Chapter 8 How to Create and Launch a Profitable Online Store (Seriously)
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If you’re just dropping in to this guide here, then we have a lot to cover!
First, this is one chapter in a 9-chapter guide on how to start a profitable online business. We’ve covered everything from laws and nuances to how to source product to even giving you a free startup template for a competitive analysis in your industry.
You may be wondering, then, why the actually launching of an online store is a chapter so late in the game for a guide on How to Start an Online Business.
The answer is simple: because planning is the key to long-term success.
And, planning isn’t hard. The first step is simply to get started. Here’s what we’ve covered in terms of planning up to this point to prepare smart entrepreneurs for the next step: actually going live!
- Decide what to sell: You have two choices here –– commoditized or unique products. By and large online, unique products sell best. So, find yourself a product niche you are passionate about or one that is trending. Bonus points if you can manage to find both. Google Trends can help you spot trends. For passion, you’ll have to look deep within yourself. Reference Chapter 1 for a breakdown with examples of how other entrepreneurs found niche success.
- Make sure you can actually sell it: Beyond other people potentially wanting to buy what you are selling (which is another exercise almost entirely), it is important that you consider the challenges in your product niche before you move forward with launching a store. For instance, have you thought about your product’s weight and size? Sure, you might be able to sell your item for much less than the competition, but will shipping costs obliterate your margins? They will if your item is too big or heavy. Reference chapter 2 for more information.
- Get to know other people who are selling it (and already buying it): Online competition is fierce,and your best offense is a good defense. Or, rather, your best offense is knowing your competition thoroughly and differentiating yourself in the market. At this stage of the game, you’ll want to do some keyword research. Then, you’ll want to get a good understanding of your product market and the overall trends driving that market. Read chapter 3 for more information on how to do this effectively.
- Analyze what your closest competitors are doing: Now that you have a better feel for the lay of the land, use this competitive analysis template to get a top level view of your top 10 competitors in the space. Remember, there are three types of competitors: primary, secondary and tertiary. You want to have a good eye on each of them. Pinpoint strengths and weakness of each brand. Note where they are selling. All of this will help you to easily find the holes in the market. Those holes are yours to fill. Reference chapter 4 for more detail.
- Make sure you aren’t breaking any laws: Of course, before you begin anything, double check that your business is operating within the confines of the law where you’re selling — local, state, federal and even international, if applicable. This applies both before you launch (i.e. can you legally sell that?) and even after you launch (i.e. have you paid the proper taxes?). This can get complicated, and different states have different rules. Grab yourself some coffee and sit down for a legal lesson in online sales.
- Identify your market (and your differentiators): Now that you have your competitive analysis on lockdown, you can easily identify your target market. This will be the market that is interested in the product, but is currently underserved. You’ll use this targeting in determining your brand look and feel, tone and overall point of view. You want your brand to be the trustworthy confident of these underserved customers in a trending category. So, speak to them like you are.
- Source your product: And once you have all the background information figured out, it is time to source your product. Will you dropship, make the item in house or use a 3PL? The answer to this is different for every single brand, even within the same selling category. There are benefits and pitfalls to all of your options. Figure out which one works best for your margins, your sales channel and your customer’s expectations.
Choose an ecommerce platform
Now that you’ve done all the research, it’s time to choose your ecommerce platform, build your store, and launch your online brand.
The vast majority of new online stores today choose to go with a SaaS solution like BigCommerce. This is because there is a low cost to entry — no costly development or technical headaches — and a scalable framework that’s designed to help you grow.
Look for a platform with a great community of people both running it and using it who will testify to their success on the solution. Get on their forum, check out their blog and take a peek at their support materials.
Next, make sure you ask all the right questions before you commit.
You can connect with sales and support staff to get your burning questions answered, or test out features yourself by starting a free trial. Just make sure you go through the following checklist for each platform you consider:
- Does their website builder have everything I need, including drop down menus or an editor?
- How simple is the platform to use? Do I feel comfortable using it?
- Does it offer reliable hosting? Will my site stay up even when I get a flood of traffic?
- Who is going to be there to support me when I have questions? Do I need to pay for support?
- Will the platform support the type of products I want to sell? If the product has variations, how does the platform display all of these options? How simple is that to manage?
- Is there a limit to how many products I can sell? Are there any transaction fees?
- Can I sell directly to customers on Facebook, eBay, Amazon, and Pinterest without managing separate inventories?
- How do I manage inventory?
- What options do I have to accept payments? Should I use PayPal or Stripe for credit cardsbu? How much do they cost?
