Ecommerce has grown by leaps and bounds as consumers are now more comfortable shopping online. As a result, the Web has become a viable retailing medium for small businesses.
If you are thinking of starting an online store, here are some steps to consider:
1. Think of your overall business strategy.
Selling online is just like any other business: you need to think carefully what you want to do. There are a lot of questions to think through, and some of the things you need to consider are:
- What will you sell?
- Will you sell a product that you yourself have created, or will you sell products that you can get from suppliers?
- How will you make your online store different from competition?
- What is the level of demand for your products?
- Do you have the resources to start the business?
2. Find your niche.
It is very hard to be the next Amazon.com where you sell everything and anything. Without deep pockets, your option is to find a niche that you can focus on and excel at. You can choose to target a specific market (e.g. college students, backpackers, home office owners) or you can choose to provide the best inventory for a particular product (e.g. iPad cases, scooters, Murano glass necklaces).
3. Start thinking of your how you want to present your storefront.
Your goal should be to create a polished and professional storefront. It all starts with the name of your store. Since this is an ecommerce store, you need your store name to be the same as your domain name. With most good keywords snatched up, you’d want to find an available domain name that will clearly represent your online store.
4. Line up suppliers and wholesalers.
Once you have a clear idea of what you are going to sell, start the hunt for suppliers and wholesalers. Check if you can buy directly from the manufacturer, especially if this is a branded product. If not, find out who is the exclusive distributor, importer (if the item is imported), or wholesalers of the products. Contact them how you can buy the products for resale. It is important to understand that each industry has their own distribution process. In most cases, it will not be easy to find the supplier willing to sell to you.
5. Set up your website.
There are two ways to start selling on the Web and creating your ecommerce storefront:
- Use a turnkey vendor that provides everything you need to operate a storefront for a monthly flat fee. One example is Yahoo Store where the price can be as much as $224.96 per month http://smallbusiness.yahoo.com/ecommerce/compare-plans
- Build your own ecommerce website from scratch and put together the elements needed to run an ecommerce store. The cost will vary depending on the bells and whistles that you add to your storefront, as well as what you can do yourself vis-à-vis what you need to outsource.
If you build one from scratch, you will need the following essential elements needed to run an online store. To give you an idea of how much each cost, I included some of vendors and their prices (some vendors may offer lower or higher prices):
- Domain name (about $8 or less per year)
- Web hosting (anywhere from $24 for more robust solutions than the cheap $2.99/month to as much as $1000+ per month depending on your volume)
- Merchant account fees (if using Paypal, bank provided merchant account)
- Payment authorization gateway such as Authorize.net http://www.authorize.net/solutions/merchantsolutions/pricing/ (can be $20+ per month)
- SSL Certificate (https:// for secure transactions) – Verisign offers anywhere from $399-1299 per year depending on encryption strength http://www.verisign.com/ssl/buy-ssl-certificates/compare-ssl-certificates/index.html
- Shopping cart software such as Volution, which is anywhere from $19/month for 100 products to as much as $149/month http://www.volusion.com/ecommerce/web-hosting/
6. Set up your business processes.
There will be a number of processes involved in running an online store, and it is best to be prepared as soon as you can.
- Who or how will you photograph the products and write the copy? The easiest way is to get the product photos and copy from the manufacturers. However, if you want to establish a strong search engine presence (and get more traffic for your online store), it is best to make your own photos and write your own product descriptions. If you simply reuse what the supplier has given you, there is a strong chance your website can be filtered out of the search engines especially if the manufacturer and hundreds of other sellers are using the same exact copy.
- Where will you store your inventory? Your garage may be ok at the beginning, but as your business grows, so will your inventory. You need to find a space to keep the items you have for sale.
- Who will do shipping and fulfillment?
- How will you handle returns?
7. Market your online store.
Just because you built your online store doesn’t mean that customers will come. You need to spend a great deal of time marketing your website and getting traffic to it. The key to success is to select products that people want to buy, with a website that is easy to use and setup in such a way that search engines will love. You can use a variety of techniques to get traffic, including social media, search engine optimization, online and offline promotions.
8. Track your performance.
It is critical to have a plan in place to track measure and monitor the performance of your online store. There is always room for improvement, and it is important to know problem areas as soon as they develop. Use analytics software such as Google Analytics, carefully tying it with your sales performance. You need to look at metrics that help measure the size and quality of your traffic, how visitors are interacting with your site, and metrics to help track your ROI.
For more information, get the book How to Sell More Online: 40 Tips for the Small Online Entrepreneur