Building an Online Store -What You Need to Know to Start Selling Online

A recent nationwide study* of small businesses revealed that 78 percent indicated their company benefits from having a Web site. In addition, more than a quarter (26 percent) of those that don’t currently sell products online plan to add e-commerce capabilities to their site within the next two years. The question these small business owners have is how?

Despite what you may have heard, you don’t have to be a computer whiz to learn how to build a profitable Web site. All it takes to master online selling is a clear idea of your business, a realistic sense of your level of technical expertise and a strategy that integrates both.

To sell online, you first need to know the products or services you want to sell, how you will fulfill orders, and the sales approach you will take.

Offering

First, you should decide what you plan to sell. Consider whether your products or services are a good fit for online selling. Are other businesses selling similar things online? If so, is there room for your business? For instance, if you want to set up a Web site to sell books, you should consider whether or not your products are unique enough to compete with Amazon — one of the top 10 most-visited sites online.

Fulfillment

While you’re thinking about what you’re going to sell, you should also consider whether or not you can quickly and efficiently fill orders. If your sales suddenly increase, do you have systems set up to handle that? What will your shipping and handling policies be? What is your return policy? Research shows that good customer service is very important to online buyers. How will you handle customer inquiries and issues? Many visitors are still wary of shopping online. Creating a sense of trust through clear explanations of policies and with strong customer service is essential. If these pieces are not in place, you’ll lose sales.

Commitment

You’ve now thought about what you’re going to sell and how you’re going to sell it. Before you investigate the different ways of achieving your goals, you should consider one more question: Do you have the commitment it takes to launch a successful e-commerce venture? In many ways, running an e-commerce business requires much more efficiency than an offline, traditional business. It also requires commitment because the Internet is always changing. Those who profit most from online sales are business people who are not afraid to constantly grow and adapt. E-commerce is a huge opportunity, but it does take work. Once you are online, the work does not end. It’s vital that you market your site (using online and offline methods) to increase its success.

Strategy & Approach

Finally, you have to decide on an approach. Do you want to sell from your own Web site, or take the quicker route and add your products to an established site? Or do you want to hire someone else to do it all for you? There are advantages and disadvantages to each approach.

Selling From Your Own Site

Creating your own site is the best e-commerce avenue to take if you’re serious about selling online. You can control all aspects of the customer experience and create relationships that will lead to future sales. In addition, you can better market your own site by featuring your URL (your site’s Web address) in all offline advertising and paperwork including invoices, shipping packing slips, etc. With your own site, you can use search engines and pay-per-click keyword advertising to market your site and increase your visibility.

That said, your approach to implementing e-commerce on your site should be determined based on the number of products you have to sell.

Business: You want to sell 1-10 products on your Web site; Solution: Online Portfolio.

If you only have between 1 and 10 products to sell online, you may want to create a basic online portfolio (catalog) with images, descriptions and prices. This will allow your customers to easily and conveniently browse your product offerings online.

Implementing a basic online portfolio is the easiest solution to do yourself, and doesn’t require you make any special arrangements for online payments. Customers who see a product on your site that they
would like to purchase simply mail, phone, or fax orders to you for fulfillment.

The only drawback to this option is that many of your customers, already accustomed to the ease of purchasing online, may go elsewhere because you don’t have credit card purchasing capabilities on your site. If you feel that this describes your customers, then you might want to consider a storefront-building application.

Business: You want to sell 11-100 products on your Web site; Solution: Online Storefront.

If you have between 11 and 100 items for sale, you should consider using a storefront-building application to create an online storefront. Using your online storefront, visitors can browse and pay for items completely online.

An online storefront should consist of a catalog and a shopping cart. The catalog area of the storefront contains images and descriptions of products. Products are typically organized into categories that let visitors easily find what they’re looking for. Most catalogs include pages with smaller images of a number of products, so visitors can browse and compare. When a visitor clicks one of these thumbnail images, a page with more detail about that particular product appears.

Leading online storefronts also include a shopping cart, which recreates an in-person shopping experience by letting visitors pick the products they want as they browse through the catalog, and then go through a “check out” to actually purchase them.

