Many people come to me and say “we should just open up an online store, and…”
Even though I’ve been immersed in online shops for over a decade, it’s now, everyone I talk to, they want a piece of the action. And with easy, automated recurring business and online payments, why not?
Well, it’s easy for me to assist and the cost barriers to opening up a good looking, functional e-commerce site are well and truly broken. The thing is though, I want my clients to be successful and not be deflated with any hidden surprises down the track.
So for anyone out there reading, here’s some things you really need to consider before employing any kind of web designer:
1. Who else is doing exactly the same thing?
Google it, you may be surprised.
It’s not the end of the world, competition is healthy…. however you do need to consider how exactly it is you’ll out-do them at their game. Is it customer service? Competitions? Tempting loyalty programs? Amazing viral social media campaigns? A convenient app to penetrate the younger market? A better product? A cheaper product?
Some niche markets and products are obviously going to be easier. But really, if you have an idea like “we need to setup some kind of online computer parts store” – you need to can that thought, pronto! You’ll have an easier life and more returns working at a supermarket.
2. Warehousing concerns
Are you holding stock? Or entering into a drop-ship programme?
You need to think about this. Especially if your market is highly competitive, there are so many costs and issues around stock, warehousing and delivery. First of all, are you required to hold stock? Do the models change frequently or does the product go off – in other words do you have to worry about stock rotation. If so, are you across the costs and time in managing this? How much product do you think you’ll need to hold, and if you’ve borrowed money for stock, are you able to remain competitive while ensuring your products have enough return to keep up with that interest?
Many successful online stores use drop-ship programmes, where giant distribution warehouses offering popular products handle all of the delivery and warehousing concerns – you just need to sell their product for them online. This is a great way to go, but once again, you need to do your research on the numerous suppliers available and go back to my first point – how will you differentiate yourself from hundreds of other stores?
3. Product selection and marketing
So you’ve selected a product or product range. Is it the type product that sells itself through a redeeming feature, such as its uniqueness, quality or price point? If you’ve nailed one or two of those, you could be on a winner. Have you examined how other people are doing it online? Are there cheap nasty equivalents for sale on eBay at tempting prices? Are the websites selling similar products a bit dodgy? Make sure there’s an opening there for you, where consumers can easily recognise you have a point of difference.
4. How are you reaching your market?
Is it the web alone (ie good search rankings and an effective store) that will do it, or have you considered other avenues for your marketing mix? Who is your market and are they web savvy? Do they prefer to use mobile phones, apps and social media, or are they the Baby Boomers sitting at a desk?
These questions will determine your best approach to your marketing and what service you present online – you may opt to go for a traditional e-commerce site with good search rankings, or mobile optimised site getting traffic from Facebook and Google+.
5. How are you handling payments?
Payment Gateways and Merchant Bank Accounts
If you’re expecting large volume sales and frequent, high value transactions I would definitely suggest going for a dedicated payment gateway solution through a merchant account at your preferred bank. St George Bank and Westpac use decent services such as eWay and PayWay which have excellent APIs for Australian website developers. It is a solution that is larger scale and has additional security concerns. Transacting in this way requires PCI compliance to avoid being banned or restricted by any of the leading credit card suppliers (Visa, Mastercard et al) and being subject to fines.
On the other hand, those transacting less than say, 100K a year online, simple PayPal solutions are available. They are easier and quicker to setup, and while the transactional costs are high, the setup cost is much lower. Since eBay has adopted it as a payment method for a decade or more, consumers are familiar with how it works and trust it.