In short: To sell online, choose a product with real demand, decide whether to use a marketplace, your own website or both, set up payments and delivery, and follow UK consumer and data protection law. Register with HMRC once your trading income goes over £1,000.
Selling online can be a low-cost way to start a business. You do not need a shop, and you can start small. This guide covers the key steps for a UK seller.
1. Choose what to sell
Good products usually have:
- clear demand – people already search for them
- a margin that covers all your costs
- a size and weight that is affordable to ship
- few legal restrictions
Test demand before buying lots of stock. Order a small batch, or take pre-orders.
2. Pick where to sell
- Marketplaces such as Amazon, eBay or Etsy bring buyers to you, but charge fees and control the rules.
- Your own website using a shop builder gives you control of branding, prices and customer data, but you must bring the visitors yourself.
- Social media shops can work well for visual products.
Many sellers start on a marketplace and add their own website later.
3. Set up payments
Use a well-known payment provider. Make sure payouts go into a business bank account, not your personal one. Check the provider's fees and how long they hold funds before paying out.
4. Plan delivery and returns
- Compare courier prices for your parcel sizes.
- Offer tracked delivery for valuable items.
- Write a clear returns policy.
- Decide whether you will ship abroad. If you sell to the EU, customs and VAT rules apply.
5. Follow UK consumer law
When you sell to consumers online, the law gives them important rights. In general, you must:
- give clear information about you, the product, the total price and delivery costs
- respect the buyer's right to cancel most online orders within a set period
- provide goods that are as described, of satisfactory quality and fit for purpose
- show your business name and address
The details matter, so read the official guidance on selling online, or ask a solicitor.
6. Protect customer data
If you collect personal data, such as names and addresses, you must follow UK data protection law. Have a privacy policy, keep data secure, and only send marketing emails to people who agreed to receive them. Check whether you need to pay the data protection fee to the Information Commissioner's Office.
7. Market your products
- Use good photos and clear descriptions.
- Collect reviews from real customers.
- Build an email list of people who opted in.
- Learn basic search engine optimisation for your product pages.
- Start small with paid ads and track what works.
Do not buy fake reviews. It is unlawful and platforms remove sellers for it.
8. Get your tax and records right
- Individuals can earn up to £1,000 a year in gross trading income tax-free under the trading allowance. Above that, you must register for Self Assessment, by 5 October after the end of the tax year you started trading.
- Since 1 January 2024, many online platforms report seller information to HMRC.
- You must register for VAT if your taxable turnover over the last 12 months goes over £90,000.
- Keep records of every sale and cost.
9. Choose your business structure
You can start as a sole trader or form a limited company. A company is separate from you legally, which limits your personal liability, and it can look more established to suppliers. It also means filing accounts and a confirmation statement each year. An accountant can explain the tax differences.
How Form My Company can help
Get trading fast. Our Digital Package forms your company for £290, including the £100 Companies House fee and VAT, and most companies are registered within 24 hours. The Privacy Package adds a business address for the first year, so your home stays off your website and the public register. We also offer Mail Handling and Forwarding for your business post.
Frequently asked questions
Do I need a licence to sell online in the UK?
Most products do not need a licence, but some do, such as alcohol, some food and certain regulated goods. Check the rules for your product.
Do I need a website to sell online?
No. You can start on a marketplace or social media shop. A website gives you more control later.
When do I need to tell HMRC about online sales?
If your gross trading income is over £1,000 in a tax year, you must register for Self Assessment.
Do I need a privacy policy?
If you collect customers' personal data, you should explain how you use it in a privacy policy and follow UK data protection law.