The e-commerce market emerged as a subsequent economy area, and is now spreading its wings. According to Adobe Analytics (report from DigitalCommerce360) within the first “10 days of the holiday shopping season, U.S. consumers spent $21.7 billion online”.
While the customers went wild, the coronavirus pandemic has left businesses wonder in a Hamlet-like way: To be or not be. Under current market conditions, it was not an exaggeration. It literally meant either opening ecommerce sales channels or closing up for good. It’s now obvious that the only way to survive is to focus on constant growth. No proof needed, as we ourselves witness the ecommerce boom.
If you are shopping for business ideas, then most likely you will consider online sales. What if you come to regret it after a few months? How to run an online store, make profit, and attract a crowd of customers - all at the same time?
REMINDER! It is not enough to open up an online store and wait around for success.
There are many factors that determine the online sales success. It is obviously the time and work you put into preparing and running an e-shop. Yet, we encourage you to analyze the e-commerce basics. To make it easier, we present a list of common issues. Don’t take it lightly, yet consider them thoroughly. Be extra careful, if you are a novice. Take your time and prepare yourself, go through all stages. Just then, you will be ready to run your business with success.
We have complied for all of you, a practical cheat sheet guide. For those taking their first steps or in ecommerce or are planning to do so. Also, it may prove useful to those of you who already have their own business and wonder what else to improve.
So, reserve some free time and sit back. Make sure that no one disturbs you. Examine each of the following points while answering all questions. Don’t provide ambiguous or simplified answers but get into it. It is your business future at stake, so everything applies. Each answer is a key part of your business plan. Then imagine your business flourished. Being in that frame of mind, you will learn about all the business intricacies. It gives you a chance to prepare for the things to come.
1. Your store's offer
Setting up an online store itself is not that difficult these days, in fact - everyone can do it. There are enough IT tools on the market you can choose from. You need a strategy if your idea is starting a profitable business with lots of sales. Thus, reflect on one question: What should I sell?
Nowadays, it is possible to sell almost anything on the Internet. The range of possibilities is almost endless. The IDEA is a key word here. Begin with that and decide what to sell and why. And just like that, you have taken your first step towards opening up your own e-shop. Then determine the potential target group who will be interested in your product offer and why. Put yourself in their shoes and answer yourself: If I were that customer, would I buy it and why? Once, you do that, look at your competition. How is their business doing: is there any market demand, do they have many customers? Observe anything you can.
- Can you identify your potential customer? What are their needs?
- Does your offer meet the current market demand?
- What problems will solve products / services you wish to sell? Do they offer your customers any additional value or opportunities?
- Is the product / service a onetime or a regular purchase?
- How much are your customers willing to pay for it? What are the costs you will have to bear?
- How does your competition present your offer? How can you improve it and emphasize that advantage on your website?
- Can you convince the customer to buy from you? How will you achieve it?
How will you encourage them to come back and recommend your store to their friends?
2. Co-workers - who will help you?
Opening your own e-shop comes with several obligations. Be honest and answer: will it be possible to handle everything by yourself? Here, the answer may vary. It depends on your experience, skills set and hands-on e-commerce know-how. If you decide, you can handle it on your own, then multitasking awaits you. You will need to take care of many tasks if you want to sell online. Those include customer service, financial settlements, procurement and shipping, settling complaints or returns issues, etc.
Is controlling each aspect manageable? Consumers pay great deal of attention to the quality of customer service and response speed. Will you keep up and guarantee that high-quality customer service? Being on good terms with customers and maintaining that relationship is a priority. It means replying to customer questions in time, addressing any issues they might have and keeping them up to date with their order status. Meanwhile, you need to run and manage promotional events or growing your online store. If you think about the vast range of responsibilities, you may require some support, at least in the beginning. If it’s not the case, then once you’ve started plan who else could be of help.
- Do you know what tasks involve running an online store? Collecting orders and shipping them is only a small part of the actual work.
- Do you have the know-how and skills set e.g. multitasking to juggle many tasks at the same time?
- Think about how will you manage the overall store’s offer. Who will enter product info into the system? Will you create rich multimedia content: take good-quality photos or even shoot videos? Who will write appealing product descriptions?
- What about the logistics? Will you order products from suppliers and store them? Who will deal with preparing orders for shipping? What delivery methods will you offer (public post office or courier services)
- Do you have the skills to deal with the financial settlements yourself? Are you confident enough to solve issues and mistakes? Do you trust your judgement?
- Will you accept and fulfill orders yourself? Will someone else deal with the complaints and returns? How about maintaining a good relationship with the customers?
