A Guide to Running an E-Commerce Business

Running your own e-commerce businesses is an increasingly attractive prospect for many entrepreneurs right now. It’s currently the fastest growing retail market in Europe at the moment, with sales in the UK are expected to top £60bn in 2016. On average, online shoppers spend around £1,372 purchasing goods over the course of a year. For those looking to get an understanding on the basics, here’s what you need to know.


Importing Goods into the UK

These days, many UK businesses source their goods from overseas, especially items like electronic equipment, clothing, and plastics. When purchasing goods from EU countries, you will need to get a commodity code and pay VAT, but not import duty. Some EU countries also include specific restrictions and bans on importing certain items as outlined here, as do European countries operating outside of the EU, like Norway or Russia. Sourcing goods from non-EU countries, like China, can be more complicated. Like with the EU, you will need a commodity code, but you will also be responsible declaring your imports to customs as well as paying both VAT and duty.

Handling Customer’s Orders

There are several different ways to handling customer’s orders. Rather than having to build a system yourself, though, many e-commerce businesses looks to take advantage of the ready-made tools in place other platforms like Squarespace or Shopify instead. When the customer makes an order, the web server pushes the request to the order management system. This queries current inventory levels to confirm that the item is in stock and ready to be dispatched. If the item is not in stock the order management system can instead immediately order new stock from the supplier. Many businesses have their system automatically order new stock once inventory levels reach a certain threshold, so consumers are never left waiting too long.

Shipping to the End Consumer

Finally, once the order has been successfully processed, it’s time for the shipment to the end consumer to begin. The advent of e-commerce has created a wave of new, independent courier companies looking to take advantage of this booming industry. Finding reliable service is crucial in establishing a brand and a reputation that your customers can trust in the long-run. Interestingly, many of the most well-known couriers, like Yodel and Hermes, were recently ranked amongst the worst parcel delivery firms according to a recent customer ratings poll. These companies are still used by other large organisations, like Amazon and Tesco Direct, due to their large reach, but smaller e-commerce businesses may benefit from looking at other options.