Top five tips for becoming an online seller

Do your market research 

It’s no good selling Furbies when all the kids want Labubus. If you are going to sell things that come in and out of fashion, you need to be quick to react to the latest trends or you could end up buying high and selling low - the exact opposite of what you need to do to build a successful business.  

If you are planning to sell something with evergreen demand, ensure you pick the right lines and don’t overstock.  

And if you choose reselling i.e. second-hand and vintage goods, investigate what currently sells well on the online platforms and what items you might see gathering dust on your shelves in three months' time.  

Sort your USP 

USP = Unique Selling Point. What is going to make your business stand out among the rest in what could be a crowded market? It could be unique packaging, fast postage, colourful branding or TikTok videos to market your products.  

Your USP should flow from your market research. After all, if you have decided to sell clothes with a target market of 16-25-year-olds, branding which would look at home in a Women’s Weekly advert probably isn’t going to do the trick. 

Choose your platform(s) wisely 

There are a vast number of competing online platforms which you can trade on, with different sites being better for different goods and target markets.  

See number 8 in our low-cost business ideas article for summaries of the main reselling marketplaces.  

If you’re selling new goods, you will probably want to have your own website using a service such as Shopify, Squarespace or Wix.   

Or for higher volume traffic – the online equivalent of footfall for high street shops – platforms such as Not on the high street, Wayfair and giants like Amazon and eBay allow you to market and sell your products to their customers, with various fee structures. 

Track your costs and sales carefully 

Before you even make your first sale, and preferably before you buy your first materials or stock, set up your bookkeeping system. This may be a simple excel spreadsheet of purchases and sales to begin with, but if online selling takes off for you, you would be wise to move to a cloud-based bookkeeping solution.  

Software such as QuickBooks or Xero make recording your expenses and sales a doddle, can be used from your smartphone, tablet or laptop and can give you AI-powered insights and tips to help your business grow. Bookkeeping solutions like these also mean you will be ready for your first tax return, and for when you need to join Making Tax Digital for Income Tax (MTD for IT).  

Understand the tax rules  

If you start online selling as a side hustle, be mindful of when you will need to start reporting your income for tax purposes and paying tax on that income.  

Self-assessment tax returns 

Currently you need to register and file a self-assessment tax return and start paying income tax when you reach £1,000 of trading income. The reporting threshold is set to rise to £3,000 by the end of 2029 but the date when this will begin has not yet been announced. For more information see our Q&A here.  

Once you start to grow your online selling business you need to be mindful of further tax thresholds.  

Making Tax Digital for Income Tax 

If you reach £20,000 of gross income in a tax year, you need to consider MTD for IT. This means using digital accounting software to making quarterly submissions of income and expenses to HMRC and filing your end of year tax return from that software too. For those with qualifying income: 

VAT 

The VAT registration threshold is currently £90,000 of turnover (i.e. sales) but you can also register voluntarily. It may be worth talking to an accountant to check if the benefits of claiming back input tax outweigh the extra admin requirements for your business. 

If you become VAT registered you will need to join Making Tax Digital for VAT, so digital records will be essential. 

If in future you decide to incorporate and run your online selling business as a limited company, there are more company reporting and tax rules to consider.  

Need some advice and support with your start-up business? 

Contact TaxAssist Accountants on 01923 944287 for a free, no obligation consultation and a fixed fee quote or use our online contact form. 

Last updated: 18th December 2025