- Will you ensure and maintain high-quality customer service?
- Can you manage other business tasks while running promotional events? And display your offer on social media channels and websites?
Will you draw up the stores regulations yourself? Are you confident the document will correlate with a specific market and be legally binding? If you have even small doubts, maybe get expert help. Make sure you protect yourself from breaking the law and/or financial penalties.
3. eStore procurement and suppliers
Since you already know your core product, it is prime time to think about procuring supplies to sell. Finding the right supplier is essential and affects the success of your online shop. You will want a company that provides a quick delivery and products at favorable prices. Once you get one, running the store becomes easier.
Choose cooperation with just one wholesale if you do not intend to store goods anywhere. In this way, you can order only the products people already ordered. Otherwise, if you have bought a lot of stock, then you would have to wait for ROI (Return on investment) and place orders with a supplier. It would have to extend the overall fulfillment time on both sides: yours and the clients.
- Have you already selected a single supplier or intend to cooperate with other companies?
- Does the wholesaler specify the ETD (Estimated Time of Delivery) for ordered products?
- Do you have an alternative scenario in case the supplier cannot fulfill the order and deliver it on time? How will you get those products in a flash and enable their purchase?
- How will you settle the accounts with your supplier? What payment methods (e.g. advance or other) and timeframe will you agree on (after sale)? Will the supplier let you return the remaining unsold items?
- What delivery requirements are acceptable for you? Will the supplier manage the delivery, or would you rather to pick it up yourself?
- Are there any limitations on transporting the products to the store (size, weight)?
- Do you need to keep the products in a controlled storage conditions (e.g. particular FMCG products require a specific temperature)?
- Are you able to forward the goods right away to your customers? What is your company’s ETD for completing the order?
- What shipping methods would you prefer? Have you calculated the standard transportation cost? Is it a fixed fee amount guaranteed or it might change whenever?
Does the supplier offer shipping single orders directly to your buyers?
4. Budget to start
The Internet is the best place to test your business idea without incurring upon yourself a high financial risk. You should estimate an initial budget and decide which elements are vital to start your business and which you can introduce later on. Here is a simple strategy, since setting up the online store comes in stages, do the same with your budget. First, select the must-have factors will enable you to run the store. Break down the cost for each and determine its fair cost. Then compare it with your financial capabilities.
- Do you know the actual cost of establishing and maintaining an online store platform? What budget will you need at the beginning? What about the fixed and variable costs you will need to add later?
- How will you gain the funds to launch the online store?
- Did you include typical IT aspects into the equation? For instance, managed hosting, domain and SSL certificate purchase, etc.
- How much is the cost of drawing up the store regulations or enriching the product content (photographs, descriptions, designing promotional materials, etc.)?
- How much are going to spend on promotion and initial marketing activities? For instance, SEO, placing your products in price comparison websites, using sponsored links or launching advertising campaigns. You will need those tools to promote your store, so the customer can find you.
- Have considered including social media and industry websites in your budget? If not, do that. These are additional sales channels that again will increase presence online and help customers find you.
- Time is also a resource you need to include in your calculations. Set a timeframe for cooperation and discussing arrangements with the software vendor and suppliers. Make sure you prepare all marketing materials, the website launch and product content, etc. How long will it take you to get everything ready?
What is your initial investment in the commodity? It may happen your funds will get stuck in inventory, do you have plan how to avoid it? If you are unsure, then consider spending less on goods and more on store promotion?
5. Product presentation
At this stage, you decide how to display products on the website. How you do it has a tremendous impact on how your customers will perceive the store and its products. Thus, product info must be comprehensive, include technical parameters, items available variants, prices or delivery conditions.
Well-thought out and appealing product presentation has a significant impact on the final purchase decision. During the process, often the emotions guide our customers. The idea is to convey and encourage the emotions you want your clients to experience. Can you achieve that result? Adapt it to the target industry and group and make sure your product description is comprehensible. If you do that, you will gain greater customer trust.
- Did you know that most customers “buy with their eyes”? What can you do to convince them they should choose your product?
- What steps should you take to show your product’s better than your competition’s?
- Will you offer your customers a multi-product comparison tool on your store’s website?
- What product information will you include in a single offer? Any additional info your customers may need?
- Do you have extensive knowledge about products you sell? Are there any special features?
- What differentiates your products from to others? Do you have any ideas on how to show that contrast?
- How detailed will be your product descriptions? In what way will you highlight their extra features?
- How about product descriptions? Will you get them from a supplier or maybe create them yourself? Have you considered outsourcing those descriptions to a copywriter and/or a proofreader?
