3 steps to cash in on ecommerce: Setting up your first online business
The benefits of starting your first business online are plentiful. Here are some pointers to get you started, with top tips from leaders in the field.
Diana Albertyn, 13 May 2017
Ecommerce has a lower barrier to entry, and needs less financial capital to launch, than starting a traditional brick-and-mortar business. This has made it an increasingly popular option for modern entrepreneurs who want to run retail businesses, especially with newer ‘ecommerce in a box’ solutions such as SimplyBlu™.
By 2018, South African’s online spending had reached R53 billion, accounting for 5% of the entire retail space, and is currently growing by over 20% per year, proof that local shoppers are going online and that you need to be available when they log in to the myriad of retail options out there.
Take note
"Online offerings is about offering quality products in a quality environment that works every time," says Mike Cotterell, Pick n Pay’s head of online shopping. This is even more important when you’re running a purely ecommerce store.
While ecommerce has fewer barriers to entry than brick-and-mortar, that doesn’t necessarily make it an easy business to run. You still need some initial capital and skill to design and build your website. You also need to find a reliable hosting provider and warehousing; you need to stock your inventory, and you need to set up a versatile payment system.
Here is some industry-leading advice on how you can get it right:
1. Find a home (host) for your business
How do you decide who will handle your webhosting and what would work for you? You need to choose wisely as your hosting provider is the foundation of your business. Your business is open only while the website is up, so you need to work with a company that can guarantee reliable and secure operations.
It’s important to ask any potential host what is included in their per-month charge and what costs extra. Depending on the package you purchase, you could end up paying additional fees for things such as payment processing, customising your storefront or even attracting too many customers! Make sure you're clear on what this means to your site’s design or your budget.
Luxury online sock store owner Nic Haralambous shares his experience on the ease of getting started. “Putting up a website is ‘free’ and easy today,” he says. “You can use WooCommerce, Shopify or any number of solutions to launch something.” But be sure that the service you use can handle unexpected bursts of traffic. The last thing you want is for your site to crash from heavy traffic during your very first Black Friday promotion.
2. Build a quality site
Haralambous started his first website at 12 years old. By 2012, ‘NicHarry’ was born. “I started my thriving business with R5 000 and made a profit in the first month,” he says. “I specifically wanted to get into ecommerce,” says Haralambous. “I didn’t want to accept returns, and I wanted a light product that could ship cheaply to anywhere in the world.”
You can hire someone to build a site for you, or you can do it yourself, like Haralambous did. There are many free website-building products available, although you may need to pay a small fee if you want to apply your own branding.
Once these decisions are made, the next step is ensuring that customers from anywhere in the world can purchase and receive your goods.
3. Establish (global) payment capability
PayPal might still be the most well-known tool for online payments across the world, but there are many other providers, both locally and globally, which may better suit your needs. When choosing one, pay careful attention to their fee structure.
According to technology and productivity expert Melanie Pinola, “PayPal, which accepts all major credit cards, is an easy solution that integrates with most major shopping carts. There are no setup charges or monthly fees, and getting started is very quick. But PayPal takes between 2.2% and 2.9% of each transaction, depending on your monthly sales volumes.”
It’s also important to remember that some customers might not want to use PayPal. “Not everyone is comfortable using PayPal, so having another payment gateway would be beneficial. Allow shoppers to order directly from your website, but also offer alternative payment options like EFTs for people who don't trust online transaction processing,” Pinola says.
You’ll save on rent costs and mitigate staffing issues by starting your first business online, but this method doesn’t come without its challenges. Just like a traditional store, if the basics such as location (your hosting), look and feel (the design of your site) and ease-of-payment options aren’t in place, the chance of not getting your ecommerce store off the ground are still real.
Did you know?
Standard Bank have their own fully featured ecommerce platform. SimplyBlu™ is a complete ‘ecommerce in a box’ solution, helping you to take your existing business online, or start an entirely new venture. If you already have an ecommerce website, you can add SimplyBlu™ by simply installing our plugin.
Whether you’re technically savvy or not, with SimplyBlu™ you can start an online business in no time!