Step one: product, customer and margin
Most new online shops fail for commercial reasons, not technical ones. Before choosing a platform, answer three questions honestly.
Why would anyone buy this from you?
If you sell the same branded products as dozens of other UK retailers, you compete mainly on price and advertising budget, and the large marketplaces usually win that contest. An own product, a genuine specialism or a clearly defined audience gives customers a reason to choose you.
How does your customer discover products?
Some buyers type a product name into Google, some compare on Amazon or eBay, some discover things on Instagram or TikTok. The answer tells you where your first marketing effort belongs.
Does the margin survive real costs?
Work out what remains after the cost of goods, packaging, delivery, returns, payment fees, platform fees and the marketing needed to win each order. A product with a thin margin and a high return rate is very hard to make profitable, however good the website.
Where to sell first: your own shop or someone else's
You do not have to start with a full website. Many successful UK brands test demand on a marketplace or with a simple hosted shop first, then invest in a proper store once they know what sells.
| Route | Strengths | Drawbacks | Suits |
|---|---|---|---|
| Marketplace (Amazon, eBay, Etsy) | Existing traffic and trust from day one | Fees and commission; little control over brand and customer data | Testing whether a product sells |
| Website builder with a shop feature | Quick and inexpensive to launch | Limited flexibility and search structure | A small range and an idea to validate |
| Hosted ecommerce platform (such as Shopify) | Hosting and security handled; scales well | Monthly plan plus app costs | Brands that want to grow without managing servers |
| WordPress with WooCommerce | Full control; strong for content | Hosting and updates are your responsibility | Content-led brands and those already on WordPress |
| Social selling (Instagram, TikTok Shop) | Reaches buyers where they browse | Dependent on platform rules and algorithms | Visual products that need to be seen to be wanted |
Setting up the business: HMRC, sole trader or limited company
If you sell regularly to make a profit, you are likely to be trading, and you need to set up a business. GOV.UK explains how to tell whether you are trading in its guide to working for yourself.
- Sole trader: the simplest structure. You register with HMRC for Self Assessment and you are personally responsible for the business's debts.
- Limited company: registered with Companies House, with the company as a separate legal entity. It brings more administration, and company details must appear on your website and documents; GOV.UK lists what to show under signs, stationery and promotional material.
Which suits you depends on expected profit, risk and personal circumstances; an accountant can advise. You will also want a separate business bank account, bookkeeping that copes with online payments and refunds, and appropriate insurance, such as product liability cover if you make or import goods.
If you handle customers' personal data, which every online shop does, check whether you need to pay the Information Commissioner's Office data protection fee; GOV.UK summarises your obligations under data protection for your business.
VAT in general terms
You must register for VAT once your VAT-taxable turnover passes the registration threshold set by HMRC, and you can choose to register voluntarily below it. The threshold and the way it is measured are set out in HMRC's guidance on VAT registration; check the current figures there rather than relying on numbers quoted in articles, which date quickly.
Once registered, you charge VAT at the correct rate for each product, show prices to consumers including VAT and display your VAT number on the site. Rates differ by product, and some goods are zero-rated or reduced-rated, so confirm the treatment of your range with an accountant before you build your price list. Registering, or not, also affects your margins, which is one more reason to do the margin sums early.
The rules for selling online to consumers
Selling at a distance to consumers comes with specific obligations. The main ones, in general terms:
- Information before the order: who you are, how to contact you, the total price including taxes, delivery costs and times, and how cancellation works. GOV.UK's guide to online and distance selling lists what is required.
- Cancellation rights: under the Consumer Contracts Regulations 2013, consumers can usually cancel an online order of goods within 14 days of delivery without giving a reason, with exceptions such as personalised or perishable goods.
- Quality rights: the Consumer Rights Act 2015 requires goods to be of satisfactory quality, fit for purpose and as described, whatever your own terms say.
- Privacy and cookies: a privacy notice under UK GDPR, and consent for non-essential cookies under PECR.
- Product rules: cosmetics, toys, electrical goods and food, among others, carry their own safety and labelling requirements.
This is general information, not legal advice. Our guide to ecommerce terms and conditions goes into the documents you need, and a solicitor can check them for your situation.
Choosing a platform and building the shop
An online shop website builder is fine for testing an idea with a few products. Once the shop is meant to be a serious sales channel, choose the platform on catalogue size, how much content you will publish, the integrations you need and how much technical upkeep you are willing to own, not on the lowest monthly fee. Our pages on Shopify web design and working with a WooCommerce developer set out the trade-offs of the two most common choices.
Whatever you choose, the work that decides success is the same: clear categories that match how people search, complete product information with good photography, sensible variants, a short checkout and fast pages on mobile. Register your domain, platform and payment accounts in your own business name so you keep control if you change supplier later.
Payments, delivery and returns
Most UK shoppers expect card payments with Apple Pay and Google Pay; many also look for PayPal, and some products suit a pay-later option. Fewer, well-chosen methods beat a long list.
For delivery, compare Royal Mail and courier services on price, tracking and reliability, and check surcharges for the Scottish Highlands, islands and Northern Ireland. Show delivery costs and times on product pages, not only at checkout. Plan returns from the start: who pays, how labels are issued and how quickly refunds go out. A clear, fair returns process wins repeat customers.
Selling abroad after Brexit
Selling to customers outside the UK is possible from day one, but it is no longer frictionless for EU orders. Parcels need customs declarations with accurate descriptions, values and commodity codes; GOV.UK explains how to find commodity codes. EU customers may face import VAT, duty and handling charges unless you collect VAT at checkout, for example through the EU's Import One-Stop Shop for lower-value consignments. Northern Ireland follows its own arrangements.
Many new shops start with UK delivery only and add international shipping once operations are settled. HMRC's overview of exporting goods is a sensible first read, and a carrier or customs adviser can confirm the details.
Winning your first customers
Publishing a shop is not the same as having one that sells. Plan where visitors will come from before launch.
- Search: category and product pages written around real searches. This takes months, but brings visitors you do not pay for per click. See ecommerce SEO.
- Google Shopping and search ads: visible quickly, paid per click, and useful for learning which products convert. Our PPC agency page explains how paid search fits in.
- Email: repeat customers are usually cheaper than new ones. Marketing emails need consent, with a limited soft opt-in for existing customers under PECR.
- Social media and creators: strongest for visual products and new categories.
Build it yourself or have it built
Modern tools make a do-it-yourself shop realistic, and for a first test that is often the sensible route. When the shop has to be a dependable channel from launch, or it is outgrowing its first set-up, product data, integrations, speed, search structure and checkout design need experience that is hard to acquire in a few weekends.
Our guide to ecommerce website costs explains what a professional build involves, and ecommerce website design describes how we work. Projects start with a paid 50-minute strategy session with the founder, a conversation about your ambition, market and whether we fit.