ecommerce

How 2 succeed at eCommerce


By Grant Johnstone, Ecommerce expert

24th April 2018

Summary:

Affordable online platforms, more parcel delivery services available, and more people willing to shop online are all factors contributing to making it super-easy to set up your own online-shop and make a reasonable profit for your time and effort. In addition, it may be worthwhile understanding the following business principles for an even greater chance of success in the online game.

Outcomes:

  • Understanding whether a retail-shop or online-shop will work best for you
  • Understanding how to brand your online-shop
  • Understanding what it takes to grow a loyal customer base

Steps

Step 1: Assess the feasibility of operating online

It is important to understand whether you are at a cost advantage by starting an online-shop versus renting a shop in a shopping-centre. In both situations, you need to attract lots of visitors to your store. A regional shopping-centre with at least 100 shops and an anchor tenant can easily have a monthly foot-flow of 100,000 unique shoppers. If only 2.5% of these shoppers enter your store, you will have personally “touched” 2,500 potential buyers. To get this amount of visitors to your online-shop may cost you a similar amount in marketing and advertising as what you will pay for shop rentals.

Similarly, you can either pay for a shop-assistant, or for an online-shop you will need to incur delivery and packaging costs plus find the time to prepare parcels for delivery or employ workers to manage the procurement and delivery process for you. In addition, when it is no longer feasible to operate from your residential premises, you will need to rent a warehouse, the cost of rental for this being roughly only 20% the cost of retail space.

Bottom-line is that it is worthwhile doing a cost analysis for an online-shop compared to a retail-shop and which is in line with your specific requirements. It is also common practice to start a retail-shop and then include an online-shop component that will synchronize stock availability with what you have in store.

Step 2: Make your store relevant

To increase your chances of selling more online, it is worthwhile selecting products which you have an interest in, and which complement each other. This will make it easier for you to develop a brand image around your online shop, so that visitors get to know exactly what you specialize in, and what they can expect to find listed in your store. If you are very selective in what you sell, visitors will get to know that you stand for quality and that you show a real interest in your product range.

The following points need to also be considered:

  1. Products up to $500.00 are more likely to sell online
  2. Source products which you would not normally find at the local shopping-centre
  3. Keep to products with a less likelihood of being returned
  4. Ensure that your products are reasonable in size for ease of delivery
  5. Ensure that the cost of delivery does not price you out of the market

Step 3: Decide on your delivery strategy

It is now very common for online-shop owners to make use of a delivery method known as drop-shipping. Essentially what this means is that you do not need to keep your own stock and can arrange for your supplier to ship the parcel directly to your customer.

This method works well if you are only selling goods from a single supplier on your online-shop. If you are selling products from various suppliers, your customer would land up receiving more than one parcel for the same order. In this case, ensure that your cost-price per product includes the delivery cost by the supplier, or you could land up with unprofitable transactions.

Also bear in mind that if you place a bulk order with a supplier, you will be able to negotiate a better price. You may even be able to negotiate to pay the supplier on a 30 day term period.

Step 4: Decide on your packaging

Research has indicated that online shoppers enjoy the experience of receiving a parcel which makes them feel like they are receiving a gift. It thus makes sense to source attractive packaging and labelling so that your customers get more satisfaction from the buying experience.

Ensure that your product range is suitable for being placed in the boxes that you source, and be aware that heavier and fragile items will require more packaging materials and may cost more to deliver.

The preparation of products for delivery is essentially the most important process in your business which needs the most attention. If your skimp on this process, you may not get repeat business from the same customers, or referrals for new business.

Step 5: Develop a communication strategy

And finally, communicating with your customers is vital to build good relationships and to improve the chances of repeat business. In order to create a successful online-shop, it is still worthwhile communicating with your new customers by telephone as well. Keep them informed as to when they can expect the delivery of their parcel and follow up with them to ensure that they have received their parcel.

Start a newsletter as a “top of mind” strategy and to keep your customers informed of new developments and special offers. And show your appreciation by offering a discount-coupon on a 2nd purchase, or offer a voucher for signing up to your newsletter.

What is important to understand is that is costs far less to look after existing customers or regular followers than to attract brand new customers who have never heard of your brand before.

About The Author

Grant Johnstone

Grant Johnstone is a successful entrepreneur who has developed systems to help entrepreneurs to set up and sell their products online more easily, including an easy-to-use template online-shop system called Diwi. www.diwi.co.za

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