Tips to start a successful E-commerce business
This post is dedicated to people who decided to open an E-commerce business and are feeling overwhelmed with options. I believe most people who decide to open an online retail business will face a huge amount of choices and challenges.
The format of the store is one of the biggest decisions to be made. A website, specially an online store, is a very daunting project, even for people with some knowledge of web-design and e-commerce.
It takes a long time to get it ready for launch and nobody wants to launch a pitiful website with only a handful of items and empty category pages.
This is where Ebay or maybe Amazon can be helpful tools.
I can only talk about it from my experience. It took us about 1 year to get the website fully ready and operational in a way that I was proud to actually hand out a business card with the website’s address on it to people.
In the meantime, I opened an Ebay store and I found it to be a fantastic tool. It is so easy to list items on Ebay and if the products listed are in demand, priced well, then they will sell very well.
Ebay charges a fair amount, but they do a lot of work for you. I will get back to that.
These are the current Ebay charges in Australia (January 2018):
* Store monthly costs vary from $19.99 to $299.95.
We use the Premium Store option for $59.99/ month, which basically allows us to have 1000 items listed.
* Final value fee (fee applied to every sale) – Ebay charges 7% (or more) on each Buy Now sale. This includes any postage charges. So if an item sells for $10 + $7 shipping, Ebay will charge a final value fee of $1.19. 7% of $17 ($10 item + $7 postage) = $1.19.
However, these fees are not wasted.
Ebay spends fortunes in advertising. I often search for products we sell on search engines and see our products featuring in a Google paid ad, placed by Ebay.
And this brings me to another tip. Always put your store’s logo in your pictures. Don’t place it in the middle of the image, or over the product like a watermark, just place it in the corner somewhere. This is an amazing tool for branding.
We have now had the Shop For Safety website running for about 3 years, but we still keep our Ebay store, which has very good sales every month.
On Ebay, our products are usually not the cheapest. I honestly don’t know how some business can survive. Most probably don’t break down the costs and set up their prices based on what the competition is selling it for.
We sell everything for the lowest possible price, but not at a loss.
Coming from an accounting background, I believe the prices must be calculated by taking into account the full cost of the item. This has to be applied to every item.
It means the cost of the product, which includes the shipping to our warehouse + the cost for the payment gateway (Paypal – $0.30 + 2.8% of the final sale cost inc. postage) + Ebay final sale fees (above) for Ebay items. If the item is to be sold free shipping, then the real shipping cost must be added as well.
Only after we know the full cost of the item, we can determine the sale price, which will include a small percentage to cover our admin costs and a small profit.
At this stage, after determining the full cost of the item, we check what other shops are selling the same item for. This is the point when we decide if an item is worth listing or not. A lot of times it isn’t.
Ebay is a good tool to gadget the market and help determining prices, specially at the beginning.
You can list an item fast and test the market. We now have almost 3000 positive feedbacks, but sales have been good since the beginning, even we only had like 50 positive feedbacks.
My tip to anyone who is thinking about opening their own online store is:
“Don’t feel daunted, research a lot, start small and always make a small profit on each sale!”
Choose a good name for your business and a good website domain and register both.
Choose good items to sell, ideally from reputable brands or things that are unique. Things that people need on a regular basis are usually best.
Add good photos and take time writing a description. Product Descriptions should have at least 20 lines of text. The more detailed a product description, the better. This applies to Ebay and to your online store. Add a price that gives you a small profit and see what happens. Check what happens if you list some products on Ebay with a Basic store that will cost you $19.99/month and note if they sell. If so, then start investing in your own online store.
At this point, take care.
And always be aware of scammers. Make sure that you sign a contract with your web-designer and developer, stating that you are the owner of your website, not them.
Your website is all you got when it comes to an online business. It is the biggest asset and it needs to be treated as so.
Choose the the right eCommerce Solution.
There are many platforms available for eCommerce like Magento, WooCommerce, Shopify, Prestashop, etc. Switching platforms later can be a tedious task. Before you start, do a lot of research, understand your needs and choose a platform wisely.
This part of the process will also involve the shipping solution offered, check out solutions and security, which are essential components of a successful e-commerce shop.
Learn all you can about SEO and remember to ALWAYS write long product descriptions and ALWAYS and names with pertinent keywords + alt keys to ALL images. This is the best SEO tip ever!