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E-commerce website: How to start an online business

A step-by-step beginner’s guide to creating an effective e-commerce website

Electronic commerce (e-commerce), the process of selling your products and services online, is a golden opportunity for budding entrepreneurs. Many new businesses launch exclusively online as it’s an easy way to reap the benefits of sales, to have more control over operations and reach both a UK-wide and international customer base.

For retail businesses, an e-commerce website offers the advantage of being open 24/7; a storefront that is always accessible to your customers.

With online spending rocketing the time to embrace the power of e-commerce is now, especially given the wealth and variety of e-commerce software and platforms available on the market as Andy Headington, CEO of digital agency Adido, explains:

“Setting up a fully functional e-commerce website in 2014 is probably easier than it’s ever been thanks to the growth in platforms like Magento, Shopify and Sellr which have had thousands of man hours invested in them.”

With that being said, Startups has produced a step-by-step guide on how to create an effective e-commerce website for an affordable price with advice from leading experts within the space.

Domain name

Once you’ve identified the product or service you want to sell online, choosing a domain name for your site is essential. A domain name is your web address on the internet and the first step to setting up a website. Make sure your domain name reflects your business and is both memorable and easy to spell, so that visitors can find your website with ease.

Given the recent launch of new top level domains such as .uk and .london you may also want to look into registering for these web addresses.

Web hosting comparison

You will need a place to host your website which will need to be compatible with your shopping cart software (see next page). A website host is a computer or set of computers which stores all of your website data and then when someone visits your domain, forwards the visitor to the hosting computer; known as the server.

You can either purchase a third-party hosted e-commerce solution such as 1&1 or 123-reg which manages hosting on your behalf or you could choose to manage your own hosting. To manage your own web hosting you will need technical expertise, equipment and access to high speed internet which is usually much more expensive then leasing hosting space from a provider.

Here are some of the best UK web hosting providers:

Web hosting provider

Monthly fee



£6.99 for first 12 months then £9.99

Unlimited with 2 GB RAM space







£5.99 for first six months then £6.99





There is a vast array of web hosting providers on the market with different site features included in their hosting packages so make sure you shop around to find the best solution. For detailed comparisons of UK web hosting providers, visit The Best 10 Web Hosting.

John Webb, marketing director of start-ups and developers at IT hosting company Rackspace, suggests purchasing a cloud web hosting solution as it will enable you to scale your e-commerce business as it grows:

“For a retailer a ‘hybrid' cloud can be the right hosting solution as it enables payments and customer details to be hosted in a secure private cloud environment. This then connects to a public cloud environment that provides additional, highly scalable space for other applications or workloads, such as browsing pages.

“A hybrid cloud solution means that businesses can quickly add capacity for busy periods and reduce it when demand dies down.”

Alongside your e-commerce website, you should also consider setting up on third party platforms and online marketplaces, such as eBay, Amazon or Etsy, to increase your online sales.

Shopping cart software

This is a key component of your e-commerce site as the shopping cart allows site visitors to store items before they commit to buying them, gathering up items in the same way as an actual shopping basket or trolley would. This tool gives your customer flexibility and a better online shopping experience.

For an effective shopping cart script you must have website wizards, shopping features, payment options, shipping and tax configurations, statistics and security.

You can buy pre-made shopping cart software which allows you to customise your e-commerce website as well as e-commerce platforms which plug directly into sites such as WordPress, with many script installations free of charge.

One of the most commonly used e-commerce shopping cart software is eBay’s Magento platform but solutions from Shopify, Sellr and several other brands are popular.

We've listed some of the most widely used UK shopping cart software with details of recommended packages, basic features (including how many products you can list), and any associated fees:


Cost per month

Transaction fee

Data Storage



Free trial



800 MB

16 GB


30 days

£47 ($79)





14 days



2 GB



30 days



250 MB

10 GB


14 days






30 days



500 MB



14 days






14 days


E-commerce website design

You will need to decide whether you want to design your e-commerce site yourself or choose a web designer or design company to develop your website. For flexibility and functionality, it is recommended that you choose a Content Management System (CMS) platform such as WordPress, as this allows you to edit your web content and products/services without help from web designers, who will charge you.

You will also need to consider how your e-commerce store looks, and how easy it is to use, on smartphones, tablets and other mobiles devices and ensure that your website is compatible, especially when it comes to the checkout process.

Roland Bredner, head of retail for Peer 1 Hosting, argues that one of the key things business owners should concentrate on when creating an e-commerce website is multi-channel optimisation; aligning your website across many devices.

Bredner: A multi-screen strategy is nowadays a must, with consumers accessing the internet at every possible angle, a business must ensure the content being delivered is created uniquely for each screen – mobile users purchase differently from those who do so on tablets.