- Who will take product photographs? Will you do it yourself or hire a professional?
- Have considered using video presentations or products’ interactive 3D models?
- Do you have all necessary product certification documentation, including product safety data sheet (PSDS)? Are you confident your knowledge about those products is adequate?
- Will you enable your customers to post product reviews?
- Have you decided if you will use “You may also like…” feature to suggest users other products that may interest them?
- Have you considered grouping your stock into several categories? Will the potential customers find them obvious and intuitive?
Do you know what is your customers’ path to finding your products? Will you provide them with a basic or more advanced product site search? How will you build a buyer-friendly search with easy-to-use filters?
6. E-commerce software selection
Choosing the right e-commerce platform is a vital factor makes operating a successful business much easier. If you look at the ecommerce software market, there is a wide variety of “out of the box” software options. Those ready-to-use packages envision opening an online store in no time. Alternative way to go is finding yourself a company who provides technical support all the way i.e. from opening a platform to launching your sales. Some focus on creating extensive and dedicated sales platforms to meet the expectations of store owners and buyers. We recommend them to any brands whose position on the market is strong and who have a rich and extensive product offer.
Selecting an ecommerce software should be well-thought out. Best if it the platform would include and follow your business plan key concepts. As there is no perfect or versatile tool, you need to x-ray your needs and analyze them through and through. While doing so, consider the following factors: business scale, time to spare, skills set, product range and type, required features and the initial implementation’s budget. Throw into the mix, the software’s further development. You can learn more by observing your direct competition. It may be helpful to see what the others do that works and what does not. By looking at those companies, you can implement already the best solutions and implement them at a lower risk.
We will help you choose the right platform for your needs. Write to us.
- Are you up-to-date with the popular and current IT solutions on the market? Do you know how they all differ (e.g. in terms of features)?
- Have you already chosen the software for your ecommerce online shop? If so, why the one is the best?
- Think a moment about your products’ presentation to customers. Will it require you to take a standard approach or display the product with a little sparkle? For instance, highlighting a unique feature by increasing its visual appeal?
- To what extent those selected ecommerce platforms will meet and adapt to your factual business expectations? Will they allow you to alter its structure and features? Will it be enough to distinguish your store from the competition? Do they support and are compatible with any mobile devices?
- What is the actual implementation cost for your software now and within the next few years?
- Does the ecommerce platform give you room for further improvements and adding new functionalities?
- Have you already decided what systems’ integration you may need? There are several options at your disposal e.g. payment operators, courier companies, suppliers’ warehouse systems, CRM or marketing support systems, etc. Do you know which ones will be useful to you?
When would like to sell your products (i.e. launch deadline)?
7. Warehouse and logistics services: delivery
Now, it is time to consider such aspects of ecommerce like the logistics and storing goods in a warehouse. Already upon starting your own online store, develop a method to keep all products organized. It is best to select a method that suits the industry, and your company’s business profile. For those who have just stepped in ecommerce, drop-shipping may be a good fit. The supplier sends the goods direct to the buyer.
Another strategy is cross-docking. In the scenario, the goods travel to the warehouse, one reloads and forwards them further in a supply chain. The company’s development combined with a vast product expansion follows getting a warehouse or investing more in storage space. Then the company gains a great deal by becoming even more profitable. Flawless and efficient order fulfillment process is fundamental for ecommerce success. A substantial part of it is the efficient inventory management.
- How vast range of products will you offer in your store?
- Where do you intend to keep the merchandize (e.g. at home, at supplier’s warehouse)?
- Who will fulfill and sending out the orders to customers? You, yourself or your supplier? For instance, if you take this on, have enough storage space and will deliver parcels to courier shipping points.
- Can you estimate an order amount per week? With that in mind, do you have enough storage space to keep all the upcoming order packages?
- Do you need to provide special storage conditions for your products (e.g. FMCG products require a cold storage facility)?
- What do you intend to do, if the order amount will increase unexpectedly many times over?
Or just opposite, when no orders will come in for several months?
8. Billing and payments options
Nowadays, a wire transfer is not enough. Your customers should have a free choice of payment methods. Therefore, include a multi-payment option in your ecommerce store. It guarantees your customers security, flexibility and comfort of use. It will significantly increase customers’ engagement in the long run.
On the market, you will find many diverse types of payment. It is vital to offer payments options suitable for your client preferences and habits. For instance, some clients may want to choose COD (Cash on delivery) while others would like to pay via PayPal or any other e-wallet. From time to time, observe also popularity of payment types on various markets and any new ones emerging in the Fintech sector.
