All You Need to Run a Successful E-Commerce Business
Plenty of people believe that anyone can run an e-commerce store. Simply selling products online, putting it in a box and receiving cash in return. Sounds easy enough. No need to rent a physical store, no need to hire a bunch of sales representatives to sell your inventory to store visitors. People will just magically appear on your site, browse through your content and pay with their credit cards. Think again.
You will likely have a lot of questions:
- How will you finance your business?
- What are you going to sell? And how will you know what is popular and profitable?
- Will you just sell through your own site, or could you earn more by selling through multiple channels, through for instance Amazon?
- How would you coordinate so many individual channels and scale?
Once all these questions are answered, the remaining thing left to figure out is your order fulfillment. Where will you store your goods, who is going to pick & pack incoming orders and how will you ship it worldwide?
All in all, a lot of things to keep in mind to ensure the success of your e-commerce store. This guide was created to help you solve all these problems and provide you with the knowledge you need to create an all-round successful e-commerce business. Let’s dive right in.
Not Sure Yet What to Sell?
So you have decided to open up your online store—maybe as a side project to generate some extra income or as a full-time business that will require all your attention and effort. Either way, you’re going to ask yourself these questions sooner than later: What products am I going to sell online? And more importantly, how do I find them? What do I need to consider when researching? We get it. Here we’ll provide you with some valuable tips and guidelines to answer these questions, so that you can get your eCommerce business started and ready for success!
First of all, let’s get a common misconception out of the way: there is no such thing as the “perfect” product. As the saying goes, many roads lead to Rome. The reality is that many products can be successfully sold online, as you can see from the millions of listings on marketplaces such as Amazon or eBay and thousands of e-commerce brands. The products that you, as a new seller, should offer depends completely on your preferences, but you would be wise to reduce your risk by making sure there is significant demand for your products as well as an opportunity for a reasonable profit margin.
Before we dive deeper into the how-to’s, it’s important to know that there are different types of online selling. Most importantly, these differ with regard to how much startup capital you are willing to invest.
Common Types of Online Selling
When a customer buys your product, you simply forward this order to your manufacturer. They will then fulfill the order for you. On the upside, this means little capital requirements and low risk because you don’t need to purchase upfront and take care of inventory management. On the downside, you are reliant on your manufacturer and profit margins tend to be lower. When they run out of stock, you do too.
A common approach for hobbyists and do-it-yourselfers, this option involves the sale of handmade goods and if executed well, it can be very well a profitable niche. But you need to keep in mind that making or manufacturing your own products is usually expensive, requires high inputs of time, and tends to be not scalable too well.
Through either a crowdfunding campaign or an e-commerce store that you could run on Shopify, Magento, WooCommerce or any other e-commerce platform. Selling your own invention and brand on your own website. You would be selling a unique product but a lot of marketing costs involved to building a brand and creating a demand for your product. This is the most difficult category in terms of estimating demand, since often times, these are non-existing products yet and thus, there might not be an immediate market for them yet.
Private label products
As the name implies, you put your own label on existing products, maybe slightly altering them, and sell them under your own brand. This way, you can set yourself apart from your competition by being the only seller of this specific product. This advantage comes with (typically) costly brand development and expensive pay-per-click advertising campaigns.
When you follow this approach, you buy products in large quantities and resell them for a profit, and usually at a discount, to other retailers. Naturally, this requires larger amounts of capital for the initial bulk purchase but retailers are a much more consistent source of revenues than consumers.
Another option is to buy discounted products that you then sell for a profit. This means meeting with suppliers and negotiating discounts, attending conferences and trade shows or checking out local retail stores. Retail arbitrage is a solid choice for new sellers because it permits you to start out with just a few units. From there, you can slowly progress to selling wholesale or private label goods.
Now the question is, which road are you going to travel? For sellers that are just starting out, we recommend to concentrate on retail arbitrage or, if you have enough capital at hand, wholesale goods. If you already have retail experience, you can consider self-made and private label products. However, we discourage from dropshipping products because the market is crowded with competition that is unnecessarily pushing down profits.
Not sure what the difference is between dropshipping and selling your own goods through e-commerce? We listen out the Pros and Cons here: Check out this article.
We will focus our tips and guidelines to selling on Amazon in order to be able to provide more detailed guidance. Why Amazon? Simply put, because it’s the future of retail. According to Statista, 17.5% of global retail sales are expected to be made by eCommerce sellers by 2021. This is more than twice as much as in 2015. Out of that, Amazon holds an impressive global market share of 15%, as of 2017. Compare that to less than 5% for eBay or 1% for Walmart and it becomes evident that Amazon is the leader.
