverages and pet products, do require some permits. 

To see whether your business needs a license, it’s recommended that you run a check using a license finder

With the tool, all you ought to do is:

  1. Type in your business field and hit the Search button. 
  2. Or, expand the Choose your area of interest collapsible menu and choose a business niche. 
  3. Select one or more activities.
  4. Pick a location.
  5. Click Find License.

When all is set, the tool will provide you with a list of licenses you need to prepare.

There are also a set of rules for online trading

If you’re selling from the UK to customers outside it, you’ll need to check the VAT and exporting rules. If you’re selling from outside the UK to UK citizens, there are VAT rules for selling through an online marketplace.

On top of that, business owners must set up HMRC accounts and register their business’ legal structure.

The former stands for Her Majesty’s Revenue and Customs – the UK government’s department that takes care of tax collection throughout the country. The latter refers to information about a company’s business structure, which can be sole traders, partnerships, or limited companies.

2. Determine the Products to Sell

Deciding on the perfect items to sell can be a major blockage when it comes to building an online shop. However, that shouldn’t be a problem if you know where to look.

A study revealed that 55% of UK citizens buy clothes, shoes, and accessories online. As a general rule, it means those items are probably highly profitable to sell. That said, the more in demand a product is, the harder it is for your new business to stand out.

Here are some tips for choosing niche products to sell:

  • Offer items that solve your target audience’s problem. It’s one of the most effective strategies that can boost your sales. By understanding your prospective customer’s pain points, you may be able to provide the best solution to help them solve their problems.
  • Target a specific group of passionate hobbyists. They may be cycling enthusiasts or avid comic readers. Due to their interests, these groups of people are more likely to invest their money in collecting items related to their hobbies. On top of that, they may also bring about higher engagement levels and better customer loyalty.
  • Provide better solutions to existing products. Reading competitors’ customer reviews helps gain insights into the potential improvements to the products you want to offer. From there, you can create and develop better products that meet your target customers’ expectations.
  • Sell something small and lightweight. The former ensures your products won’t take up too much space in your inventory storage. The latter can save you from being charged high shipping costs, which are among the biggest concerns for online shoppers.
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3. Build Your Website

Once you’ve determined the products to sell, it’s time to set up your online store.

One of the easiest, most popular ways to build one is by utilizing an eCommerce website builder. Typically, such a platform comes with a minimal learning curve, making it perfect for beginners. 

Some of the excellent eCommerce site builder examples include Wix, Bigcommerce, and Shopify.

This type of platform is an excellent choice for building your online store, as it’s equipped with eCommerce site optimization tools. Most of them pack marketing analytics tools, SEO tools, payment gateway integrations, and beautiful templates.

On top of everything, using this platform is the perfect option if you’re tight on budget. The price range falls from free to approximately £350/year

4. Customize the Website

This stage is where you play around with your new eCommerce site’s look and feel. 

Your online store’s design is one of the most vital branding elements. The layout, colors, shapes, and images you bring to your site will encourage your visitors to build first impressions of your business. 

If your eCommerce site is poorly designed, your user experience may suffer. Consequently, it may fail to invite your visitors to explore deeper into your store. 

Opting for a minimalist design may be the perfect option for the above problem. The clean and modern look can help to emphasize your product photos and support clear navigation. As a result, it may boost your user experience, reducing bounce rates.

Using a mobile responsive website template also helps enhance your site’s usability and readability. When using one, your eCommerce site will be able to adjust its layout based on the various screen sizes and resolutions.

In addition, building a responsive online store should be one of your top priorities. This is because 54.8% of global internet traffic comes from mobile devices, including tablets. 

Thus, there may be a high chance that your prospective customers will access your site via their smartphones.

5. Market the Website

Once you’ve finished customizing your online store, it’s time to spread the word about it. 

There are dozens of effective marketing strategies you can use to promote your new website. Some of the most effective ones are search engine optimization, content marketing, and social media marketing.

SEO is a technical practice for enhancing a website’s performance to help it rank higher in the search engine results pages, attracting more organic traffic. It includes:

  • Keyword research for content creation.
  • Link building.
  • Improving page speed by compressing media files and minifying code.
  • Optimizing image alt texts, meta tags, and page titles.

Content marketing is about creating high-quality, informative content to attract a specified audience group and drive conversions. 

Another essential tip to a successful content marketing strategy is originality. Apart from ensuring valuable content, authenticity adds uniqueness to your articles. Thus, it may set your content apart from your competitors and help build credibility for your brand.

Further, combining SEO and content marketing together can yield more effective results. 

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When search-engine-optimized, your articles have higher positioning in the SERPs. That way, they can help boost your eCommerce site’s online visibility and attract more prospective customers.

Social media marketing is a strategic marketing approach that involves the use of social media platforms to:

  • Promote your products or services.
  • Generate website traffic.
  • Connect with your audience.
  • Retain your existing customers.

Instagram is among the most popular platforms for conducting social media marketing. As it focuses on image sharing, business owners often find it practical to showcase and introduce their products or services on Instagram. 