- How are you going to settle accounts with your clients? Can you enable internet-based payments to them?
- Can you provide one or various payment options?
- Is it possible to offer your customers an installment payment plan? Especially when buying many or more expensive products? Have you calculated the approximate cost of launching such a payment?
- How much are the transaction fees for installment payment systems operators?
- Cash on delivery payment is satisfactory for clients. For you, it delays receiving the payment for orders. Do you know, what is the estimated delivery and payment timeframe for COD option?
- Will you issue invoices (paper, electronic) or receipts? Do you know, when it is best to choose a specific financial document? How much will cost each of these options?
- Will you include automated return option in your online store for your customers’ comfort?
Many users feel forced to share their personal info and memorize their account passwords. Will you enable your customers to buy items as guests (no registration or account required)?
9. Delivery options
Customers have many motivations to buy online. Delivery is quick, and they can return ordered items with ease. Here, you can gain a competitive advantage, e.g. by sticking to delivery time and shipping cost and following them through. You can segment customers to various groups and prepare special purchase schemes. For instance, one group may require a fixed delivery date at a specific time, then you will make sure they get it on time. Some customers will choose a flexible order pickup. Meanwhile, for others delivery price will be a priority.
Consider free shipping, as it is very popular and customers welcome it every time. It has a potential to increase your sales due to a psychological technique i.e. positive reinforcement.
- What shipment methods apply to deliver the orders? Will you provide one main delivery option or a range of choices?
- Will these methods allow to track shipments’ status? What will you do when a shipment has not reached the customer? How will you handle the situation, if you miss that deadline?
- Did you know you need to include a product return option within a platform? It may generate substantial loss, hence what strategy will you apply to minimize the damage? Is the return policy clearly put, so any customers will understand its conditions? Did you place the policy on your website and include in the store’s regulations?
- Will you ship items abroad or just outside the EU borders? Do you know what delivery methods to use? Do you know what is the landed cost (all things associated with international trade: taxes, duties, etc.)? Did you make sure how a country-specific legal regulations affect the actual landed cost?
- What pickup options will you offer your customers (e.g. a curbside pickup, at pickup or service points?)
- What carriers will deliver the orders to your clients? Have you checked if they can transport items of all shapes and sizes (e.g. marble slab)?
- Can you afford to offer any free shipping (e.g. bulk orders, loyal clients)? What price would suit you best and even let you make a profit?
How will you show all delivery options and costs (e.g. a standard table, pop-ups, field selection etc.)? Will it help your customers see and understand clearly all the break-up costs (e.g. fees, taxes, etc.)?
10. Advertising and online store promotion
Sometimes, running an online store with a variety of products at reasonable prices, is not enough to talk about a genuine success. Of course, you can measure it by high sales figures and pie charts. However, always remember that behind those numbers are actual people, your customers. While opening your online store, you need to engage and appeal to them. The larger group of potential clients you reach out to, the greater chance you have to sell and succeed.
For starters, announce promotions and special deals. See what advertising tools and how you can apply in a situation. Analyze the customer data and go ahead with marketing strategies and IT tools. These two factors just may be what you need to get an e-commerce success.
- How are you going to let potential customers know you have just opened up an online store?
- Any ideas on how to persuade them to come and visit your store? What are the chances it will work?
- Have you considered increasing your online presence (e.g. search engines, price comparison websites)? What methods to use as to attract attention?
- How about SEO and promotion activities? Will you do that by yourself or outsource?
- Can you estimate a promotion cost? Will these ad-based methods guarantee your store being visible to potential customers or even visit and purchase an item at your store? Have you got a Plan B, in case it does not work out?
- Have you thought about offering appealing discounts for a friend recommendation?
- Will you let your customers use special features and tools that will advertise your products and enable to share them with others?
- Have you heard about audience interaction tools? Make a note and include them in your marketing plans.
Social media channels offer great opportunities for getting in touch with consumers. Did you know you can apply them to build your brand’s awareness and support online sales? Any ideas on how else to use them? Are you competitors using them too? If so, on a scale one to 10 - are they effective?
11. Sense of security
As an online shop owner, it is your job to ensure your online shop inspires trust. Since the first visit at your website, while entering their personal and financial details, upon to the point of the sale itself. Security has here a tremendous impact. The customers who feel confident and safe are more willing to make a purchase. If you improve that aspect, you can increase your store’s credibility and literally feel the sales rush.
There are several ways to do so. From a legal perspective in many countries, you need to provide company information. They include e.g. the address of registered office, or a direct point of contact to customers. Make sure that any documents related to purchase terms and conditions contain all necessary information and written in a comprehensible manner, so that customers know what to expect. If your company is transparent and legally compliant with regulations, then more customers will buy what you are selling.
