Many entrepreneurs wishing to start an e-commerce business become fixated on one specific element, the payment gateway, to the exclusion of the many other important factors that must be put into place before an online store can get up and running. Once you see the big picture, you can methodically take all of the steps in the right order. Doing so will help you get your site off the ground with the best chance of success.
The Payment Gateway
For those who might be fixated on the question of how to take payments, let’s get the payment gateway out of the way first. If you already have experience as a brick-and-mortar retailer, you probably know a good deal about accepting customer payments via credit and debit cards. Upon swiping or dipping a card, the buyer’s transaction was handled by your point-of-sale (POS) system or terminal, which transmitted the data for authorization and processing.
When you run an online operation, that same task is accomplished through what is called a payment gateway, which transmits credit and debit card data for authorization.
Maximize Your Success by Making the Right Product Choices
Long before your first customer puts a purchase into their shopping cart, you need to be sure that you are selling the products or services that people both want and need. Competition online can be cutthroat, and the last thing you want to do is pour your time and money into an endeavor that no one is interested in supporting. For that reason, you need to use multiple strategies to determine the best items to sell and to whom.
If you either are or can hire someone with the knowledge to research keywords for search engine optimization (SEO), you can get a good idea of what trending items people are searching for and can jump on that bandwagon. Alternatively, find goods or services that uniquely satisfy a previously unmet customer need, desire or passion.
Another idea is to find something that you yourself believe deeply in, using your enthusiasm and knowledge of your product to attract people who are equally dedicated. You might also take advantage of a deficit or gap you see in the way existing products are marketed. In other words, do things better or in a different way than your competitors to land those sales.
Finally, if you see a trend coming down the pike that interests you, jump on it right away. You just might be the early bird that gets the worm.
Obtain Your Products
Your next challenge is to determine the best way to obtain the items you wish to sell. There are several options:
- Make them. Doing it yourself gives you the ability to control quality for your brand. This method can give you low startup costs, brand and price control and maximum agility. However, you need to purchase and store raw materials and find the time to do the work or hire people to help.
- Find a domestic or overseas manufacturer. With this strategy, you can control your prices, create your brand and have the lowest cost per unit. However, you generally need to order in bulk and pay accordingly. This method can also take more time as well as leaving you open to fraud, particularly if you are using overseas manufacturers.
- Buy wholesale directly from the manufacturers or from a third party. You then resell your inventory at a higher rate. With wholesale, you are dealing in already established brands and usually don’t need to purchase in extremely high quantities. However, keep in mind that your competitors are also selling these brands. In addition, you may be required to price your products according to the manufacturer’s rules. If you sell various products wholesale, you will probably do business with several partners, which can be confusing.
- Dropshipping. With this strategy, you sell items that you don’t actually own or store in inventory. You take an online order and forward it to your dropship partner, who in turn fulfills the order and sends it to the customer. Dropshipping enables you to have a diverse, ever-growing product offering without having to worry about inventory management. Costs are low, and you don’t need to worry about the details of packing and shipping. The downside is that you need to give the dropshipper a cut of your profits on products whose margin may already be small. What’s more, competition is fierce, and problems often arise with back-ordering products.
To decide which of these methods is right for you, think about your products and the marketing niche you are seeking to fill as well as your financial situation. In many cases, your choice is a relatively easy one.
Craft Your Plan and Get Started
Dedicating time and careful thought to a comprehensive business plan is one of the best gifts you can give to your e-commerce store. This is an indispensable road map that will help you to explain your company and its needs as well as its competitors, express how you plan to market your products and services, how you will go about getting your wares into the hands of your customers, and how you will finance your business. No investor worth their salt will put any funds into your company without this document.
With a completed plan in place, your next job is to register your business and your domain name as well as create a logo that will be both attractive and compelling. Follow that up by writing descriptions of your products that are easy to understand and explain why what you are selling is better than other brands. Then take product photos that pop, and you’re ready to build your store.
Get a Merchant Account
Now we return to the original issue of accepting payments. In order to do so, you are required by law to set up a merchant account with a bank. This enables you to process customer credit card payments through your website. If you already have a gateway, that company will generally be able to set you up with a merchant account after checking your and your business’ credit.
Pay Attention to Your Website
Remember, your website is the first impression that online shoppers have of your business. Be sure yours is clear, uncluttered, easy to use and descriptive. If you don’t have the time or technical knowledge to make this happen, there are numerous templates that enable even neophytes to set up an adequate e-commerce site.
Alternatively, you can hire a professional web designer to make your site stand out from the rest. However you set it up, be sure your site includes a shopping cart that allows customers to securely input credit card information and make encrypted payments. To that end, it is crucial that you get a security certificate for your website from an established company such as VeriSign or McAfee. You will be required to have a payment process that includes SSL data transmission, AVS, address verification and CVV2.
As you can see, a great deal of work goes into your e-store long before the first product is sold. While it might seem daunting, taking each task step by step can enable you to slowly but surely accomplish each necessary goal. Before you know it, you will be open for e-business.