link protect

In 2018 ecommerce accounted for more than 14% of all retail sales in the US, up 15% over the previous year. That amounts to roughly $517 billion spent online with digital retailers. While a large portion of that can be attributed to Amazon (49% at last count) there is still plenty of opportunity for ambitious entrepreneurs looking to carve out their own piece of the ecommerce pie. 

Up until recently launching an ecommerce business required a team of experienced website designers and some fairly deep pockets. Fortunately, with the rise of user-friendly ecommerce platforms launching an online retail business has never been easier – or more affordable. 

In fact, we can give you the lowdown in 7 easy to follow steps.

First – Find Your Niche

Before we get down to the nitty gritty of building an ecommerce website we should talk a little about the products you want to sell. While it’s true that online retail is a growing market, the playing field is not exactly wide open. There’s already plenty of competition out there and you’ll have to work hard to carve out your own lucrative niche. 

You need to think about the products you intend to sell. Are they unique to your business, or are they common to every other online retailer? To maximize your chances of success you want to concentrate on products (or services connected to those products) that set you apart from other online retailers. 

To help you find a suitable niche you’re going to have to do some research. Using a keyword research tool do some online searching to see what kind of competition you face in your desired market. This will show you how many searches per month are made for specific keywords relating to your products. 

You will also want to give special attention to ‘keyword difficulty’. This is one of the most important features of your keyword research tool. The higher the keyword difficulty score, the harder it will be to rank for that search term. Remember, starting out your site will be an unknown quantity, and you’ll need to do everything you can to improve your site’s ranking in online product searches.

Step 1 – Choosing an Online Store Platform

Once you’ve settled on a product line, and found the niche in the market that you want to serve, it’s time to start building your online store. You have three basic options from which to choose, and each has its own advantages depending on the type of business you want to launch. 

  • Dedicated Ecommerce Platforms – If sales are the primary focus of your website a dedicated ecommerce platform will be your best choice. These offer more robust sales and management features than basic website builders with shopping cart add-ons. Some of the more popular options at the moment include: Wix, Squarespace, and BigCommerce.
  • Website Platforms with Shopping Cart Add-Ons – These are basic website platforms that allow you to add a simple shopping cart feature. If you’re intention is to sell only a few select products online this can be a quick and affordable option. However, if your goal is to build a full service ecommerce website this may not be the best choice.
  • Blog Platforms with Shopping Cart Add-Ons – Blog platforms like WordPress make it easy to build a basic website, and with the addition of a shopping cart plug-in like WooCommerce or Ecwid you are able to complete simple transactions. Again, if your goal is to build a large-scale online shop this option will likely fall short of your needs.

Step 2 – Order Fulfillment

With your ecommerce website in place it’s time to think about your stock and how you will fulfill your customers’ orders. This is an important step, and you need to think it through carefully. You have choices when it comes to order fulfillment, but your decision will have a significant impact on customer service. Again, each option comes with its own pros and cons. 

  • In-House Fulfillment – This method of order fulfillment keeps everything in-house. You maintain stock levels, process invoices, and finally pack and ship all orders that pass through your website. The advantage here is that you remain in control of all aspects of your business’ order fulfillment so you always have control of customer service. The downside is that you need to maintain stock levels (that means warehousing product) and you’ll need staff to process orders.
  • Dropship Fulfillment – Dropshipping has become extremely popular with ecommerce start-ups. With this fulfillment model your product suppliers ship orders directly from their warehouses to your customers. You won’t have to warehouse stock or pack and ship orders yourself.
    This has become a popular option for smaller online retailers as it cuts down on the need for warehouse space as well as eliminating the need for extra staff. Moreover, in most cases you only have to pay for the goods after the order has been processed, eliminating the need to have your cash tied up in backstock.
    However, there are some serious disadvantages to dropshipping. Not all product vendors support dropshipping, limiting your potential business partners. Dropshipping also puts your customer service in the hands of another company who may not be as invested in your success as you are.
  • Outsource Fulfillment – With this option a fulfillment company, also known as a third-party logistic company, stores your inventory and is responsible for the picking, packing, and shipping of orders. They also handle returns and other back-end customer service needs.
    Outsource fulfillment can make your day-to-day life easier, and can free you up to concentrate on the front end of your business. However, it does come with a cost. Outsource fulfillment isn’t free, and you will have to balance the cost of an outsourcing partner with any potential savings you might realize in staffing and shipping costs.

Step 3 – Managing Orders and Shipping Tasks

Sprout Funding logoNext, you have to think about how you are going to manage the shipping and tracking of your orders. If you choose to outsource your fulfillment this will not be an issue for you, but rather for your business partners. However, if you will be directly responsible for shipping your own products you need to think about how you will manage and ship your orders. 

There are three options to consider, and you will need to decide which is the most efficient and cost-effective for your business. 

