How To Set Up An Online Shop For A Small Business

Online retail in the UK has been gaining ground in the past decade and the value of online retail sales in the UK was estimated to be worth £106bn in 2022.¹

Setting up an e-commerce website to allow your business to sell online can be straightforward and beneficial to your company. Many long-established brands have successfully developed an e-commerce venture after selling via retail outlets for many years.More recent start-ups have taken advantage of selling online from day one.

Why Set up an Online Shop?

Even if you already have a website for your business, you could see many benefits from selling your products online:

Attract new business – an e-commerce site can make it easier for customers to find your business.
Widen your reach – an online shop allows you to take international orders, not just those from your local area.
Boost profits – e-commerce costs are relatively low and your shop is available 24/7.

Building an e-commerce website isn't without challenges. Even if you take security precautions, there’s a risk of fraud. Establish how your online operation fits with other sales channels. Are you going to charge the same prices online as you do in-store?

Disadvantages of Selling Online

The costs of setting up a website, including hosting fees, security certificates and domain charges.
Heavy reliance on digital marketing, there’s no physical shop for customers to walk past so you’ll need to take your shop to customers. And that can be expensive – for example, if you are using paid for advertisements such as Google Ads.
Technical issues – there’s always the potential for something to go wrong which could effect your website from working correctly and prevent people carrying out purchases. Security – e-commerce websites can be a prime target for criminals to steal payment data so you’ll need to invest in robust protection.

To create a successful e-commerce website, you need to focus on these critical elements:

A product catalogue, so you can display what you sell to customers
Payment processing, so your business can accept payments online, usually by credit card
Handle enquiries so that you can deal with questions
Stock control – do you want to display stock levels online?
Fulfilment and returns; shipping items – internationally and to domestic markets – can be labour intensive, and costly.

There are three main ways to build your e-commerce website:

Online Marketplaces

Sites such as eBay and Amazon, and more recently Facebook and Instagram, offer marketplaces where you can sell online. Because these channels take care of all the important online shopping functions, it's easy to get started. You also benefit from Google Search Engine Optimisation (SEO) by being visible on one of these popular marketplace sites. However, they can lack flexibility and can be expensive because they take a cut of every sale you make.

E-commerce Services

These packages include everything you need to set up an online shop. Templates that allow you to add information about your products offer ways to get started if you don't already have a website.

Shopping Cart Systems

Shopping cart systems are designed to add online shopping functions to an existing website. They offer flexibility, allowing you to build an entirely customised online shop. The downside is, they take longer to set up and are typically more expensive.

When evaluating these options, think about how well-suited they are to the type and volume of products you sell. For example, some marketplaces and e-commerce services restrict the number of items you can offer for sale.

Web Hosting

However you decide to build your website, you need to make sure your web hosting is reliable. A slow or unresponsive site will not only mean customers may go elsewhere, it can also negatively affect how your site ranks with search engines such as Google.

It's often essential to keep costs low – especially if you're starting with your online shop. To balance performance with cost, look for:

Processing Payment

Your online shop will have to be able to process payments. If you have a ready hosted package, payment processing will likely be included. If it doesn’t, you'll need to find a payment service provider (PSP) such as PayPal, SellerDeck and WorldPay. Most offer similar features but make sure you understand the level of fraud protection and check how the feature can be integrated with your online shop.

We adivse that you get started with a credible platform that customers recognise, such as PayPal. However, they charge processing fees for every transaction for smaller online retailers^.2

Make sure your online shop adheres to the UK's rules for handling credit card data, known as the Payment Card Industry Data Security Standard³ (PCI-DSS). If you process payments through a PSP, it's easy to stay compliant because you never see any of your customers' payment details.

How to Promote and Market your Online Store

Finally, when setting up an online shop, marketing becomes much more of an investment – you need to work hard to get your shop noticed.

If you've chosen to set up your website, then search engine optimisation (SEO) techniques are a way to boost your shop up the Google rankings page.⁴

Setting up profiles on social media is an easy and effective way to promote your online shop. You can share promotions, promote products and highlight new stock. Post regularly and engage with your followers to drive web traffic and build up a loyal customer base.

Click here to find out about ecommerce insurance.

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