Tips for Starting an Online Store
Are you thinking about starting an online store but don’t know where to begin? Having a good business idea with little knowledge of where to begin can be quite stressful, especially when it feels like a gamble.
You might assume you never know how successful your business will be, and that is true to an extent. Before opening a store, you should look into the demand of the products you wish to sell, open up statistics or simply start looking at stores similar to your idea and seeing how popular and appreciated they seem.
Nowadays it has become easier to start online stores through apps that are specifically for creating them and connecting with consumers who exclusively download the app for the purpose of spending on products that are offered.
You may be asking yourself what else you need to start an online store. There are three main components for beginners: a name, a hosting account, and commitment. There are specific parts that are more important than these basics in the long run though, for example, optimizing your business practices to get the most out of every transaction.
Skills for any job are creativity and drive, so choose a name that represents the niche you have chosen and also has a nice ring to it when looked at from a consumer’s point of view. As mentioned, choose a web hosting site, which can range from basic social media like Instagram or Facebook, to more specified sites like Depop or Shopify.
Setting up shop
The base for most successful businesses is location and timing, so make sure to find e-commerce or social media platforms that are right for you, as well as look into the demand your shop would have in your region. Knowing about your targeted audience is a basic need when starting a business that depends on consumers.
Before you upload your products, you might want to consider creating anticipation for your shop. This step isn’t necessary and is recommended if you have a large social web or following. Try advertising your “opening day”, it can make potential customers aware of your existence beforehand.
You must also create a nice interface for your consumers, in other words, make your online store, logo, and name pleasing to your targeted audiences. Focus on colors, design, and preferred legibility, as well as clarity for buying, selling, and ethics you wish to follow.
When taking photos of your products and overall aesthetic, focus on good quality, descriptive images. Maybe buy a DSLR camera for crisp pictures and practice some photo editing. You may want to take a look at color theory if you’re unsure, or hire a designer if you are willing to invest more.
It may be beneficial to study some basic economics and business practices using books, which are useful skills for any job, but if you aren’t ready for that, the next couple of paragraphs are here to help you.
When thinking about pricing, you should always think about profits, optimizing said profits, how much demand there is for your products, and how much a customer would be willing to pay for them.
After taking into account operations, warehousing, and marketing costs, you as store owner must still retain a profit to survive. It is ideal to hit a profit margin of between 15% to 30%, ideally 20% and above.
Try to maximize the amount you can earn, sell your products at as expensive a price range as you can, since making 20% in 20 dollars versus making that on 100 dollars makes you more money overall. Unlike mass-production companies, you need consumers to support your business, since you’re working privately or with a small team.
On the topic of competition and support, try avoiding niches that are already dominated by household names. It is quite hard to make a breakthrough into a monopolistic market since consumers won’t even consider alternatives.
Shipping and Selling
There are many models for product maintenance and selling, so let’s look at them.
The first would be dropshipping, a popular method for e-commerce stores nowadays. With this method, you do not hold inventory, rather a supplier holds and ships it for you. The process starts with the customer ordering and paying for a product through your store, which is then forwarded to your supplier. You pay wholesale to the supplier.
Not holding inventory means you do not need capital to purchase your items, you can list most items in your store, you avoid warehouse costs, and you won’t be the one having to pack orders.
Issues with dropshipping will depend on your supplier. Customer fulfillment is out of your control, so if something goes wrong, the drastically slowed communication between you and your supplier will cause inconvenience for your business and customers alike. Returns will also be icky thanks to this, as well as branding not being personalized to your name enough.
If you handle in-house shipment, you would be able to immediately rectify shipping complaints and apologize, though it will take up more effort, time, energy, and space within your areas, as well as costing more to store, package, and ship your products.
You create a more personalized relationship with customers through this method and are also in more control over customer satisfaction. You know and can inspect your products before shipping them, and can get better reviews overall from your customers thanks to your control.
In-house shipping also allows you to make better profit margins by not having to pay a third party and ordering from manufacturers in bulk, which is usually discounted if you adhere to a Minimum Order Quantity (MOQ).
Return policies can be annoying for both sellers and customers. There are a few options for this, but the best one would be a strict policy for returns on defective products or wrongly sized products. Set a certain time limit for returns too, ideally giving buyers 30 days. The key is to make it clear for customers what they can and cannot do.
Branding and Marketing
There are many ways you can brand your products. Your focus on packaging will boost customer experience and create an iconic message for your name, as well as aid advertising depending on how it is shipped. You can also ask customers to post the products they buy with a tag or hashtag that is your store’s.
Other ways for marketing are through methods of advertising through social media, happy customers spreading the word, paid advertisements, and the list goes on. It is worth looking into what methods best suit you and your business.
You should also look into your regional business laws regarding tax, registration, and so on.