E-commerce: the basics

With the right sales strategy, prac­tic­ally any product can be sold online, meaning opening an online store could be easier than you think. Thanks to a con­sid­er­able amount of e-commerce software that comes in the form of toolkits, extensive pro­gram­ming knowledge is not necessary. The ap­plic­a­tions are generally easy to use and provide the necessary tools in pre-built designs to create an ap­pro­pri­ate platform for your product. With well-thought-through online marketing campaigns and efficient tools, it is quick, effective, and in some cases free to market your store and goods.

To be able to set up an online shop, it is crucial to have seed money. When cal­cu­lat­ing your starting balance, ensure it's large enough to cover any occurring in­cre­ment­al costs so that you will not be thrown off course. You must invest in your store from the very beginning if you want to be noticed by customers and search engines. You should therefore take into account the cost of ware­houses, the size of your product line, and marketing campaigns (online and offline) when cal­cu­lat­ing your starting balance. Keep in mind that you will still have main­ten­ance costs to pay because you it is unlikely that you'll make a profit during the first few months. Remember to also account for the price of hosting your shop as well as the costs of pur­chas­ing new products, employees’ salaries and other services such as couriers. Always give this project due respect and take it one step at a time. Begin with a limited amount of stock in order to determine which products are the most popular and how your offers are generally received. Once you've got your business off the ground, you can adjust your offers, thus in­creas­ing your revenue.

As soon as you've worked out your budget, there is just one more step before your store can hit the ground running: re­gis­ter­ing your business. You can apply for a business license at your local gov­ern­ment’s business de­part­ment or via their website. As well as the ap­plic­a­tion form, you will need specific documents, for example, if your stock includes food you'll need Global Food Safety Ini­ti­at­ive cer­ti­fic­a­tion, whereas trading second-hand items such as cars requires a police clearance cer­ti­fic­ate. If your store is on your state’s company register, the business de­part­ment also requires a con­firm­a­tion of that. Ad­min­is­trat­ive charges vary from state to state.

Before you open your online shop, you should always check the current cost of insurance. Only when your goods and employees are suf­fi­ciently insured can you protect yourself against nasty surprises and fully devote yourself to e-commerce.

User-friendly design templates make it possible to build and establish an online store within a few days, as long as you already have a well-thought-out business concept. Design software ap­plic­a­tions also contain templates optimised for mobile devices as a standard feature. Costing just 10 to 40 pounds a month, the reas­on­ably-priced online store packages are suitable for most small and medium-sized busi­nesses. Expensive software programs mostly just vary in their ca­pa­cit­ies and extra features. Use the free test versions offered by many providers to analyse exactly what you need from them. If you make a rushed decision and choose a basic toolkit, one that does not offer reliable search engine op­tim­isa­tion or severely limits your range of goods, it could po­ten­tially be in­suf­fi­cient for your shop. It is also crucial that the toolkit is com­pat­ible with your software’s ap­plic­a­tions, as even the best features will not comply if they don’t know how to deal with the software. Take the time to get to know all the options and educate yourself further using guides to online store programs.

With e-commerce providers – rented toolkit solutions that run on your browser – hosting is included in the monthly price and you receive a online shop with your desired domain. Since you only rent the store from an operator, it reduces your ad­min­is­trat­ive expenses. The operator itself is re­spons­ible for the technical security and reliable operation of your data centres. Your store is therefore available around the clock, leaving you free to con­cen­trate on the layout and marketing of your product line and dis­patch­ing your products or services.

If you want to set up an online store, it's legally required to register your business, as already mentioned. However, in addition to the business permit, there are other things to do to become legally insured and avoid receiving a dis­cip­lin­ary warning letter.

• Photo and text rights: All images and de­scrip­tions provided on your website must be your own property. Simply copying content from other websites is a pun­ish­able offence. You should therefore either create your own original texts and images or employ somebody to do it for you. Another option is to use online archives to search for license-free texts and images (most of these only retain their legal right of use through royalties). Al­tern­at­ively, you can also request the per­mis­sion of the rights holder. However, you should get any positive responses in writing to make it legally binding.

• Prices: There are strict reg­u­la­tions on how prices of goods should be presented online. Firstly, you need to state the final price, including VAT and shipping, where the shipping costs are presented not as part of the product de­scrip­tion, but as part of the ordering trans­ac­tion.  For products that are sold by weight or volume, the flat rate must be stated (i.e. 100g = £1.99.) For busi­nesses that are exempt from sales tax, basic prices must be given.

• Can­cel­la­tion policy: Your customers must be made aware of their right to return un­sat­is­fact­ory products. The standard return period is at least 14 days. For every product, the law provides a different model that may not be changed.

• Terms and con­di­tions: A con­trac­tu­al term must appear on every online store. This discloses all relevant terms and con­di­tions, such as the mode of delivery and delivery time, product avail­ab­il­ity, payment methods, guar­an­tees or privacy policy.

If you are using a e-commerce program, you will usually receive a pre-written text on terms and con­di­tions, which will include all the in­form­a­tion to which a shop owner is legally obliged. That will include, for example, the 14 day return period, shipping costs or delivery times.  Never forget that the order button, which makes the sale binding, must have the word “order” or “buy” on it. Legal offices will also sometimes provide free support so that your terms and con­di­tions are always of current legal status.

When setting up an online store, the best way to encourage its growth and success is through an extensive marketing strategy that in­cor­por­ates both online and offline elements. Online marketing or online op­tim­isa­tion is far more important these days than it was a couple of years ago. The most important change that has occurred with the rise of online marketing is the sig­ni­fic­ant role search engines play in directing traffic to a website. Online marketing campaigns should therefore be used to improve your ranking in the search results. Try to ascertain early on which platforms can be used to reach out to customers. While using flyers, posters and ad­vert­ise­ments in magazines and TV can prove to be effective, for some it is better to avoid them. It is a good idea to find out which is the most effective way to market your business online, whether it is using search machines, websites or social media.
Re­gard­less of your chosen marketing strategy, you should always be using search engine op­tim­isa­tion (SEO). With SEO you can:

• Create in­form­at­ive, in­di­vidu­al product de­scrip­tions using keywords, images and videos

• Connect with customers via re­com­mend­a­tions and share buttons on Facebook.

• Advertise with seal of approval sites such as Trusted Shops

• Create internal links to other pages of your online shop.

In­cor­por­at­ing these op­tim­isa­tion tech­niques into your marketing campaigns will not only improve your ranking in the search engine results, but it will also show in your sales figures. You can also hire SEO companies to optimise your shop for you. Together with the other relevant es­sen­tials such as business concepts, the cla­ri­fic­a­tion of legal issues, the im­ple­ment­a­tion of diverse payment methods and delivery options as well as suf­fi­cient venture capital, a coherent marketing plan ensures that you will be suc­cess­ful when setting up your online store.