How to become an e-commerce seller in the UK?

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The eCommerce market is booming in the UK, with online sales accounting for a significant portion of total retail sales. According to trade.gov, eCommerce revenues are expected to have an annual average growth rate of 12.6% by 2025 in the UK.

With the advancement in technology, people are searching for deals and affordable products online. Online marketplaces like Shopify, eBay, WooCommerce, Amazon, and many more provide a platform for sellers to reach a massive audience.Though digital relationships can erode trust between consumers and sellers, online shoppers look for customer reviews to foster trust and credibility.

In the UK the most popular categories for online purchases include fashion, consumer electronics, cosmetics and body care, and pharmaceuticals.

How can I tap into this market? In this article, we will explore the fundamental aspects of starting an eCommerce business in the UK, rules and regulations, and steps to help you get started.

What is eCommerce?

E-commerce is the buying and selling of goods and services over the Internet.  It relies on technology and digital platforms, including websites, mobile apps, and social media to make buying and selling possible. 

UK eCommerce rules and regulations

Before you start an eCommerce business in the UK, there are some rules and regulations put in place you should consider. The regulations include:

• Consumer Rights in E-commerce: This regulation safeguards UK consumers in both traditional and online transactions. These rights outline rights and remedies available to consumers when they make purchases from businesses.
• UK GDPR and Data Protection Act: The General Data Protection Regulation, (GDPR) protects consumers' and website user’s personal data. E-commerce businesses that store the personal data of EU citizens must comply with GDPR requirements which include ensuring data security measures are in place, obtaining consent for data processing, and providing individuals with the right to access, rectify, and erase their personal information.
• E-Commerce Regulations: eCommerce businesses have to provide consumers/ shoppers specific information about their business and products and services.
• Consumer Protection from Unfair Trading Regulations: This regulation protects consumers from unfair practices and being misled by online traders. The regulation states all prohibited commercial practices that are essential for any entrepreneur who wants to start an eCommerce business.
• Electronic Commerce (EC Directive) Regulations: This regulation states that e-commerce businesses must disclose company details, marketing via electronic communication, and the display of terms and conditions on their websites for transparency purposes. Online businesses must provide information such as pricing, taxes, and delivery costs to consumers.
• Provision of Services Regulations Act: eCommerce businesses must meet certain standards when handling complaints and they must also avail specific information to customers.
• Online Intermediation Services for Business Users Regulations: This states the obligation of eCommerce businesses and search engines used to reach consumers.  
• Advertising Standards Authority (ASA) Guidelines: eCommerce businesses must adhere to Advertising Standards Authority guidelines when creating and disseminating advertisements. These guidelines state that advertisements should be honest, truthful, and not misleading.
• Intellectual property rights (IPR): This is the automatic protection rights for copyrights, patents, designs, and trademarks for your business.

Steps to start eCommerce business

Now that you know the laws and regulations of eCommerce business in the UK, it will be easier to start a business. Here are steps that can help you take advantage of the eCommerce trend.

Research e-commerce business models

There are different e-commerce business models that you have to familiarise yourself with before you start the business. The major types of eCommerce business models include:

• Business to Consumer (B2C) model
• Business to Business (B2B) model
• Consumer to Consumer (C2C) model
• Business to Business to Consumer (B2B2C) model
• Consumer to Business (C2B) model
• Business to Government (B2G) model

Understand these models to consider who will be your target market. Decide whether you’ll sell tangible products (like clothing or electronics), intangible products (such as software or digital files), or a mix of both (known as B2B2C companies). You can list the products and categories you want to sell online and a business plan.

Choose your niche and products

Choose a niche that is profitable and products that can be sold online. To know the niche and products to choose, research market trends, demand, and competition. Choose a product that aligns with your interests and expertise since this will benefit your overall competency.
When you find a niche, consider factors like sourcing, shipping, and inventory management.

Create a business plan

Now that you have chosen a business model, a niche, and the product you want to sell online, it will be easier to create a business plan. Outline your business goals, target audience, pricing, marketing strategy, and financial projections. Also, include details about your customer acquisition plan.
Make sure you cover everything related to your concept for the business, an analysis of the industry including potential customers and an overview of the market for your goods or services, how you plan to execute your vision for the business, and how you plan to grow the business.

Business registration and legal formalities

Once you have a detailed business plan, register your UK limited company. Choose a legal structure for your business such as sole trader, forming a corporation, limited liability company (LLC), limited liability partnership (LLP), or limited partnership (LP). If you want a business entity that will shield you, consider avoiding the sole proprietorship model.

