How to Start an Online Shop From Scratch? Procedures, Costs & More

What Is an E-commerce Platform? 

An e-commerce platform is one of the tools used for setting up an online shop. It provides all the means, such as structure, marketing and payment tools, etc., to establish an online shop in one place and help you save time and cost¹. After registration on the e-commerce platform and paying the fees, you can use the various tools offered by the e-commerce to establish and manage your online shop platform independently¹. 

Open an Online Shop Step 1: Choose an E-commerce Platform¹

When choosing an e-commerce platform, you could consider the following factors. In terms of cost, some e-commerce platforms require monthly rental fees, similar to renting a brick-and-mortar shop¹. In addition to basic subscription fees, different e-commerce platforms may require other charges, such as fees for domain names and hosting options, premium branding designs, plug-ins, etc. While certain e-commerce platforms may include the above-mentioned services, some would ask users to purchase these additional services on their own. Therefore, it is wise to pay extra attention when choosing an e-commerce platform². 

In terms of functionality, each e-commerce platform has its own strengths and advantages, which should be considered carefully when making a choice. For instance, some e-commerce platforms allow for website URL customisation², SEO support tools, order tracking, sales or international sales through websites or social media, etc². You should also consider the electronic payment options that are supported by the e-commerce platform, whether they facilitate payments of goods or services by customers using different e-wallets or Consumption Vouchers, and whether these payment methods could be linked to your business bank account². 

There have been incidents where foreign e-commerce platforms customers were unable to log in to their own online shops as a result of a malfunction of internet cloud service providers used by some overseas e-commerce platforms³. In addition to the importance of the system stability of the e-commerce platform, the customer service it offers should also be taken into consideration, so in case online shop owners encounter any problems, they can contact customer service immediately. When choosing an e-commerce platform, you should consider whether the e-commerce platform provides an emergency support hotlines. You can also check if it offers direct support from a local team.

Open an Online Shop Step 2: Add Unique Branding Elements to Your Online Shop⁴

Choosing a website URL that is directly related to the product and the brand name can make it more memorable for consumers. You can insert your brand’s logo and unique design elements to your online shop on the website's homepage, menu bar, headers, etc. Before officially launching your e-commerce website, remember to check all the pages of your website thoroughly and that every button and link on your site must be valid⁴. A well-designed website should be effective and clear; even a 404 error page should be designed according to the overall theme⁴. Besides, try and check if the website works well on different web browsers⁴, including Responsive Web Design, i.e., whether website content can be displayed on both mobile and desktop versions of the website. 

Open an Online Shop Step 3: Apply for Business Registration⁵

Do you need a business registration to open an online shop? The answer is Yes⁵. In Hong Kong, any business (including trading of goods or sales of services)⁵ conducted through an online platform, or operated by sole proprietorships, partnerships (except limited partnership funds) or unincorporated body of persons, non-Hong Kong company, and branch business needs to apply for business registration within one month from its date of commencement of business⁶.

You can apply for business registration in person at the Business Registration Office, by post or online through your “eTax” account. Online Business Registration application through an “eTax” account is only applicable to sole proprietorships, partnerships (other than limited partnership funds) and branch registration. To apply, you must complete the required forms, provide proof of identity, and pay the business registration and levy. Generally, the Business Registration Office will issue the Business Registration within 2 working days⁶of the receipt of a properly completed application. 

How Much Does It Cost to Open an Online Shop

Business Registration Certificate can be divided into two types, namely the 1-year certificate and the 3-year certificate. Starting from 1st April 2023, the former costs HK$2,150, and the latter costs HK$5,650⁷.

Under certain conditions, you may be exempted from paying business registration fees and levies. For instance, your company must be an unlimited company, and there is only one business function. The average monthly sales or receipts of your business do not exceed HK$10,000 per month (a business that derives profits mainly from the sale of service) or do not exceed HK$30,000 per month for other business functions⁸, etc. 

Moreover, depending on the nature of the business, if you decide to use an e-commerce platform, apart from a difference in the basic charges of these platforms, you may also need to pay extra fees for domain names, SSL certificate, e-commerce hosting, themes and design of your online shop and any other third-party tools⁴. 

Note on Payment Collection and License Issues for Online Shops

You may consider setting up an independent business bank account to manage transactions on your online shop. To ensure a seamless payment collection and smooth business operations, also to facilitate account management and filing of taxes, opening a business bank account could be a wise decision. 

Once you have decided on the goods or services you want to sell, it is also important to note that other types of licenses may be required for certain businesses, or you may have to obtain specific qualified certifications⁹. For example, if your online shop sells restricted foods (e.g., sushi, frozen desserts, cakes, etc.), you need to obtain a restricted food permit¹⁰. 

Are you planning to start a new business and open an online shop? Open a business bank account at DBS SME Banking now and manage payment collection of your online shop, and many other business financial needs with ease. Click here to learn more. 

The above information is for reference only. For more detailed information, please refer to the source and seek appropriate professional advice as necessary.

Article Published on 1 February, 2024

1Source: Entrepreneur (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.entrepreneur.com/) - 12 Steps to Building a Successful Ecommerce Site in 12 Months (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.entrepreneur.com/growing-a-business/12-steps-to-building-a-successful-ecommerce-site-in-12/284175)
2Source: Coursera (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.coursera.org/) - How to Build an E-Commerce Website: Your 2023 Guide (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.coursera.org/articles/ecommerce-website)
3Source: BBC News (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.bbc.com/news) - “One Fastly customer triggered internet meltdown” (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.bbc.com/news/technology-57413224)
4Source：Forbes Advisor (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.forbes.com/advisor/) - How To Build An eCommerce Website (2023 Guide) (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.forbes.com/advisor/business/software/how-build-ecommerce-website/)
5Source: Inland Revenue Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/welcome.htm) - Internet Business (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/tax/bre_ib.htm)
6Source: Inland Revenue Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/welcome.htm) - "Business" Required to be Registered & Application for Business Registration (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/tax/bre_abr.htm) - How to Register & When to Collect Business Registration Certificate (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/tax/bre_abr.htm#a3)
7Source: Inland Revenue Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/welcome.htm) - Business Registration Fee and Levy Table (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/pdf/brfee_table.pdf)
8Source: Inland Revenue Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/welcome.htm) - Exemption from Registration or Payment (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/tax/bre_erp.htm)
9Source: Inland Revenue Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/welcome.htm) - Apart from Business Registration (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.ird.gov.hk/eng/tax/bre_fbr.htm)
10Source: Food and Environmental Hygiene Department (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.fehd.gov.hk/english/licensing/online_restricted_food.html) - Sale of restricted foods online (https://www.dbs.com.hk/sme/disclaimer.page?url=https://www.fehd.gov.hk/english/licensing/online_restricted_food.html)