Lesson 10: E-commerce
A website doesn’t have to just generate leads for you. It can generate sales. The pandemic advanced the adoption of online shopping by at least five years. If you’re ready to add a virtual shop, this lesson is for you. Hang on tight! It will be a wild ride.
E-commerce
E-commerce was a luxury for small businesses at one time, but not anymore. According to IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to online shopping by roughly five years. That’s a giant leap, one that small businesses need to turn into a competitive advantage.
Online purchases now account for almost a quarter of all retail sales globally. During the pandemic, customers got used to shopping at home on their computers, and this change in shopping preferences appears to be permanent. Where online ordering used to be a value-add for many small businesses, it is fast becoming an expectation of customers.
Why you should consider selling online
The number of customers shopping online should be reason enough to add e-commerce to your website or make it part of your overall sales strategy.
But there are other reasons to sell online, including building lasting relationships with customers around the clock, expanding your customer base, even internationally, and leveling the playing field with larger competitors who are still figuring out their own online shopping platforms and customer acquisition strategies.
Online, even the smallest company can look big. You may have a very small footprint on main street in your community, but you can look like an “amazon” online thanks to new technologies. Best of all, e-commerce is a very affordable sales expansion strategy for a small business. You’ll spend more time on keyword optimization, marketing and packing up orders than you will managing your e-commerce module.
The secrets to success in selling online are pretty straightforward:
- Do your research first. Figure out who your customers are and how to reach them.
- Set a budget. Be sure to factor in all the costs related to adding e-commerce, from the platform and payment processing fees to marketing and fulfillment.
- Choose the right platform. Your e-commerce process should be simple for you to manage and easy for customers to use.
- Figure out fulfillment. This can be one of the most challenging aspects to master, filling orders once they come in, especially if you are a one or two-person operation.
- Determine your marketing strategy. Customers won’t magically show up at your new online store, even if they are current visitors to your brick-and-mortar. Many traditional methods will get them there, but you can add new tricks to your toolbox to consistently generate sales.
1. Do your research first
Before you get too far, you’ll want to do some old-fashioned research. Some of this may look familiar from Lesson 1, but this is specific to the actual shopping experience.
Start with your competition. If your competitors sell online, visit their storefronts. Assume the role of a potential customer and experience the sales cycle. Contact them with a question, and see how their e-commerce module calculates shipping costs and what the promised delivery times are. When are these calculated during the checkout process? What payment options do they accept? What is their pricing strategy, and how does it stack up to yours? You may want to order something from them to see how the order arrives and assess the packaging and labeling. Pay particular attention to where they came up short in the sales and fulfillment process, such as poor packaging or late delivery. This will help you avoid making similar mistakes and improve your customer service and support.
Do a keyword search. Use Google to search for keywords you think your customers would use to find you. Don’t cheat by using your company name. Instead, think like a customer who may be searching for a product they know you carry, or better, a product they think you may carry. See what the search engine returns. Make a list of possible keywords before you start so you can do this in rapid-fire fashion. Then branch out with additional keywords and phrases. Study how the search returns differ with each search entered and who appears on the first page of search results with that particular keyword or search phrase. See where your competitor ranks with the different keywords. Are they above your listing or below?
Pro Tip: Be aware that many of the sites ranked on the top of a page are sponsored, i.e., the company paid the search engine to be there. For now, ignore these and find the first ranking that is not Sponsored. These are organic keyword search returns, and this is what you will want to focus on for now. You can think about sponsored links down the road after you become an expert in online sales.
Study the pros. Visit some of the major online retailers to see how they handle online sales and fulfillment. What sticks out to you? Is it easy to find products? How good is the store’s search engine when it comes to returning results that match what you were looking for? Do they offer other items you might like or make recommendations based on your selections? How easy is it to have a question answered? Do they have customer service staffed by real people? Or is it a bot (using artificial intelligence), or conducted by email? How quickly are orders filled, and what are the delivery options and timeframes? What is their return policy?
The point of this exercise is to study what others are doing so you can take advantage of lessons learned and tap into best practices. Mirror what other companies have done well, making your own improvements to their ideas where the technology allows. If this seems a bit daunting, you can always start simple and add more features and capabilities as the site begins to prove itself as a revenue stream and you have additional funds to plow back into improving your online storefront.
2. Set a budget
There are a lot of ways to create an online shopping experience. The general rule is you get what you pay for. You also don’t need a solution with more bells and whistles than you will ever use. In determining a budget, do some additional research.
If you have a WordPress website, adding e-commerce shouldn’t run you more than $1,000 to $3,000, depending on how much of the work you want to do yourself (such as adding and setting up products). If you are starting from scratch with a website that will have e-commerce, expect to pay between $2,000 and $5,000. This is a lot cheaper than it used to be. In the early days of e-commerce, online stores had to be built manually. Now, a plug-in such as WooCommerce automates most of the process, significantly reducing the cost of building and maintaining a sophisticated online store.
You can also rent a solution. Places like Shopify, Wix and Square offer website templates with integrated e-commerce. In return for the convenience, these sites charge a monthly fee and a per-transaction fee attached to every sale. If you want to go this route, compare the monthly and per-transaction prices since they affect your profits. As noted elsewhere, remember that these sites lock you into their system. If your site isn’t performing like you want it to, you can’t take it with you. That’s why it’s best to own every aspect of your website from the start. It may cost a little more upfront, but if you calculate the cost of leasing an online store vs. owning one, you’ll find that the cost of ownership over a period of five years is far less than a leased solution.
3. Choose the right platform
If you run on WordPress, WooCommerce is the dominant player. It has a lot of bells and whistles, allowing you to create a shopping environment that is sophisticated and affordable. Expanding is easy, so you won’t run into dead ends or have to start over. This allows you to start with a basic shopping environment that you can build on over time as sales flow in.