Okay, let’s dive into the details. So how do you find your first product to sell? How do you start, where to look for product ideas? Here are some simple-to-implement strategies to help you come up with some nice product and niche opportunities.
Product Discovery Strategies and Places to Search
- Consider Your Interests, Passions, Hobbies & Problems. These are a good starting point for your product research. Think about what you love doing, things that you are drawn towards, activities you do in your leisure time. You’re likely to see many opportunities that others won’t or can’t because you’re already into the industry. Purchase decisions driven by passion or hobbies also often have high potential for great profit margins because those consumers are happy to pay a premium to get exactly what they want. And if you’re actually interested in the product you’re selling, you’re much more likely to keep going when you run into difficult times. Just sit down for 5 minutes and write a list, and try not to judge the feasibility of selling this product/idea yet.
- Solve Customer Pain Points. Think about what bothers you and others on a daily basis. If you can solve a pain point, this should be a great opportunity since customers usually deliberately seek solutions to their problems. Obviously you won’t come up with 50 pain points on the spot, so be observant of your environment and carry a notebook with you for a few days to jot down anything you notice. Also keep in mind that “pain point” is not necessarily meant in a literal way, rather this can also be an experience that frustrates or costs lots of time.
- Find Product Opportunities in Keywords. This approach encompasses strategic analysis of the search queries people are entering in search engines such as Google and Yahoo. Ideally, you want keywords that are high in volume but low-competition. Note that this strategy requires some understanding of keyword research and search engine optimization, and it can therefore be quite technical. But there are endless resources out there to educate yourself! Shopify offers a useful Beginner’s Guide and Ryte with their Wiki, eBooks, and expert articles are great for everything related to SEO. Obviously Google with their Keyword Planner Tool comes to mind immediately, but it’s not the only place that people use to search on the internet. Other resources and tools, especially for Amazon, include: Keyword Tool, Keywords Everywhere, Sonar, KeywordInspector, Helium 10.
- Leverage Online Trends. A final strategy is to browse all kinds of online resources for trends. Get inspired by checking out what’s popular and trending around the web, which is likely to be a good approximation for current customer demand. If you catch the right timing, you can even establish yourself as a leader for some niche. It is crucial, though, that you use your common sense (and maybe do some additional research) to judge what are only fads, and what will most likely be around for longer. Else, you are likely to sit on your inventory once the fad is over. An easy starting point is Google Trends, other trend publications are Trend Hunter and Trend Watching. Of course, Amazon itself is another valuable source for finding popular items with Amazon Bestsellers and Amazon Movers and Shakers. If you want to get product ideas right from the source, check out Alibaba, TradeKey, Global Sources, and Made-in-China. Reddit is worth a try, too, especially subreddits like SHUT UP AND TAKE MY MONEY or BUY IT FOR LIFE and relevant threads. Finally, social media is filled with potential ideas, just browse #hashtags on Twitter, Facebook, and Instagram, or the popular section on Pinterest.
Now that you have a better idea of how and where to find products, let’s look at what you should consider when evaluating potential products.
What to Look out for When Evaluating Product Opportunities (And What to Avoid)
- Small, Light, and Cheap to Ship. Try to find products that are small and don’t weigh too much. Consider the “shoebox test”: Avoid anything that won’t fit into a shoebox and can’t be easily carried with one hand. The simple reason for this is that the heavier your products, the more you will pay in shipping costs and Amazon FBA fees. Also, your supplier will need to send heavy products via surface mail, rather than air mail, which will increase the time you will have to wait for your products to arrive.
- Keep It Simple. Do yourself a favor and don’t choose intricate and highly sophisticated products that may break easily. This will save you the trouble of dealing with a lot of returns and bad reviews. The more complicated your item, the higher the chances of encountering difficulties. So try to avoid glass, electronics, and highly complex products in general if you can.
- Moderate Price. Items that sell in the “sweet spot” range of $15 to $50 (or $100 USD max) are ideal. We don’t want to go lower than $15 because this leaves us with too little profit as we have to cover costs like Amazon fees, cost of goods sold, and advertising costs. But we also don’t want to go much higher than $50. Why? Most people won’t purchase products over a certain price threshold (less impulse purchases) and higher prices also mean that you’ll need more capital to source the product from your supplier. In general, you should aim for a profit margin of at least 30-50%.
