Whether you are an established off-line retailer, or interested in selling products strictly online, getting into ecommerce can be a daunting process. The purpose of this article is to outline some of the things to consider when planning your ecommerce strategy.
Things to Consider
Before jumping into the ecommerce waters, there are several things to consider, discuss, and mull over. Here's a list of common issues that business forget to think about:
Costs: It may be relatively cheap to sell products online, but there are costs involved. Depending on how you go, you may incur costs for an SSL certificate, merchant account with a credit card processor, hosting costs, setup / development, etc. To see what your estimated monthly charges would be, try this online merchant payments calculator.
Advertising: On the web, competition is brutal. Chances are, many other providers sell the same products you are selling. Most likely, you will need to spend money on advertising to get people to your site. Even with good search engine placement, expect to spend a recurring fee on advertising.
Shipping: These days, customers expect low shipping costs, and many shopping cart providers will calculate exact shipping (from UPS or Fedex, etc.). However, you need to consider your products, and what will work. Keep in mind, that once an online transaction is completed, the customer expects to pay what was on the screen. You can't easily go back and increase their shipping costs if you forgot to account for an oversized or heavy product. Also, remember the time involved in fulfilling orders.
Taxes: As an online retailer, you are still required to collect taxes for orders within your state. You should check with your state's Small business administration for details and requirements.
Region: The Internet allows you to sell to clients globally - however, you may not want to do that. Collecting payments and shipping products overseas could cost you more than you can afford.
Payment methods: How can customers pay you? Will you accept credit cards in realtime? Checks? Paypal? Keep in mind that each of these methods may require monthly charges, or transaction charges. For some good payment providers, see this page.
Options
There are several ways to get into ecommerce on the web. I'll address these from cheapest / least risk to most expensive.
eBay Merchant - A simple way to get started is to become an eBay seller. You can sell individual items, or set up a store to sell from your inventory. This has several advantages. First, it's low cost of entry. You pay very little for listing an item, and pay a transaction fee when it sells. Second, you can guage the demand for your products, by the number of bids you get, and the selling price. Third, you get instant traffic - something that takes time (or advertising $$) to get otherwise. If you have some success with ebay, you can always look at the other solutions later on.
Hosted Store - There are many providers out there that will give you a instant web interface to set up your store. Two such solutions are provided by Yahoo Stores, and Monster Commerce. You will pay a monthly fee, setup fee, and perhaps additional fees, but these let you get your products set up, and your store launched very quickly. Usually, you can cancel after a few months, if things aren't working out, which allows you to cut your costs.
Shopping Cart Software - This category includes software packages you buy and install on your website, or pay someone to install and configure for you. These tend to cost several hundred dollars and up for the license fee, and could cost thousands to have someone install and customize to your site. I consider these the most expensive because they require the biggest committment of time, and dollars to get up and running. Most of the investment occurs before you actually have the store up and running, as opposed to the options listed above. The main advantage to this method is that the corporate branding; the store is integrated seamlessly to your website.