Additionally, obtain necessary licences and permits. All companies require a business license, whether they sell online or have a storefront. If you’re selling within the UK, you can usually trade without a business license, once you start, you must ensure that your business is properly registered with HM Revenue and Customs (HMRC).

UK businesses must register for VAT if their turnover is over the current threshold of £85,000.

Need to register your company? Icon Offices offer affordable company formation services and can also help you register for VAT. To also secure your online brand, we offer domain name and logo creation services at an affordable price.

Set up your online store

Choose an eCommerce platform where you will be operating your business. Popular platforms like Shopify, eBay, WooCommerce, Amazon, TikTok, and Magento exist. Customise your store design, add product listings, and set up payment gateways. Use support facilities that the e-commerce platforms you are trading on provides. If you have a website, optimise it for mobile devices for better user experience. 

Product listings and high-quality content

Write compelling product descriptions with relevant keywords to rank high when shoppers search for products or services in your niche. Optimise your content for search engines (SEO) and use high-quality images to showcase your products.

Marketing and promotion

Develop a marketing strategy to attract customers. Consider social media, email marketing, and paid advertising. Businesses are now using influencers to market and advertise their products so you can leverage influencer marketing or collaborate with other businesses.

Shoppers go online to look for better deals and affordable products and services, you can consider offering promotions, discounts, or loyalty programs to encourage repeat purchases.

Fulfillment and Shipping

Choose reliable shipping partners or use fulfillment services for a better shopping experience for your customers. Also, set clear shipping policies, including delivery times and costs for transparency.
Provide tracking information to customers to track their goods and know where and when they will receive them.

Customer service and reviews

Offer excellent customer support, respond promptly to inquiries, and resolve issues. This will make customers leave positive customer reviews to increase your customer base. Encourage customers to leave reviews and testimonials.

Stay updated and adopt

Keep an eye on industry trends and adapt your business accordingly. Monitor your analytics, track sales, and adjust your strategies as needed.

How Icon Offices can help you start an eCommerce business

Since Brexit, e-commerce companies have been facing challenges related to international trade.  Companies must now comply with new customs and border regulations, which can be time-consuming and expensive.  The regulation change has also made it more difficult for UK-based companies to sell to EU customers, as they now face additional taxes and tariffs.

Icon Offices can help eCommerce businesses overcome these challenges with ease. With our company formation services, we can advise on the best company structure that suits your business and help you set up a UK-limited company. Our online process is simple and easy to fill in your details as we do all the paperwork and submit them to Companies House.

For overseas traders, you can get an address to register your business through our virtual office services. We have a variety of prestigious addresses you can choose from at an affordable rate. The virtual address boosts credibility, maintains privacy, and comes with mail handling and forwarding services. The registered address is required by law for Companies House and HMRC filings while a business address can be used for marketing and routine business mail.

For businesses that need physical office space, we offer shared offices and serviced offices that come with a rental agreement in your or in your company name.

Once you start trading, we can help you set up your business bank account. We have partnerships with banks such as Tide and Cashplus where you can get up to £70 cash back once you open a business bank account. New businesses are often turned away, especially by High Street banks after the introduction of Know Your Customer (KYC) and Anti Money Laundering checks and requirements. With our banking partners in the UK, Icon Offices can assist with opening a UK business bank account and do so online without a physical meeting for UK or non-UK residents.

We also offer VAT registration service for businesses that meet the £85,000 threshold. You must register for VAT if your company’s total VAT taxable turnover will be more than £85,000 in the next 30-day period. You can also register for VAT voluntarily even if your business has not met the threshold.

We provide VAT registration services to clients from around the globe and in the UK for all types of businesses. Our eCommerce clients include eBay sellers, Amazon sellers, and many more.

How to open a UK business bank account online

1. Choose a bank that suits your business
2. Have all the necessary documents such as proof of identity, and contact information.
3. Visit the bank’s website and start the application process.
4. Fill out all the forms and attach the requirements accurately.
5. Examine the application form before submitting it.
6. Await approval.

Choose banks that provide UK account details, sort codes, IBANS, and virtual and physical bank cards. Virtual banks may require less documents for verification, which could make it relatively easier for non-UK citizens to access banking services.

Starting an eCommerce business in the UK presents a wealth of opportunities. Partnering with Icon Offices can help your business unlock the full potential of e-commerce and drive growth. For more information, reach us at info@iconoffices.co.uk.