At check out, visitors pay for their purchases using a credit card. Online storefronts with 100 or less products often use a third-party service such as PayPal to process credit card payments. These services deal with verifying the credit card information and transferring money between accounts. More advanced online storefronts with a large number of products can set up credit card processing right on their own site, but it’s more complicated.

Business: You want to sell more than 100 products on your Web site; Solution: Advanced Online Storefront.

If you are selling more than 100 products, you should consider advanced storefront-building software from companies such as Cignant, Digital River and Interland, with features such as inventory tracking and the ability to perform automatic price adjustments for different shipping options, sales tax, and discounts. Advanced storefront-building software can be very complicated, however, and may require some knowledge of computer programming. Unless you are technically sophisticated, you will likely need some help to work with all the features.

Most businesses that implement an advanced storefront solution also add the ability to process credit card orders right from their own site, which allows a more integrated user experience, quicker access to payments, and better tracking of money and charge backs. However, setting up your site to take credit card payments is a complex undertaking, and really only pays if you are selling in very high volumes or at high prices.

Selling from an Established Site

Selling from auction sites or digital malls is quick and easy, but can be costly and doesn’t provide much opportunity to build your own brand.

Online auction sites like eBay allow anyone to add an item for sale. You can either set a fixed price or let people bid to purchase the item. Payment for the item(s) is handled by the auction site, which takes a percentage of the purchase price. A merchant who sells goods on an auction site handles fulfillment — shipping the item to the customer who purchased it.

Although popular and easy to use, auction sites have some drawbacks. They tend to take a high commission from sales. If you decide to use an auction site, you will want to consider whether or not the site’s commission percentage will negatively affect your profit margin.

Auction sites also have strict rules about selling directly to customers, which leaves little opportunity for you to promote your own brand: your business name and logo. For instance, when a customer buys your custom-made picture frames on eBay, she generally will not know the name of your business. So, when her friends ask her where she purchased the frames, she will most likely say, “on eBay” as opposed to saying, “from Smith’s Custom Frame Shop” which would provide your business with some additional promotion. For some business, the loss of brand recognition is not a concern at all. For other merchants who are interested in building their brand name, this may not be the best choice.

In addition, merchants don’t have total control of fulfillment and customer care. So, a customer who has a bad experience with one merchant on an auction site may be unwilling to buy from another, totally unrelated merchant.

A digital mall is an e-commerce site on which you can create your own storefront and feature your products, just by uploading pictures and filling in forms. Altura International, CCNOW, or Yahoo! Store® are examples of a digital mall.

Having a storefront on a digital mall is similar to renting space in a real mall. You’ll pay a monthly fee, and the digital mall may also take a percentage of the products you sell. The upside is that you won’t have to worry about processing credit cards or setting up a shopping cart — it will all be handled for you. (There are sometimes extra charges for these services.)

In most cases, you won’t have much control over the design of your site in a digital mall. There will be a limited number of templates from which you can choose, and very little opportunity for customization or building your brand.

Business: You want to sell a service on your Web site; Solution: Online Scheduling Tool.

A new generation of online scheduling tools, such as those from AppointmentQuest, Time Trade and Office Tracker have brought e-commerce to businesses that focus on selling services. Online scheduling can be an invaluable resource if your business relies on scheduled appointments to make sales.
For instance, a hair salon could enter the days and times that salon staff is available for appointments. Customers would then simply access the salon’s Web site and review the current appointment schedule to set up and pay for their own appointment using a credit card.

If this sounds like it could work for your business, you might want to use an online scheduling tool that can take payments as a visitor makes an appointment. As with storefront-building software, online scheduling tools usually have options for accepting online credit card payments either through a third-party service or directly on your site.

Rest assured, there’s an e-commerce solution for everyone — whether you’re new to the Internet or a programming guru.

John Lally is area vice president for Interland, a leading provider of Web hosting and online services for small and medium businesses.
 
Contact Vox Novus Media today to let us help you create your website!