Introduction: Why Selling Online is Easier Than You Think
Selling online is a great way to start and grow a business due to the low upfront costs – in fact you could start a business from your own home. I had the idea to start my own business but delayed for a long time as with my day job draining my energy, it seemed like such an overwhelming task that I kept putting the idea to one side. However, I didn’t realise that online marketplaces like Etsy or website builders such as Shopify take care of the technical side and make it easy to get started, all you need is a product and a name for your business.
Whether you plan to sell handmade items, digital products, or print on demand, this guide will take you through the general process of starting an online business step-by-step, from choosing the right products to getting your first sale and optimising your store for future success. Although this guide is not exhaustive, it is intended to take you through the main steps and I will go into further details of each step of the process in future articles.
Phase One – Research and Planning
Step 1: Deciding What to Sell
Before setting up your shop, you need to decide what you are going to sell. The best advice here is to play to your strengths and stick to areas you know and have experience in. Consider the following:
1. Identify Your Interests, Skills and Areas of Expertise
- Do you have a hobby or craft that could be monetised? (e.g., handmade jewellery, sewing, artwork)
- Are you passionate about curating items? (e.g., vintage goods, handmade/local product collections)
- Do you have an eye for design? (e.g. printables, digital products, print on demand products, physical product design)
2. Research Market Demand
- Use tools like Google Trends and keyword planners to see what people are searching for.
- Check competitors on platforms like Etsy and Amazon to see what is popular and where there may be gaps in the market.
3. Consider Profitability and Scalability
- Calculate costs, including materials, shipping, and transaction fees. Remember to also price in direct labour costs, i.e. the time it takes you to make the product.
- Think about how easily you can scale production without sacrificing quality – would you be able make your products quicker in batches and can you make a living wage?
The aim is to choose profitable products with strong demand and low competition that you are either able to offer at a competitive price or with a unique selling point.
Step 2: Identifying Your Target Customer
Once you have decided what you’re going to sell, you need to identify who is going to buy your product. This is important for making informed decisions about branding, marketing, and pricing. Consider the following:
- Demographics: Consider age, gender, location, and income level.
- Shopping Behaviour: Where do they shop online? What influences their buying decisions?
- Pricing Sensitivity: Will your customers want the most affordable option or are they willing to pay more for a premium product?
Determining your customer will influence your product offerings and help inform your decisions about branding and marketing, as it gives you a picture of who you’re talking to and who you’re creating things for.
Step 3: Choosing the Right Platform
Your choice of platform will depend on what you are selling and who your customers are. In general, I recommend starting on an online marketplace such as Etsy to test the waters before going to the effort and expense of creating your own website. Here are a few options:
- Etsy: Best for handmade, vintage, and unique or customisable goods. It has built-in traffic but higher competition. Re-selling is prohibited except for craft supplies.
- Amazon: The go-to site for many shoppers has a little-known handmade section with relatively low fees, however it is difficult to compete with the mass-produced products on the rest of the site and there are strict policies.
- eBay: Ideal for auction-style sales and second-hand goods – better for vintage and antique sellers. Also has a lot of mass-produced products so handmade sellers will find it difficult to compete.
- Shopify: A great DIY option for building your own website. You may decide this is the best option if you want full control of your brand and more customisation options. You will have to drive your own traffic to the site as it is not a marketplace.
Step 4: Understanding Costs & Pricing Strategies
To run a profitable online store, investigate these key costs:
- Platform Fees: Etsy, Shopify, and other platforms charge listing fees, transaction fees, and/or monthly fees.
- Product Costs: The cost of materials, production, and packaging.
- Taxes: If you are in the UK, platform fees are generally subject to VAT and are usually quoted before VAT. Most wholesalers also list their products exclusive of VAT. This is effectively an add-on to the cost if you are a new business with revenue below the VAT threshold (£90k at the time of writing). This means you cannot claim back VAT you are charged; however, it also means you do not have to charge VAT to your customers, giving you a competitive edge on price over larger VAT-registered companies. You should also make yourself familiar with self employed taxes where you are based and the thresholds and percentages that will be applicable.
- Shipping: Research the costs to ship your product and check the rates for countries you plan to ship to as well as import duties and taxes.
Once you have costed your product, you will need to ensure that you are able to price it competitively and still make the required profit margin, or that your product is sufficiently differentiated from the competition to command a higher price. You should also check you are able to comply with any laws related to selling your product in the countries you plan to sell to.
Phase Two: Setting Up Your Online Store
Now you have a product to sell and have chosen your platform, it is time to set up your online store. Before taking this step you should first check whether there are any local laws or tax requirements you need to comply with before starting your business, such as registering your business with your local authority or for tax. Once you have attended to that it’s time to get started.
Each platform has different setup processes, but common steps include:
- Creating a business name and logo
- Photographing your products and editing them to ensure they are optimised for your selling platform, following size, quality, and format guidelines for the best visibility and presentation.
- Writing compelling listing descriptions that include all relevant details, such as product features, dimensions, materials, and care instructions, to provide customers with a clear understanding of what they are purchasing.
- Organising your products into sections or collections
- Writing an ‘About’ page, telling your customers a bit more about you and your business
- Setting up payment and shipping options
- Setting up store policies such as a returns policy and privacy policy
Phase Three: Marketing and Growing Your Store
Once your store is live, drive traffic and sales through:
- SEO (Search Engine Optimization): Do keyword research and optimise your product listings for your chosen keywords, following the best practices for the platform you are selling on.
- Social Media Marketing: Promote your products on social media such as Instagram, Pinterest, and TikTok. Establish an online presence to build trust for your brand.
- Email Marketing: Build a list of customers to send marketing emails to. Offer an incentive to encourage customers to sign up.
- Pay-Per-Click (PPC) Advertising: Use paid advertising options such as Etsy Ads, Google Ads, or Facebook Ads to drive targeted traffic to your store.
Conclusion: Don’t Delay, Just Get Started
Starting an online business seems daunting at first and there is so much more detail to get into than what I’ve outlined above, however this is a basic plan to get you started. When I had a day job, I certainly decided that a side hustle wasn’t for me as I needed my free time to unwind. Now I wish that I had started sooner as it gets a lot easier once you get over the initial hurdle of getting started. Set aside some time and follow this guide, taking it one step at a time. As long as you carefully research and plan to ensure your products are high quality, in demand, and profitable, you will start to see results.