Note: This post was updated in May 2014 to include recent changes to SEO and social media.

You can start an online shop on a really tiny budget. Seriously.

OK, let’s get on with the steps! Here’s how I’d start my own online shop…

1. Work out what to sell

I’d have a think about things I might like to sell and then look for niches. (Why is a niche so important? Check out my post Why you need a niche.) So let’s say I fancy selling t-shirts. A basic t-shirt shop is pretty boring and I doubt I’d be able to compete with the big stores out there anyway, so I need to find a specific type of t-shirt. When I type ‘t shirt’ the Google Adwords Keyword Tool I can see what different types of t-shirts people are searching for. This gives me niches like ‘retro t shirt’, ‘designer t shirt’, ‘star wars t shirt’. I’d aim for a niche/keywords that has quite a few people searching for it, but that doesn’t have high competition.

Let’s say I go for ‘goth t shirts’. I’d still do this if I’d already been selling on eBay and was planning to move over to my own shop.I’d even do it if I was planning to make my own craft items because I might be able to tweak what I make to match what people are searching for. I’d make a note of the words people use when looking for goth t-shirts. Do people search for ‘goth t-shirts’ or ‘gothic tshirts’? How about ‘gothic clothing’? Then I’d look at my competitors to see how I could do things differently. If most goth t-shirts are poor quality, I’d look at selling some really top quality ones, for example. Cost = £0

2. Do the maths

There’s no point in opening a shop if you aren’t going to make any money. Here’s where I’d look at how much the t-shirts would cost me to buy, how much I could sell them for, what my expenses would be and how many t-shirts I’d need to sell to make the income I want. I’d also factor in my time; how long would it make me to process each order, pack and take it to the post office? This would be even more important if I planned to print them myself.

If it looked like I couldn’t make the income I want from selling goth t-shirts I would either a) look at selling them differently (if the profit margin is too small when I buy wholesale, could I make them myself?) or b) go back to step 1 and start again.

Cost =£0

3. Start researching

Your aim here is to both do some market research and to start promoting your shop before you even open it.

Find out where your target audience hangs out online. Facebook and Twitter are great places to start, but your audience may be most active on another platform such as Tumblr, Google+, Pinterest or a specialist forum. If you already have an account on that platform in your own name then it’s fine to start with this. Most of us already have a Facebook profile, for example. Otherwise set up a new account, preferably in your own name (or a nickname, if that works better) rather than your prospective business name. People respond better to people than they do to faceless businesses, and this is especially true on social media.

Whichever platform I chose for my goth t-shirt shop, I’d aim to get inside the mind of the goth t-shirt wearing community – where do they buy clothes? What do they like? How much do they spend? What do they read? Where do they hang out? I’d interact, listen and get to know people. I’d also ask what they thought of my idea for a new online shop and what they’d like to see in it.

Cost = £0

4. Get a website

There are a number of different options here including hiring a web designer or setting up a WordPress websites with an ecommerce plugin, but I recommend taking a look at website builder Create first. That’s because it’s simple and inexpensive to create your own attractive online store with Create.

I’d set up an account with Create that gave me a website, shopping cart and blog. The basic package would cost £5 a month (although I’d pay £9 a month because it gives you useful extra features like discount codes.) I’d also get a domain name.

Cost – from £5 to start and then £5 or £9 a month

5. Add a logo

I have two options here and it’s not so easy to choose between them. If I’ve done my maths and research well and I’m reasonably confident that I will make some money from my goth t-shirt venture, I’d find the cash to pay a graphic designer to make a logo for me. That might sound expensive, but if you find a freelance designer working from home, you could get a logo for between £50 and £100. Most of us aren’t good at graphic design and even if we’re artistic, we don’t always have the technical skills or the branding know-how to do it right. However, we do all know a rubbish logo when we see one and will click away from ugly websites in a nanosecond. So in my opinion, this is an area where it’s worth spending a bit of cash. That said, if you’re dipping a toe in the water you might want to try to do-it-yourself at first and then pay for a graphic designer a bit later on. But then how many potential customers might you be turning off? It’s your call. But if you’ve got doubts about hiring a logo designer, that might be a clue that you need to do some more market research.

Cost – £0 to £100

6. Set up shop

I’d set up my shop using Create like this:

Choose the layout of the website using the templates and colour schemes.

Create the homepage and ‘about’ page making sure the text is clear, easy to understand, had some personality (not “we are a small goth tshirt company based in the South East..”) and contained a handful of the keywords (step 1) sprinkled through it in a natural way.

I’d list the items in my shop using the best photos possible and clear descriptions.

Cost – £0 if I do my own photography

7. Add a mailing list

Once I’ve got people to my website, I’d be mad not to stay in touch with them using a mailing list. I’d offer them an incentive to sign up (discount voucher or e-book) and make sure I signed nobody up without their permission. MailChimp is a pretty good email service and it’s free to send up to 2000 emails a month. Personally, I switched over to Aweber because it has a few features that MailChimp doesn’t, but both are good.

Cost- starting from £0 if you use Mailchimp

8. Check systems are in place

Before I launch I’d want to make sure I had systems in place to process orders efficiently. Is my stock stored so I can find it easily? Do I have a supply of packing materials? Have I bought stock or will I be drop-shipping? How can I be sure my suppliers can cope with demand?

Cost – depends on how much stock/packaging you buy and whether you’re buying wholesale or drop-shipping

9. Start promoting

Well, carry on promoting, actually! I’d keep my Facebook and Twitter followers updated on my progress and offer them a special deal if they buy on the launch day. I’d start to blog about my new business before I launched so the search engines can start to pick up the fresh content on my website (again, using my keywords in a natural way). I’d also start contributing to internet forums where my target audience hang out – ideally including my web address in my signature (but check the rules of the forum to be sure). I’d even send a press release to my local newspapers and any other publication that might be interested in my story. On launch day I’d tell everyone I could possibly think of that it was happening and splash a big ‘Launching today!’ sign on my homepage.

Then I’d carry on promoting my website a little each day – blogging, contributing to forums, updating Twitter and Facebook, possibly LinkedIn and Pinterest. I’d definitely consider YouTube too.

Cost – £0

If that sounds a lot of work the great news is that you can spread it over months, doing a little work here and there in your spare time. Plus it’s nothing compared to the work and money you’d need to invest in a bricks-and-mortar shop, so it’s a fantastic opportunity.

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