- What options can I offer for shipping?
- What are my options for themes? How customizable are those themes?
- How will my store look on a mobile device? Can I customize the mobile experience?
- How do I show up for Google search results and improve my search engine optimization (SEO)?
- Does it offer integrations with additional applications so I can customize my ecommerce business as it grows? Do I need to pay for any additional functionality I might need?
- Are there open APIs I can use to customize and automate my business grows so I won’t have to migrate to a new solution?
- What are the out-of-the-box UX features that will make it easier for customers to shop on my site (i.e. faceted search, HTTPS, etc.)? Do I have to pay for these features?
- How will this platform help me show up in search engines so potential customers can find my online store?
- What material is available to help me learn more about growing my online business?
Even after you get the answers to these questions, make sure you take the ecommerce solution for a spin before signing up for a plan.
Below are some of the top concerns for new store owners when looking for an ecommerce platform.
Ecommerce platforms are not free. The services they offer combine the need for multiple technologies all in one: hosting, checkout, payments, PCI compliance, fraud, DDoS attacks, analytics and more. And, they organize all of this on the backend so it’s easy for you to access every point you need.
Their pricing models do differ, though, and it’s crucial that you research your options. Pay special attention to what is included at each price point.
For instance, the out-of-the-box functionality of BigCommerce can save businesses up to $300 – $5,000 annually in app subscription costs, compared to Shopify specifically.
Thinking About Magento?
Not so fast. On-premise solutions like Magento are often much more expensive than SaaS solutions like BigCommerce or Shopify. Use this total cost of ownership calculator to determine exactly how much more you’d be paying for your specific business.
How did we configure this?
On the low end, $300/year comes from the analysis of the top 30 apps offered by Shopify which BigCommerce natively includes 60%. Of those top 30 apps, the monthly subscription cost would be $26.94/month, or $323.28 annually.
Separate from this number, we commissioned a study where both BigCommerce and Shopify instances were set up in the effort of finding what apps were needed to add to Shopify to get to the same level of functionality found with BigCommerce out of the box. Per the analysis, the study found that there were $169-$424 in monthly subscription costs to achieve this, or $2,033-$5,093 annually*.
Clearly, what your business needs is unique to you. You may not need the same level of functionality our interns and employees found they would need. Do note though that most apps in an ecommerce platform’s marketplace come at an additional cost.
*All of this data is as of January 2017.
Your site’s design is a fundamental part of your business. It is your first foot forward with your consumers. And today’s consumers are used to excellent web design and UX.
As you are just starting up, it’s important to find a theme or template that best represents your brand. Also, you want one that is customizable enough for immediate differentiation at launch and for long-term growth overtime.
Most platforms have free and paid for themes. I recommended starting trails with your top ecommerce platform choices, uploading filler content to the backend and then previewing your site on multiple themes to see what will work best for you.
Look specifically for attention to device size, ease of use, customizability and scalability over time.
Here’s how you would do this in BigCommerce.
Ease of Use
When it comes to ease of use, you want to be able to do your job (typically marketing your brand) without having to also become a technologist. This means that the platform needs to be easy to navigate, setup properly and use over time.
Here are a few things to look for.
Does the platform offer an easy setup flow, explaining everything you need to do before you launch, including loading in products, setting up taxes, domain name registration, payment processing and the like?
Here’s how BigCommerce walk you through it.
Product and SKU Management
Bulk uploading products from CSV files is a much faster way to add products to your catalog once you have the basics set up. Be sure the platform you are on allows this, especially if you have a large or growing catalog.
One-Click App Marketplace
You’ll want a plethora of one-click apps or already built-in integrations to help you grow without having to hire developers. Use your platform’s App Store to browse and integrate tools you want or need to use.
Centralized Channel Management
The current state of ecommerce in omnichannel. Customers shop everywhere and anywhere –– and it’s important that your product be there so you can win the sale. Once you launch and begin to see sales, you’ll likely want to expand pretty quickly into additional channels.
With many ecommerce platforms, you’ll then be required to manage both your ecommerce site platform as well as the platform of any other channel. This can get confusing, and even get you kicked out of certain marketplaces for unintentionally breaking the rules.
Look instead for a centralized channel management platform where you can push your product directly over, manage price points, product descriptions and more without ever level the page.
Scalability & Customizability
Because you’ve planned your business so well, over time you will grow. And as you grow, you’ll need additional support from your ecommerce platform.
What kind of support?
