Most of the businesses we work with sell their products both in physical stores and online. And while investing in an online store is a lot cheaper than bricks and mortar, it is still an investment and you need to make sure you have a plan in place to ensure that you get your money back and then some!
There are some great, established marketplaces, such as eBay and Amazon and for small businesses this is a great way to get started, but serious merchants will find that they can get much better results from their own website, if they invest in the right solutions.
Selling on your own website usually enables you to have more control over the customer’s purchase experience. Even if this simply means that your competitor’s products are not showing on the same page, it is worthwhile! You will usually have lower transaction fees as you can process payments directly through PayPal (2-3%) instead of paying both listing and transaction fees (which can be well over 10%). And you will be more stable and less reliant on third parties, who may put restrictions on your accounts.
Despite the many positive benefits of running your own eCommerce website, there can be just as many negatives, but this is often simply due to poor planning and implementation. So what do you need to do before you start selling online to ensure that you succeed?
1. Make sure you have a market!
Who is going to buy your products online? Usually, successful offline-stores make successful online-stores and people sometimes just put it down to the existing customer base… However, these businesses often work because there is already a market for the products that they are selling. It is true that the best place to start your online presence is with your existing customer base, but by going online you will open your product up to a much larger range of customers that you may never have been able to reach otherwise. It is not possible to know for sure whether a market exists, but doing a little research before-hand is crucial. In some cases, you will even see customers demanding an online store. If you have a basic website already, are customers asking you about buying online?
2. Understand your competition
All new online stores need to do some competitor research. If you are selling very similar products to your competitors, your customers will be heavily influenced by price and you will need to make sure that you can match or better their pricing. You simply can’t compete with a business that is selling your product for less than what you pay.
Reviewing your competition regularly is a core part of running any business and you need to ensure that you understand your costs even before you order your inventory. That said, if you have a unique or custom made product, the focus of your competitor research might need to be on the product rather than the price and this leads us to the next point…
3. Don’t be your customer’s best friend
Don’t feel obliged to offer competitive pricing if you have a product that is custom made or simply better. Sometimes you will need to act like a business and make a profit. Whilst building rapport with customers is important, becoming overly friendly with your buyers may be a time sink. Your customers are often interested in the best deal for them, but that might not be viable for you to provide as a business owner.
Also make sure that you do not take things too personally. If you have an angry customer, never threaten or play the blame-game. Take a break and come back with a cool head. Your goal is to stop any action by the customer that might negatively impact your position in the marketplace, such as a bad review. Keep the relationship professional.
4. Invest adequately (and reinvest to grow)
Don’t underestimate the costs in building a successful website. Make sure that you engage a team who understands the importance of usability and a smooth, seamless checkout experience. If you can’t invest adequately at the start, you may need to look at simple solutions, such as PayPal payment buttons, which might help you to determine if there is a market for your product online. The problem with these cheaper solutions is that it’s difficult to know if you are missing further sales that could have fueled your growth. This becomes even more important as you start spending money on marketing… If there is an issue on your website costing you 50% of your sales, a $200 website fix might solve it, which would have the same benefit as doubling your total marketing budget.
Set goals and re-invest your profits! Make sure you invest in both your website and your inventory. You need to source products in the right volume to be competitive and this is a high priority. You should set goals before spending the profits or paying yourself a bonus.
5. Automate to grow / scale
You don’t need to grow your business before you can automate it. There is now a wide range of quality software for e-commerce. While the best solutions are not always cheap, we will suggest the best solution in your price range, because it is always beneficial to automate your business. Automate your business in the early stages, so that it does not prevent you from growing later.
A good website should empower sellers, with tools and features, such as automated tracking numbers, calculated shipping rates and customer communications.
6. Test and improve your checkout process
On many websites, there are more customers abandoning their cart than those that complete the checkout process. This is usually due to poor checkout implementation. Your website must be reliable and easy to use.
Telling your customers about the steps involved can be an easy way to avoid frustration and keep them engaged. Allow your customers to create accounts, so that they do not have to enter their details every time they purchase. If possible, personalise the experience for your customers.
Also consider localising your results or focusing your efforts on your desired geographical market. This might be as simple as registering a .com.au domain name to target Australian customers, or as complex as a using your customers location to show more accurate pricing or more relevant products.
7. Don’t spread yourself too thin
As a business owner, your to-do list will often be longer than your arm. Make sure that you don’t spend all day “growing your business” on Facebook, Twitter and Pinterest and forget to ship your items in a timely manner and don’t delay in adding new items. Time management is extremely important and any business will need to focus on their service delivery before marketing.
8. Don’t expect overnight results
Most successful online businesses have spent years developing trust with their customers. When you enter with no feedback or reviews, buyers might be more cautious of the “unproven” seller. Don’t expect to get an immediate rush of customers. It can take a lot of perseverance to successfully sell online, especially with a new product. Put in the time and profit!
9. Don’t forget about marketing
A website is not a marketing plan. Unlike a physical store, when you set up a website no-one is going to see it unless you show it to them. It is not enough to simply submit your website to the search engines and hope that they will send you customers.
You need to market your website aggressively and get in front of your customers when they are most likely to purchase. Ideally you can integrate your website with your offline business. If you are solely relying on online sales, you will need a well researched marketing strategy. Consider investing in search engine marketing, social media, display advertising and/or remarketing.
10. Be sure to have a backup plan
What would happen if you couldn’t fill an order, ran out of stock or fell ill and couldn’t reply to customer emails? Most buyers won’t care that you are trying to take a holiday, they won’t care if your internet connection was knocked out by a storm or even whether you are sick.
At some point, you are guaranteed to experience these difficulties and you need to ensure that you have people and procedures in place to handle it, whether that is a spouse, partner or employee. Document your process so that someone else can take over if they need to. Documenting your process is also essential to scaling your business, as it will help you when employing new staff, freeing you up to grow your business and perhaps even sell it.