If you are working with a web designer, ask them for their recommendations. Even if you settle on the e-commerce platform, you will need some other things, including a server host and plan, a content management system (WordPress is an example) and a domain name. We covered all this in Lesson 6: Getting Started.
No matter which platform you choose, you will need to factor in the cost of the payment gateway. When someone wants to use a credit or debit card (and even some other payment methods), the payment request runs through what is known as a gateway. A gateway is a third-party provider that handles the financial transactions that shift your customers’ funds to you in a secure fashion.
Every provider is different, so you want to do some research to compare pricing. Most charge a flat percentage plus a per-transaction fee. These will affect your pricing and, ultimately, your profit margin. So shop around. In the next section, we’ll take all the mystery out of the payment process.
To ensure security, you will want to make sure your site has what is known as an SSL (Secure Socket Layer). This security encryption process ensures that things like credit cards and other sensitive information are encoded and shared securely. If you see the ‘s’ at the end of ‘http’ in a web address (https), the site is secured using an SSL.
If you’re reasonably savvy with website design tools or a content management system, you can set up an online store yourself. After installing the plugin, a lot of it is point-and-click and fill-in-the-blank. If you have other things on your plate, think about hiring a web designer or team to do the work for you. Plenty of experts are out there, including those found on sites like upwork.com and guru.com. A local firm is a good choice, too, and there are plenty of good design firms in Washington.
4. Photographing products
An online shopper can’t pick up an item. Photos do the selling. Invest in a small photo booth that you can use to shoot your photos. They are relatively inexpensive and have back and side lighting to give your product a professional look, even if you’re taking photos with your phone. If you have smaller items, you may want to purchase some clear acrylic stands to lift them off the floor of the booth. It also makes it easier to rotate the item so a buyer can see it from different sides.
In your product descriptions, include the measurements of the item or include something in the photo that shows scale. You want the customer to be able to make an informed decision about their purchase, especially when they can’t see it in person.
5. Get personal
These days, customers expect you to read their minds. They want you to know that if they bought one thing, they may want a product or service related to it. If you’ve been on Amazon, you know the routine. You put one thing in your cart and they offer three or more other, similar options. Or they recommend something else you might like that will go with it, such as extra blades for a trimmer or a scarf that matches the coat you are about to buy.
Shopping modules can do this to some extent through the strategic use of keywords and checkboxes to connect products. You can also turn to artificial intelligence to do some of this work for you. As your customer roams about the site, the algorithms turn from learning mode to suggestion mode, remember what your visitors saw, what they put in their cart and what they actually bought. This allows you to control their sales journey to some extent, providing them with offers for specific products, discounts on others or offering to put an item into your Wish List so you can go back to it later. As you build your site, think about how you can make the experience more personal, from welcoming them by name to anticipating what they may want to purchase next, based on their shopping history, color and size preferences.
6. Figure out fulfillment early on
Generating sales is the easy part of e-commerce; filling the orders can be far more challenging, especially if you sell collectibles or smaller, more fragile items. If you haven’t filled online orders before or have done a relatively small volume, experts advise that you figure out how you will process and fill orders before your online store goes live.
This includes having a space for all the supplies you will need, such as packing peanuts or bubble wrap, tape, labels, a scale and customs forms (if shipping overseas). You’ll also need a printer to print out postage or delivery service labels. Of course, you’ll also need space to store merchandise. This is easy if you have a brick-and-mortar shop but more difficult if you run your business out of your home. A garage or spare room can usually fill the bill, at least in the beginning.
You’ll also want to create sections on your website that clearly spell out your return policy, store credits or refunds, and estimated delivery times, including the time it takes to process the order, pack it and get it to the shipper.
You want to manage customer expectations in an Amazon “One Click, Get It Next Day (or Same Day)” world. You’re not Amazon, so orders may take longer to fill and ship, especially if you live in a rural part of Washington where you have to drive to town to drop off shipments.
You can, however, be Amazon. Nearly 60% of all products sold through Amazon are from third-party sellers – primarily small and medium-sized businesses. The company offers a couple of different levels of their Fulfillment by Amazon program with varying degrees of cost, either per product or as a fixed bulk fee. You can sell your products on Amazon or have a store of your own. Either way, Amazon will handle all the fulfillment details. All you have to do is set up your account with them, ship your products to one of their distribution centers when asked, and they handle the rest, including returns.
For businesses new to the idea of online sales, this can be an absolute godsend, especially if you’re operating out of your home or a small apartment. There’s no need to warehouse products or stock up on shipping supplies.
On the downside, Amazon gets a sizeable cut of your profits in the form of a commission, warehouse storage fees, delivery costs and advertising. This doesn’t seem to bother too many business owners, as 500,000 small businesses let Amazon handle all the fulfillment for them.
However, it can be a good solution depending on your business model and volume. They also offer additional services to help you get your feet wet, including:
- FBA Export: At no extra charge, expand your FBA business to more than 100 countries—minus the complexities of international selling.
- Multi-Channel Fulfillment: Sell from your own or third-party e-commerce sites, with Amazon picking, packing, and shipping to your customers.
- Amazon Global Logistics: Ship ocean cargo from China directly to Amazon fulfillment centers in the US, UK, and Europe.
- Remote fulfillment with FBA: Sell to customers with Prime shipping in Canada and Mexico without sending inventory to those countries.
Another option is a fulfillment partner such as ShipStation. They provide you with a streamlined process for preparing and managing shipments, including branded labels and packing slips. You can also manage inventory, connect to other shopping portals, run reports related to your shipping, customer care and more.