Last editedSep 20212 min read
For years you’ve yearned to start up your own retail business, but the prohibitive overheads for opening a physical shop have always proven a barrier to entry. However, the rising tide of ecommerce proves that there’s a wealth of opportunity for online stores, especially in the post-pandemic era.
Although shops have reopened (hopefully once and for all), online retail shows no sign of slowing. In the UK alone, an estimated £120.48bn worth of online purchases will be made in 2021. The combination of ample demand and low overhead costs make the realm of ecommerce a great place to flex some entrepreneurial muscle and grow a profitable business.
Follow our guide to taking that all-important first step.
Choose a niche
Before you start checking out different ecommerce platforms or getting quotes from suppliers, it’s essential to establish your niche.
This will influence everything from the average value of each sale to how many repeat customers you get and how you will market your business. Specificity is highly important.
For instance, sportswear may seem like a nice, specific niche. But what kind of sportswear do you want to build your brand around? Durable sportswear? Ethically made sportswear? Organic sportswear?
Your niche will form the foundation of your brand. Choose it wisely!
Decide how you’ll store and distribute your products
Do you want to store your own products? Or would you prefer to use a dropshipping model? Both have their own challenges.
Storing your own products inevitably means warehousing costs. or having to surrender every inch of free space in your home to keeping stock.
Dropshipping is extremely popular as there are virtually no overheads. You buy wholesale from the supplier and they ship the goods to the customer on your behalf. The caveat, however, is that you have no control over order fulfilment. Choose a bad supplier and they could cause damage to your nascent brand’s reputation. Check out these tips on choosing dropshipping suppliers.
Name your business
Don’t be afraid to take your time over this. Your business’s name is possibly the second most important thing you’ll have to decide upon after your niche.
By all means, indulge your creative side, but we recommend a name that is:
Easy to spell and pronounce
Original (piggybacking on the names of other brands may invite legal action)
Significant and relevant to your niche
Not tied to a specific product or line (this will limit your growth)
Matched with an available domain name
As soon as you’ve thought up your business name, register your domain name before someone else snaps it up.
Build an inventory
Next, you need to build an inventory of products to sell. These will be a big part of what defines your business. Unless you’ll be making them yourself, you’ll need to do market research – find out what products are selling well with other online retailers and start from there.
Create your website
You have a name. You have products. Now you need a website so that customers can buy your products.
Make sure you hire a web designer straight away. But if you have little or no budget, online store builders like Shopify offer free trials. Choose a template and theme, and you can customise these to suit your branding.
Register at Companies House
In order to trade legally, you need to register your business at Companies House within three months of opening your online store. You can do this here.
Your website is live and your stock is ready to go. Now you just need to start marketing to your niche. Online retail is extremely competitive, and you need to be proactive in securing new clientele.
Social platforms, especially visual platforms like Instagram, are a great place to showcase your products and start building an audience. It can take time to build a following organically, so set aside some money for a paid ad campaign. You can then follow this up with content marketing techniques that will help prospective customers to start building a relationship with your brand.
Follow our advice on marketing your business on social media.
We Can Help
If you’re interested in finding out more about starting an online store and receiving payments, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.