“Keeping calls to action and design very simple is the key to a successful mobile-enabled e-commerce site, excluding unnecessary banner adverts or cryptic fonts. Also, optimised buttons in the right size and colours make it a smooth and simplistic route to purchase.”

If you can’t afford to design a mobile interface for your e-commerce site then make use of innovative visual content and interactive functions that will make your site more engaging when accessed on mobile devices.

Once you’re happy with your e-commerce site design, Mike Flynn, CEO of search specialist Fast Web Media, recommends asking yourself these questions:

  • How does it look in different browsers?
  • Is it mobile-friendly?
  • Is it inviting to the user?
  • Is it user-friendly and quick to load?

E-commerce payments

To accept and handle payments through your e-commerce website you will need an e-commerce payments system which will accept electronic payments for online transactions. You can either open a merchant account with your bank to receive online payments through credit or debit cards or you can use a payments processing company, such as PayPal or WorldPay, to handle the payments for you.

Payments processing companies charge a percentage fee on each transaction made via your e-commerce site so you will need to bear this in mind when choosing your payment method as fees will differ.

Chantal Willis, VP of e-commerce at Skrill, explains the importance of considering your e commerce payment options: “When purchasing online your customers want the experience to be two things, convenient and secure. If you have a processing system which achieves this you will maximise converting browsing into sales.

“E-commerce evolves rapidly so you need to be prepared for swift expansion of your business, perhaps into new geographical markets, by offering local payment methods and currencies. If a payment gateway isn’t fast, flexible, secure and provides the local payment methods which is familiar to each specific geography customers will no doubt look to purchase on another website that offers experience that they expect.”

Moonfruit customer operations director, Walt Rothon, advises using PayPal’s payment software – “With PayPal’s Express Checkout you can start collecting payments from your customers using web and mobile optimised payment gateways without any configuration required.”

Your online payments platform should be customer-friendly so it is advised that you avoid using payments software which requires the user to make an account before they can purchase.  Adido CEO, Headington, explains:

“There is honestly no bigger way to stop customers buying than the dreaded ‘create an account’ forms. Make it as easy as possible for people to buy and if you want to offer customers additional account options, get them to do so after the purchase, not before.”

Marketing your e-commerce website

Once you’ve created your e-commerce website and it's up and running, you will need to spread the word to attract customers. Make use of banner ads, search engine optimisation (SEO), pay per-click advertising (PPC) and pop-ups to drive traffic to your site.

Find a marketing strategy that suits your budget and business needs; SEO phrases (keywords which make your business appear higher on organic Google rankings) cost nothing but can be highly effective in attracting your target audience.

Alternatively you could utilise Google Adwords, a paid-for service which allows you to investigate useful keywords in your subject area and create ads that will appear next to your keyword search results. This is an effective tool to attract customers that are already interested in you. Google estimates that if you were to spend just £5.97 a day ($10) on Adwords you would get an extra 25 clicks a day to your website.

Moonfruit’s Rothon offers other possible SEO suggestions to help market your e-commerce website:

“Creating linkable content on your site for SEO is a great way to see how many people are clicking-through. You can use Google Analytics to monitor the visits, which will give you a good idea of whether people are interested in your product and an insight into what changes to make.”

Social media is another great tool to help leverage visitors to your site so you should ensure you have a presence across social media platforms, especially Twitter and Facebook.

If you struggle with online marketing then you may to want to look to employ a freelance marketing specialist who can help you with Google Adwords, SEO and social media to attract your desired audience.

Another potential, but arguably more pricey, option to market your e-commerce website is to work with affiliate partners as Graeme Sandwell, managing director of affiliate network Paid On Results, outlines:

“Once your e-commerce website is up and running, you need to do as much as possible to attract new customers. One way of doing this is to invest in affiliate marketing, whereby other websites (your affiliates) promote your brand, services or goods in exchange for commission if they help to drive a sale.”

For information on marketing your new business and effective marketing strategies, visit our dedicated marketing channel.

E-commerce website checklist

  1. Register your domain name
  2. Purchase a web hosting server
  3. Purchase shopping cart software
  4. Design your e-commerce website
  5. Choose an e-commerce payments system
  6. Ensure your e-commerce site is easy to navigate and (ideally) optimised for mobile devices
  7. Create a marketing strategy for your e-commerce site

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Showing 5 comments

  1. Do we have to register a company name to start an online business or their no need?

  2. I’m surprised not to see Export Technologies Limited’s international retail platform on this list. It’s handled over £1billion in sales transactions and they include expert consultancy in conjunction with the system.
    In addition matching the system with the correct PPC expertise is critical – one without the other renders the inputs useless. Happy to discuss @niall_mcginnity

  3. Thanks for this detailed overview. I recently went through a similar process of searching myself, and came across Weebly… an all-in-one platform a bit like SquareSpace. I was really surprised how well it works, especially the e-commerce when you use Stripe as a payment provider. You can see the end result at

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