Ecommerce 101 Toolkit The world is turning digital. In less than two decades, the Internet has dramatically transformed how people share information. This shift is especially apparent in the way we purchase and research products today. Online business, or ecommerce, has experienced breakneck growth since its inception with no indications of a slowdown. Even with recent economic troubles, ecommerce has continued to see increased revenues and acceptance. Thus, it’s logical that more and more people like you are turning to the Internet to open an online store. So whether you want to start an online business or sell online as a side gig, it’s important to prepare before getting started. That’s why we created this document – to give you an overview of how to start your ecommerce journey on the right foot. You’ll learn the answers to these important questions:
What is ecommerce anyway? How do I decide what products to sell online? What is drop shipping and is it a good option for me? How do I build my online store? What is a domain name and how do I pick the right one? How do I select the right shipping provider? How do I get paid? What are the best ways to market my business online?
Knowing these important aspects ahead of time will speed up the setup process, allowing you to make more money, faster. Once you get a grasp on these ecommerce basics, you’ll be fully prepared to launch the online store of your dreams.
What is ecommerce anyway? Ecommerce is short for “electronic commerce.” This broad term incorporates several aspects of traditional commerce, including product research, marketing and payment transactions. For our purposes, the definition is a bit more clear – ecommerce is the buying and selling of products and services over the Internet. While there are several facets of ecommerce that complement buying and selling, each support the overarching idea of exchanging goods for money online. The history of ecommerce is nothing less than an overnight success story. The industry as we know it began in 1991 when the U.S. Government lifted a ban on commercial business transactions over the Internet. This ban was in place because of security concerns regarding sensitive digital information. Interestingly enough, almost 20 years later, data security is still a prominent issue for anyone selling online. The fledgling industry was mostly stagnant until ecommerce giants Amazon and EBay launched in 1995. Amazon paved the way for traditional ecommerce transactions while EBay pioneered the online auction site. As people became increasingly comfortable with purchasing goods on the Web, more and more people began to sell their products online. Over the next 15 years, technological innovations and worldwide adoption of ecommerce as a viable business venture paved the way of how we know ecommerce today. As of 2010, the ecommerce industry is a $155.2 billion industry. Forrester Research projects this number to skyrocket, reaching an eye-popping $248.7 billion by 2014.* Clearly now is an opportune time to enter the game, especially since the platform presents an outstanding chance for long-term success. *“US Online Retail Forecast, 2009 To 2014” Forrester Research, Inc., January, 2010
How do I decide what products to sell online? No matter what you sell or how you sell them, your products are the foundation of your online business. Thus, it’s of particular importance to spend time deciding what to sell – whether you already have a product or not, consider the following before launching your store:
Can I legally sell my product? There isn’t much that can’t be sold online – you can sell anything from apparel to zucchinis, but there are several laws prohibiting the online sale of certain goods, such as drugs or firearms. Many providers also disallow the sale of adult goods, so if you’re not sure if your products meet legal or company-specific guidelines, be sure to ask.
Is my product profitable? Like it or not, in order to stay in business you have to make enough money to pay your bills. So before getting started, think about the pricing of your products. How much does it cost for you to obtain and store your goods? How many sales will you have to make to cover your costs? Is there anything about your product that would increase your shipping fees?
Is my product shippable? This typically isn’t an issue for the majority of online storeowners, but there are some restrictions to which products can be shipped and how they can be handled. For example, wine and spirit sales involve different
legal requirements. Or, if you’re selling food, you’ll need to make sure it doesn’t spoil while being shipped. Ask your shipping provider for information regarding any special considerations.
Does my product stand out? There isn’t a right or wrong answer to this question, but it does shape how you’ll promote your business. There are millions of ecommerce sites out there, so if you offer a truly special product, you can base your marketing on product uniqueness. If you’re selling a commodity, you’ll need to find another way to stand out.
Am I passionate about my product? The most successful online business owners sell products that they’re interested in. Just think – you’ll be working with these products rather frequently, so sell something that you enjoy. Your passion for your products also provides a continuous motivator to keep working for greater success.
How will I get my inventory? This question is always answered on a case by case basis dependent on your business needs. Some online merchants create their products in their living rooms while others work with major third-party distribution companies. The method in which you secure your inventory is directly tied to how you price your products and how they’re shipped, both important pieces of the ecommerce puzzle. Once your products are secured and your inventory is set, you’re on the right track to successfully selling online. If you’re not sure about what products you’re going to offer, then drop shipping might be right for you.
