Published on May 01, 2011 How to start selling online
Got an idea for a business and want to start selling online? Or do you have an offline shop and want to take your business online? Where do you start?
Here’s how.
Most people get started selling online by finding a product and then working out how to sell it. We think that this is the wrong way to go about it. You need to do the research to work out if that product is the right one to be selling online before even thinking about registering a business or choosing a provider to open your online shop.
Online Business plan and Marketing plan
Start with a business plan and marketing plan. It doesn’t need to be a grand 80 page document to be useful, but it needs to have strong financial reasoning in it if you want to make your business a success. Don’t try to use it to justify an idea that you already have. Do it properly.
Here are some of the things you should cover in your business plan:
- Market: how mature is this market and where do new customers come from? Do customers come from new people buying this product who have never bought before? Or do they come from people switching from the same or similar products provided by other businesses?
- Who are the customers? Who, specifically. A big mistake that people make when going online is that they think they’ll be the next Myer, Target or Deals Direct and try to take on every product they can possibly imagine. It is a legitimate business strategy to stock or offer a wide array of products from different categories, but this strategy must be supported by sound stock selection and warehousing as well. Large department stores have huge economies of scale by buying in bulk and unless you can match that, it might be better to focus on a sub-set of every possible person you can ever sell to.
- Competitors: who are the competitors and what are their strengths and weaknesses.
- What are your own strengths and weaknesses? Where are opportunities to grow external to your business?
- What factors outside your control could affect your customer base and market?
- Competitive advantage: What advantage do you have over your identified competitors
- How sensitive are people to price in this market?
- How many people could, realistically, buy your product?
- What targets are you going to set yourself?
- What are the minimum costs that you’ll have to pay. What can you/can’t you get out of?
- How much money can you devote to marketing, and over what time frame?
- How will you measure your results?
Choosing suppliers
It’s important to have good quality suppliers for any business if you want to make it a success. This is especially true if the suppliers will be sending products directly to the customer on your behalf (drop shipping). If you can’t trust your supplier your business reputation can suffer.
If you can find a reliable supplier, do a test order to look at the quality of their products. If that’s good then it’s time to get the business set up.
Business set up
To start selling online , you’ll need a business set up. You can just trade under your own name but that’s not very professional in our opinion and not the way you’ll get strong growth. That’s not to say you can’t be a sole trader – some very large businesses with a strong employee base are set up as sole traders. What it does mean is that you’ll need to register with the ATO to get an ABN number, and if you expect to do a large amount of sales, you’ll also need to register for GST.
If you plan to accept credit cards in your site you’ll probably need a merchant account with your bank as well. Most banks will require to look at your finished and operational website to approve this, so you’ll need to start working on your business policies, set your prices and develop your website before even contacting them. Many people start out with PayPal or Paymate when they get going so they can trade and keep trading while they decide what to do about accepting credit cards directly.
Selling Online – Software
When you’ve made the decision to take your business online you’ll need software to run your online shop. The software that turns a standard website into an online shop is called shopping cart software. There are two types of shopping cart software: software that you download and install, and it plugs in to an existing website (usually in the form of a button), or all in one hosted solutions, where the shopping cart and the website are provided all in one by a provider.
If you’re looking for a PayPal button to add to an existing site, then you don’t need a full shopping cart. But if you want a complete and professional online store with a web design that’s personalised for your business, then you’ll want a complete and professional ecommerce website solution with Australian Ecommerce Features, like Ozcart.
Ozcart gives you Australian ecommerce features and a professional design that is personalised to your business (all included in the setup price). You rent the site from month to month and as your business grows you can increase the plan that you are on. If it doesn’t work out, you can cancel with just 7 days notice, and, if it does, you can continue to draw on our excellent support when you need it.
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