- Sufficient Demand and Low Seasonality. It is crucial to sell products that are actually wanted by customers. Additionally, we are looking for items to be sold all year round so that our business does not suffer from inconsistent cash flow. As a quick product demand test, you can use Google Trends to gauge whether or not demand for a product will stay the same or vary by season for a given product or category. For a more thorough analysis, create a free account for Google’s Keyword Planner to uncover search demand by searching for relevant keywords to your product idea. You should get a good impression of the potential market size of your product idea by combining these techniques.
- Reasonably Low Competition. Another thing you need to consider is competition. For Amazon, there are two indicators you can look at. The first one is product reviews. When you’re evaluating a product category and notice that the top sellers each have thousands of reviews, this is a warning sign for high competition in this category. But when you’ve found a product with sufficient demand where the sellers mostly have few (< 200), and ideally bad, reviews, it is probably worth a try. The second indicator is Amazon’s Best Seller Ranking (BSR), which gives you an idea of how a product sells overall and in a specific subcategory. The close to 0 the score, the better the product performance. While in high demand, products with high BSR scores also mean more competition. Additionally, you can use the BSR to assess demand. Try to avoid products with very low BSR rankings ( > 100,000) since such products likely won’t sell well. The crux is to find a good balance between competition and demand.
As you might have noticed, product research is no easy feat and a time-consuming task. There are many elements to consider, and, unfortunately, lots of guesswork is required. Especially repeating this process for hundreds of products is hardly possible. As you might have guessed by now, a number of online platforms have been developed to address this problem. One of these tools is Algopix, which was designed to save you time while delivering accurate information for your product research. Their solution delivers all the essential information you need to make product decisions in a matter of seconds.
In order to find out whether or not a product is recommended to sell on your chosen marketplace, all you need to enter is a product identifier (i.e. the ASIN, which can be found on the Amazon product page) and your purchase price. Select your shipping method (i.e. FBA) plus the market(s) you are interested in selling to (e.g. Amazon US) and the Algopix algorithm calculates the product demand level, a breakdown of expenses, a competitive analysis and a recommendation of whether or not to sell the product—all while being much more accurate than estimating these data yourself.
Algopix even gives insights into the product sales in the past 30 days. You won’t be able to get these metrics from manual product research.
To top it all off, Algopix also has a bulk analysis feature, where you can upload price lists from your suppliers or potential future suppliers. Instead of spending your time researching hundreds of products individually, you can use it to find more promising products with the click of a button.
Convinced? Give Algopix a shoot with your FREE 30-day trial!
How to Manage Your Cash Flow
Now that you know what you want to sell, it’s probably a good time to think about the financing of your business. Assuming you can afford purchasing a small quantity of inventory, you can get started with your e-commerce business. Then sell, reinvest capital and expand your business. However, almost 5 out of 6 businesses fail due to poor cash flow management, according to one study by ACCA.
Every business needs cash. Irrespective of industry or nature, no business can survive without proper cash flow management.
But for new and growing businesses, this could not sound more ominous as they must keep turning the cash flow wheel, reinvesting profits back into the business to sustain and grow, and, unfortunately, also do not have the luxury of having idle funds to cover shortfalls and operational hiccups should they arise. In other words, it is no easy feat as a small business owner to get their business off the ground where they are constantly treading on thin ice and where a single miscalculation or delay in shipment could compound quickly and adversely affect growth.
However, by understanding what cash flow means for your business and tailoring a strategy specifically for your business, not only will it allow you to keep your business afloat, but also provide you with a tremendous competitive advantage.
Here we will use e-commerce businesses as a case study to illustrate a seemingly simple, yet elusive aspect of cash flow management – managing your inventory. The reason why cash flow management is especially relevant for e-commerce businesses is mostly because for online sellers, inventory is their largest asset, but at the same time, also their largest CapEx. There is a very common misconception that e-commerce as a business model is easy to operate, which is true if anyone decides to treat it as simply a hobby. As the e-commerce landscape continues to develop, extra considerations must be made when making business decisions such as preparing for peak seasons and growing your product line. Cash flow management for e-commerce is just as important as other types of businesses, if not even more crucial.
