Do you desire to get the profit pie of your market off bricks and mortar? The ecommerce business approach is the way to go, and it’s taking the business world by storm. With many customers shopping online, it’s undeniable that there is a bright future for the online business.
Check around; ecommerce is taking over the retail world. Many brick-and-mortar stores are closing up. They can’t match the competition of the online operating brands. Starting your online shop now is an excellent investment.
But you need to know what’s required to get your business running swiftly, efficiently, and at a reasonable cost. So, let’s dive into factors you need to consider BEFORE opening that online store.
Know What You’ll Sell
Deciding what you’re going to sell is the primary step into starting your business. You probably have thought about it and have various ideas. But try to narrow down your product selection to a specific niche. As a starter, this will help settle on a particular product and grow your business slowly, meaning, after introducing your product of choice to your niche, you can expand, add more products and reach a broader market.
That said, allow your passion to guide you; business is easier when you sell what you are familiar with and passionate about. Also, remember to evaluate your competition and focus on offering unique products. Setting yourself apart will give you a competitive edge in the ecommerce industry.
Have the Right Business Insurances and Licenses
Like a physical store, you have to operate legally and also protect your business from unexpected misfortunes. Your online shop will be an independent entity recognized by the law. Meaning your business’s loan can’t be processed under your personal identities, nor will you be personally liable for litigations related to the company. Not to mention, customers and vendors tend to deal with registered businesses. So, acquiring the proper legal permits ensures you’re compliant with the law and also aids in winning customers’ trust.
Above all, you’ll need to save your business from costly liabilities. Make sure you get business insurance. If unsure of what legal permits you need and the right insurance cover for your business, consult Smart Business Insurance to get the right advice on your product insurance.
Prioritize Credit Card Processing
What mode of payment will you accept? Nowadays, shoppers want to be able to pay via credit card. This makes credit card processing a vital aspect of ecommerce trading. Through this service, payments will be debited from the customer’s account and credited to yours faster and conveniently. Moreover, these transactions take place electronically.
To survive in online trade, you must allow credit card transactions. Otherwise, you can forget about improving sales and achieving efficiency in this competitive industry. If you must know, accepting credit cards legitimizes your online business, translating to increased sales and cash flow.
Have the Right Mode of Shipping
Do you want to buy the inventory straight from the manufacturers at a discounted price and handle the shipment to your customer, or would you like to work with manufacturers who can ship the product directly to the customer (drop shipping)? Of course, each of these options has its pros and cons. Either way, you’ll incur shipping fees. But keep track of the product delivery costs to establish your profits per sale.
Different scenarios will demand you use either of these two shipping options. So, you will need to keep inventory and also have reliable drop shippers. So, purchase the stock and handle the shipping where it benefits you and opt for drop shipping whenever it proves to work to your advantage. To survive in online trade, aim at offering convenience, quality, and affordability.
Have an Expected Profits Analysis
Evaluate the market to establish your potential profits. Come up with a detailed cost analysis of your product, all the way from sourcing to delivery. Consider:
• The cost of buying the product– from the manufacturer or wholesaler
• Shipping cost
• Credit card processing charges
• Delivery period
• Website fees
• Storage costs, if any
Deduct all these costs from your product selling price to find out if the business is worth it. Or if there is a need to seek cheaper alternatives. More so, if you should increase your selling price. Remember, to survive in business; you need to make good profits. However, it doesn’t mean you should increase the cost of your sales. Negotiating discounted prices with your manufacturers, wholesalers, business insurance providers, and drop shippers can help improve your profit margin.
Have a Clear Return Policy
A return policy is a must-have for your ecommerce business. Both your team and your customers need to be aware of how you treat a return order. For instance, what should the employee do upon receiving a return order? Plus, what conditions mandate a customer to return an order, and what are the subsequent terms.
Having a detailed return policy will help build customers’ trust and avoid confusion among your team. That way, your business will run smoothly, and you’ll have good connections with your customers. Ensure your return policy aligns with what you are selling. Some products are not resalable once returned, meaning you’ll be at a loss if you accept a return on such products.
Perfect the Website Design
A website is a doorway to your ecommerce business. It is where you showcase your products and allow consumers to peruse through and complete their shopping. Ensure you add a cart to your business site to enable your customers to shop easier and faster. Luckily, there are many excellent options that you can maximize to build a unique ecommerce website.
You don’t have to be an expert in creating business sites. Most of these website designing options are easy to learn and come with a detailed and precise guide on how to go about building your website. Besides, you can hire a competent website designer to create your ecommerce business site.
Consider the Sales Tax
What is sales tax? The percentage amount added to the product cost when selling to the consumer. Physically located stores are not new to sales taxes. Well, the ecommerce industry has always been a gray area, but not anymore.
In addition to business insurance, online traders are now expected to collect sales taxes. So, plan because you may be required to submit sales taxes once your business is up and running. Meaning, you’ll have to collect sales tax from your customers and submit them to your local city.
Start Your Ecommerce Business Today
You now understand that starting an ecommerce business is not a walk in the park. The above factors are just your primary concerns but very critical. The odds are that you’ll stand a chance of not surviving in this market if you proceed without taking the above factors into account. These are the core basics to starting your business on the right footing.