Operating an online store presents an excellent opportunity for a source of passive income, but many people don’t know where to start. Just a few easy steps can get you off the ground and turning a profit. Read on to find out just how to break into online sales and gain financial freedom.
1. Choose an Awesome Product
There are a lot of factors to consider when deciding what to sell. Personal interest plays a small role — it’s more fun to sell things you are passionate about — but it’s also important to consider the quality of a product, the profit margin, the demand for a product and how many other sellers provide the product. If you have a lot of competition or a low demand, it will make selling a greater challenge.
You can obtain this information from software like the SaleHoo Market Research Lab, which allows you to compare products by sale price, competition, number of listings and bids.
2. Brand Your Business with a Name
If you’re just starting a company, it’s unlikely you’ll achieve the name recognition of big brands, such as Apple or Target, so a descriptive company name helps potential customers more quickly understand your purpose. Second, try to choose a company name that is easy to pronounce. Word-of-mouth recommendations are incredibly effective, but your customers will have a harder time singing your praises if they aren’t sure how to pronounce your company name. Third, pick a company name that is easy to spell. Your company name, or at least part of it, will likely serve as your domain name. If your domain name is difficult to spell, potential customers are less likely to visit your website and even more unlikely to make a purchase.
3. Consider the Logistics (Sales Tax)
If your state requires sales tax, you’ll need to get a sales tax ID. Identify your tax percentage so you can include this when calculating the price of your product. Visit your state’s website for this information.
4. Find Trusted Suppliers
You have a few options for suppliers.
Dropshippers are suppliers that ship purchases to the customer on your behalf. The major benefit of dropshippers is that you don’t have to deal with shipping or inventory. This allows you to offer a lot of different products, but you pay a little more for this luxury — generally around $3 or $4 per item.
Wholesalers allow you to purchase a large quantity of products for a lower price. The larger your purchase, the larger the discount. This allows you to save money, but also requires you to have storage space for your inventory.
Liquidators are suppliers that are trying to make money fast, so they sell products for less than their value. This isn’t a reliable source for the long-term but can be a great way to cut costs. Be careful, because some liquidators won’t let you see the items before purchase, meaning some of them might be faulty or damaged.
Manufacturers present the opportunity for you to purchase directly from the producer. They offer great prices but require massive minimum orders, meaning you have to pay a lot up front. This is a great option for more established sellers who have resources to work with, but can be a challenge for a brand new store.
Once you have narrowed it down to a type of supplier, you need to find a trustworthy partner to work with. Again, there are many factors to consider: profit margins, recommended selling prices, pricing structure, fees, warranties, shipping policies, and customer service, just to name a few.
Directories like SaleHoo exist to make this easier. They allow you to compare these qualities to determine which suppliers are legitimate and offer the best deal.
5. Order those awesome products
Once you have chosen a supplier, order a sample product. If you are pleased with the quality of the product, identify the highest price you can pay in order to still make a profit reselling the item. Take this number into negotiations with your supplier and don’t pay a cent more!
Stay secure: Suppliers that only accept unsecured payments such as wire transfers are probably illegitimate. Always pay with a secure method, including PayPal or a credit card. This way, if your shipment never arrives, you can get your money back.
Be thorough: Immediately after your shipment arrives, do a careful examination of each product. This is tedious but important. If you find any defects, the sooner you can contact your salesperson to have the issue corrected, the better.
Monitor: It’s important to keep detailed records of your inventory so that you have a good supply at all times. If you aren’t keeping your inventory yourself (as with dropshipping), stay in touch with your supplier regularly to check levels of stock.
6. Select the best platform
You have several choices when deciding where to sell you products. The right choice depends on your individual needs.
Amazon: Amazon provides you access to a wide selection of customers but has some limitations as far as describing your product and pricing. The marketplace also collects a percentage of each sale.
eBay: eBay gives you more flexibility with marketing your product and how you price it, but it has a smaller customer base. It will also take a cut of your sales.
A personal, online store: This option gives you the most control over how your product is priced and marketed. A tool like SaleHoo Stores or Shopify will help you build an online store without any background in web development.
7. Set up shop
Create thorough, detailed descriptions of every item
Your product description is a spectacular marketing opportunity. Use incredible detail, incorporate keywords that you think customers might use to search for the item, and edit for perfect spelling and grammar.
Add high-quality images
Great images are just as vital to sales as a solid product description. You might even want to outsource a professional photographer to take photos of your items, or see whether your supplier has photos that you can use. If not, be sure that you have a clean black or white background, excellent lighting, and a good camera to get a high-resolution shot of your product.
Understand the competition
Regardless of whether you choose Amazon as your selling platform, this is where most of your store’s competition will be. This means it’s important that you understand how Amazon works and what it provides to the customer. Amazon’s prices, customer service, and shipping times, among other factors, will be the baseline expectation that you need to exceed in order to be successful.
Establish a Return Policy & Customer Service
Create a clear return policy and post it in an obvious spot. Make a commitment to respond to customer service inquiries and stick to that commitment. Never take more than 48 hours to respond to an inquiry, or you could find yourself losing customers left and right.
A highly competitive price is key to becoming a popular store. Sum up your costs — the price of the item, shipping, storage, listing fees, etc. – and decide what you can sell the item for in order to still make a profit. Remember to include the cost of any software or equipment you use, as well as other business supplies.
8. Market, market, market
The only way to turn a profit in your store is to make sure people know about it!
Return customers present an excellent opportunity for business. You have already proven yourself in terms of reliability and quality, so encourage your existing customers to return. Collect their information at checkout and send emails about discounts, related products, and accessories.
Everyone is on social media these days, which means your store should be, too. Social media platforms can be high-maintenance, as you have to remain active on your profiles, but the effort is worth it. Post diversified content — images, video, and articles — that may not relate directly to promoting your business, but still appeals to your customers.
The comment section of blogs and forums within your industry are excellent places to find customers. Be careful with this strategy and don’t be spammy, but if you see a question that relates directly to your products, answer it and post a link to your store.
9. Get it shipped
Once you have made a sale, make sure that you’re sending the item out no more than 24 hours after the sale. It’s also important to insure your shipment (some providers include insurance and tracking automatically). Remember that you can add tracking and insurance as shipping upgrade options that consumers pay for. And finally, adding your business logo to the shipping materials makes a nice finishing touch.
10. Don’t forget the post-sale wrap-up
Send a thank you email to your customer (you can automate this) or include a hard-copy thank you note with the customer’s shipment.
Ask for feedback
Some platforms, like eBay, offer an opportunity for the seller to leave feedback for the customer. Doing this will encourage the customer to leave feedback for you, and good feedback scores are essential to success, as they improve your reputation.
11. Know the importance of testing
Tweak various elements of your online sales process to see if they improve performance. Try different platforms, different items, and even different prices, as well as a variety of listing strategies and keywords. There is always a way to improve. These steps are just a baseline for opening a store. Continue to experiment and expand your presence to ensure you’re getting the most out of your online sales.
The post Home Business Breakdown: How to Start an Online Store appeared first on Home Business Magazine.