Well, that is hard to predict. Every business is unique. That’s why many brands use APIs to customize and automate their stores based on their needs. Businesses in their infant stage aren’t quite to this point, but it’s something you want to plan for if you intend to scale (and if you’re reading this then you probably do).
Plan well for this stepping stone in your brand’s growth and look for platforms with trusted and fast APIs.
Some platforms limit API calls at 2 requests/sec. On request, they might up this to 10 requests/sec. That’s fine for the short-term, but it doesn’t allow for real-time syncing of catalogs or immediate data pushes (so you can automate fulfillment at various warehouses, for instance).
BigCommerce’s API allows for 100’s of requests per second. To translate that, BigCommerce updating a 25,000 product catalog vs. other platforms updating that same catalog is roughly 60 seconds versus two hours. Four hours, even, if you are referring to the 2 requests/sec.
Think long-term here. Your future self won’t have that time
Launching Your Online Store
Now that you’ve picked a platform, committed to a product and worked on winning over a target audience, we can focus on essential tips for creating and launching your store.
Sure, you could whip a website together in a few hours, throw it up on the internet and just wait to see what happens. But I’m going to ruin the surprise and let you know you’ll only have a handful of visitors and an empty bank account to show for it.
If you want to have a viable online business, you need to focus on quality from the get go.
You need to build a store that looks professional, attracts the right kind of customers and has the right calls to action once they arrive. These next three posts are going to show you the basic blueprint to make sure you’ve got the right stuff to run a successful online store.
It’s not about your website, it’s about your product
It is very easy to blur the lines of “design” and “functionality” when building your online store. Not to say that design isn’t important, an attractive website design can drive online sales. But your design shouldn’t outshine what you are trying to sell.
Make your products the star of the show!
Online shoppers will decide if they trust and want to purchase from your website in about three to five seconds. That means you need to have a simple, trustworthy and easy-to-use website. What you are selling and where a customer needs to go to find it should be crystal clear. Resist the urge to overload your website with so much “stuff” that people get overwhelmed or lose patience waiting for everything to load.
Marucci Sports is a great example of clean, focused design. Their unique product is front and center in every way.
Build your design on the right foundation
Don’t worry about colors or logos yet. Start by by selecting a design template that really showcases your products or services.
Your website should serve as a tool for effective online shopping. Overly styled sites run the risk of distracting customers rather than guiding them towards checkout.
Secondly, while picking a design template, make sure that the navigation menu is clear and does not overwhelm your customers. By having clear navigation you will be able to present various product categories and ensure your customers know where to go within your store and also never get lost.
If you only have a handful of product categories, selecting a theme with menu navigation across the top will work great. However, if you have loads of products and categories, think about consolidating them as best you can (get feedback from friends and family if you need an outsider’s perspective) and choose from the templates that have navigation running down the left or right side.
You don’t want to force shoppers to scroll far down the page to get the information they need. Potential customers should be able to see nearly all of the relevant and compelling parts of your site upon arrival.
Best yet, if you have a lot of categories, use your homepage to let customers self select their shopping journey.
See below how Eazy Wallz allows customers to self select their persona to drive them to a more targeted shopping experience.
Last, but certainly not least, make sure whatever design template you choose has a rock solid mobile version as well. You will 100% lose sales if you don’t provide your customers with a good mobile experience and streamlined checkout process.
Rather than quote stats, I want you to answer one simple question: how much distance is between you and your mobile device right now? Is it right beside you? Is it in your pocket or purse right beside you? Are you reading this blog post on your smartphone or tablet? Yeah, I thought so.
Get all the nuts and bolts in place
There are a few key pieces you need to put in place to make sure your store is ready to accept orders. The following steps are essential in helping you launch your store and setting you up for long-term success.
Step 1: Pick a payment gateway
If you want to get paid, this is a pretty important step!
Payment gateways are how you collect money from your customers. Your ecommerce platform can tell you what gateways work with their system. Bigcommerce supports over 60 different payment gateways and features one-click, digital wallet options like Apple Pay and PayPal One-Touch.
Once you have a list of options, you need to get the full picture of how it works and how it will affect your bottom line. You also want to pick something that can grow with your business. So before you lock yourself in, ask the following questions about each payment solution:
- Are there set up fees?
- Are there monthly and/or transaction fees?
- Are there penalty fees? If so, what triggers them?
- Is there a minimum balance requirement?
- What about transfer delays?
- When I need help or support who do I contact? How do I contact them? What hours are they available?
