If you have not checked out part one of this series, make sure to read here
In this two-part series, we look at what you need to evaluate if you are considering starting an E-Commerce business. In part one, we explored why choose e-commerce as a business, what products and in which market, and dropshipping. In this post, part two, we will explore creating a business plan, shop policies, payments and tools to help you on your e-commerce journey.
Create a Business Plan
A solid business plan is the foundation of any successful business. List your business activities, set your long-term goals, and, accordingly, your short-term goals. Assign a timeline to each.
Your goals must be ‘SMART’, i.e. specific, measurable, achievable, realistic, and time-bound. Create a realistic plan for your business that will not affect your performance in your full-time job if you plan to do this as a side hustle. You must also do some form of financial planning to ensure your business is viable and will make a profit. You can find various templates, many free, which can help you with this stage.
Make Your Own Return Policy
A sound return policy is necessary for every e-commerce store. Customers are accustomed to a generous return policy these days, so it’s become less of an advantage but a requirement.
A good return policy is an important way to earn customers’ trust and also offers incentives for the business to come up with solutions that reduce customer returns which, in turn, improves customer satisfaction. So we believe it is a necessary evil that may seem like a wasted cost at first, but in the end, pushes the brand to succeed.
When crafting a return policy, consider when cases are non-refundable due to the nature of the product and when you want to make an exception. For example, whether you accept returns with the tags ripped off or the packaging needs to be untouched.
If you are selling personal or health-related products such as pacifiers, underwear, swimming suits, cosmetics, and so on, do you still accept returns? If a customer can provide an unboxing video that shows the product is defective, then would you make an exception?
While we generally believe brands that optimize for customer satisfaction will ultimately succeed in the long run, it is important to evaluate the immediate cost of having a generous return policy and decide how much return cost you are comfortable absorbing.
If you are suffering from a high rate of return, the issue is probably not with the return policy itself but with other issues with the business. Find out why customers are returning, and focus on the root of the issue. For example, if you are selling apparel, a high return rate might be because of fit issues and because you have inaccurate size chart information.
Online Payment Gateway Integration
The most convenient point of online shopping is that customers can place orders and pay easily. Therefore, a safe and fast online payment method is necessary. Fortunately, online payment gateways have become more and more common in the past few decades.
PayPal, Stripe, Apple Pay, Amazon Pay, Google Pay, Square, and many other online payment service providers can all be integrated with your store to guide you to make checkouts dead simple. However, every online payment service provider’s commission and service charge are different. Some will only charge setup fees and monthly fees, and some will draw transaction fees of around 3% to 5% per order.
Having a wide range of payment options will reduce the possibility of purchase drop-offs, but be mindful of the cut these processors are taking. These costs will eat into your margins. Fortunately, the bigger the size of your business, the easier you can negotiate the cost down.
Start to Set up & Integrate with E-commerce Tooling
As mentioned earlier, there are many good platforms to help you start with, such as WooCommerce, BigCommerce, Shopify, 3dcart, Volusion, Magento, and so on.
All of these platforms support some form of plugins integrations, allowing you to enhance your store with more third-party services, such as Yotpo for helping you collect customers’ reviews, Shogun for making customized web pages with a simple drag-and-drop interface, Vajro for creating mobile storefronts, or Kiwi Sizing for reducing your return with professional size charts and fit recommenders. All of these are indispensable tools when running a successful e-commerce business.
Besides using one of those e-commerce platforms to create your shop, another alternative is selling on marketplaces like Amazon, Etsy, or eBay, which already have high customer traffic you can leverage. The downside is that it is harder to build a brand on those marketplaces, and you would be subjected to price comparisons and be forced to cut down your price to stay competitive. There is also significantly less customization available which may or may not be a plus for your business goals.
Schedule Everything – even the smallest task
Schedule any task, chore, or errand you may have. Jot everything down in your diary or digital calendar so that you don’t forget things and fall behind on your timeline.
Even if the task is as small as calling up a bank for a business loan, or uploading your business presentation on the pen drive, schedule everything.
Let us know if you have any questions or tips to help start an e-commerce business. We love hearing from our readers.