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Advantages of starting an e-commerce business in the UK

It has become easier for people to shop online due to technological advancements. People can also keep a connection with businesses through smartphones, and other mobile devices, and download apps for shopping. All these advantages inspire businessmen to launch new e-commerce projects. If you are wondering how to start an e-commerce business in the UK, then this article is for you.

What is e-commerce?

E-commerce involves a multi-faceted process of selling and buying goods and services. At the same time, the exchange of funds and data takes place. It is part of a larger industry known as e-business, which includes all the processes required for a company to operate online.

There are several main segments:

  • Business to business (B2B) – no third parties between enterprises.
  • Business to Consumer (B2C) involves sales between enterprises and their customers.
  • Consumer-to-consumer, which allows people to sell to each other, usually through a third-party site such as eBay.
  • From a consumer to a business that allows individuals to sell artwork to businesses, such as artists who sell or license their artwork for corporate use.

Selling goods and services is not an easy task. Business in the field of e-commerce requires careful research on the products and services you intend to sell. In addition, you should research the market, audience, and competitors, and also calculate possible commercial costs.

Once this is determined, you need to come up with a name and create a legal structure such as a corporation. Then create a site with a payment option. 

How to start an e-commerce business?

First, you need to decide on a niche (what exactly you will sell). After that, you need to legalize an online store, find suppliers and delivery services, create a website, and launch advertising and sales.

In addition to your own website, goods and services can be sold on marketplaces. For small businesses with a small assortment, it is easiest to work with social networks: there is everything you need to promote the brand, and the functionality is convenient and easy to understand.

Another option for those who are not yet ready to develop, set up, and promote their own website is to post products on the marketplace. The main advantages of working with marketplaces are access to a wide audience, help at the start, and the ability to delegate logistics issues to the platform.

To attract customers and launch sales, the next step is to engage in online promotion. Specific methods depend on the selected platform. This can be targeted advertising, cooperation with bloggers, search engine optimization, services to promote sellers from marketplaces, etc.

Advantages of e-commerce

Those who have already achieved success in the field of e-commerce are well aware of the benefits that open up here for entrepreneurs. Let’s take a look at them

  1. Saving time and money. E-commerce has a fairly low entry threshold: a business can be started quickly with minimal financial investment. To work on the Internet, you do not need to rent an office or hire staff. Many tasks can be entrusted to computer programs (processing applications, collecting information, accepting payments, etc.) and you can rent a virtual office.
  1. Wide target audience. The Internet is used by millions of people around the world every day. By properly setting up advertising, you can easily find people who are interested in your offers.
  1. Detailed analytics. Tools like Google Analytics collect important audience data and aggregate it into visual reports. The project team can study where customers came from (from an advertising platform, from a search engine, or other channels), what products they studied, and through which browser they access the Internet. This and other information allows you to make your business more efficient. For example, you can calculate the cost of customer acquisition and understand whether marketing costs pay off.
  1. Convenience for customers. Unlike ordinary retail outlets, online platforms operate around the clock: the client can go to the online store at any time, view products, and place an order right from home.
  1. Wide opportunities for development. The scope of e-commerce is expanding every year, and people are getting used to online shopping. Online trading services are being introduced: electronic payment systems, mailing lists, CRM, SaaS, etc. The business has great potential for brand development and promotion.

Choose a form of ownership for your e-commerce business

Let’s consider the main forms of ownership that are relevant for those who open their own e-commerce business in the UK.

Sole trader

Suitable for those who independently conduct business, selling their goods or services. It can be dropshipping, house cleaning, dog walking, product delivery, custom cake baking, massages, photography, and more. In this case, you are solely responsible for the debts of your business. You need:

  • control records of income and expenses;
  • file an annual income tax return for the self-employed;
  • pay income tax: use the calculator on the HMRC website to find out how much you will need to pay depending on the profit;
  • if your turnover exceeds £85,000, you need to register for VAT.

Limited Liability Company

This option is chosen by many entrepreneurs. This form provides for the possibility of being the sole shareholder and director of the company. In addition, you can cooperate with any number of shareholders. The participants will have certain rights, for example, approval of any changes in the structure or strategy of the business.

The director of the company is not personally liable for debts, but performs the following legal and financial obligations:

  • monitors the implementation of the rules of the charter;
  • notifies the state registrar of all changes (resignation or appointment of directors, changes in the authorized capital, address, etc.);
  • regularly submits financial statements;
  • pays income tax, national insurance contributions on employee salaries, etc.


This option allows two or more people to do business together and share personal responsibility:

  • pay tax on their share of the profits;
  • personally liable for debts and other obligations;
  • jointly buy equipment, shares, etc.;
  • if the turnover exceeds  £85,000, register for VAT.

Final thoughts

The UK is an excellent jurisdiction for starting an e-commerce business. If you need help starting a business, such as preparing documents, renting a virtual office, mail forwarding, and other services, please contact Hoxton Mix. The experience and knowledge of the company allow it to maintain a high level of professionalism in its client’s business, which positively affects their productivity and income.

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