E-commerce and entrepreneurship go hand in hand. You can start small, track your progress and, if you play your cards right, can really get to know your market. Through this, you can gradually scale up and target customers that simply aren’t reachable if you’re offline. Getting e-commerce right involves a learning curve and the learning needs to start before you set up shop.
If you’ve got an idea for products or services to sell via your own website here’s what should be on your radar:
Do your research
Up until recently a low-paid ‘McJob’ (your ‘dead-end’ and low skill roles) was the only real option for most students looking to boost their cash flow. Times have, thankfully, changed and online selling offers a genuine alternative. An e-commerce website is essentially a shop, but it’s one that doesn’t have to be manned 9 to 5. This makes it possible to run your own online business from anywhere and fit it around your other commitments. Small wonder that almost half of the students who sell products and services online do so via their own website.
For many, it’s a matter of taking their skills, passions and/or hobbies and turning them into a way of generating cash. But for a business (not just a hobby) you need to be sure there’s a market out there you can target. It’s worth finding out who exactly you want to communicate with, you can then tailor and present your online store in a way that’s going to appeal to that market.
Look at these areas as part of your planning process:
- Check that your idea is scalable. This is especially the case if you’re producing something by hand. You’re able to handle existing requests from your circle of mates and ‘friends of friends’ at present, but how much extra demand can you realistically handle? Is it worth looking into outsourcing your product?
- Get your pricing right from the off. Work out how much it costs you in terms of time and materials to produce each unit. If it’s a physical product be sure to factor in postage costs and research the right supplier for your business. Look at what other sellers are charging for similar products online. Can you compete?
- Who are your competitors? Research them, identify their strengths and weaknesses and then exploit them. Are you plugging a gap in the market or improving upon an existing product? If so, what can you do to appeal to the same market only better?
Stick to the rules
It might start out as a part-time money-making exercise, but there are still rules to be aware of, especially concerning tax, and what you can and cannot say on your website.
- Income tax. Once you start trading if you sell regularly to make a profit, you need to register as self-employed. This can be done online, as can filing a tax return. Everyone (including students) is potentially liable for Income Tax and Class 2 National Insurance contributions. Additionally, you’re taxed on the profits you make after expenses, so get into the habit of keeping and filing all receipts for your outgoings to avoid getting over-taxed.
- Do I need to charge VAT? You only charge it if you are registered for VAT. According to 2022/23 thresholds, you must register for VAT if your business turnover (not profit) is likely to be more than £85,000.
- When it comes to buying and selling goods and services ‘don’t be greedy’ (and therefore, misleading!) might be Google’s view on the matter. However, it’s also a pretty accurate way of summing up the rules on how you should treat your online customers, the claims you make about your products and the quality of your offerings. Customer trust is one of the most important factors in running a successful business. For further information on trading take a look at the government’s easy-to-digest breakdown on the Sale of Goods Act and selling over the internet. It is highly advisable you read this before you put together the content for your site.
- You will also need to comply with GDPR to protect your customer’s personal data, such as email addresses, full names and telephone numbers etc.
Choose a domain name
Your ‘domain name’ essentially refers to your shop’s internet address, such as JohnLewis.com. If you choose to set up your store through a hosted platform (Shopify, for instance) you are often given the option of using a ‘subdomain’ as part of the package. With this your website address would then appear along the lines of MyAwesomeProduct.myshopify.com. It’s not nearly as clean or as professional looking as MyAwesomeProduct.com so consider opting for your own domain.
It’s frustrating coming up with a list of brilliant business names only to find that the domain names are already taken. As a starting point use sites such as NameStation and Business Name Generator to see what’s available.
Tip: have you found something? Register the name quickly and also consider helping to protect your brand by forming a company in that name (something that’s quick, cheap and easy to do). This means that no other business can register that company name in the UK!
Choose a platform
As a rule of thumb self-hosted, open-source platforms are for the tech-savvy. Hosted platforms tend to be better suited to e-commerce newbies who want to get up and running straight away.
Invest in a camera
From the customer’s perspective, when faced with a choice of websites, would you choose to buy from the one with a single grainy shot of the product you’re looking for or one that lets you get up close with 360-degree views? Try getting your hands on a DSLR camera and get to grips with it before you start selling.
Want to know more about setting up a business on a limited budget? Check out the resources in our knowledge base for useful hints and tips.