Frequently Asked Questions

Not necessarily. You can start as a sole trader, which is simpler and cheaper to set up. However, a limited company gives you personal liability protection if things go wrong, and it can look more professional to customers. Many UK e-commerce businesses start as sole traders and switch to limited company status once they're generating consistent revenue.

With dropshipping, you don't hold stock—your supplier sends products directly to customers. It's lower risk and cheaper to start, but you have less control over quality and delivery times. Holding your own stock means higher upfront costs and storage needs, but you get faster shipping, better margins, and complete control over the customer experience. Most successful UK stores eventually move towards holding at least some inventory.

You'll need clear terms and conditions, a privacy policy that covers GDPR, and transparent pricing that includes all taxes. If you're VAT registered, you must charge and collect VAT. Include your business registration number and contact details on every page. The Consumer Rights Act also requires you to give customers at least 14 days to cancel orders. Getting these wrong can result in fines, so it's worth consulting a solicitor or using a compliance template designed for UK e-commerce.

Shopify is hosted and easiest to start (plans from £29/month), but you pay transaction fees and less flexibility. WooCommerce is free but requires WordPress hosting and more technical knowledge. Bigger platforms like Magento suit larger operations. Choose based on your budget, technical comfort, and growth plans. Most UK startups begin with Shopify or WooCommerce because they're proven, affordable, and have good UK payment integration.

It depends on your startup costs and sales. A lean operation might break even in 6–12 months; a store with significant inventory investment could take 18–24 months. Focus on getting traffic and converting visitors first—most new stores underestimate how much marketing costs. Track your unit economics closely so you know your actual profit per sale, and reinvest early revenue into marketing rather than expecting immediate returns.

Yes, it's a smart strategy. Amazon and eBay give you instant access to millions of UK shoppers, while your own store builds your brand and gives you direct customer relationships. The downside is fees—Amazon takes up to 45% on some categories, and you're competing on price. Start with your own store for brand building, then expand to marketplaces once you have product-market fit and can manage multiple channels efficiently.