Online retail sales are escalating over the last decade and attracting more people to start their own eCommerce endeavors. Internet has turned from massive database of information about everything into the largest international market where gigantic volume of transactions takes place. People are getting accustomed to purchasing goods from home and starting to abandon the old-fashioned brick & mortar stores.
Some will argue and insist that starting an eCommerce business is easy and profitable right from the start, but those people only make small portion of all ecommerce owners; chances are they have the financial resource or established brand names beforehand. For the vast majority of people, eCommerce is not going to be an easy affair, especially when they’re just starting it up. If you are currently at the same position and trying to figure out what it takes to be successful in eCommerce business, here are some things to expect.
Trial & Error
Unlike regular personal blogs, an eCommerce platform allows you to setup transaction-related features including but not limited to payment gateway and shopping carts. There are some popular platforms for examples Magento, Shopify, WooCommerce, Yo!Kart, BigCommerce, and more. Each has its own advantages and drawbacks, so it is wise to shop around and compare prices. Some platforms also offer free trial for limited period. As a startup, you may not need expensive and heavily-featured platform or package. Bare minimum requirements are as follows:
Landing Page: this is the first page that your visitors see. A landing page is like the front door of a brick & mortar shop, so a welcoming and user-friendly design is essential. Remember that online shopping involves a lot of browsing and price comparison between products. Make sure every link works as intended in the landing page. Give your customers a pleasant experience with attractive design and easy navigation.
Cart Functionality: in an online store, making a purchase means adding items to a shopping cart. The process will automate total price of orders and shipping. There are probably some options such as free shipping but with longer delivery time or fast shipping but with additional cost. The only way you can be sure that all features and options are displayed properly it to test them yourself.
Payment Gateway: once a customer places an order, the platform must allow for payment options which may include credit card, wire transfer, escrow, PayPal, and more. Try to place an order and see if the money is transferred to the company’s account. It is even better if you can make sure that the delivery or shipping is accurate and on time.
Even when everything works as intended, you probably find that some aspects of your eCommerce website have room for improvement. This may involve a lot of trial and error processes to get the best possible user experience.
Hiring an Employee
The beauty of an eCommerce business is that you can save money from property rent, furniture pieces, and storage facility. Everything runs online and is automated by your platform. Many startups thrive with strong sense of DIY mentality; they save money because they work alone. In reality, an eCommerce website involves a lot of people right from the start. Regardless of the platform you chose, you will want to personalize the design and interface. Unless you have the expertise in website design, hiring a professional is a wise move.
You are the owner, founder, and leader of your eCommerce website. As your business grows and sale increases, it is easy to get overwhelmed by the amount of works you need to do on daily basis. If you spend 12 hours or more to fill orders, reply all emails, basically follow up on all customers’ inquiries, you have no time to expand the business further. At this point, you should be able to afford hiring at least one employee but without losing profit. Staffing companies allow you to hire on the fly if you want to avoid the hassle of hiring many workers quickly. If hiring more employees is costly, you can look into outsourcing some operations.
Decide the Profit Margin
When it comes to profitability, it is essential that you know the margin before settling on any product. You are not the only eCommerce business in town, and your competitors can probably survive with lower profit margin that yours. Think about how much you get from every sale and adjust the price to stay competitive. Many (if not most) products sold online have a margin of 30% but it is a volatile number depending on products’ popularity and demands. Electronics including phone accessories are often savagely marked up to more than 200% despite its lack of scarcity. Some people who can afford to buy in bulk will get enough discounts to sell at lower price yet get higher profit. You may need to contact distributor or products’ manufacturers directly concerning this issue.
Online retailers do not make all the products, but they resell them to make money. Amazon is an exception because the company also makes its electronic tablets, phones, and streaming services; but many other products it sells are from third-party manufacturers or suppliers. Because you might not make and sell your own products, you must find manufacturers or suppliers. Specializing on a particular product category will narrow down the options, but if you want to list different product aisles, you have a lot of work to do to find suppliers and see who your competitors are. Fortunately the Internet has at least two things to help you:
Directories: online directories of suppliers make it easy to find manufacturers. Some directories will charge you from using their services for example Worldwide Brands which comes with $249 membership one-time payment fee (at the time of the writing). The website offers instant import buys and lists only certified suppliers. Free directories are also available such as Wholesale Central but with less products and suppliers listing.
Google Shopping: the search engine shopping feature also provides information on many physical products sold online. Or you can simply use the search feature.
Now it is time to contact each supplier on your list and ask if you can sell the products on your website. Ideally, you will want to work with reputable distributors but some of them are reluctant to provide their products for new businesses. However, you can always start with someone who has the least intimidating application requirements. Develop good relationship with many small suppliers and build your reputation. Various outsourcing companies can also assist in procurement and can help leverage costs.
Last but not least, expect to spend money on marketing. No one is going to end up on your eCommerce if people don’t even know that the website exists at all. There should be plan for SEO, social media integration, and probably PPC ads.
If you still need some extra help, especially on the supply chain and logistics side of your business - be it seasonal spikes or rapid growth - IntegraCore can help! We specialize in helping eCommerce businesses - large and small. Contact us online, give us a call at 800-410-755 or get a free, no obligation quote online today!