How to Set Up and Run an E-Commerce Site
We go through the benefits and steps of establishing and operating an online shop for your small business
As more and more people gain access to low-cost broadband and wifi-enabled devices, and grow increasingly confident about the security of online purchases, the e-commerce market continues to thrive.
Setting up shop online is now a matter of rote for many businesses – allowing them to sell to customers anywhere in the world at any time of day or night, whilst cutting down on the cost of staff and premises.
And investing the time and effort in establishing a fully-automated online sales process can see your overheads slashed and your profits soaring.
This guide will help you recognise the advantages of having an e-commerce site, establish and design an effective e-commerce platform, identify the challenges and costs involved, and market the site effectively.
What are the advantages of an e-commerce site?
As mentioned before, developing an e-commerce site gives you a shop that can be accessed and purchased from by anyone, anywhere, and at any time.
It can help you to attract new customers. Having a website gives you access to a whole raft of new potential customers – customers who live overseas, or customers who stumble across you whilst browsing or searching, and so on. If you are in a particularly niche market it is a much easier way for customers with an interest in your offerings to find you. And a website will help to cut costs as you do not need to pay rent or in-store employees when operating a website. You may also cut down on the costs of holding and ordering stock – if you hold the stock yourself or if your suppliers deliver to customers directly, such costs will be vastly reduced.
It can also help to facilitate orders and monitor buying habits. With a website, your customers can easily re-order their favourite purchases, and see related items that they might wish to buy and allow for downloads. If you sell information or software, customers can download their purchases as soon as they’ve bought them.
It can help to improve your after-sales service and support. You can offer a better service for you existing customers, and businesses can have immediate success. If offering the right price to the right market, you may see rapid results.
You can also quit cheaply and quickly. If you’re unsuccessful, you need not worry about redundancies, leases or undoing shopfitting costs when dismantling your business.
What products are suitable for selling online?
Most items are now available online however there are a few that easily adapt to the online marketplace. For instance niche products tend to do well online as many people shop online when looking for specialist products such as collectors’ items, specialist foods, and other products that are difficult to find on the high street.
Also cheap commodity items as customers buy online to take advantage of the low prices and convenience of direct delivery – online supermarket shopping is popular for this reason. Items whose quality does not vary (Books and CDs for example) are also commonly bought online for price reasons.
Finally information like software, music, images and videos that can be downloaded immediately upon purchase are popular online. You must be sure to offer something with real value however, since people are often used to getting such items from the internet for free.
How do I set up an e-commerce site?
If you have no prior experience of e-commerce, don’t be overambitious from the get go. Instead, establish your site on a small scale, and then develop it as your business and experience grows.
The first step is to purchase web space and a domain name. Avoid default domain names that have the name of the web-hosting company in them, as this looks unprofessional. Consider purchasing a ‘turn-key’ package. Most web-hosting companies offer these design templates that you can place your information and products into, as well as payment facilities. These are generally designed to be easy to use, and do not require technical expertise to master.
Also look at ‘shopping cart’ software, many web-hosting companies also offer this for a modest cost. It allows the shopper to store provisional purchases in a virtual ‘shopping basket’ until they are ready to confirm their purchase, and makes multiple purchases much easier (and thus more likely). Build your site around this functionality.
Find a technical expert as you will need someone with a good working knowledge of coding and programming to run your site for you. You may also need a legal expert to ensure you comply with regulations around data protection and distance selling. They can also help you to set up contracts and terms of trade for the online environment.
You will also have to choose a shipping company (if you sell physical items). Make sure you can trust them to deliver items on time as promised, and keep a regular check on their performance. If possible, build delivery tracking software into your site, allowing customers to track their purchases.
And finally, prepare for the impact of orders. Make sure you purchase enough resources to meet projected demand – failing to meet orders will see you garnering negative publicity and losing customers.
Designing your e-commerce site
When creating your website there are a few things that you should consider. One of these is to try keep it simple. Make sure it is easy to view, locate items, and purchase from. Avoid big pictures and complex graphics that will slow down load times and turn off online customers (who quickly lose patience).
Also include support pages such as any relevant/useful background information (FAQs, product specs, user guides, etc.). Include information about delivery times, warranties, exchange polices and customer rights.
Try and provide links, news, discussion forums and reviews. Link out to other relevant sites and manufacturers – if you are comprehensive your customers will treat you as an information resource as well as an online store. And try to build a community around your product and market. Update regularly with news and information.
Receiving and processing payments
There are a number of different payment choices you can pick, three of the simplest include online credit/debit card payments. To do this you must apply for a ‘merchant status’ with your bank. Turn-key packages and shopping cart software should include payment processing functionality. Alternatively, specialist companies can process online credit card payments.
Also try and offer phone-through credit card payments as this option to customers with concerns about the security of online payments.
And finally monthly payment invoices. B2b transactions usually take place this way. Carry out checking procedures before setting up any accounts. Online invoicing services can manage customer accounts.
What are the costs of setting up and running an e-commerce site?
E-commerce costs tend to be significantly lower than the costs of establishing and running a traditional shop but there are a few you should plan for.
This includes software costs, for instance most turn-key packages start at around £10 a month. Shopping cart software is usually available to buy or lease. You will also have to pay web-hosting costs. You may need to pay a basic charge to your web-hosting company to host the site – up to £50 a month. You will also need to pay someone to run and update the site (unless it is yourself).
And finally transaction processing fees. Most banks and payment processing companies charge an annual fee, with a percentage of each transaction as extra. If your average transaction value is high, you may find it more profitable to find a package that charges a flat rate per transaction.
How do I market my e-commerce site?
Similarly, the costs of marketing an ecommerce site tend to be lower than those associated with marketing a traditional shop.
One way to promote your online business is through pay-per-click advertising and advertising on related sites. Target people who search for particular items related to the ones you offer. You can also negotiate reciprocal links between such sites.
Also try a targeted email using everyone on any mailing lists you have compiled and utilise social media. Many retailers build customer bases through sites such as Facebook or Twitter. Finally include information on your other promotional materials i.e. on any other advertising or marketing literature you produce.
An online business can be an easy way to help existing businesses to increase their sales, promote their company and interact with existing customers and without the need for a retail store or even an office, the costs and risks can be low.
For more help with starting and running an e-commerce site, check out our sister site’s dedicated online channel here.