The choices of opening an online shop

Once you’ve opened your new business and decided that you want to sell online, there are a number of choices available to you and a few decisions you’ll need to make about how you want to trade online.  Whilst online trading may sound easy there are some serious options that you’ll need to consider which will have a profound impact on how your business will operate, market and trade.

Multi-channel is the term used to describe selling through a variety of mediums including online stores, marketplaces and retail outlets, many business now sell through a variety of channels.

Considering the product and your competitors

When you’ve decided exactly what it is you’re going to sell it’s worth doing a bit of research into what your competitors are doing. If you’ve already made a start on a business plan, it’s likely that you may have done some competitor research already and thought about:

• Who are your main competitors?
• What service they are offering?
• Do they adopt multi-channel selling through:
  • Retail “bricks and mortar” stores
  • Online marketplaces such as Amazon and eBay
  • Online stores through their own websites?
  • How are they promoting their business?
  • What forms of advertising are they using?
  • How are they pricing their goods? Is a discount offered for online sales?

Once you’ve completed this research and analysed the results, it will give you some useful insight on how you might like to sell yourself.

The costs and ease of setup

There is no doubt that there is far less effort involved to set up an online shop within an online marketplace to start trading as they will take care of the hosting and transactions for you.

If you decide to go it alone and build your own online store integral to your website you’ll likely need to consider the following:

• Hosting
• Branding, logos & marketing
• SEO and online promotion
• Site design and themes
• Ecommerce toolkits
• Web site development
• Payment processor (such as PayPal)

Going it alone

Whilst this may sound daunting there are some major advantages over “going it alone” compared to using an online marketplace like Amazon.

Competition

By using a large online marketplace, you’ll likely face some fierce competition from other people selling the same products; the main form of competition will be down to the price. As store designs are fixed by the marketplaces there is little you can do to customise the layout and design to stand out from your competitors. Furthermore, most potential customers will initially just see your products through the marketplace search so it’s harder to stand out from the crowd.

Customer loyalty

There is very little customer loyalty within online marketplaces so don’t expect to customers to stay loyal to your online shop for repeat business. Provided the other retailers within the online marketplace have good reviews, price competitively and have good delivery arrangements, customers will use them too.

Online marketplaces are very good at displaying other sellers with similar products so the customer can get an immediate comparison.

Tip: Be aware that some people may sell at very low margins on marketplaces just to get the business. Whilst this may win customers in the short term, it’s unlikely to be sustainable and they are likely to go out of business; so work out your margins and price sensibly.

Promotion

By promoting and advertising your online shop on a marketplace, you are in fact promoting the marketplace itself and the other suppliers that sell through it.

Fees

Online marketplaces work by charging a small fee, typically for each transaction. Whilst these fees may be reasonable today, they could dramatically increase tomorrow. Any work you’ve done to promote your online shop within a marketplace could be lost if you switched to another provider such as going from Amazon to eBay.

Control

To sell through an online marketplace, you must abide by their terms and conditions, which may change over time and could present problems with the way in which you sell your products or services. They may also decide not to permit particular types of trading or decide to leave the online marketplace completely.

Promoting your online shop

Online marketing can be far more successful when your online shop is integral to your website. You’ve got a far better chance to build a relationship and engage with potential customers. Along with your online shop, your own website could:

• Have customer reviews similar to the online marketplaces
• Include a blog of useful information about related topics
• Provide detailed case studies from existing clients
• Give usage examples
• Offer additional professional services such as installation
• Provide detailed information about the products you sell and their suitability for particular tasks
• Give fitting information for DIYers
• Provide product usage video guides.

All these things will help attract quality traffic to your website from search engines and this type of content is far more likely to encourage sharing with social media.

Any work you do to promote your site with search engines with pay per click, social media sharing or traditional link building will truly benefit your own site and not the online marketplace.

Setting up a custom online shop

Many people use content management systems such as Wordpress or Joomla for their websites alongside toolkits such as WooCommerce to help manage the online shop. Themes can be used so you can easily change the layout and design of your shop and payment processing can be easily completed with PayPal.

Tip: Do consider your purchasing provider carefully as transaction abandon rates can be high with the wrong payment provider.

There are plenty of guides to setting up your online shop, but if you’re new to online trading it may be worth getting some consultancy to help get you started.

Getting started

Whilst it may take some time to build an online shop, it will give you a better understanding of how online trading works than if you just used a marketplace. If you need to trade straight away, you could always use an online marketplace whilst your website is built.