With online sales growing year after year, launching your own e-store may sound like a great, but complicated idea to you. Yet, it’s not such a great step to undertake when you have an exact road map to guide you through. Follow this 3 step action plan to launch your first e-commerce website this week!
Step 1: Choosing your niche and your product
For most entrepreneurs-to-be, defining the market and choosing the right type of products is the hardest step to accomplish. Fret not! Here are the key bite-sized tips to get you through:
Choosing the right price segment: if you opt for selling low cost products, reaching positive ROI may be rather challenging. Choosing a high-scale product ($1.000+ per item), your potential customers might want to speak to someone on the phone or via live chat, or even visit your office. In any case, this requires extra spending to support, but can potentially pay for itself in 10 times. Most sellers agree that the ultimate price range to build effective selling channel is $100 to $200 per product.
Setting the right margin: what’s your cut from each sale? Margins depend on the industry and are around 30-35% on average. However, electronic goods, for instance, typically have thinner margins, while small items like phone accessories can be often marked up 200%+. Contact different manufactures and distributors directly before developing your price strategy.
Defining your target market: will you ship locally or internationally as well? Who’s your ideal buyer personal? Ask yourself the following questions to determine your target market.
Shipping Costs: What’s the size of your product? How much will it cost you to ship it domestically/internationally. Remember customers these days don’t want free shipping, they expect it! Thus, dealing with heavy or large products may severely affect your revenue. Some retailers just include shipping costs into the price and label it with “Free shipping”, however this strategy often results into less competitive prices and decrease of sales.
Step 2: Finding great distributors with excellent products
Now, as you have some ideas of what to sell, let’s find out who are the best manufactures. Here are a few tips to help you with that:
Google Shopping is an essential tool to identify who are the most popular manufactures of your product and who’s also re-selling it (great for scoping out competition). Just launch a search for your product and pay attention to whom shows up under the “Brand” section. Afterwards, you can contact them directly for more details.
Online suppliers directories offer great insights about the manufactures. The most popular ones are:
- Worldwide Brands – Over 10 million products from thousands of sellers ($299 membership fee)
- Wholesale Central – 1,400 supplies and over 700,000 products (Free)
Build a list of potential partners and start reaching out to them with your offer. Remember, not all manufactures would like to work with a newbie seller, so start with smaller companies who have the least intimidating application and requirements. Leverage your relationships with smaller providers first to score larger suppliers on board.
Don’t forget that a lot of manufactures will ask for your Tax ID number or Resale Certificate number, so make sure you have all the papers ready at this point.
Step 3: Creating a website that sells
You now have the products and suppliers; it’s time to create your platform for selling them! The most dreadful question at this point is – which e-commerce platform should I choose? Obviously, there are many choices, but lets have a look on the three most popular ones:
Magento is one of the most popular choices for e-Bay re-sellers and folks running websites with numerous products. It offers ones of the most pleasant and easy-to-use content management systems, easy 3rd party integration and Built-in up-sells and cross-sells. You can power it up with extra features like speed optimization, higher conversions and better UX with Argento template.
Shopify made setting up e-commerce websites really simple. They take care of everything including hosting, security, and credit card processing. However at the same time, you are a bit limited when it comes to changing how the website functions and looks. Sure, there are numerous apps and templates and while some of them are free, many have monthly fees that can add up quickly.
OpenCart (Free) is an open source platform, meaning you can code your own design and functionality if you have the skills. Yet, you’ll have to deal with hosting and security on your own as well. There are thousands of “extensions” available that will help you avoid the cost of hiring a developer, however many of them have a one-time fee of $10-$50.
Next, create your logo and design (there are dozens of free and paid web templates available) and start selling! Don’t forget to develop an effective marketing strategy to promote your goods and funnel sales!