What else can you do? On the website, include as many external communication channels as possible and make them visible. Be active in social media and engage customers in any way you can. Another way is sending a thank you note to customers for choosing your store. It shows a great deal of appreciation, while requesting modestly for recommending your store or the item they bought. It is a small favor to ask, yet some customers may even share it with their friends. These or similar actions you take, build your brand’s positive image and a long-term relationship with customers.
- Can you tell if your customers trust you? Have secured your online shop with up-to-date SSL certificates?
- What else can you do to increase your store’s security?
- Are you familiar with the GDPR and comply with these regulations? How will you inform your customers about GDPR compliance?
- When customers visit your store, can they tell who will be responsible and who takes care of its quality and customer service?
- What vibe does your store give (a large shopping mall or a small boutique)? Does it inspire customers through its appearance and high quality?
- Can customers with ease find information about return policy, file a complaint, or report any issue with items they bought?
- Have you informed customers about legal regulations in a comprehensible language? Did you double check it? Make sure you didn’t miss anything? Did you include options such as payment, delivery, returns, and complaints?
- Can you provide to your customers product guarantees? If so, how do you intend to handle any future complaints or warranty claims?
- Will you let your customers send inquiries about the store’s operation, product offers, shipping methods, or their delivery time? How fast can you respond and provide those answers? It may require activating real-time communication channel. Have you considered that option? If so, at what times your customers be able to reach you or customer services consultants?
- Will you enable customers to express their opinions about your store via product reviews, forms to send inquiries and report suggestions or issues?
Are confident that you can provide high-quality customer service experience? And within an acceptable time limit? How will you do it? Will you use templates (e.g. confirmations, order status, invoices) or for categorize incoming inquiries?
Review, develop, and monitor
Never rest on your laurels while operating an ecommerce business. Needs analysis will let you collect a set of tools required to set up a well-functioning online store. However, this is a glimpse into the ecommerce, a bare minimum to start an online business.
To gain a broader perspective, you need to think about the future and plan earlier. At hand, there are many issues to consider. Here is a good idea - try grouping them according to their complexity. You may use a scale from 1 (being the easiest) to 10 (being the hardest). Some aspects may more challenging than others, come back and re-examine them. While re-examining, new thoughts will flow and help you specify what other things require action and your undivided attention. Also, you will discover the ones you can optimize yourself and how. For some, you will need to hire an expert.
Before selecting that company, find out what is their scope of services. Pay utmost attention to ecommerce IT software available, however, remember to choose the ones which include post-implementation services, high-quality technical support and further cooperation opportunities. It is vital to determine all aspects before the launch and have the guarantee agreement the platform itself will operate well and be reliable at all times.
Keep in mind, all these separate actions are part of the entire business plan. They also contribute to your long-term benefits. While considering support actions you should pay particular attention to:
- Monitoring: Aim at constant control. It provides protection against operational failures and their vast consequences. The store, so to speak, is not ‘indestructible’ and resilient to faults. Thus, you must be sure that, if something goes wrong, then the reaction will be instant to fix those issues. One of such examples is dealing with heavy website traffic. You should feel secured that even at peak times the store will run and process orders well. The point is to get your money’s worth. The one you have already paid for store promotion and other services.
- Development: Your online shop requires constant optimization and adding extra features and solutions. Since e-commerce is a productive environment, trends and user expectations shift all the time. You need to follow them and adapt to your platform. Fortunately, there are infinite possibilities to improve platform’s operation aspects and customer shopping experience. You find that is true when you significantly multiply your catalog items during a short period.
- Fixing issues: We have already mentioned that IT support is crucial while choosing a software company to protect your ecommerce business (unless you chose otherwise). Removing existing flaws in actual time is their key responsibility. Here, customer involvement and input may be significant. You can apply a simple solution, create a form for the sake of reporting any errors and discrepancies. In this way, you get data which will enable you to improve your online shop at the lowest cost. Return the favor, award your customers with a special discount for items at your store.
Running your own online store is a great responsibility for the store platform, products, and customers’ satisfaction. To triumph, you just need to be customer-obsessed. That is right. Indulge customers’ every whim, make them feel special, and provide exceptional service. Since they already have a tremendous impact on your business, why not use to your benefit? Engage them to submit ideas, suggestions, and improve your business.
As a token of appreciation, they will purchase more and become your store’s ambassadors who recommend your store to others far beyond the cyberspace. And remember, your customers are literally your business.