Calculating the Price of Building an eCommerce Website

Building an eCommerce website is great for boosting your business’s online presence, generating more sales, and improving its profit margin. However, many business owners often overlook the importance of financial planning.

Weak financial preparation can bring about unexpected expenses, leading to loss of profits and stunted business growth.

One of the main budgeting blockages comes from calculating the expenses for building the eCommerce site itself. 

When it comes to starting an online store, several factors affect its costs. They include web hosting costs, web design, payment processing fees, and add-on costs. 

Web Hosting Costs

Web hosting is a service that lets users publish their web pages on the internet. Without a web hosting service, you may need to build your own web server, costing you a whole lot more money. Therefore, getting it from a web hosting provider is a better option.

The cost of eCommerce web hosting falls between the range of £150/year and £250/year. However, it also highly depends on the number of resources your eCommerce site will need.

When choosing a web host, it’s essential to check if it packs a free SSL certificate, which can save you around £170/year. The certificate itself is vital for an eCommerce website, as it encrypts all your customers’ sensitive information.

Getting a free domain can also help you save. Therefore, checking if your selected provider packs a free domain name is highly recommended. 

Web Design Costs

When using a professional’s help, custom-designing your new online store can be really costly. The price varies greatly, ranging from £400 to £1,000

If money isn’t a problem, hiring a web designer to translate your design idea into reality can ensure your business’s success. This is because they are aware of the latest web design trends and will apply that knowledge to the development of your eCommerce site.

However, if you’re on a tight budget, there are also lots of free responsive templates that offer flexible customization. 

Online Payment Processing Fees 

As the name suggests, you’ll be charged for online payment processing fees every time you process your customers’ payments. When excluded from your financial plan, this type of fee can significantly inflate your expenses, reducing your sales profit.

For example, credit card fees for small and medium businesses often include:

  • Credit card transaction charges. Also called swipe fees, they are a small amount of money that a business needs to pay to process credit card payments. Usually, they are between 1% and 3% of the transaction amount.
  • Merchant service fees. Refer to the percentage that will be paid to a business’s bank to process customers’ transactions. The charges may cost up to 0.3% for each transaction.
  • Transaction authorization fees. Often referred to as post-auth, they’re the fees for every time a business processes a credit card transaction. For that, its provider will charge 2p.
  • Monthly minimum. Refers to the amount of money a business needs to pay if it doesn’t reach the specified monthly transaction threshold. This fee can cost up to £10/month. 
  • Chargeback fees. Happen when a customer files a dispute about their recent transaction or when the customer’s credit card provider denies the transaction connection. Typically, chargebacks cost between £10 and £20.
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To note, each payment gateway has its own sets of rules for payment processing fees. Thus, make sure to check them to help you anticipate your expenses.

Add-On Costs

An add-on or extension is a piece of software that enables users to expand a website’s functionality. For example, YoastSEO is a WordPress plugin that helps users optimize their content for search engines. 

One way or another, you’ll need to expand your eCommerce site’s functionality. This is because even the most excellent eCommerce builder won’t be able to meet all of your eCommerce feature requirements and needs.

Opting for free add-ons is always the best choice. However, there are also dozens of premium options that you may need to integrate into your online store. Typically, paid add-ons include:

  • Marketing automation and personalization.
  • Marketing and sales analytics.
  • Social media post automation.
  • Upsell and cross-sell boost.
  • Customer alerts.
  • Live chat.

Depending on your choice of eCommerce builder, the total expenses for extension installations may cost up to £250/month. If you’d rather build the extensions from scratch, prepare up to £3,500/month for using a professional developer’s services.

Conclusion

Throughout this article, you’ve learned the easy steps for setting up an online store in the UK. From preparing licenses and determining the business niche to building the website and promoting it, here is the short recap of the tutorial:

  1. Check the need for a business license. Run your industry and activities on the government’s license finder to see if your business needs any permits. Also, don’t forget to register your business and set up an HMRC account. 
  2. Determine the products to sell. Before deciding on your product line, make sure you know who your target audience is. One of the most effective ways to stand out from the competition is to provide solutions to your prospective customer’s pain points.
  3. Build your website. An eCommerce website builder may help you create your online store with ease. Apart from that, it comes with various eCommerce site optimization tools. 
  4. Customize the website. By playing around with the layout, color scheme, and imagery, you can control how your target audience perceives your brand. Also, make sure your design doesn’t complicate your site navigation.
  5. Market the website. Conducting SEO, content marketing, and social media marketing is the best way to promote your new online store. 

On top of that, it’s also essential to calculate the expenses for building your eCommerce website. 

Financial preparation helps entrepreneurs make more informed business decisions. For that, taking care of the additional costs like web hosting, web design, payment processing fees, and add-on installments should be on your to-do list.

All In all, creating an online store is one of the most effective ways to boost your sales and increase your revenue. Therefore, start making your plan and get building. Good luck!

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