Preparing to trade online: 10 things to consider

18
Nov

1) Build Costs
Many businesses looking to start trading online under-estimate the amount of work and preparation that is involved in setting up a good quality online shop. In some respects the building of the website is the easy part, it’s setting up the content including products and images that takes the real time.

Having a clear idea of exactly what functionality and pages you need, will always help.
Preparation of product images, descriptions, stock codes and pricing will go a long way, and potentially reduce costs. Online shop projects often break down and fail where product entry has been poorly thought through and data has been supplied far too late and in a poor quality format.

The more detailed the brief, the better the result and often cheaper.

2) Potential Market
Too many new businesses believe that once a website is built, people will automatically find the website and buy your products. This unfortunately couldn’t be further from the truth. Assume no-one knows of you and can’t find you and you won’t go far wrong. High street shops have the advantage of passing foot-fall, online shops don’t!

Investigate links to your sites from partners, suppliers, affiliates, friends, customers and most importantly shopping sites. Advertising such as Google AdWords may also be an option. One of the busiest market places on the internet is eBay.

With any new business and finding your market, it’s as important to find out what doesn’t work, as well as what does. With this in mind, don’t be afraid to test your product and market on eBay first before investing in a new online shop venture.

3) Taking Payment
More often than not Stripe or PayPal comes up as the easiest solution, but not always the cheapest. It’s cheap to install and easy to set up, but the charges are higher than most other methods and not everybody likes or wants to use PayPal. PayPal is fine for an initial venture at low cost, but is better suited as an alternative method of payment, not the only method of payment.

To take payment online you need a service called a Payment Gateway, these include Stripe, SagePay and WorldPay to name a few. In order to use Payment Gateway you need a merchant bank account and an Internet Merchant ID. These are obtained from your bank, and can take several weeks to acquire.

Also be aware of how you handle credit card information in your business both online and offline. There are standards in place such as Payment Card Industry/Data Security Standard (PCI/DSS). Falling foul of these standards could land you with fines in six figures and end up putting you out of business.

For more details, check our article on Payment Gateways

4) Legal Obligations
As well as an understanding of PCI/DSS, there are Distance Selling Rules which are applicable to trading over the internet. These work in conjunction with the the Sale of Goods Act and the Data Protection Act.

5) Carriage
Online shops selling physical product have different carriage needs. Charge too much or make your carriage too complicated, and you’ll confuse or lose your customer. Charge too little and you’ll make a loss.

In terms of your website: If you’re using an off-the-shelf shop package, be clear on what carriage features could be in place and how they will work.

If you’re developing a bespoke shop, make sure you’re as detailed with your carriage needs as possible.

6) Advertising
Launching your new website and being number one in Google the very next day for every key phrase you can think of sadly isn’t going to happen. With this in mind, you’re almost certainly going to have to advertise.

More often than not, the real cost and effort of developing an online shop is after the shop is built, to before.

Advertising such as Google Ads, Price Runner, Shopzilla, Google Shopping and Kelkoo are common. You may not be able to ascertain what will work and what won’t, but with some thorough investigation, you will be able to allocate a realistic marketing budget and ensure you’re focusing on the right products.

7) Data Entry
This is often one of the most time consuming and vastly under-estimated parts of any new online shop build.

Product information entered product by product takes time, and data sourced from different suppliers will invariably be in different formats and take time to migrate if possible at all.

Every shop in the world will need the following data:
Product Name, Product Description, Price and a picture.

Many products have variations such as a product with a Green, Blue and Red version. These can be handled differently in different shops.

Always be clear on what data is available before developing your shop. Just assuming “it will all just import and be fine” could be a costly mistake.

8 ) Service Uptime
There are many different types of Web Hosting packages ranging from shared hosting to banks of dedicated servers.

Shared Hosting is fine for a low traffic shop that doesn’t need 24/7 support, but as you grow, expect to have to upgrade.

Platforms like Amazon Hosting and Rackspace are fail-safe but costly. Standard shared hosting with GoDaddy and Fasthosts (for example) are inexpensive but not 100% up-time guaranteed.

9) Business Strategy and Marketing
Too many new businesses with an idea for a new online business go to see a web designer first.
Just because it’s initially an online business, it doesn’t mean the website is the business.

Website developers are experts at building websites, but not always experts at developing a business and marketing strategies.

Always get the right people for the right job.

10) Time
With everything signed off first time and all the content ready before the job starts, a good size online shop could be built in a couple of weeks. In six years in this industry, this has yet to happen!

It takes time to:

  • get content ready
  • draft up terms and conditions
  • sign off all of the page templates (typically at least 6)
  • enter product information
  • get bank accounts set up
  • build
  • test

Expect to be online in a few weeks, you’ll likely be disappointed, a few months if you’re lucky.
Work on the basis of 3-6 months and you won’t be disappointed.

Good luck, and call us on 01727 739812 if you need any help.

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