Let’s begin by introducing the concept of “Cycle Time” and explaining what it means for your business. For e-commerce businesses, a huge proportion of cash flow is generated by selling your inventory, so in this sense the success of the venture depends largely on two factors: how high of a profit margin are the goods being sold at, and how fast the goods are being sold for. Cycle Time relates to the latter of the two. To put simply, Cycle Time refers to the timeframe between 1) when you purchase inventory (money outflow) and 2) when sales are made and profits are generated (money inflow). To calculate your Cycle Time, simply follow the below formula:
First, calculate your Inventory Turnover by dividing your Cost of Goods Sold over a period of time by your Average Inventory over the same period of time.
Cost of goods sold ÷ Average inventory = Inventory Turnover
Next, to view this from a time perspective, simply divide 365 days by your inventory turnover figure.
Cycle Time = 365 ÷ Inventory Turnover
What the final figure tells you is the average number of days it takes for your inventory to turn over. In general, the shorter the Cycle Time, the better it is for your business as it indicates the ability to reinvest money back into your business at a faster rate. If you’ve watched Shark Tank before, this idea is just like Kevin O’Leary’s analogy of sending soldiers out to battle, and have them return with more soldiers. The soldiers here being referred to as money.
Take a look at this example of an Amazon seller:
The above scenario is very typical of merchants who source their products from overseas, where the average Cycle Time is 69 days or more (that is assuming that the inventory bought will be sold out), which also means that there’s a huge 2+ months cash flow gap where the business is waiting or cash to return and must be highly cautious of expenditures.
If only running a business were as simple as buying and selling inventory – there are also operational costs to consider, including order fulfilment, inventory management, human resources, and digital marketing. These costs can range from $500 to $10,000 or more for a small to mid-sized business depending on the number of SKUs, and can vary even more greatly if you’re running your own e-commerce website.
At the rate that this seller is growing, a big portion of the profits earned will have to be used to maintain operations, significantly restraining their growth potential.
Contrast this with another scenario where the seller has a buffer of extra cash. There will be less anxious waiting for money to come in, and instead, he or she can buy more inventory or even launch a second product – one with a higher unit cost, but with even higher margins. As the seller continues to grow and their products garnering more attention, sales are expected to rise leading to a higher Inventory Turnover rate, which in turn contributes to faster Cycle Time. Imagine the level of compound growth that could be generated in 3 months, 6 months, or even a year’s time.
With this simple case study, we should now understand the limitations that come as a result of poor cash flow, and how having a healthy cash flow can help unleash the potential of your business. Below are two key takeaways of why cash flow management is so important-
1. Better Cash Flow Means Better Resource Management
Understanding your business’s cash flow means being able to better control and allocate resources. With a more accurate reflection of your business’s health, it becomes much easier to know when it’s time to grow and to actually do so.
2. Faster Cycle Time Gives You a Peace of Mind
Being in control of your cash flow gives you confidence in making business decisions and allows you to know ahead of time when you’re going to have shortfalls.
As a growing e-commerce business owner, it is no longer necessary to rely on profits to expand your business. Innovative supply chain finance solutions like Qupital provides flexible financing solutions specifically tailored for e-commerce businesses. Unlike traditional banking facilities, the application process is done simply through an API connection to verify the seller’s store performance. Qupital provides instant support to your e-commerce business with invoice finance and unsecured business loan dedicated to your specific needs. Check out how Qupital can improve your CapEx for your e-commerce platform.
Finally selling on Amazon – But are you profitable?
Many entrepreneurs will choose to start selling on Amazon first, before deciding upon starting their own e-commerce site. So, let’s look into Amazon first. One of the most exciting moments in your Amazon journey is when you have launched your product and the sales start to trickle in.
You have done your research and found a great product opportunity – you sourced it from a factory and finally, the products are selling.
Inside of Amazon Seller Central, you can see how many units are sold on the right side under “Sales Summary”. This is where most new sellers go to estimate their profit. For example by applying an estimated margin (let’s say 25%) to get the most basic estimation of your Amazon profit.
The reality is a lot more complicated…
You can get a more detailed profit estimation by going to the Reports dropdown menu in Seller Central and selecting “Payments”. Here you will find the payout that Amazon transfers to you every 2 weeks, including Product Charges, Rebates, Amazon fees, Refunds and Advertising fees.
If you are just selling 1 product, it’s good enough to use the Payments Report to calculate your profit. Just deduct your product costs from the Closing Balance in the selected 2-week timespan and you have calculated your profit! This is both easy and accurate!
