Trading Online

E-commerce allows you to reach your customers 24 hours a day, 365 days a year. This guide takes you through the first practical steps to start trading online.

This guide covers:

  • Turning your idea into an online business.
  • Choosing the right Internet Service Provider for an e-commerce site.
  • Information you need to include on your website.
  • Collecting payments from customers.
  • Getting people to visit your website.
  • Making the most of your banking as an online trader.
  • Checklist: before you go live.

Turning your idea into an online business

Becoming an e-trader and selling products online requires more than a website. Like all businesses, your idea will benefit from a well-researched plan.

Writing a business plan

You should consider all the elements of a traditional business plan, but also think about the following:

  • Who are you trying to sell to? Will they be comfortable buying online?
  • Where are they? Is your market largely UK-based or is it international?
  • Can your product easily be sold online? It is easier to sell a tangible product like a book online than a service such as a taxi booking.
  • Are delivery costs low? Your customers will consider delivery charges as part of the overall product cost. If the charge is too high, they may prefer to buy from a bricks-and-mortar store.
  • Are the features and benefits easy to understand? If the choice of product requires a conversation with the customer, then it may not be suitable to sell online.
  • Is your product in digital form? Electronic products such as software, music or e-books can be downloaded directly from your website, eliminating the need for delivery charges.

Registering for VAT

Your online sales may also be subject to VAT, although you don’t need to register until your turnover reaches a certain level. You can check the current turnover limits at the HM Revenue and Customs website – www.hmrc.gov.uk

Choosing the right Internet Service Provider for an e-commerce site

You need to find an Internet Service Provider (ISP) who will host your website for you. Many ISPs cater for business customers and the support and services they offer are likely to be more comprehensive than a consumer-orientated provider.

Consider the following when making your selection:

  • Will they host your chosen domain name?
  • Do they offer a number of email addresses for you to use?
  • Do they have templates and site building tools?
  • Can they offer integrated shopping cart facilities?
  • How easy is it to switch providers in the future?
  • Do they charge monthly or annual fees? Is there a minimum commitment?
  • What level of service availability do they guarantee? Is there financial recompense for downtime if the service cannot be accessed?
  • Do they offer traffic-monitoring options so you can track how many people visited your site and can calculate your conversion rate by reference to how many bought your products or services?
  • Do they back-up your website and its data or do they provide tools for you to do it?
  • Do they update their own systems to ensure they offer you the latest versions of software and security tools?

If you use a professional web design service, ask them to recommend ISPs.

Information to include on your website

If you are trading online then you should add the following:

  • Your contact details, including address and telephone number, and VAT details if relevant.
  • A privacy policy explaining how personal data is protected and how financial transactions are carried out (you’ll need to comply with the Data Protection Act).
  • Your terms and conditions of sale.
  • A guarantee of the quality of the products or services.
  • A clear exchange/refund policy, describing how refunds will be made delivery costs and timescales.
  • Up-to-date prices and stock availability – include all customer costs eg VAT and postage & packing.
  • Customer service details: information on the data people need and how they can contact you to query a transaction.

Collecting payments from customers

To collect payments from your customers through your website, you’ll need to include a virtual shopping cart and a secure way for them to pay (sometimes known as a payment gateway).

Shopping with a virtual cart

As your customers browse your site they can choose items to put in their shopping cart. When they are ready to pay, they go to the checkout page, where they give their delivery address and the details of their credit or debit card for payment.

The shopping cart must be easy for your customers to use, otherwise they may fail to complete transactions. You should also consider how simple the shopping cart is for you to manage, especially if you want to use it to run special offer promotions on your site, or to send newsletters to your customers.

You can buy shopping cart software and integrate it into your website, or you can use a third-party provider who will host the cart for you. Many providers can sell you the full package including the shopping cart and the payment gateway you need to collect the card payment details. The downside is they are usually a standard design and cannot be customised.

Collecting payments

To collect payments from customers you will need a merchant account. You can use a provider like WorldPay or PayPal, or you can approach a bank. You will need to check the service charges with the providers, but you will usually be charged a percentage of each transaction charge, and in some cases there may also be a set-up fee and/or monthly service fee.

Our merchant service provider Cardnet® may be able to help you collect online payments from your customers.

You’ll also need to ensure accurate order confirmations are made and that the confirmation information is kept by you and given to the customer.

Getting people to visit your website

You’ll want to make sure that your customers know where to find your site. Website promotion should be part of your overall marketing plan. If you already sell offline you should integrate your website into your traditional advertising and promotions campaigns.

Your web presence will enable you to reach more of that market as you are not confined to a particular geographical area.

Here are some ways that you can promote your website:

  • Through your website’s URL (domain name). Choose a short and simple name that is easy to remember, and use it everywhere – your email signature, business cards, letterhead, packaging and adverts. Your URL is just as important as your business name.
  • Offline marketing – advertise in your local newspaper, or send a press release about your new site to your local paper or trade magazine.
  • Email marketing – collect email addresses from your customers, or buy a mailing list, and send out an email about your website and your latest promotions. (You must comply with the Privacy and Electronic Communications Regulations: you must have the person’s permission to send them an email, and you must give them the option to un-subscribe from your list and avoid future mailings. You can also offer people the chance to subscribe to your emails/newsletters directly from your website; same rules apply.)
  • Search engine marketing – you can use a service like Google Adwords to pay for a short advert and a link to your site to appear on the search results page for certain keywords and phrases that you select and pay for. You’re charged on a cost-per-click basis, so you only pay when someone clicks on your advertised link.
  • Search engine optimisation – you can hire a specialist to optimise the content on your site so that it appears high in the natural (non-paid for) listings on a search engine results page when someone searches for a related topic.

Making the most of your banking as an online trader

If you are trading online then you are more likely to be using automated payment methods than cheques and cash. With this in mind, we have created the Electronic Business Tariff, where payments such as direct debits, debit card payments and Internet banking transactions are free of charge when your account is in credit. There is a monthly fee for this tariff.

You can use our Internet banking service Online for Business to access your business account from any PC at a time to suit you, 20 hours a day, 365 days a year. You can also receive up-to-date balance information through our free Text Alerts service.

To make the most of the Electronic Business Tariff, or make online transactions yourself, you may also be interested in our range of card services, such as our Business Credit Card, Business Debit Card and Business Charge Card.

All of these services can be used with our Business Extra Account.

All cards are available subject to status.

Checklist: before you go live

There are a couple of last minute things you should always check before you go live and open your website for business:

  • Have you tested the site? Do all the features work? You must test before you start so you can fix any problems before subjecting your customers to a poor experience. Remember to test end-to-end from the start to the end of the transaction process: to help with this, your ISP may be able to help with dummy accounts or your bank with practice confirmations.
  • Have you made business continuity plans? If your website fails or your trading data is lost, what will you do? Make sure you have a backing-up process and have a copy of your website stored away from your ISP.
  • Think about security and fraud. Make sure you are up to date on processes and policies.

Useful links

Check to see if your domain name is available at Nominet – www.nic.uk


This Trading Online business advice article published in association with Lloyds TSB.

Whether you are looking to start-up a business account or want to move your existing business account Lloyds TSB can offer you all the Business Banking support you need

While all reasonable care has been taken to ensure that the information in this website is accurate, no liability is accepted by Lloyds TSB for any loss or damage caused to any person relying on any statement or omission in the content of this website. The content of this website is provided for information only and should not be relied on as offering advice for any set of circumstances and specific advice should always be sought in each instance

Trading Online

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