Embarking on an e-commerce venture is like strapping up for a real adventure. While you may argue that business is business everywhere, there are many aspects of an e-commerce business that make it unique and exciting simultaneously.
The platform on which an e-commerce business depends – the internet – is an ever changing landscape with constant surprises waiting for you round every corner.
Every other day something new ambushes the unsuspecting e-commerce entrepreneur – Google decides to change its search algorithms which affects your site’s rankings and visibility, Facebook decides to start charging for stuff that was free so far, email marketing rules become more stringent with Gmail and Yahoo cracking down on spammers and so on.
Then there are the surprises that come with running a retail business anywhere on the planet – inventory stock outs, shipping trouble and the like.
While it is practically impossible to be prepared for each and every aspect that may challenge your e-commerce venture, there definitely are certain risk-mitigating steps that you can factor in before you launch your digital dream.
1. Domain Name & Web Hosting
In the early days of e-commerce and SEO, it was considered a good idea to use broad category-specific domain names (exact match domains) to attract more visitors. But that practice is being debated and we now see a bigger influx of brand oriented domain names. Though it means you spend money in building your brand and then get traffic to your site, picking a brand specific domain name helps in brand recall and pays off better dividends in the long run.
Tony Hsieh of Zappos recounts a story about domain names in his book Delivering Happiness. In it he says, Zappos.com was originally supposed to be Shoesite.com. But Tony shot down that move and after much brainstorming, they ended up with Zappos.com, which is just as well, because today Zappos sells a whole load more than just shoes.
Opt for a .com domain name if you are based in the US or most other countries around the world. In some cases special domains work – if you are in the UK, a .co.uk name works better, in Germany .de is more popular than .com. But by and large, users have a tendency to append .com at the end of most domain names and this will help with getting you traffic.
Picking a domain name is like choosing a name for your house. But you’ll also need space on the internet to build your house – your hosting service. Pick a reputed hosting service for your website that will allow you to grow and spread as your business grows bigger over the years.
2. Web Platform, Store Design and UX
A web platform is the skeleton on which you will build your e-commerce store. The sequence is simple,
Domain Name -> Hosted Web Space -> Web Platform
House Name -> Plot of Real Estate -> Skeleton for the House
You can pick from 3 types of web platforms on which to build your site:
a. Open Source e-commerce platforms – You download the source code and build your store from scratch with the help of developers and designers. Useful if you are a developer yourself or are getting in a professional team of developers to build your site. This option is cheap in the long run and allows endless flexibility. The downsides are significant too. The complexity of setting up an open source site from scratch means high dependence on professional developers to build and maintain your site. The open source software needs endless patches and updates on a regular basis. There’s no real customer support team to turn to in case your site runs into trouble and so on. Examples: Magento, UberCart.
b. Hosted e-commerce platforms – Ready to roll out e-commerce sites that need minimal customization. You can develop your site yourself with drag and drop functionality, full hosted services, round the clock technical support, a range of plugins and apps to enhance site features and a monthly or annual fee in return for all these services. This is the quickest route to market, but is also often the most expensive in the long run. Costs add up quickly with each site feature you add, there is very little flexibility to the site design once you’ve zeroed in on a particular one, worst of all, as you grow in size and scale, your hosted platform will charge you higher fees for supporting your operations. Examples: Volusion, Shopify.
c. Hosted Shopping Carts – This option lets you add a shopping cart to an existing blog or plain website and integrates a checkout, payment and order management process into a basic non-e-commerce site. This can be set up even by rookies and does not affect the overall functions of what you offer. Example: ShopIntegrator.
The design and layout of your store will determine to a large extent how many visitors to your site will convert to paying customers. Spend time researching the best designs that you can consider, test the various design options you have with A/B tests and qualitative usability testing before your decide to freeze on any one design option to launch your site with.
Owen Fuller takes you through the intricacies of balancing great aesthetics with good conversion optimization techniques in this post. Christian Holst from Smashing Magazine explains the science of building navigation structures and product categories for easier findability and conversions in e-commerce set ups here.
3. Supplier relationships & Inventory management
No brick and mortar retail store can survive too long without managing their suppliers well. The same holds true for e-commerce stores as well. Invest time and effort in choosing good suppliers.