However, if you sell multiple products you need to make a deeper dive into Seller Central to find out which products are profitable (and which ones are not). Perhaps one of your products is having a serious issue and therefore has a high number of Refunds while another product is very profitable? Knowing which products to focus on (and which ones to cut) will have a very big impact on your bottom line. Unfortunately, the Payments Report won’t give you such information.
Making a ‘per product’ profit estimation using Seller Central
Before we start, we should mention that there is an easier way to do this – by using Seller Metrix. Instead of manually calculating which of your products are profitable, you can simply connect your Seller Central account and let Seller Metrix do it for you. Profit calculation is automatic and reported in real-time.
Now let’s get back to the guide! It’s possible to make a ‘per product’ profit estimation using Seller Central (and Excel) but it’s a bit more complicated. Below, we will go through each step so you can retrieve the most important information and put it together yourself using Excel. Let’s start by finding your sales per product.
Finding Sales per product in Seller Central
Go to the Reports dropdown menu and select “Business Reports”. On the left side, select “Detail Page Sales and Traffic by Child Item” (Please note that the data here is 24-48 hours delayed). Select your desired date range and download the CSV.
Now you know your Sales per product and how many units you have sold. Next we will look at the Amazon fees per product on Amazon.
Find the Amazon Fees per product
The fees you pay to Amazon depend on a number of factors. Are you shipping your products from your own warehouse or via FBA? What category is the product sold in? What is the size and weight of your product? The easiest way is to use this generator where you can enter your ASIN and sales price, then press “Calculate”. Now you just need to extract 2 values:
- a) Selling on Amazon Fee (Sometimes called Referral fee)
- b) Fulfillment by Amazon Fee (this is only if you use FBA)
Note that these are the Amazon Fees per unit sold.
Next, we will look at the Advertising cost when selling on Amazon, if you don’t use Amazon advertising, you can skip this part.
Finding your Advertising cost per product in Seller Central
Go to the Advertising dropdown menu and select “Campaign Manager”. Select the date range you are interested in and you will find the total advertising expense.
If you are selling multiple products, you will want to calculate the profit for each of your products. To do this, switch to the “Advertising Report” tab and download the “Advertised Product” Report for your desired date range. Open it in Excel to find your Advertising expense per SKU/ASIN.
Finding your Refunds per product in Seller Central
For Seller Fulfilled Returns/Refunds, go to the Reports dropdown menu and select “Return Reports”.
For FBA Returns/Refunds, go to the Reports dropdown menu and select “Fulfillment”. From the left sidebar, select “FBA Customer Returns”. Here you can download the report in csv or txt format.
Now you have everything you need!
You have your Sales, Amazon Fees, CoGS, Advertising and Refunds, which are the most important expenses when selling on Amazon.
Whether you calculate your Amazon profit manually, or use Seller Metrix, it’s important to understand which of your products are performing best – so you know where to focus.
And for the products that are underperforming, you need to know the reason. Is it because of a high number of refunds, or too high advertising spend? Or maybe some products are not selling at all? Many sellers are surprised when they first see the bottom line for their products. Get control by knowing your profit on Amazon.
It’s Time For Your Brand to Go Multichannel
Up to this point, you have already found out about getting money for your ecommerce business, selected products that will sell well on the marketplace you prefer and learned about the most popular sales channels. And now you probably want to scale, becoming a multichannel seller.
Being a multichannel seller is beneficial for your business as 66% of all customers rely on more than one channel for purchases. In fact, the vast majority of them rotate between two, three or more channels to make purchases. There lies a great opportunity for merchants who want to find new touch points with potential customers which will lead to increased sales and improved profit margins.
What is Multichannel Selling?
Multichannel selling is a practice of selling products through multiple sales channels. In ecommerce, under multichannel selling, we mean marketing merchandise on multiple platforms. When you become a multichannel seller, you bring the operation to the next level.
This ecommerce business model benefits both sellers and customers as marketplaces become an additional touch point for them.
Advantages of Multichannel Retailing
Before making any decision, it is important to understand what the process of choosing a multichannel ecommerce business model implies.
Why do companies go multichannel? The first and foremost reason is to reach new customers. When placing products on such marketplace like Amazon, eBay, Walmart, etc., you are putting them in front of the billions of shoppers thus making more visible.
It is quite challenging for new and aspiring sellers to become visible and recognized among customers. The task becomes a little easier when you start utilizing marketplaces. The more customers see your store, the more they are likely to buy from you.