What is drop shipping and is it a good option for me? Drop shipping is the practice of order fulfillment where a manufacturer or distributor ships a product to a consumer on behalf of a retailer. In other words, a drop shipper is a company that stores and ships products for you. With drop shipping, you keep very little or no merchandise in stock. Instead, your customers’ orders are sent directly to the manufacturer or wholesaler, who then ships the item to your customer on your behalf. Drop shippers, while similar to warehouses, are a bit different since they provide the inventory for you – warehouses only store your products. Quite simply, drop shipping is a viable option for your business if you don’t have any products to sell on your own. Also, if you don’t have the money to secure your inventory upfront, using a drop shipper helps reduce startup costs. Or, if you don’t have any space to house inventory and want to offer a wide assortment of products, drop shipping makes this possible. Another benefit of this model is that you don’t invest additional time into shipping or worry about excess inventory. The best way to find a drop shipper is through an online search. Some drop shippers provide inventory storage while others work with a multitude of wholesalers/manufacturers to provide a wide assortment of products. There are also industry-specific drop shippers, so performing research into your options will give a better understanding of which providers meet your specific needs.
Once you narrow down your drop shipping finalists, frame your decision on the following questions:
How will the drop shipper charge me? Some drop shippers will charge you a monthly fee for a full suite of services while others are modeled on a per product or per transaction basis. Providers typically supply inventory to you at a wholesale price and allow you to price your products as you please. Finding out how a potential drop shipping partner collects payment makes a big impact on your operations.
Who does the drop shipper use to ship products? Make sure that the drop shipper you choose is using a major shipping company to avoid problems down the line. Some drop shipping services shave costs by using lesser-known or unreliable shipping partners. Also, check to see if their shipping provider sends products to the geographic locations you need them to.
How will my drop shipper notify me of inventory changes? Drop shippers, just like any other company, have shifts in product lines or the amount of inventory available for use. To prevent any upset customers on your end, ask a potential drop shipper how and when they’ll notify you if any changes occur in their product offering.
Will the drop shipper send notification emails to my customers? A universal best practice for any online store owner is to provide order confirmation emails to customers upon purchase of a product. This email should also provide tracking information for shipping. Some drop shippers will send this customer notification for you, so check to see if your provider offers this service.
What is the return policy of my drop shipper? This is an important question because it directly affects your customer return policy. Check with your drop shipper to see how they require products to be returned to them, particularly in regards to any additional fees or packaging requirements. Knowing this information ahead of time will save you precious time and money when handling inevitable returns. After selecting your drop shipper and the products you want to offer, you can begin the fun part of creating your new online business – building your store.
How do I build my online store? Once you’ve got your products hammered down, let the construction begin. You’ll need to decide on an ecommerce provider first, because their system will ultimately determine how you go about building your online store. Many providers offer a free trial to test out their system and become accustomed to the software before purchase. The first step of building your store is selecting a design template. A template provides the aesthetic skeleton of your store and includes the top (header), bottom (footer), and navigation menus that will be consistent throughout your ecommerce website. You can either create a template from scratch or choose a predesigned option from your ecommerce provider. Remember, you can always go back and make changes later. Once your template is selected, you’ll then want to add in your logo. If you don’t have one yet, no problem – simply enter the name of your business. 4
Next up, add in your product categories. Categories help customers locate your products by following a hierarchy of where items live on your site. For example, an apparel store could have categories of “jeans,” “blouses,” “accessories,” and so on. You can segment your categories based on product or customer. For example, the same apparel store could have categories separated into men’s, women’s or children’s clothing. Once your categories are established, you now have a place to add your individual products. If you have a small number of products, you can add them in one at a time. If you have a large product listing, you can opt to import them into your store all at once by placing them all into a spreadsheet. Regardless of method, you’ll need to have a few things handy (at a minimum) before finishing this step, including: Product image Product code Product name Product price Product description Your product image should provide a bird’s eye view of exactly what customers are buying. Since shoppers aren’t able to physically see the actual product they’re purchasing, it’s essential to have quality product images, preferably multiple high-quality photographs. A product code is a series of characters that defines the product for inventory-tracking purposes. Your product name is self-explanatory – it’s the name of the product that you’re selling. The product name is visible to your customers while the product code isn’t readily available to them. Also, be sure to establish your price so customers know how much they’re paying for the product and have a well-written product description so customers can learn important details of said product. If you need a break from adding your products, you can begin working on some of the “business stuff.” While this isn’t necessarily the most exciting part of building your store, it’s essential for success. These items include actions like selecting which regions you want to ship to, entering your tax information, establishing a return policy, and providing contact information for customer inquiries (phone number, email, hours of operation, etc.) Next, create your content pages for your website. Providing additional information about your business creates a sense of trust and credibility to online shoppers that you’re operating a legitimate business. At a minimum, it’s recommended that you have: 1) an “about us” page that describes your business and product offering, 2) a “contact us” page that informs customers how to reach you and 3) a “return policy” page that outlines how customers should return items they aren’t satisfied with. The beauty of ecommerce is that it’s a constantly evolving work in progress. This means that you can consistently enhance your website as your business develops. For example, you can update your site with new designs and images at any time. Keep in mind that you don’t have to perfect every aspect of your store before opening to the public. As you learn more about your customers, you’ll be able to make adjustments to boost your sales and brand. With all of the hard work you’ve put into your online business, it’s equally as important to select the perfect address, or domain name, for shoppers to find you. 5
What’s a domain name and how do I pick the right one? Choosing your domain name is like naming your child – once it’s done, it’s permanent. And once customers remember that domain name, they’ll use it forever. Thus, selecting your web address is a critical decision that can help or haunt your online business for years to come. Keep the following in mind for a little guidance.
