Starting an online retail business – 10 things to consider

Online retailing is a lucrative business – UK shoppers spent £68 billion online in 2011, an increase of 16% from 2012. Thanks to advances in technology it is now easier than ever to try and capitalise on this market.  The Middleton’s ‘Party Pieces’ business (even pre Royal Wedding), is a great example of turning a simple concept of creating party bags for children, into a multi-million pound turnover online business, supplying party essentials across the UK.

More and more women are looking to set up their own online businesses. They are faced with the pressures of finding a work-life balance, affording expensive nursery fees and finding precious time with their children. Running an online business from home is the perfect solution.

Ten practical things to consider when setting up an online retailing business:

1. Know your market

It is absolutely essential that you know the market in which you intend to trade.  Whether it’s a product or service, you must know everything about the strengths, weaknesses, opportunities and threats and it certainly helps if you have worked in the industry before.  Formulating your business plan will help with this.

2. Business plan

The best place to start your business is by formulating your business plan.  This is essentially a document which looks at your strategy logically and helps you to understand everything from finance through to delivery and is as much for your own benefit as it is your bank managers.  There are plenty of online guides to building your own business including the one recommended by the government on Businesslink.

3. Financing

Most start-up businesses have some start-up costs.  There will be overheads such as stock, marketing i.e. the cost of building your website, storage etc.   Therefore your budget will determine where you need to access finance from.  The different options available include a bank overdraft, bank loan, equity investment including Business Angels and Venture Capitalists (individuals looking for investment) and the Small Loans Firm Guarantee.  Of course if you are really lucky, your own personal savings may suffice.

4. Website

As an online business, your website is your most important selling tool as it is essentially your ‘shop- window’ for the product.  Therefore keep it clean and simple to use and relevant to your product or service.

Register your domain

Registering your domain is registering your website name.  There are a number of ‘registrars’ that you can do this with some free, some may cost a little but the most important thing is to ensure that the domain is registered in your name and not the registrars.  *Domain registrars include:

Find a webhost

A Web host is the company that will “rent” you space on their servers to host your website. Some of these companies will offer domain registration and it’s easier to have both with the same company.  *Therefore web hosting providers are the same as above.

Designing your website

There are two options to complete this task, either by doing it yourself via a template service or hire a web designer to do it for you.  The first option can be done via:

  • Hosting company – They offer free site building tools
  • Word Press – Free tool and simple to install
  • Dreamweaver by Adobe – This will take a while to navigate

Hiring a professional is definitely the easiest option and you can either use someone you have met via word of mouth, or you can go through a third party where designers looking for work will advertise their services.  These are:

5. Payments

The payment process must be as simple and easy to use as possible, otherwise you risk losing the sale.  There are two methods of doing this through online payments or a shopping cart:

Online Payments

Shopping Cart

6. Logistics

Once a customer has made a purchase from your site, you will need to ship the product to them.  Your product size and weight will determine how you make the shipment.

  • A simple method is to use a downloadable information product or an online service via
  • A more comprehensive shipment will require a courier e.g. Motivational Fulfilment or Mailing Fulfilment Service Association.

7. Marketing

You need your ‘shop window’ to be as accessible as possible and to reach as many people as possible, therefore you need to consider how you will market your website so that it is ranked favourably online.  You can use the following methods to market your site:

  • Register with the three major search engines (Google, Bing and Yahoo)
  • Blog in the major blog directories
  • Content marketing, including video and audio podcast
  • Online advertising e.g. Google and Facebook ads
  • Offline marketing (direct mail, company vehicles, print ads, promotional products)
  • You could always outsource this job to an ‘SEO specialist company.’

8. Prospecting

In order for your business to grow you will need to do a fair amount of prospecting for new and existing clients.  Capturing customer email addresses when they are making their purchase will give you a contact.  Moving forward, a great way to keep in touch is to email them monthly with news, offers and competitions.  Using a professional email marketing template accessed via a specialist email marketing company will make this activity look more professional.

Email Marketing Providers include:

9. Track Growth

You need to have some control over your web activity to determine how many visitors to your site, the most popular time for their visit and other criteria which will help to make your marketing campaigns more effective.  Google Analytics is a free tool which tracks popular pages, traffic sources and popular keywords etc.

10. Things to think about…

You are almost well on your way to launching your start-up online business however there are just a few more things to consider:

  • Tax
  • Banking
  • Licensing and trademarks
  • Accounting
  • Legal matters
Did you follow these steps when setting up an online retail business? What challenges did you face along the way and how have they impacted on your business?


About the Author: Katie Nunwick is a UK based content writer, writing part time for Project Simply: Digital agency Manchester and also writing on a freelance basis. She specialises in writing content for business, finance and well being websites.
Good Luck!

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