Moreover, if your brand is visible across multiple sales channels, it helps you to build and your reputation and trustworthiness. As a study by DigitalCommerce360 states consumers are more likely to buy from a seller they do not know on a marketplace rather than on independent online store.
As more and more companies go multichannel, you cannot stay behind. You need to keep up with your competitors or even be ahead of them. Learn where they already sell products and join that marketplace or you can find a marketplace that holds potential for you and which your competitors are not aware of. Make multichannel selling your competitive advantage.
When you want to test an idea, the first thing that comes to mind is the budget. Marketplaces are a cost-efficient way of testing new markets and strategist. As you need little to no upfront investment, the risks are minimal. You can easily test how your products would sell in another country or whether a product will find a ready market.
This is probably the main reason why e-commerce businesses go multichannel. Multichannel puts your products at the spotlight of attention of millions of customers. What is more, 15-30% of multichannel shoppers are ready to spend more on purchases than buyers who shop on a single sales channel. Their lifetime value is also higher.
All combined, marketplaces like Amazon, eBay, Etsy, Walmart, and others are able to generate more sales and multiply your revenue.
Choosing the right marketplace
Now that you know about the multichannel selling, you face the problem of choosing the right online marketplace. With 150+ marketplaces out there, the process of making the decision may take quite a long time. Here is what you need to consider before committing to any of them.
What product(s) do you sell?
If you sell clothing, devices or other high-in-demand products, it makes a lot of sense selling them through multiple sales channels. Marketplaces are a better place to finding your customers right away and compete against high competition more efficiently. Moreover, some marketplaces may turn out to be more suitable for one type of products while others for other types.
If you manufacture something unique, you need to establish your brand and an online store is an integral part of it. You may want to launch your own website and e-commerce store on Shopify, WooCommerce or Magento instead.
Where is your competition?
As we have already mentioned, staying ahead of the competition is vital. If are not on any marketplace, find out where your competitors sell. Also, you need to know where your customers prefer to shop as you do not want to place products where no one will be interested in them.
What are the fees?
Marketplaces allow you to sell products to multi-million audiences and, in return, you pay them for such an opportunity. The fees you will have to pay depend on the marketplace you choose as some have monthly subscription and listing fees while others only charge a percent on the product value every time a purchase is made.
For example, if you are working on the US market, you need to choose between Amazon, eBay, Walmart, and Etsy, as they are four of the most prominent marketplaces up to date. Let’s take a closer look at each of them.
This is the most recognized marketplaces in the world with 2+ billions of monthly visitors, which is a great place for experienced ecommerce owners for expanding the business and for newbies to try ecommerce multichannel.
Amazon applies different referral fees which depend on the type of items you sell. Fees may vary from 6 to 96 percent. You can create either an Individual or Professional account. The former one for those who sell fewer than 40 items a month and will charge you $0.99 per item sold and additional fees. The latter one is for sellers with high-volume sales; it has a monthly subscription fee $39.99 and additional fees.
eBay is another famous name which supports auction-based sales and sales with set prices. You can sell new and used products, as well as unique collectibles and vintage things. In case you choose eBay, be ready to pay the standard insertion fee of $0.35 per listing (first 50 listings are free) and in some cases when you sell in select business and industrial categories, you will be charged $20 per listing. Also, there is the final value fee which varies from 3 to 12%.
Except for being a famous retail chain, Walmart also has a marketplace where third-party sellers can market their products in 35+ product categories. Unlike the previous two marketplaces, Walmart is not for everyone. The marketplace strives to provide the best shopping experience, that is why sellers with little to no online selling experience are not allowed to operate there. It is better to start with Amazon, eBay or your own online store and after getting there quite a few positive feedbacks moving to Walmart.
The only fee you pay is referral fee which varies from 6 to 20 percent.
Etsy stands out from the crowd because it is a place to sell homemade and unique products you make or manufacture yourself.
Etsy does not charge you for registering your store but you will need to pay $0.20 for each listing and 3.5% of the price of each item sold.
Multichannel Ecommerce: Moving in the Right Direction
By now you have probably decided whether going multichannel is worth your time and effort or not. If you are struggling with business expansion, want to tap into a new market with little investment, reach a wider audience and increase profit margins, it is worth going multichannel.
