How to Start Your Own Online Store
The online trade is conquering more and more market shares. It is tempting to be there and to start your own online store, because you can also sell products all over the world.
But, before you dare to go online, you should answer two important questions.
Question 1: Is it worth it?
Before you invest a lot of money and more time in your own online store, you should thoroughly analyze whether this can even be worthwhile, and whether your own business idea promises success.
If you still decided to start your online store, then you should ask yourself the following questions:
Can I stand up to the competition?
What is the price level of the competition? How long have the competitors been on the market? Which prices, which quality and service do you offer?
Suppose say you want to sell children's shoes. The first page of search results is dominated by major online stores, as well as giants such as Amazon and Ebay.
Many of the shops have been active for many years, everything points to a price war. It is therefore unlikely that you can survive in such a market as a newcomer, if you bring no real competitive advantage.
Can I afford start an online store?
Starting an online store costs money. Here you do not have to consider only the one-time installation costs. In addition there are costs for hosting, for the payment methods (SSL certificate) and for any updates. Another big expense is the marketing spend.
Added to this are the costs associated with the products: manufacturing costs, storage costs, as well as packaging costs, and so on.
Does a reasonable profit margin remain at the achievable prices?
Are my products suitable for online sales?
Is there a demand for my product? Have I already sold it successfully in the analog world or on online marketplaces like Ebay and Amazon?
Also, how "trendy" is my product? Will it still be in demand in several years?
Do I personally have the necessary qualifications?
Before you start an online store, you should be honest with yourself:
- How well prepared you are to start your own online store?
- Do you have an idea of how to attract internet users to your own site?
- What experiences do you have regarding storage and shipping logistics?
It makes sense to focus on topics such as user guidance and conversion rate optimization before creating your own online store. You do not have to be a professional in all areas.
But, only those who have a clue about the matter can, for example, ask the right questions to programmers or agencies and give clear instructions. Knowing these basics also helps avoid costly mistakes when you start your own online store.
Anyone who still thinks about starting an online store now comes to the second important question:
Question 2: What alternatives are there to your own online store?
Would it be possible to sell your own products instead via online marketplaces like Ebay and Amazon or even a classic store opening?
For sales through a large online platform such as Amazon, the following points are true:
- Lower start-up costs: depending on the online store settings, you should expect start-up costs of a thousand dollars (euros) or more. At the same time, opening a "store" on Amazon, Ebay and Etsy is associated with insignificant start-up costs.
- Less prior knowledge required: Anyone who invests in their own online store must first conduct market research, analyze their own target group and their wishes and acquire a solid basic knowledge of CMS and online marketing. The use of marketplaces, on the other hand, can be learned very quickly.
- Attracting customers: attracting potential customers to your own web site is very difficult and expensive. Especially at the initial stage after starting your online store.
How to start your online store in 10 steps:
So, you are really ready to start your own online store? Once the decision has been made, the work starts.
Step 1: You need to find a domain name
If you want to start an online store, you need a good, memorable internet address. The most important rule here: short domains are better than long. Buyers will remember them better and fewer opportunities for typos.
Finding a good domain is becoming increasingly difficult because almost all attractive names are already taken. So, how do you choose a suitable domain for the online store?
Step 2: Choose payment methods for your future online store
Which payment methods a webshop should offer depends above all on the target group.
Who appeals to a young target group and offers only the payment methods "advance payment" and "bill", will certainly forfeit sales. The most important payment methods are currently:
- Credit Cards
- Mobile Payments
- Invoice purchase
- Bank Transfers
- Prepaid Cards
- Direct Deposit
- Cash on delivery
Step 3: Calculate costs realistically
Experts estimate that several tens of thousands dollars or euros must be invested in a new online store if it is to be successful - at least! Because the competition is now too good and too big.
Step 4: Working with ecommerce consultant and web designer
Anyone who wants to do everything themselves when starting an online store is either a genius or (and that is far more likely) a fancier.
A consultant who helps you set the right priorities and select the right partners and software is essential to most.
Step 5: Select the software to start the online store
Of course there are numerous free templates for online shops in the net. However, these are often not free at the end because you have to run a programmer to adapt the template to your own needs.
A paid package solution can therefore be worthwhile - especially since there is also a customer support.
Step 6: Purchase site management software
If you want to build a true, profitable business, you need software that supports it and automates as many work steps as possible, such as billing and managing customer data. A combined merchandise management and mail order software takes over these functions.
Even for founders of online shops who already have brick-and-mortar stores, it is often advisable to choose software that has been developed directly for ecommerce - instead of building on the existing in store retail management system.
Two popular manufacturers used by many online retailers are JTL and Pixi. It is important that the software can grow with the online store and, for example, you can buy certain functions that you do not need at the beginning.
Step 7: Warehouse and equipment
Some online store owners store their products in the living room - but this is only until you achieve real success. And this is not the best solution.
So, you need a warehouse complete with equipment: a packing table, shelves for storing goods, a hand cart, pallet carts, cash registers, barcode scanners, and so on.
Step 8: Engage photographer and copywriter
High-quality images and informative product descriptions are irreplaceable. Finally, one wants to convince the customers to click on "buy".
Here you should be honest with yourself: are you really gifted as a photographer and copywriter so that you can do the job yourself?
Step 9: Make Marketing
Even the best online store will not succeed if you do not lure customers to the site. How many visitors an online store really needs is shown by a simple calculation:
500 visitors come daily to the webshop. We consider an optimistic conversion rate of one percent, which results in five purchases. Let's say the average order value is $100 and the gross profit is $20 per order. Then there is a gross profit of 100 dollars per day and 3000 dollars a month.
Of this, however, all costs still have to be deducted, for example for advertising, storage, shipping, software and so on.
The example shows: if you want to start a successful your own online store, you need to attract hundreds of visitors every day.
There are, among others, the following ways:
- Ads using Google AdWords
- Search Engine Optimization (SEO): Search engine optimization ensures that a potential customer who searches for your products on Google will see your online store on the first pages of search results.
- Online advertising, such as banner advertising on other websites.
- Content marketing: this is a set of techniques that tries to establish itself as an expert in the eyes of customers with content related to its own product - and in the end, sell more.
For example, a tool online store might publish instructions on how to properly use the tools or a photographer's tips on photography.
- Social media marketing and advertising: social media platforms such as Facebook, Twitter or Instagram allow you to communicate with your target group, increase brand awareness, promote your image or introduce your products.
Step 10: Get legal advice
A warning can quickly bring online store operators into financial trouble. So from the outset it is necessary to avoid any reasons for the warning.
Frequent warnings are violations of the labeling obligation, the imprint obligation, the data protection, the consumer protection right or and the rules for exchanging and returning goods.
Of course, you can also make yourself smart and read on the net, which criteria a webshop must meet in order not to risk warnings. It is safer, however, to hire a law firm. For any errors that later lead to warnings, then liable for the lawyer.