Ecommerce platforms like BigCommerce can help you get the lowest possible rates. For instance, the rate offered to BigCommerce customer who use PayPal powered by Braintree is the lowest possible one out there. Research it. Go ahead. We’ll wait.
Step 2: Set up shipping
This step can feel a little overwhelming to someone just starting an online store. Shipping options depend heavily on your product, your business model, your target audience and your ecommerce solution.
The trick is making sure all of these factors are working together. Fortunately we have some tried-and-true best practices to put your mind at ease and increase your sales.
Shipping is an important value proposition for your store. It has the power to attract customers, but it can also push customers away. So if you are new to selling online, think about starting small. That means you may want to stick with domestic shipping and master that before you dive into international shipping.
There are a couple tips to keep in mind when you’re getting started with online shipping.
- Start by researching your competition, you may uncover some really great insights on what works and what doesn’t in your category.
- Make your shipping policies are very straight forward, this will prevent confusion or surprises, making it more likely the your potential customer will follow through with their purchase.
- Lastly, offer multiple shipping options based on different shipping speed or carriers. How quickly a shopper gets their product can be just as important as how much they pay for shipping.
Now, if you can offer free shipping on your products, do it! According to a Forrester Research Study, high shipping costs are the number one reason for cart abandonment.
You can actually increase your average order value with free shipping or by offering free shipping at a minimum order amount. Getting something for free has a huge impact on the psychology of making a purchase. Also, if you can provide local pick-up as an option, you should. It’s often easier for everyone involved, plus the customer doesn’t have to pay any shipping costs.
On the back end, you need to plan and organize your order fulfillment process. A lot of new merchants neglect this step, and that can be extremely detrimental to your business as you grow.
If your products are sprawled across your coffee table right now, you have work to do. Even if you only carry a few items, you need to work drafting up a procedure for what happens when an order come in.
Here are the questions you should answer around fulfillment:
- How do you know you have an order?
- How do you print the invoice? How do you print the packaging slip?
- What packaging materials do you need?
- What information goes with the product in the box? Directions for assembly or use, batteries or additional parts? Maybe a thank you note or coupon? The options are endless.
- What does the presentation look like when opening the box? Does the look and feel of your packaging reflect your brand?
- How do you organize products that need to be shipped? Are they in bins, refrigerators, rooms or a warehouse? Can you place the product location in your online store so it prints on the invoice for a more streamlined approach?
If you don’t spend time planning out this process, your customers may not get their orders on time, which makes for a bad first impression. You’ve already turned a browser into a buyer, so do everything you can to keep them happy and coming back for more.
Step 3: Tackle Taxes
We’re talking about taxes for your business at this point, not local sales tax. So this step is pretty short and sweet — talk to a tax professional.
This doesn’t necessarily have to be an accountant or CPA, it can also be a state comptroller or another authority on taxes in your area. They will help you do things like attain your tax ID and understand your area’s tax classes, rates and structure. All of this can vary from location to location. Trust me, you’ll save money and headaches in the long run by consulting a pro.
Step 4: Select a Great Domain Name
Picking a domain name is critical. It is your web address as well as your brand and an important marketing tool.
Your domain name will serve as a way for potential customers to find you and then come back to buy more. So keep it simple. Resist the urge to include difficult spellings or unknown acronyms.
If you have an established business already, don’t change lanes and switch your domain! Choosing a credible domain will instill confidence in customers and build customer loyalty, so take your time.
Step 5: Set up analytics to measure your success
You need data and benchmarks to grow your business. We recently highlighted 55 ecommerce metrics you should be tracking. Download the spreadsheet to get started with that here.
To start, examine your platform’s in-store analytics. At the minimum, your platform should be able to help you with basic metrics like unique visitors, conversion rate, most popular products and average revenue per customer. Also take a peek at platform options like in-store site search that could provide you with valuable insights into what your customers are looking for.
It’s pretty safe to say that no matter what, you should use Google Analytics for your online business. This will help you understand what the search giant sees happening both inside and outside your store. Google Analytics can give you the following insights to help you expand and improve your business:
- Get to know your target audience
- Track where shoppers come from, where they go and where they leave
- Track how your visitors engage with your store
- The ability to annotate your efforts
That last one is my personal favorites. You can tag the important actions or events on your timeline, like adding new products or a sale, so you can see the impact they have on your store. Talk about efficient! Analytics in general are a key element in helping you act on facts rather than assumptions about your customers and business.
Tackle these key areas — site functionality, business basics and analytics — and you’ll have created the solid foundation you need to build out your online store. Now, you’ll need to read up on how to begin driving traffic.
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