To streamline multichannel retail, use multichannel ecommerce solutions. Sellbery is a multichannel listing platform that helps to create and synchronize listings, manage orders and inventory across marketplaces and ecommerce platforms. The best part about Sellbery are the price control feature and short synchronization intervals from 15 minutes. The platforms supports integration with the largest sales channels in 50+ countries around the world. You can synchronize data between you online stores built with Magento, Shopify, and WooCommerce and such popular marketplaces like Amazon, Etsy, Walmart, eBay, and many more.
Sellbery has reasonable prices and different types of subscription plans, starting with a free option for beginner sellers with 99 SKUs and an unlimited number of orders and sales channels.
How to increase website conversions?
Now you have money to start your business and build an online shop with in-demand products. Before launching your marketing campaigns – browse through your store to make sure you’ve done everything possible for having high conversions. Even small improvements can bring you lots of money, strengthen customer loyalty, and ‘please’ Google rankings. Therefore, we’ve collected the most useful tips to skyrocket your website’s conversion rates.
Speed Up Your Website
For Google, the threshold of eCommerce website page load time should be less than 2 seconds. It’s even better to strive for half a second. Moreover, 79% of online customers are not willing to buy from the same store if they faced with slow website speed. So, a blistering fast site is a crucial element to shopper’s loyalty.
How to optimize your online store then? There is a bunch of methods. Let’s look at the 5 most effective and common ones:
- Optimize and Compress Images. Definitely an excellent way to reduce page weight and yield performance improvements for your online store.
- Effective Use of Content Delivery Network. Its optimization means using servers nearby user location.
Improve Checkout Experience
Could you guess the percentage of online buyers who abandon their shopping carts? It’s a whopping 68%! Not the worst number compared to 75% of lost sales due to cart abandonment again. So, not to be part of such scaring ratings, make sure these two methods of optimizing checkout funnel work on your website:
- The Shortest Way to Checkout. Count the number of steps your customers take towards completing the transaction and make adding products to the cart easier. For that, you can use custom third-party modules (LightCheckout, ProCart) that help add or edit products immediately, without page reload or opening.
- One-Step Checkout. Minimize user interaction with checkout by implementing lookup tables and reducing the number of jarring information to fill out. Primarily, streamline input of returning customers by using algorithmic detection. It looks up for a customer’s email and other data in a database to find existing records. An excellent shot to quickly get personal information is using a social connector for the signup.
Use Third-Party Extensions
Plugins can add unique functionality to boost your eCommerce conversions even further. For instance:
- Discount for Subscription. Motivate users with a bonus for newsletter subscription.
- Discount for Facebook Page Like. It works the similar way, a visitor should “Like” your Facebook page to get the % off the purchase.
- Product Quick Overview. Such modules provide a user with the base product information without opening a new page.
- Loyalty Programs. These are the extensions or even services that give bonuses to customers for special actions like subscriptions or referring a friend to an online store. The customer can use the rewards for purchasing products. Loyalty programs are an excellent way to encourage users to buy.
Low performance, complicated checkout, and slow servers are killers to your website conversions and revenue growth. It’s the fact that managing so many business operations is tough. Especially if a business owner is not a code addict. What can come in handy then? Working with specialists who know inside out of eCommerce and will maintain and improve your website while you focus on strategy and sales.
One of the teams to get in touch with is GoMage Magento 2 Development Company with 9 years of experience, 900+ developed projects including websites and extensions from scratch, and 70% of clients are medium to large Enterprises. Moreover, most of the team has Magento2 certifications and is a real eCom whiz. Among GoMage services are website development and design, Magento 1 to Magento 2 migration and support, security audit and server optimization. So, if you want to have a high-converting website, that’s definitely the thing GoMage can do.
Shipping the Orders to your Customers
Now that you’ve decided upon what to sell, how to sell it, through which channels or e-commerce platforms to sell it and how to finance it, there is still the matter of getting the incoming orders to your customers. Shipping.
Shipping for a Dropshipping business
If dropshipping is your preferred business model, you will have less to manage yourself. Warehousing and shipping will both be handled by your suppliers. All you would need to do is to simply take care of the integration between your online store and the supplier, and they shall handle incoming orders for you.
This obviously has many advantages. Your fixed and variable costs will be significantly lower, as you do not have to pay for storage fees or order picking fees. You also save a lot of time as the supplier will handle labelling, ordering cardboard boxes and potentially negotiating lower shipping fees.
