Start an online store: the market, the rules and what you keep per order
An online store lives on what is left per order after shipping, returns, payment fees and advertising, not on its gross margin.
In this topic: Starting by industry 5
Start an online store: the market, the rules and what you keep per order
An online store does not live on its gross margin but on what is left of each order after shipping, returns, payment fees and advertising.
An online store lives on what is left per order
If you want to start an online store, the first number you calculate is usually the gross margin. Noor plans an online store for linen bedding. She buys a duvet cover for €32 and sells it for €80 excluding VAT, so on paper 60% of the price is hers. Then come the parcel, the returns, the card fee and the advertising that brought the customer in. Of an average order of €80, about €16 is left for her storage unit, software, accountant and her own income.
That gap explains why many online stores grow in revenue and stay short of cash. The amounts here are in euro; the logic works in any currency.
How big is the online market?
In 2025, 78% of internet users in the EU bought or ordered goods or services online, against 62% in 2015 (source: Eurostat, February 2026). In the US, retail e-commerce sales reached $340.2 billion in the second quarter of 2026, 12.2% more than a year earlier and 17.1% of total retail sales (source: US Census Bureau, August 2026).
Most online sales are not to consumers at all. Businesses in 43 economies generated close to US$25 trillion in e-commerce sales in 2021, and in most of those economies sales to consumers were less than a quarter of the total (source: UNCTAD, June 2024). If your product suits companies or schools, look at that market too.
What that means for a new online store
- Competition crosses borders: your customer compares you with foreign sellers and large marketplaces in the same search.
- Margins are made per parcel: a low order value with a bulky product rarely works.
- Marketplace or own shop: a marketplace brings visitors but takes commission and owns the customer; your own shop gives you the customer data, but you pay for every visitor.
The rules for selling online in major markets
The principle is similar almost everywhere: a consumer who buys without seeing the product gets extra protection. You inform clearly, deliver on time, refund correctly and often owe tax where the customer lives. The details differ per market, and the EU has added several new rules in a short time.
| EU rule | What it means for an online seller | Status |
|---|---|---|
| Right of withdrawal | Consumers have 14 days to withdraw without giving a reason; if you did not give the required information, they get one extra year; you refund within 14 days of being notified (source: Your Europe, July 2026) | In force |
| Withdrawal function | Online contracts need an easy-to-find function labelled "withdraw from contract here" or equivalent wording (source: EUR-Lex, November 2023) | Applies from 19 June 2026 (source: EUR-Lex, November 2023) |
| General Product Safety Regulation | The offer shows the manufacturer's name and postal and electronic address, a responsible person in the EU if the manufacturer is outside the EU, product identification with a picture, and warnings in a language consumers understand (source: EUR-Lex, May 2023) | Applies since 13 December 2024 (source: EUR-Lex, May 2023) |
| VAT and the One Stop Shop | Above €10,000 a year in sales to consumers in other EU countries, you charge the VAT of the customer's country and can declare it through the One Stop Shop; the Import One Stop Shop covers consignments up to €150 (source: European Commission, October 2026) | Since 1 July 2021 (source: European Commission, October 2026) |
| European Accessibility Act | Online shops must meet accessibility requirements; service businesses with fewer than 10 employees and under €2 million turnover are exempt (source: Your Europe, July 2026) | For services placed on the market after 28 June 2025 (source: Your Europe, July 2026) |
| Packaging and Packaging Waste Regulation | One regulation for all packaging, applied in phases: harmonised labelling from 2028, limits on empty space and reuse targets from 2030 (source: European Commission, August 2026) | Applies since 12 August 2026 (source: European Commission, August 2026) |
Outside the EU, the same questions get different answers.
| Market | Cancellation, returns and delivery | Tax on remote sales |
|---|---|---|
| United Kingdom | Customers can cancel up to 14 days after delivery, or up to 12 months if you did not tell them about this right; deliver within 30 days unless agreed otherwise (source: GOV.UK, October 2026) | VAT registration with HMRC once you pass the registration threshold |
| United States | The FTC mail order rule requires a reasonable basis for any shipping time you state; without one you must be able to ship within 30 days, and if you cannot ship on time you ask consent to the delay or cancel and refund promptly (source: US Federal Trade Commission, July 2025) | Since the Supreme Court's Wayfair decision, states can require out-of-state sellers to collect sales tax above a state threshold; in California that is more than $500,000 in sales into the state (source: California Department of Tax and Fee Administration, October 2026) |
| Canada | Consumer protection is provincial; in Ontario, a business that agreed no delivery date has 30 days to deliver (source: Government of Ontario, April 2025) | GST/HST registration once taxable revenue exceeds $30,000 in a calendar quarter or over four consecutive quarters (source: Canada Revenue Agency, January 2026) |
| Australia | No refund is required when a customer simply changes their mind, but a business with a change-of-mind policy must follow it; consumer guarantees cover faulty goods (source: ACCC, September 2026) | GST registration within 21 days once GST turnover reaches $75,000 (source: Australian Taxation Office, September 2026) |
In the EU and the UK, a missing cancellation notice extends the period in which customers can cancel to about a year, so returns can arrive long after you counted the sale.
