Selling Online: A comprehensive small business guide to online marketplaces

Want to start selling online? Read this first!

Selling online has always been a great way for physical shops to extend their market. If you want to branch out to online selling, but you’re not sure where to start, we’ll explore your options in this guide.

• Why sell products online?

• The Big 5: Amazon, eBay, Shopify, Etsy, OnBuy

• Alternative marketplaces for selling online

• Licensing requirements

Why sell products online?

Your business may already sell your products and services digitally. Maybe you have your own website with ecommerce functionality (whether that’s an email order form, or a fully fledged retail experience!)

But even if your business has a digital footprint, the perks of selling on online marketplaces are too good to ignore. Research has shown that shoppers are five times more likely to look for a product on a marketplace than on a brand website. This increases for younger audiences - with nearly half of all product searches starting on a marketplace.

The advantages include:

• Greater product visibility

• Customer trust from established platforms

• Brand strengthening across multiple sites

• Increased customer loyalty

• More sales and reviews

The Big 5 Online Marketplaces for Selling Online

1. Amazon Marketplace

Amazon is the world’s largest online retailer. Amazon Marketplace gives you the opportunity to sell on their globally recognised site. It is a great way to reach a huge international audience. You can reach hundreds of millions of customers via Amazon Marketplace, but competition to be near the top of the search results is very high.

2. eBay

eBay is the closest competitor to Amazon in the UK, attracting 279 million visits each month. It offers auction-style and fixed-price selling options, with fees generally lower than Amazon's.

Founded in 1998, it's a trusted brand used by millions of people in the UK every year. You can sell anything on eBay (well - within reason) and sellers have access to tools like pre-set templates and advice on price setting and promotion.

Like Amazon, you can choose a basic pay-as-you-sell plan or sign up for a monthly subscription to access more professional tools and support. Whether you're a hobbyist, a growing startup or an established business with a large inventory, eBay provides various levels of subscription with different levels of fees.

3. Shopify

Although not a marketplace, Shopify excels as an ecommerce website builder. There are several packages to help sellers to get online and get organised, with customisable templates that help you build a branded online shop that will give your customers a seamless process from ordering to secure payments to shipping.

Packages start at £25 a month for individuals and small businesses - all the way up to Shopify plus for high volume sellers, with custom subscriptions of at least $2,000 a month!

4. Etsy

Etsy is a go-to platform for unique, handmade products. If you sell crafts or vintage goods then Etsy is worth checking out. The third most popular online marketplace in the UK, with UK shoppers the second-largest market on the site (after US consumers).

Starting a shop on Etsy is free, and you pay per item (a listing fee, a transaction fee, and a payment processing fee). If you choose to pay for their Offsite Ads feature, they will also advertise your products across the web, helping you reach an even wider audience.

5. OnBuy

OnBuy is a British site with over 8 million visits a month from UK shoppers. It positions itself as a British alternative to Amazon, with both new and refurbished products available for sale, as well as "collectables" section for items like vinyl, books, art and memorabilia.

OnBuy charges sellers a percentage fee per item sold (starting at 25p), but no fees for listings. You can sign up for monthly subscriptions starting at £19 a month.

What are the alternatives to Amazon and eBay?

If you're contemplating the world of selling online but want to explore alternatives to Amazon and eBay, here's our "best of the rest".

One of these online marketplaces could become your next sales channel.

Google for retail

Unsurprisingly, tech giant Google offer opportunities for online retailers. While not strictly an online marketplace, you can sign up to list your products across the Google online ecosystem. Your products can appear in Google search, get in front of local shoppers in Google Maps, appear in the specialised Google Shopping tab, or even show up in Google Image and YouTube search results.

You can show your products and shop on Google for free - just like you can show your website in Google search results at no cost. But if you want to rank highly in search results it's probably worth supplementing free listings with paid advertising. And, as you’d expect from Google, you can create content that follows visitors around the web through ‘dynamic retargetting’ (those sticky ads that pop up after you’ve looked at something online but not bought it).

Social media

Is your business already on Facebook, Instagram, TikTok or other social media channels? If you're already talking to an established audience, you can use this to sell your products. Encouraging your followers to comment on or share your posts with their own networks is a convenient way to reach people who are similar to your current customers.

You could post in one of the many local buying and selling groups on Facebook - although that means you won't benefit from any of the support features of an online marketplace - or list a product for free on Facebook Marketplace and pay selling fees. Or take things to the next level with an Instagram Store or by applying for a customised In-App Storefront on TikTok.

Fruugo

Fruugo is a global marketplace based in the UK. They make it easier to reach overseas buyers by offering translation into foreign languages, and they accept payments in a variety of local currencies. They currently operate across 46 countries, accept 31 different currencies, and automatically translate listings into 28 languages.

Fruugo don't charge a subscription to retailers - you just pay a fee on anything you sell.

Notonthehighstreet

This UK-based platform rivals Etsy with its curated selection of unique gifts offered by independent creators. They boast 100 million annual views to their site and app, and have a curated list of approved sellers.

To start selling on Notonthehighstreet you will have to apply to sell with them, and there's a one-off joining fee of £199+VAT. If you're approved you will gain access to their brand-loyal audience, and pay a 25%+VAT commission on all sales.

Licensing requirements for selling online in the UK

While a business license isn’t required for most online sales in the UK, there are still rules you must follow. You must register with HM Revenue & Customs to ensure that you are paying the correct taxes, and that your business meets all necessary requirements to operate in the UK.

Special licenses are needed for selling restricted goods, like alcohol. More details can be found on the government's Online and Distance Selling page.

The information provided in this business advice article was correct at the time of publication (September 2023). Please check the terms and conditions of the online marketplace(s) of your choice to be sure you have the latest information.