As a startup, your products quality will be a part of your marketing efforts. Don’t opt for cheap over good quality. Many startups look at Asia for bulk manufacturing. While this saves costs and is done by the biggest names in the business like Walmart and Apple, they typically tend to have superb supplier networks, dedicated teams to handle suppliers and a strong supplier management policy framework. Learn from the biggies in this area and tread carefully. Even big names like Mango, Gap and Benetton have had to face the heat when suppliers mess up big time.
An online store cannot pull down its shutters in the night while its owners are asleep. By definition e-commerce is 24 x 7 x 365. This makes inventory management supremely important.
4. Payment Processing & Gateway Partner Choice
When you decide to sell products online, the assumption is that you are going to accept online payments. Figure out what payment options you’d like to offer (duh, all!) and what you can afford to offer and strike a balance between payment gateway charges (to you) and payment convenience (to the customer) before you make your final call.
Your payment mechanism choice also defines your level of website security. When you venture into offering credit card or debit card payments, you will need to get a SSL security certificate for your site which will allow transactions to be carried out through a secured section of your website.
PayPal and similar third party payment processor will charge you 3.5% per transaction plus 30 cents per transactions as their processing fee. In the case of credit card companies, they will charge you 20 to 50 cents per transaction plus a fixed percentage of the total transaction amount. With PayPal, transaction security is taken care of by them, while with credit and debit card companies, the onus of transaction security is squarely on you.
These are typically issues faced by websites that are built on open source platforms or even hosted e-commerce platforms. A plug and play shopping cart like ShopIntegrator will take care of integrating your site with a payment gateway, include all necessary security features and offer you a host of payment options to boot.
This totally eliminates the need for you to build in an SSL certificate on your site, as the ShopIntegrator plugin already has SSL certificates built in. No payment data is captured on your site directly – the customer is taken to the payment gateway in order to capture their payment details, thus removing the risks and liabilities associated with handling sensitive customer data.
5. Shipping Costs & Processes
Shipping your goods to your customer is a process that is exclusive to e-commerce. Traditional retail seldom has to worry about this aspect of the sale.
Check out the various shipping companies in your country of operations and pick the one with the best combination of good reputation, low costs and great service.
Shipping costs are a huge determinant of final e-commerce conversions, with at least 61% of users are likely to cancel their entire purchase if they eventually find that free shipping is not offered.
You don’t always have to offer free shipping on everything – it can be for specific high margin items, for purchases above a certain minimum threshold amount and so on.
6. Set Up & Train Customer Service
Many brands (like the aforementioned Zappos) have built their reputation and success purely on the back of exceptional customer service. A happy customer spreads the word about good service she received from your brand and brings in more customers at zero cost to you. A study by Econsultancy, showed that 70% of customers trust recommendations from other users while just 14% trust advertising directly from the brand.
Invest in a good customer care team, train them well and set them up with good CRM software. You can take your pick from Salesforce, Zendesk or NetSuite and see your customers’ journey from the time they browsed your site for products to their purchase history to their profile information all in one place.
Offer 24 x 7 customer service through a toll free phone number which is the expected bare minimum today for e-commerce sites. Also look at options like Live Chat and social media customer care post launch and growth of your business.
7. Aggressive Launch Plan & Continued Marketing
You may have sent months or even years putting together every little aspect together to launch your e-commerce venture. But without a big bang launch followed by sustained marketing, your e-commerce venture could vanish without a whimper.
Spend time with your marketing team and agencies to develop a distinctive personality and voice for your brand. Research your target audience and understand what media platforms you can market to them effectively on – Internet? Mobile? Radio? Email? Social Media? A mix of all of these? Get the brew right and launch a sustained campaign on your chosen media platforms at least a minimum of a fortnight before your site actually launches.
Once you pull off a successful site launch, switch over to the detailed marketing strategies that you have developed in advance and continue to stay on top of mind for your target audience.
As a new age entrepreneur you have a million and one tools at your disposal to unleash your original business idea on netizens around the world. Capitalize on this fact, put in your time and efforts in a strategic manner and your chances of success multiply exponentially.
Building and running an e-commerce business is complex, exhilarating, and scary, but in the end immensely satisfying. All the best on your exciting adventure!
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