What is ecommerce? A guide for UK small businesses

What does ecommerce mean for a small business?

For a small business, ecommerce means customers can buy from you without visiting, phoning or waiting for you to reply. They choose, pay and arrange delivery on their own, at any hour. Your shop keeps taking orders while you sleep, pack or serve someone in person.

It is a large part of how people in Britain now shop. The Office for National Statistics tracks internet sales as a share of all retail sales. In September 2026 that share was 28.3% in Great Britain. Put simply, more than a quarter of retail spending happens online.

The word covers more than physical products. You can sell almost anything online:

• Goods you make or stock, such as candles, clothing or spare parts.
• Digital products, such as downloads, templates or online courses.
• Services you book and pay for in advance, such as classes or appointments.
• Gift vouchers and subscriptions that renew each month.

What are the main types of ecommerce?

Ecommerce is usually sorted by who sells to whom. Business to consumer is a shop selling to the public. Business to business is a firm selling to other firms. Direct to consumer is a maker selling its own products without a middle shop. Consumer to consumer is people selling to each other.

There is a second choice that matters more day to day. It is where you sell:

• Your own online shop, on your own web address, where you set the look, the prices and the rules.
• A large online marketplace, where shoppers already browse but the marketplace sets the fees and the rules.
• Social media shops, where people buy from a post or a profile.

Many small businesses use more than one. A marketplace can bring first orders. Your own shop builds a customer list and keeps more of each sale, because nobody else takes a cut of every order.

How does an online shop work, step by step?

An online shop works like a till that never closes. A customer finds a product, adds it to a basket and pays at a checkout. The shop records the order and emails a receipt. You then pack and send the goods, and the customer can return them if they change their mind.

Behind each order, these steps happen in order:

1. The customer finds your product through search, social media, an advert or a link.
2. The product page shows photos, the price, the options and the delivery cost.
3. The customer adds the item to the basket and goes to the checkout.
4. The payment is taken securely and the order is confirmed by email.
5. Stock levels update, so you never sell what you do not have.
6. You pack and dispatch the order, then send a tracking link.
7. The customer receives it, and returns are handled under your stated policy.

Each step is a place where a sale can be won or lost. A slow page, a surprise delivery charge or a confusing checkout sends people away just before they pay.

Rather have it done for you? We build your website free, it goes live in days, and you pay nothing for the first 14 days. No card needed. See how the free 14-day trial works.

What rules must a UK online shop follow?

A UK online shop must give buyers clear information before they order and let them cancel. The UK government's guide to online and distance selling covers both. It says customers can cancel up to 14 days after their order arrives. They do not need to give a reason.

Before an order is placed, the guide says you must provide, among other things:

• Your business name, contact details and address.
• A description of your goods or services.
• The price, including all taxes.
• Delivery arrangements, costs and how long goods will take to arrive.
• How a customer can cancel and when they lose the right to cancel.

After the order, you must send a copy of the contract the customer can save. You must send the goods within 30 days, unless you have agreed otherwise with the customer. If you do not tell customers about their right to cancel, they can cancel at any time in the next 12 months.

The penalties are serious. The same guide says you could be made to pay compensation or be given an unlimited fine. This is a summary, not legal advice, so read the full guide for your products.

Why does a good online shop take skill and time?

Opening a shop is quick. Making one that sells is not. Each product needs good photos, honest words, the right price and the right delivery cost. Then the whole shop must load fast on a phone, be found in search and let people pay without a single surprise. That takes planning, testing and steady care.

Here is what a skilled team weighs on every shop:

• Product pages that answer the questions buyers ask, such as size, materials and delivery time.
• Fast loading on a phone, because most shoppers browse on one.
• A short checkout with the full price shown early, so nobody leaves at the last step.
• Delivery zones, VAT settings and discount codes set up correctly from the first day.
• Product and category pages that search engines and AI assistants can read and match to real searches.
• Clear cancellation, returns and contact details, to meet the rules above and build trust.

A worked example

Here is an illustrative example, not a real firm. A candle maker in Bristol wants to sell 40 candles online. Each candle comes in three sizes, so the shop holds 120 options. Every option needs a price, a weight for postage and a stock count.

Say each product takes about 45 minutes to photograph, describe and set up properly. That is 30 hours before the first sale, and before any testing. Then the checkout needs testing on phones, delivery charges need checking against real postage and the returns page needs writing. A rushed job here shows up later as lost orders and refund requests.

Should you build your online shop yourself or have it done for you?

Build it yourself if you have a few products, enjoy the setup and have evenings to spare for testing. Have it done for you if your time is worth more spent making, sourcing and selling. A team that builds shops every week will get the details right first time, and keep them right.

If you would rather sell than set up, our online shop service designs, builds and looks after your store for you. We load your products, set up payments and delivery, test the checkout end to end and keep it running every month. Every shop is different, so we quote after a short chat about what you sell.

Once you are selling, our search optimisation service helps people find your products. A managed website, built and cared for by us, keeps everything fast, secure and up to date. Our guide to building a small business website covers the first steps if you are starting from scratch.

Not ready for a full shop yet? Many owners start with a business website and add a shop later. The Website plan is from £149 a month, with the build, hosting and care included. Compare the plans and prices, or start your free 14-day trial. No card needed.

A shop needs a reason to buy from you rather than anyone else: work out your unique selling point first. If your orders need custom tools, such as a quote builder or customer portal, read what a web app is.

Common questions