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.

The business concept as the foundation block

To have a successful online business, it is important to find your niche. You can start by analysing the market, thereby educating yourself about your competitors’ techniques and prices for products that also appear in your line of goods. Consider whether it makes sense to enter the price war, or whether you prefer to attract customers with an edgy concept. The cheapest store is not always the most successful. Your products are about creating a novelty on the market, so you have to go one step further and firstly find out whether the internet is an ideal marketing platform. Consider where your brand’s strengths lie and emphasise these within your online store’s presentation. Moreover, make it clear to the customers why they should choose your shop by highlighting your best qualities, for example: reliable and quick delivery, satisfaction guaranteed, etc.

When you set up an online store, the name of your shop should match the business concept. To stand out from the crowd, you should choose a simple and unique yet original name. Choosing a name that users will remember is half the battle. If you are focusing on a specific branch, it is usually advantageous if it is obvious in the domain (i.e. cattoys.com), as your target group will instantly know that you are suitable for them. It is therefore also worth considering a new domain extension (TLD) such as .store or .shop. Cryptic URLs, on the other hand, should be avoided; the majority of users find them difficult to remember and that will have a negative impact on your Google ranking. You should therefore establish yourself from the get-go with a URL that includes the category or name of the product.

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Funds and formalities for successful beginnings

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.

Setting up an online store made easy with software toolkits

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.

Legal basics

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.

Methods of payment and delivery

The importance of a variety of possible payment methods should not be underestimated when opening an online store. If potential customers are unable to choose their preferred method of payment in your shop, they may decide to take their business elsewhere. The most popular payment methods that you should always offer include invoices, cash payment on delivery, direct debit, advance payment, credit cards and PayPal (and other electronic payment providers). The portals to the most popular online payment methods are featured in most e-commerce software. It's also possible to add extensions such as a credit check, should the customer wish to pay in instalments, direct debit, or purchase with credit. In addition, equipping your shop with SSL encryption keeps transactions secure and will gain the trust of your customers.

To be able to keep up with the competition, fast and reliable delivery is just as important as having a variety of payment methods. For this reason, modern online shop programs are already integrated with the biggest courier services such as FedEx and UPS. Keep in mind that additional connections to portals can be very costly if you have to do extra programming, so take time to consider which functions are specifically important for your shop in order to avoid expensive upgrades.

The right marketing concept for your store

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.