How to open an online shop

You don’t need coding skills or the services of an expensive designer to sell products online. Whether you want to physically stock and ship orders yourself or leave order fulfilment to a dropshipping company, an online store is an effective way to maximise sales. Read on to discover what you need to set up your first online shop.

Choosing which products to sell

You may already have a business manufacturing and selling products and simply wish to make them available online – if so, you can skip to the e-commerce platform section below. If you’re just starting out, however, your first decision will be what products to stock.

When it comes to selecting which products to sell, consider the following:

• Is there a gap in the market? Make sure you check that there is a need for what you want to supply. If you enter an already saturated market, you need to ensure that your product is sufficiently different from your competitors’ offerings to attract customers.

• Target the right market. Don’t assume you need to sell to a massive market. Find the right niche and you could potentially drive higher returns from a smaller but more engaged customer base that’s easier to identify and target.

• Lean into your personal interests. Find a set of products that align with your own hobbies or passions, and you’ll find your natural enthusiasm for them makes selling easier.

• Popular lines. Perform product research to see what’s currently popular. Get inspiration from Amazon’s best seller lists or find out what’s trending on eBay, for example. 

Once you’ve identified potential product lines, think about:

• Price. How much do you want to charge for your product, and what sort of profit margin do you want to generate from each item?

• Size and weight. If you’re stocking your own products, you need to consider both storage and shipping. Lighter and smaller products are easier to manage and cost less to ship

• Product quality. How robust and complex is the product? How likely is it to break down, leading to costly replacements or repairs?

• Consumables or perishables. Do the products have a limited shelf life, and do you need to obtain a licence to sell them?

Set up your new business

Running an online shop often means starting a business from scratch. In particular, don’t forget to:

• Register your business. This includes choosing whether to register as a sole trader or a limited company

• Open a business bank account. It’s not mandatory for sole traders, but a business bank account ensures your business finances are kept separate from your personal money

• Check VAT status. As your business grows, you may need to register for VAT

• Get yourself insured. Investigate which type of business insurance you require. And ensure you have employers’ liability insurance if you plan to take on staff who are not members of your immediate family

Full or part time? 

Running an online shop is something you may want to start doing part-time from home alongside an existing job. Before setting up your online home shop, think about:

• Space. If you plan to sell products directly rather than use a dropshipping company, make sure you have room to store them securely

• Time. If your online business takes off, consider what this might mean – such as quitting your main job or taking on additional staff

• Tax. Keep an eye on how much money your business makes to ensure you don’t fall foul of the taxman – consider using accounting software or hiring an accountant

For more information on running a part-time business on the side, check out our guide on starting a side hustle.

Choose your e-commerce platform

While it’s possible to build an online store from scratch, it’s far easier – and cheaper – to use an e-commerce provider. These provide you with everything you need to set up and run an online shop, including the tools required to build the site, set up and maintain a product catalogue, take payments and process orders. Four popular platforms are:

Squarespace

Squarespace is a good choice for smaller shops and beginners looking for an all-in-one package with website hosting. Choose your design and use Squarespace’s drag-and-drop builder to put it all together.

Shopify

While Shopify can handle any kind of online shop, it’s particularly suited to dropshipping businesses. It also offers an attractive starter package, which allows you to sell exclusively through social media and messaging apps if you’d rather not manage a full shop.

Square

Square is popular with those looking to set up an online store alongside an existing bricks-and-mortar outlet, such as a restaurant or high-street shop. There’s even an ad-supported plan that allows you to set up an online store for free in the UK.

Woocommerce

If you already have a WordPress-based website, you can add an online store to it using the Woocommerce plugin and your choice of shopfront template.

How to take payments

The more payment options you offer prospective customers, the bigger your sales. All e-commerce providers allow your customers to pay using a credit or debit card – expect to pay a fee of around 1-2% plus a small flat rate (typically 25p) for each transaction. 

Other options to consider include Apple Pay, Google Pay and Paypal. 

Find out more about taking payments from customers 

Design your brand

A key element of any business is brand identity. Your shopfront’s logo, colour scheme and typefaces should closely reflect any brand you have already established.

If you haven’t created your brand design yet, start with your logo. Its design will inform the rest of your store, and you don’t need to hire an expensive designer. Adobe offers a free online logo maker with access to templates and examples to inspire you. Make sure your logo reflects your business and the products you plan to sell.

How to create your online store

Although the exact steps will vary depending on which online platform you use, all follow a similar process: 

1. Sign up for an account with your chosen e-commerce platform

2. If applicable, pick a domain name

3. Select a template or theme from those offered – aim to choose something that matches your business brand and the products you’re selling

4. Input your business name and upload your brand logo

5. Set up your home page and customise any other relevant web pages, such as your About, Contact and Terms and Conditions pages

6. Start adding product details and uploading product photography to create listings

7. Configure payment details – including connecting to any third-party payment providers

8. Check other settings, such as regional settings, tax details and shipping calculators

9. Go through your shop, checking everything works correctly. Publish your site

10. Enlist the help of friends or family to perform further checks and spot any errors you may have missed.

How to identify your target customer and audience

You should have formed a good idea of your target market while researching which products to sell and formulating your business plan. However, once you start thinking about how your customers will interact with your site, creating a persona for your ideal buyer can be helpful. You’ll need to research the following information:

• Demographics. Includes elements like age, gender, occupation, income and education

• Location. If your business is regional, this can help determine where best to look for buyers

• Behavioural. Covers factors such as interests, attitudes, opinions and lifestyle

How to market your shop

Armed with a persona, you can more effectively market your shop to the right people. Start your marketing efforts the moment your shop goes online:

• Look for relevant online directories and add your shop to them

• Make use of social media to promote your shop and products – include deals and giveaways to attract interest

• Regularly post content to your online shop, such as in the form of a blog. Tailor the content to your customer persona

• Consider online advertising using the likes of Google or Facebook

• Look to foster relationships with relevant online influencers to bring your products to new audiences

A key source of new custom is through search engines. By employing a process called search engine optimisation (SEO), you boost your site’s rankings, so it appears higher on the results of searches for keywords related to your business or products. SEO is an ongoing process that begins by ensuring you fill in information like title tags and meta descriptions for each page when setting up your site.

For more tips on getting your shop noticed and boosting its SEO, check out our marketing ideas for small businesses guide.