Planning to Succeed
“The plans of the diligent surely lead to profit; and everyone who is hasty surely rushes to poverty.”
Proverbs 21:5 (WEB)
Planning is the key to any successful venture, and e-commerce is no exception. This article will look at some of the key areas to plan for when getting into e-commerce. These areas include marketing, maintenance, shipping, and payment gateways. Naturally, this is not a comprehensive planning guide; just some ideas, and questions to get you started towards a good digital business plan.
Marketing
Products and services don’t sell themselves. Keep in mind that when you go online, you are then competing with every online retailer in the world! Welcome to the global economy. Sound depressing? Don’t worry, it’s not all that bad. Advertising on search engines are a good place to start. This gives you immediate visibility to people looking for your category of products.
Setting aside a certain amount every month for paid search advertising should be the first stage of any online marketing budget. As sales start to come in, it is advisable to start putting a percentage back into marketing. This contributes to the desired upward spiral in sales.
Putting links to your new site in your email signature, on your business cards, letterheads, and any print advertising you may do are all great ways to get the word out about your site. Never underestimate the value of local advertsing or word of mouth in driving business to your site.
Maintenance
Just like a local business, online businesses can take a lot of maintenance. Someone has to answer the phone, process and ship orders, add new products, remove discontinued products, deal with vendors, handle customer complaints, update sales, and manage advertising campaigns. Consider whether you have the time to do this yourself, or the funds to hire someone to handle it. Taking into account the time needed for even a small site, can prevent burning out or providing poor service to your customers when the workload becomes too heavy.
As most entreprenurs will anticipate, during the start-up stage, you will have a disproportionate amount of work compared to the level of sales. Many business experts recommend that you have the funds to maintain the business for one year, before you begin. Obviously, this is not always possible, but it is a good rule of thumb when it is possible. Many small businesses are lucky to break even the first year, and show a small profit the following year.
Shipping
“Many find it simpler to just offer free shipping on all, or most, of their products.”
How will you calculate your shipping costs? Your choices depend on your product lines, and your e-commerce software. Should shipping be calculated based on weight, dimensions, or price? What carriers should you offer, UPS, USPS, FEDex? What options for each carrier should be offered, Ground, Next Day? Do you ship orders internationally?
Many find it simpler to just offer free shipping on all, or most, of their products. This provides an added marketing bonus, since studies show that free shipping is extremely popular with customers. The key is to calculate what your average shipping cost will be for each product, and then increase the cost accordingly.
Regardless of your choices, no one shipping choice will be perfect in every situation. Shipping calculators don’t always calculate correctly, and adding a little to compensate for free shipping doesn’t always quite cover the true cost. The trick is to find the solution in which the cost averages out correctly over time.
Payment Gateways
How will you accept payment? Will you process credit cards manually? Will you accept C.O.D. or money orders. Will you use popular payment gateways like Paypal, or Google Checkout for your customers convenience? Choosing your payment gateway and understanding the charges with each is important when you’re trying to maximize your profits.