You have a great lineup of products and you want to sell them without the hefty overhead costs, finding the right employees, finding the perfect retail space, without some of the “chores” of owning a business. Have you considered an ecommerce business? Depends, right? What’s an ecommerce business?
Alternatively, you already have an existing business in a commercial retail space and you want to grow it by entering the online world, but where should you start?
Ecommerce, otherwise known as electronic commerce or internet commerce, means buying and selling goods or services through the internet. These commercial transactions become an ecommerce business when money or information is exchanged for the product or service.
Ecommerce is everywhere. You’ve undoubtedly shopped online but may have never thought about putting your own business online or launching your small business through an ecommerce platform. From Amazon to Walmart Marketplace to Etsy. It allows customers to purchase goods and services at their fingertips, anytime and anywhere in the world.
There are many advantages to starting an ecommerce business including:
- convenience for consumers to shop online 24 hours a day, 7 days a week, 365 days of the year;
- low startup and overhead costs;
- worldwide product availability;
- easy to operate;
- ability to operate your business anywhere; and
- ability to use various social media platforms to advertise and sell your products.
Like everything, there are also disadvantages to ecommerce. Some are:
- competition - consumers can easily Google a product and purchase it at a lower cost elsewhere;
- lack of instant gratification; and
- little to no consumer and seller interaction.
Ecommerce brings in trillions of dollars each year globally. If you haven’t considered business in the online world, now is a good time to start.
When a consumer visits your website that displays your products or services, it is called your ecommerce platform. When a consumer wants to purchase products or services, they click on the items to add it to their shopping cart. Once the consumer is ready to purchase their selected items, they can go to their online shopping cart to checkout. Billing and delivery addresses are provided by the consumer and taxes and shipping costs are calculated. Communication between the server and payment gateway is done over a secure network; therefore, the consumer can submit their credit card information and complete their purchase. If the transaction is successful, an email is sent to the consumer to confirm the sale and includes fulfillment information. The consumer’s order is then fulfilled and sent to the delivery address with an email being sent to the customer that their order is on the way, usually with tracking information and an expected delivery date. Funds from the purchase will go to your business bank account.
Types of Ecommerce Business Models
An important decision to make is which business model(s) you are going to use. You don’t have to stick with one business model if more than one works for your business. Many ecommerce business models involve two parties, the business and the consumer.
Business to Customer (b2c) – the sale of a product from the seller to the customer. No one else is involved in the transaction. This setup is basic and easier to understand when starting an ecommerce business.
Business to Business (b2b) – the sale of products in bulk, at a lower price, from one business to another. The purchasing retailer will then sell the products to consumers at a higher price.
Dropshipping – the sale of products by a business to customers; however, the products are manufactured and shipped to customers by a third party. This method typically means less work for the seller and less of a monetary investment. The seller essentially doesn’t need to have any product stock and only handles the initial communication with the customer.
White Labeling – taking a generic product that is successful offered by a company that offers white labeling and selling it to consumers with your own label and package design. For example, mugs or t-shirts.
On-Demand Printing – personalization of a product with custom details requested by the customer on your online store. The product is then printed and sent to the customer.
Private Labelling – products that are sold with the seller’s brand name but manufactured by a third party.
Affiliate Marketing – using celebrities, influencers, brands or businesses to promote your product in exchange for a commission.
In addition to deciding which business models work for you, you need to decide if you’re selling a single product, multiple products or subscription services.
Ecommerce for an Existing Business
One of the great advantages of starting an online business is offering customers the option to buy online and pick up in store. Online purchases can be returned or exchanged in store which heightens the appeal of purchasing products through your online store. Starting an ecommerce business when you already have a preexisting business means you already have a good idea of how the products you’re selling are doing. If you already have a business website with steady traffic, you can put your products on there to sell. Many web hosting services have an ecommerce plugin that be added to the existing site making it much easier to start your online business.
If your business does not have a website but you have a point-of-sale system, check to see if it will integrate into an ecommerce platform. If so, your existing store inventory will sync with the online store thus making it easier to manage and track your inventory.
In the event that you don’t have a website or a point-of-sale, ecommerce platforms are readily available to host your products. Many businesses have found success on ecommerce sites such as Shopify, BigCommerce, Squarespace, etc. These platforms walk the seller step-by-step through the process of starting their own ecommerce business. It’s important to do your research on which ecommerce platform is most suitable for you. For example, look at user ratings for ease of use, what consumers and sellers like and don’t like about each platform.
Ecommerce for a New Business
Starting a new business, whether online or not, is an investment. You need to consider which business models best suit you, the image you want your brand to represent and the types of customers you want to attract. Ensure the product you are selling is in line with your business idea. Research the product you are wanting to sell and identify whether or not there is a market for it or if the market is saturated with that product already. It’s important to focus on a line of products or specific category rather than trying to sell thousands of products.
As with any new business, you will need to register your business, get a business license, apply for an employer identification number and decide what your business name will be. You should have a business plan and brand logo. Consider your monthly expenses, your startup expense and profit margin. If you require financial assistance, consider the various financial resources available to you.
Once you’re ready to start your online store, you need to have customer support in place, your special offers and discounts ready to go, email marketing and automated thank you emails set up prior to having shoppers visit your platform.
If you’re selling multiple products, put in filters. Make it easy and convenient for the user. Think about what makes your shopping experience enjoyable when you shop online. Include an easy to navigate website with a search toolbar. Look at other ecommerce platforms and decide what you like and incorporate those ideas into your website. There is nothing more frustrating than a website that does not have user-friendly features.
Using high resolution photos will also help with selling your products or services. While a description of the goods you are selling is helpful, many people gravitate towards photos rather than descriptions.
With technology readily available now whether using a laptop, computer, tablet or mobile phone, it’s beneficial to ensure your website is mobile friendly.
A great way to advertise your products or services is including a reviews section. Give consumers an option to review the product or services they have purchased on your website. It’s helpful for other online shoppers to review feedback of the product they are interested in purchasing.
Including special offers or discounts will entice consumers to revisit your website and make further purchases. Everyone loves a deal!