Keep it short and sweet. A domain name like “www.westernwearonlinewarehousediscountdealsunlimited.com,” is long and confusing. Don’t make your customers’ wrists hurt from typing in your web address. Remember, the ultimate goal here is to have customers get to your online store by directly entering your domain name into the address bar, so keep it simple.
Pay-Attention_to-Punctuation Try to limit dashes and underscores in your domain name. Most Internet users aren’t used to typing these characters into the address bar, and quite frankly, it’s a tricky maneuver for the fingers. However, in some cases, it can be helpful to your customers. For example, if your business is “Sally’s Shoes,” it might be confusing if the name was “sallysshoes.com.” One could wonder if there is one “s” or two, so a dash between words might be appropriate here.
Make It Memorable Keep in mind that your domain name is also a marketing tool. It can be used to help describe your business or define a point of difference. From the previous example, westernwearwarehouse.com would be a decent choice since it tells us, “Hey this store sells lots of western wear. I get it.”
Help Your Customers Out A lot of traffic is lost when customers misspell or don’t remember your domain name. Give them a hand and provide a few options that are close to the original. You can do this by thinking of potential spelling errors. Additionally, picking up multiple domains is a good way to protect your business from copycats in the future.
Have Some Backups Before you decide on your domain name, make sure it’s available. There are lots of websites out there, so domain names are popular items. Try making a list of 3-5 so you’re more likely to find one that is free game. Love your business like you love your child and name it with care – this decision really is one that should be given more than 5 minutes of thought. Once you’re satisfied with your choice, it’s time to decide how you’ll get your products to your customers once they purchase.
How do I select the right shipping provider? One of the most important pieces of an ecommerce transaction is the actual delivery of goods to your customer. This aspect isn’t fully under your control, so to ensure customer satisfaction, it’s critical that you invest time in deciding which shipping provider(s) works best for your needs.
To start your search, check with your ecommerce software provider to see which shipping companies are integrated with their system. There’s no point in researching a shipping option that won’t work technically with your online store. Next, go online to begin research and decide which shipping providers best meet your needs. Some of the major providers include UPS, FedEx and USPS if you’re in the US. While you’re conducting research, make sure the shipping company actually ships to the geographic areas you need them to. Also, decide which shipping options you want to offer customers. Will you only allow customers to use one shipping company or will you provide them with choices? How about an overnight option? The answers to these questions will help you determine the costs incurred from shipping. Once you decide on a shipping provider, set up an account with them. Upon completion, take your account information and enter it into your shopping cart software. Some software allows you to pull live rates to provide customers with shipping prices in real-time. Now that you have all of your shipping needs figured out, it’s time to get down to business – determine how you’ll get paid for all of your efforts.
How will I get paid? We’re all in business for the same reason – to make money. Thus, one of the final decisions of opening your online store is how to receive payment from customers. There are two options that are utilized by most online business owners: 1) using a third-party payment provider like PayPal or Google Checkout and 2) accepting credit cards directly from an ecommerce site via a merchant provider. As with any decision, there are pros and cons associated with each – keep in mind you can also pursue both options for your online store. Several merchants opt to use a service like PayPal or Google Checkout to process payment. This option is relevant for smaller online businesses that don’t process many orders. It also doesn’t require as much paperwork to get started, and the payment gateway is already included. (A payment gateway is an application that authorizes and captures payments online.) The major downside to using a tool like PayPal to process payment is that it takes customers away from your site and requires them to log in before making payment. This adds several more steps to the checkout process and is known to increase the number of abandoned carts, or customers who place an item in their online shopping cart and never purchase. Accepting payment through a third party site also causes security concerns for customers and makes your website seem less credible. The other option for processing online payments is to accept credit cards directly on your website via a merchant account. A merchant account is a particular type of bank account that allows you to accept payment by debit or credit cards. Just like any bank account, opening a merchant account requires contacting a consultant and submitting various files to ensure that you meet specific qualifications. Merchant providers typically charge per-transaction fees along with monthly fees, so do your research to see which offer works best for you.
