Thinking about Opening an Online Store?
Are you thinking about opening an online store as a part-time business or maybe trying to give your brick and mortar shop a door on the web?
- Find Your Product Niche - I would start by defining what market you would like to sell to and then pick a small number of products to sell. You have probably thought a lot about this but I do believe that this is an important area to spend some time on. When you start any eCommerce store you are immediately competing with Amazon, Walmart, and any other big department store brand that can sell the same products you do with laser thin margins. When you starting off I would find a niche and then try to service that niche in a way that the big eCommerce sites can't do. You can have your store designed for that niche, provide personalized product pages, create a community, and convey a sense that you are an expert in the niche so that people will trust you enough to buy from your store. In other words, your eCommerce store should provide an intimate experience which is something that the big shops have a harder time doing. Once you're established and have a strong customer base, you can then branch out to broaden your prospective customer base by selling new products to other markets.
- Get Legal - Whether you are selling products that you make yourself or reselling products from a distributor you will need to have your business legally registered. You can get started as a simple sole-proprietorship and use your own social security number but you should really consider setting up at least an LLC to protect yourself and your assets in case the business goes south. Setting up an LLC is really easy and should only cost around $100 to $150 if you are filling the forms yourself. If you want, you can go to someone like LegalZoom.com to help you but expect the cost to be higher.
- Importance of a Good Logo and Page Design - The more professional your store looks the more visitors will actually become customers. You don't need to spend a lot of money designing a logo or page layout, but you should spend some time with a designer in order to give the store a professional feel. You should have a great home page to draw the customer in and your product pages should make them feel comfortable with the idea of giving you their money. Also, try to provide simple and easy to understand ordering pages to walk them through the sale.
- Advertise through Social Media - Social Media is the new SEO and it's a requirement for your store to have a presence on Twitter and Facebook in order to advertise your products and draw customers into your store. The cost of this kind of advertisement is free (unless you use an agency to do the work for you, I don't recommend that for a small shop) and it will take time to develop a social media presence for your store, but the opportunity to attract new customers through social media is huge.
- Provide a Sense of Community, Openness, and Support - You want to keep your customers coming back and you should provide ways for them to interact with you and other customers. Allow customers to review products and make recommendations. You will need to provide a least one web page for customer support information. Consider using a service like Zendesk that automates this. Also, maybe open a blog or forum for your customers to talk about the niche your focusing on.
- Choosing an eCommerce Platform - There are a lot of great eCommerce platforms that are made for people to quickly setup a store without too much effort. However, the ease of use comes with a cost. This could include high monthly and transaction fees. Usually the cheaper the service is the more development is required to integrate.
- Amazon Webstores - You could host your entire store on Amazon. They have really good catalog management and analytic tools. They also handle all the payment processing and billing. Your customers will need to login using their Amazon account to make a purchase. Their webstores are also very customizable with HTML, CSS, and Javascript. However, you will need a developer to customize it so that it doesn't look like an "Amazon" template. This one of the more expensive services at $60/month with a 7% transaction fee. This is a good option if you don't mind the fees and you don't want to build anything yourself. Amazon does give you all the tools you need to create a store to list and sell your products.
- Sell on Amazon - Along with the webstores, Amazon gives you the ability to list your products on their system. This should be a service that you would add in addition to your own online store. Selling your products on Amazon gives you the ability to have your products in Amazon's catalog and this will enable you to reach their massive customer base. The cost of this service is pretty cheap to get started with a .99 cent transaction fee and then moves up to a $40/month subscription the more you sell.
- Yahoo Stores - Another host your entire store option like Amazon's webstores. These stores have all the same features of the Amazon stores but at a cheaper price, $40/month with 1.5% transaction fee. The downside is that the stores have a very simple look to them and are not as customizable compared to the Amazon stores.
- ebay Stores - A very cheap option to get started with but I wouldn't recommend it to use as your primary store. Depending on your niche I think that it could be a good option to open a secondary store with just a few products with the intent of drawing the customer back to your main store. eBay Stores can look cheap and unprofessional but you can't deny the fact that eBay has a lot of users that search their site for products and your store could come up in their search results.
- eBay Auctions - Just like selling on Amazon shouldn't be your primary source of sales, eBay auctions does provide an advertisement and sales tool to bring the customers back to your own store depending on your niche. Once you have your store online it doesn't hurt to put up a couple of products on eBay with a little message about your business and a link back to your store.
- Paypal - This is probably the most popular payment gateway. Paypal is not like Amazon, Yahoo, or eBay Stores (however, eBay does own Paypal) where your store is hosted by them but instead you host your store and then use Paypal to process the payments for your products. This service is also a lot cheaper than the hosted stores because Paypal does not charge a monthly fee and their transaction fee is 2% to 3% depending on how much you sell. If you use Paypal you will have to build everything in your store from the homepage to product pages. You can then decide how much integration with Paypal you want to spend time on. The more you integrate with Paypal the more professional your store will appear. To start you can add simple "But It Now" buttons to your product pages that will immediately transfer the customer to Paypal's generic purchase page (with your logo) to complete the purchase and then give the customer the option to go back to your store after the transaction is completed. The next level of integration would be building your own shopping cart and then sending the customer to Paypal's payment page when the click "Pay Now" on the final page of the ordering process.The ultimate level of integration is where you use Paypal to process the payment behind the scenes and the customer remains in your store the whole time and doesn't know that you are using Paypal to process their payment. This is a pretty advanced level of integration and would take some time to build into your site. However, it should be noted that the same amount of time would be required if you integrated a payment processing service with a merchant account.
- Google Checkout - Very similar to Paypal in regards to fees. However, the main differences is in the level of integration. You have the same "Buy It Now" and "Pay Now" buttons and screens but you always have to use Google's generic payment screen that only has your logo on it. Also, your customers are required to have a Google account or create one at the time of purchase. You give up a lot of control of the checkout screen but this also requires a very minimal amount of time to integrate so it's a great option to get started with.
- Shopify - This is the new Web 2.0 compromise between a full service solution like Amazon and a payment processor like Paypal. They manage your catalog, product pages, ordering pages, and payment processing. You should still maintain your own home page, community pages, support pages .... but all the ordering is taken care of through Shopify. Shopify also allows you to do some pretty deep customization and will be able to continue your home page design into the ordering pages. Shopify tries to balance the monthly / transaction fees so it may be more expensive than Amazon, Paypal, and Google Checkout in the long run.
- Merchant Accounts with an Online Payment Processor - This is usually the cheapest option (depending on your bank) but it will also take the longest to setup. There can be a monthly fee $10-$50 (depending on your bank) that is usually lowered when your sales increase. The per transaction fees are usually low between .15 to .50 cents.
My preference is to start fast, small, but make it look good. Then look to grow the store after you have tested selling your products to your market. I would build a simple platform on your own domain that would include a homepage, blog, and a couple of support pages. There are cheap third party solutions for the blog and support pages. Then use Shopify to host the product catalog, ordering pages, and to process the payments. I would then advertise with a couple of small adwords campaigns and social media. Once the store has some traction, I would build in more community features, move the product pages in house, and then use Paypal, Google Checkout, or a merchant account w/Payment processing in order to decrease transactional costs and increase your margins. Along the way I may use selling on Amazon and eBay as ways to increase the customer base.
Are you still interested in opening an online store but are concerned about all the technical issues and requirements? Then contact me and together we could setup something that would be appropriate for your needs.