The downside of this is that suppliers generally pick the cheapest, yet slowest shipping options. This often reflects the type of products that you would be selling with such a business model, as they tend to be cheaper, brandless products manufactured in China. There is no saying what condition packages will be in once they arrive, if they arrive at all, and if they do, how delayed they will be. This could have a negative impact on customer experience and may provoke customers leaving you negative reviews.
When it Makes Sense to Get a Fulfillment Partner for a E-Commerce Business
Contrary to dropshipping where you’d sell a wholesaler’s or supplier’s product – one that many competitors will be selling at low margins, e-commerce fulfillment is usually the choice for companies selling their own branded products. Their own innovations. Think of entrepreneurs running a kickstarter campaign for some unique, innovative speakers or a backpack that nobody else sells. Fulfillment makes sense for a brand that grew beyond a campaign and launched an online e-commerce store on one of the many available platforms out there. An e-commerce store looking to start selling globally, rather than simply domestically.
If you want to go beyond selling products with high competition and want to launch your own brand, e-commerce fulfillment is the way forward.
What is E-Commerce Fulfillment?
Simply put, e-commerce fulfillment is the entire process from the moment an order comes in through your shopping cart up to the delivery of the parcel at your customers’ doorstep. Warehousing, the pick and pack process, procurement of packaging material, restocking of inventory, accurate labeling and delivery through 3PL partners, couriers that the fulfillment provider generally has special price agreements with.
The Benefit of Having a Fulfillment Partner
When you run a domestic e-commerce business and order volumes are still manageable, you may choose to run your own warehouse, manage your own inventory, do the order picking yourself and also label and deliver parcels. This however takes up a lot of your time and can be quite the costly procedure. You may be using one domestic courier and pay high delivery fees. As you scale your business, this will become increasingly hard to manage by yourself. You may not have the resources or simply want to focus on sales and growth instead.
This is where an order fulfillment partner comes in. The fulfillment provider would own and manage warehouses, handle your inventory, got staff to pick and pack incoming orders and got price agreements with couriers because of the large volumes shipped. Working with a fulfillment partner saves you both time and money.
Furthermore, as you are probably well aware of, each and every country or continent has its own policies, tax-rates and tariffs. For a small company, it is hard to be aware of all these differences and the constant changes in policies across the globe. Fulfillment providers specialize in it and are therefore perfectly capable of consulting you on best practices per market you may be trying to enter.
How About Crowdfunding Fulfillment?
Some fulfillment providers furthermore specialize in crowdfunding fulfillment, subscription box fulfillment and more. In a sense, they are all forms of e-commerce businesses. Fulfillment processes however, may differ.
Whereas e-commerce companies’ order volume may differ each day, there would be a steady flow of orders on a daily basis. Let’s say that for instance, for e-commerce fulfillment, the provider would ship a few hundreds orders per day. For crowdfunding funding fulfillment however, it usually involves large batches of orders that have to be shipped out at the same time. This could be thousands of orders at once.
As you may understand, this is a more complicated process and the fulfillment provider would need to have the necessary processes in place to assure the success of shipping out so many orders at once, all to different countries, with different labels, different couriers and different products in the parcels. Not all fulfillment partners are equally capable at handling such a vast project. Floship however, is Asia’s number one in crowdfunding fulfillment. We fulfilled more crowdfunding campaigns than any other fulfillment provider. We furthermore are leading the industry with our FCLP certificate.
The FCLP certificate is a badge to display on your crowdfunding campaign. It shows potential project backers that you got your shipping figured out and the backers will indeed receive their rewards as planned. It shows that you are aware of the complexities and costs related to shipping cross-border, world-wide. Campaigns that got the FCLP certificate raise on average 588% more than campaigns without it.
Choosing Floship as Your Order Fulfillment Partner
We like to think of ourselves as a partner, rather than just a vendor, a provider of services. Floship has a Western management and a highly international team. You can therefore expect to see eye to eye with us. We understand your business needs and concerns. We furthermore understand that no single company is the same, and no single order is either.
Floship provides custom fulfillment solutions. Simply request a free consultation and we’ll talk over your business needs. It is simple. Fill out our form and we shall contact you within one working day.
Starting an e-commerce business is a dream for many entrepreneurs. Although you may save costs and do not face the difficulties brick and mortar stores face, running an e-commerce business has its own set of challenges. Being aware of these challenges and knowing who to turn to is the way forward, the way to scale your business. In this article, we went over several important aspects of running a successful e-commerce business. If you have any more questions, feel free to reach out to one of the contributing companies in this article.