Starting an online store has advantages over having a physical storefront: there's no rent to pay, and you can reach millions of customers from the comfort of your own home. To have a shot at success, however, it's a good idea to put as much thought into starting an online store as you would for any other business. You'll need a great product, a user-friendly website, and a solid marketing plan. Read on to learn how to get started.
Part 1 of 4: Developing Your Product and Business PlanDecide what you want to sell. If you want to start an online store, you probably already have an idea for a great product to sell. Keep in mind that certain things are conducive to selling well online, while other items may be more difficult to sell when they can't be viewed in person. In any case, you should believe passionately in the value of your product - otherwise, it will be hard to connect with customers. Here are some questions to consider:
- Is it a physical product that needs to be shipped, or is it a digital product that can be sent through the Internet?
- Are you going to have an inventory (more than one) of each product, or will they be one-of-a-kind (e.g. artwork, vintage items)?
- Are you going to want to sell a wide variety of products, or do you plan to specialize, like selling just t-shirts or books?
- Are you creating the product yourself? If so, make sure you'll be able to keep up with demand. Form a relationship with a reliable supplier.
- If you don't plan to make the product yourself, you'll need a good manufacturer. Research different companies to find the one that works for your business idea.
- Decide how your product will be shipped. Create a plan to ship the product from your home efficiently, or work out a storage and shipping plan with a warehouse. You could also look into drop-shipping if the product is being manufactured by a third party.
Find a niche. Knowing what product you want to sell is only part of creating a successful online store. You'll need to figure out what differentiates your services from all the other similar services people can choose, both in person or online. Why should a customer buy your hand-knit sweaters when they have 100 other online shops to choose from?
- Size up the competition. Don't just jump into selling a certain product line until you've looked at the websites you'll be competing with. Consider the main online marketplaces you plan to advertise your products; and check out the competition within those portals.
- Offer something truly original. If you're selling handmade crafts or works of art, the originality of your work may itself be the draw that sets your product apart. Try to strike a balance between something that is highly original and also has general appeal.
- Offer expertise. Perhaps the quality that sets your company apart from the rest will be your expertise on the type of product you are selling. Maybe you're a former baseball pro selling a line of baseball gloves, for example. Make your passion and expert knowledge part of the package.
- Offer a user-friendly purchasing process. Even if your product is very similar to other things for sale online, you can set your store apart by making the shopping experience fun and easy. Make sure your website is easy to navigate and fun to share. Be responsive and provide great customer service where others don't.
Test the waters by selling your items on a small scale. In the real world, it'd be wise to try selling your products through other, low-commitment avenues (consignment, flea markets, craft shows, etc.) before taking the plunge and starting an entire store. The same is true for selling online. Try selling your items individually on eBay, Craigslist, Half.com and the like. Here's what you'll want to look for:
- Who is buying your product? Offer a discount coupon or free gift if they answer a brief survey. Find out where else they shop online.
- How much are they willing to pay? Experiment with different prices.
- How is customer satisfaction? This is a good time to test how well you can get your product to the customer. Are you using good packaging? Is the shipping method reliable? Are they happy with their product? Did you describe it well?
Make a business plan. Before you start the process of opening your online store, take the time to draw up a detailed business plan, whether or not you're planning on getting outside funding from investors. It will help you plan the steps you'll need to take to make your business successful. Figure out your cost of operation and map out a marketing strategy. You'll want to take these factors into account:
- Production costs, whether you're creating your product yourself or contracting with a manufacturer.
- Shipping costs.
- Employee wages, if applicable.
- Fees for reserving your domain name and web hosting service.
Part 2 of 4: Building Your Own Online Store
Register a domain name. Choose a name that's short, catchy, and easy to remember. It should also be unique, since the most obvious names are already taken. Look up a domain registration company and try different names until you find one that satisfies you and isn't already in use.
- If the name your heart is set on is already taken, get creative. Spell numbers out, add a small extra word or try hyphenation.
- The domain registration service will provide suggestions for close alternatives if the name you want is taken.
Choose a web hosting service. It's worth finding a good service for your website, since the site is the backbone of your online store. If it's finicky, sales will certainly suffer. Free web hosting services are available, but since you're selling products online, you'll need to pay for a service that offers the options you need.
- You'll need enough space for growth if your business does well.
- Choose a hosting service that allows for customization if you're planning on doing your own programming.
Design your website. Either design the website on your own or hire a web designer to create it for you. The emphasis should be on showcasing your product and making it as easy as possible for customers to make a purchase. Don't fall into the trap of making the website too flashy - the more straightforward, the better when it comes to online shopping.
- Include a way to gather email addresses, so you can send advertisements and special offers.
- The customer should have to make no more than two clicks to check out with a product.
- Choose just a few colors and fonts to use.
Choose e-commerce software.This allows customers to view products and make a secure purchase. The software stores customer information and financial information. In some cases, e-commerce software factors into marketing, since it can be used to send emails to customers. Take a lot of time to research companies before making a choice, since the one you choose will play a huge role in your customers' experience and your company's success.
Set up a merchant account. You'll need to set up an account with a bank financial institution so that your customers can pay with credit cards. Going with a bank can be pricey, so many small online store owners go with PayPal as a less expensive option.