Merchant accounts offer several benefits as well. Most importantly, processing credit cards directly on your site prevents customers from performing the extra steps associated with leaving your store to pay at another site. A merchant account also allows customers to create an account with you, which is helpful for marketing purposes. Having a merchant account also helps boost your credibility to online shoppers, leaving them with an impression of security and accountability. Before deciding how you’ll accept customer payment, do some research to discover which options are most appropriate for your business. You’ll also need to decide if you want to accept checks or other methods of payment on your site. Once you have this decision made and your account information handy, you’re ready to start raking in the dough. And to make that dough even sweeter, you’ll want to let the world know about your online store.
What are the best ways to market my business online? Even if you have the most amazing site with the most incredible products, people have to know about your store before finding it. This is why it’s so important for you to market your new online business. When you consider that there are millions of websites out there, several of which are selling similar products, it becomes clear that to truly succeed online, you have to make yourself stand out from the crowd. One of the most powerful tools in your online marketing arsenal is email. Email is a great way to reach existing contacts and let them know of your grand opening or latest product release. As your presence and customer base grows, continue adding new email addresses to your database. Email provides a mechanism for you to retain customers who have purchased from you before, which limits the amount of marketing you need to perform in other channels. At a minimum, have a newsletter filled with exciting information about your information to send and provide special discounts. Did you know that over 80% of online purchases begin with a search in major search engines like Google? Naturally, search results that appear closer to the top of the search page have more clicks than those buried on page 13. These truths highlight the importance of making your presence known within search engines, which can be achieved by two popular online marketing practices: pay-per-click advertising and search engine optimization. Pay-per-click (PPC) is an advertising model where you pay a set amount of money when someone clicks on your advertisements. These ads appear when a potential customer enters a search term, or keyword, that you’ve deemed as important for your business. If a customer clicks on your ad, you’ll be charged a predetermined amount based on numerous factors, including the competitiveness of that keyword. PPC advertising is a proven, effective way to bring qualified traffic to your website. Search engine optimization (SEO) is a series of best practices that help various pages of your website rank higher in search results pages for particular keywords. As opposed to PPC, there’s no advertising or payment involved. Instead, SEO involves particular knowledge of how search engines work to optimize your website to become more search-engine friendly. The main takeaway of establishing a solid SEO foundation is to create valuable content that is worth sharing. Search engines rank pages based on their popularity with other users, 8
so finding ways to spread your content is crucial to SEO success. It’s also important to take a look at your actual content and ensure that your keywords are pertinent to your industry and product searches. Finally, jump on the exciting bandwagon of social media. We’ve heard a lot about this exciting new medium over the past few years, and online businesses around the world are joining the game. Social media channels, such as Facebook, Twitter and YouTube are all fantastic ways for you to make connections with people of similar interests, build relationships with current customers, and highlight the uniqueness of your brand. Better yet, these tools are free. You should also consider creating a blog for your business to provide content to churn through all of your social media channels. There are several other mechanisms for you to spread the word about your business. Simple ideas like posting flyers around your neighborhood or talking to others about your new business is a great start to any marketing campaign. You don’t have to do everything at once – start slow and see what works. The great thing about selling online is that it is an agile industry that allows you to adapt as necessary.
Ready to get started? Now that you’re aware of what comprises a successful launch to your online store, why not get started? Keep in mind that you don’t have to perform all of the actions listed in this document out of the gate. As your business and knowledge grows, you can easily deploy these new tactics in a timeline that’s comfortable for you. Better yet, there are tons of resources and professionals to provide assistance along the way. Selling online is a fun, exciting process that allows anyone to fulfill their dream of becoming a business owner or satisfy a desire to extend their hobby to the masses, especially in this period of booming ecommerce growth. If this opportunity sounds interesting to you, it’s time to turn your idea into reality with Volusion. You’ll receive a fully hosted, award-winning shopping cart solution full of features needed to build, manage and grow a successful online business. Thousands of merchants have trusted their success to us, and this number is growing each day. Our customers enjoy peace of mind by experiencing 24x7x365, live Out of this World Support™ from our team of friendly ecommerce experts. Ready to give it a try? Sign up for a free 14-day trial of our software – no credit card or obligation required.
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