- Where your customers live: consumer law and tax usually follow the customer, so list the countries you ship to.
- Product rules: cosmetics, food, toys, electrical goods and textiles have their own labelling and safety rules.
These rules change often. Check the official portal of each country you sell to before you launch, and again every year.
Where the margin of an online store goes
Work through one average order from top to bottom. The result is the contribution per order: what each order adds towards your fixed costs.
- 01
Gross margin
Selling price excluding VAT minus the purchase price including inbound freight and duties. The most flattering number in your plan.
- 02
Shipping and packaging
The carrier's rate for your parcel, plus box, filling and labour. Free shipping moves into your margin.
- 03
Returns
On a returned order you lose the margin, the outbound parcel, the return label and handling. Per order: return rate times cost per return.
- 04
Payment fees
A percentage plus a fixed amount per transaction, usually not refunded when you refund the customer.
- 05
Marketing per order
Advertising spend divided by the orders it produced. Repeat customers from your mailing list cost far less than new ones.
Fixed costs come on top, including your own income. To compare your cost structure with retail as a whole, use the industry figures.
Worked example: how many orders does Noor need?
Noor has €1,000 a month in fixed costs and wants to pay herself €2,500 a month. In the first plan, most customers come through paid social media. In the adjusted plan she sells sets of duvet cover and pillowcases, sends fabric samples and better photos to reduce returns, and builds a mailing list.
| Per order, excluding VAT | First plan | Adjusted plan |
|---|---|---|
| Average order value | €80.00 | €95.00 |
| Purchase price (40%) | €32.00 | €38.00 |
| Gross margin | €48.00 | €57.00 |
| Returns (15% and 10% of orders; lost margin plus €8 label and handling per return) | €8.40 | €6.50 |
| Shipping and packaging | €7.50 | €8.00 |
| Payment fees (2% plus €0.25) | €1.85 | €2.15 |
| Marketing per order | €14.00 | €10.00 |
| Contribution per order | €16.25 | €30.35 |
| Orders per month to cover €1,000 fixed costs | 62 | 33 |
| Orders per month to also pay Noor €2,500 | 216 | 116 |
Fictitious Firmfocus example. Amounts excluding VAT. Orders rounded up: €1,000 / €16.25 = 61.5, €3,500 / €16.25 = 215.4, €1,000 / €30.35 = 32.9, €3,500 / €30.35 = 115.3.
The first plan needs 216 orders a month before Noor earns her target, about seven every day. The adjusted plan needs 116. A higher order value, fewer returns and cheaper repeat customers almost double the contribution, and that matters more than extra traffic. For the method, see sales forecast and break-even and pricing.
Small or larger start
Side business through a marketplace
You start next to your job with a marketplace account or a standard shop subscription, a small stock and parcels from home. You learn quickly what sells; the commission belongs in your per-order calculation. See starting alongside your job.
Own shop with stock and staff
A wider range, a fulfilment partner and staff for service and packing. You need financing for stock and advertising, and cash flow becomes the main task, because suppliers are paid weeks before customers pay. Above the micro-enterprise limits, EU accessibility requirements apply.
Pitfalls for a new online store
- Planning on gross margin: in Noor's first plan, a 60% gross margin leaves about 20% of the order value. Calculate per order before you buy stock.
- One channel only: if all customers come from one advertising platform or marketplace, a policy or price change can stop your sales overnight.
- Too much stock: a large first order is cheaper per unit, but unsold stock ties up the cash you need for marketing.
- Competing on price: large sellers can always go lower. Compete on range, advice or a niche they do not serve.
Other industries work differently: compare the guides on a clothing store or a consultancy in Starting by industry, or return to the overview Start a business.
Do I need a licence to start an online store?
When do I charge the VAT of my customer's country in the EU?
What does it cost to start an online store?
Sources
- Eurostat: E-commerce statistics for individuals (February 2026)
- US Census Bureau: Quarterly Retail E-Commerce Sales (August 2026)
- UNCTAD: Business e-commerce sales and the role of online platforms (June 2024)
- Your Europe: E-commerce, distance and off-premises selling (July 2026)
- EUR-Lex: Directive on the withdrawal function for distance contracts (November 2023)
- European Commission: VAT One Stop Shop (October 2026)
- US Federal Trade Commission: Business guide to the Mail, Internet, or Telephone Order Merchandise Rule (July 2025)
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