E-commerce is the fastest growing area in retail — and understandably so. People love shopping from the comfort of home. If you’re considering getting into the game, you have some important decisions to make, all of which will determine the level of your success. In addition to insurance for your online business, you’ll need to build a site, work out fulfillment and address security concerns, along with a few other factors. To get you started, here are five things to consider before launching an e-commerce store.
1. What are you going to sell and where will you get it?
Odds are you already have a good idea of what you want to sell and it’s something for which you have a passion. This will make it easier to enjoy running the business, plus you’re familiar with the products, so representing them will come more easily. The best advice here is to start small. Think narrow, rather than broad, to make your marketing efforts more effective.
When you seek sources for your products, remember your profit is made when you buy rather than when you sell. Buy (or make) low and sell high. Ideally, you’ll work out a deal with your supplier to ship directly to your customers at first. This eliminates the need to tie up capital in unsold product while you grow. It also saves you money on warehousing and shipping personnel. Be careful to only work with reliable vendors who ship quickly and strive for quality.
2. How are you going to build and host your site?
The good news here is a handful of companies provide beautifully produced sites and host them as well—no degree in coding required. One such example is Shopify, with its plug-and-play templates and critical features built right in. These include shopping carts, payment gateways, search engine optimization and marketing tools.
Another approach is to start a store in an online mall, such as Amazon. They already have the traffic, which saves you the trouble and expense of building up a following. However, lots of other people with similar products will surround you and you will sacrifice part of your profit for the privilege.
3. Where will you seek to attract attention to your site?
Unlike “Field of Dreams,” you have to do more than just build it to make them come. Once you’ve decided what to sell and how to source it, you’ll need to start drumming up excitement for the launch of your site. Social media is the go-to for this activity. Focus on areas in which your likely customers tend to congregate. Forums and closed groups on Facebook are a good bet. Start developing your email marketing list based on people you know and ask them for referrals to others. Comb blogs and find an influencer in your area with a strong following. Offer to provide guest posts and sample products for them to consider. Start your own blog and promote it vigorously on social media.
4. Who will you be?
Your name choice should tell shoppers what you sell right away. Ideally, your store name and your domain name (internet address) will be the same, or at least very similar. Consider incorporating or forming a limited liability company (LLC) to protect your personal assets should something go horribly awry. You should trademark your product(s) and their name(s) if you created them yourself. What will your policy be regarding returns? Spend some time looking at e-commerce sites similar to the one you’re considering and take note of how they’ve solved issues like these and covered concerns you may have yet to consider.
5. When do you need to exercise the most caution?
Running an online store will make you a potential target for people who are willing to work harder to get something for “nothing” than they’d work to earn an honest payday. It’s ironic, but true. You’ll need to make sure you have strong measures in place to protect your customers’ financial information.
The best approach for this as a startup is to go with a third-party payment processor like PayPal. They’ve been around for quite a while, they have robust security protocols in place and people trust them. Yes, you’ll forego a portion of your proceeds for the service, but it will help establish your site as being credible in the eyes of shoppers. You can also enroll in cyber insurance as a backup against financial ruin after a hack.
Considering these five things before launching an ecommerce store will position you nicely for success as you dive in. Choose your product carefully, set up a professional looking site with all the right features and security measures, market yourself vigorously and establish tough—but fair—policies.
And when it comes to insurance for an online business, CoverHound can help you find a solid starter policy to protect your investment. Learn more (and get a quote) today!