  • Ecommerce Platform Management Tools – Most ecommerce platforms have built-in order management tools that will allow you to handle basic orders. You can process orders, print out invoices and, in some cases, print shipping directly from your website’s dashboard. For smaller enterprises with limited product lines the built-in shipping features are often sufficient to the business’ needs.
  • Online Shipping Software – USPS, UPS, and FedEx all offer online shipping options with free software for small businesses. This is generally the go-to choice for start-ups and smaller online retailers. Unfortunately, there is no real way to comparison shop for better shipping rates using the provided software and that can become a problem as your sales figures grow.
  • Advanced Order Management Software – Cloud-based order management software, such as Zoho or ShipStation, are often the best option for online sellers. Not only can you compare rates to make sure you are getting the best price on shipping, but all of your order management tools are condensed into one easy to use interface. This allows you to print invoices, buy shipping, and track orders from the software’s dashboard.

Step 4 – Inventory Management

One of the things that is often overlooked by ecommerce start-ups is inventory management. But this is a critical component of running a successful retail enterprise, whether it’s online or in the real world. You need to be able to track your stock accurately and efficiently, in real time, to avoid backorders and out-of-stock items that can lead to disappointed customers. 

There are two main options for inventory management to consider: 

  • Ecommerce Platform Tools – The majority of ecommerce platforms offer basic inventory management tools that are sufficient to the needs of most small online retailers. If you only have a single shop, or only offer a limited selection of products, these tools should suffice. In most cases they offer all you need to handle the basics, including product details like size and color variations.
  • Cloud-Based Inventory Management Tools – If you are selling a wide range of products, or are selling over a number of different channels (proprietary site, Ebay, Etsy, etc.) a more advanced inventory management system is generally a better fit.
    Cloud-based inventory management tools such as TradeGecko and Finale Inventory allow you to track your inventory in real time, sending you notifications when stock gets low or there is a rush in orders of specific items. Most of these cloud-based offerings are compatible with the majority of ecommerce platforms, making integration with your website simple and cost effective.

Step 5 – Payment Options

Online merchants need to be able to process credit card payments from their customers, and they need to be able to this safely and securely. Before your shop can go live, you need to select a credit card payment processor that is Payment Card Industry compliant. PCI compliance is critical to safeguarding your customers’ personal data safe and secure. 

There are three PCI compliant options from which you can choose: 

  • Secure Payment Providers – PayPal, Google Checkout and Stripe are prime examples of all-in-one payment providers that integrate well with most ecommerce platforms while delivering the security you need to accept credit card payments from your customers.
  • Secure Shopping Cart Checkouts – These are built-in features that can be found in many ecommerce platforms. They remove some (but not all) of the responsibility for processing credit cards on your ecommerce site.
  • Payment Gateways – Payment gateways act as a conduit between merchants and customers, processing credit card payments in isolation from the website itself to provide PCI compliant security.

In the majority of cases an all-in-one option is the best fit for first-time online retailers. However, when choosing a provider it is important to keep cost in mind. The number of transactions will impact the structure of your regular fees, and the faster your website grows the more you may be paying in processing fees.

Step 6 – Organizing Your Product Information

As you build your ecommerce site it is especially important to take some time over your product descriptions and images. This content is critical to the success of your enterprise. A poorly written product description can cost you a sale. Likewise, a low quality image of the product can turn off potential customers. 

When it comes to your product descriptions take the time to write them yourself. If you are reselling products try to avoid relying on the boilerplate descriptions provided by the manufacturer. You don’t want your site to look and read like every other online shop in your market. Originality is the key. 

The same tips hold true for your product images. If at all possible avoid using the stock images provided by the manufacturer. People comparison shop when they’re online, and you need your product line to stand out from your competitors.

Step 7 – Marketing Your Site

Finally, with your ecommerce site live and online it’s time to think about how you are going to get noticed in a crowded marketplace. In other words, it’s time to talk about marketing. 

Most start-ups are on a strict budget so social media, email marketing and blogging provide the most cost effective ways to get your business noticed. If your budget can stretch to it, paid marketing is another smart option. Google Ads and Facebook promotions are an effective way of driving targeted traffic to your website and encouraging early sales.

The Bottom Line

Starting an online store is easier, and more affordable, than ever. With the right ecommerce platform and a minimal financial investment you can be up and running in no time. But building an ecommerce website is only part of the equation, and once your website is up and running the real work starts. 

As orders start coming in fast and furious, you must be prepared to follow through with the kind of customer service the market demands. Remember, there are plenty of online retailers out there and the public is spoiled for choice when it comes to shopping options. How you handle orders and respond to customer needs will define your business and will ultimately lay the groundwork for any future success.

Sprout Funding helps small businesses secure the money needed to stabilize and grow. Keep your funding simple, and straightforward.  866-962-4922
We are available to talk with you weekdays, from 9-5 CST 
info@getsproutfunding.com

sprout-fundingThe Sprout Funding blog offers tips, reports, insights and other ideas to help small business owners learn and grow. Have a question for our team? Email us at: info@getsproutfunding.com, and tell us how we can help you.
If you are ready for the money to grow your business, let's get started!