An eCommerce website is a site that sells a wide range of products in a shopping-cart style manner. For example, Amazon is the largest eCommerce website on the planet, with an emphasis on books.
With an eCommerce website, you’re generally selling physical products online. Most markets are fairly competitive, so make sure you either have a foot in the door, know the market, or are targeting a small enough market such that you believe you can compete in it.
Here’s how to get started with setting up an eCommerce website.
Merchant Accounts, Payment Processing & eCommerce Platforms
To get your merchant account, you need to incorporate and get a Federal Tax ID (FID) or Employee Identification Number (EIN).
Launch your site as soon as you get your first merchant account, but in general you should also have a back-up merchant account. The graveyards of web businesses are littered with sites that had their merchant accounts frozen for one reason or another and had to shut down as a result.
Choose an eCommerce platform that works best with what you’re looking to create. Make sure the back-end system works with your merchant account. Often times you’ll need to set up a payment gateway using Authorize.net between your eCommerce platform and your merchant account.
Managing Inventory – Warehousing, SKU Set-Up and Drop Shipping
There are two ways to run the fulfillment side of an eCommerce website: through drop shipping and through warehousing.
The benefit of drop shipping is that it’s easier to set up. All you need to do is pass the orders along to your drop shipper and you’re done. You don’t have to set up a warehouse, stock up to the minimum order or process returns.
The drawback to drop shipping is that it cuts into your profits. Every product that’s drop shipped is charged a drop shipping fee. At some point this fee will significantly outweigh the cost of warehousing and shipping yourself; at which point you can bring your shipping in house.
Regardless of what you choose, you’ll have to set up product ID numbers for each and every product in your inventory. These are registered as SKUs in your eCommerce software.
Tips for Increasing Revenues
There are a few things every eCommerce website should do to increase revenues:
* Suggest other items – If someone is buying a fishing rod, wouldn’t they like to receive fishing hooks with that?
* Track disposable items – If someone bought supplement pills good for 30 days, a follow-up email with a discount 35 days later could have great results.
* Upsell – After someone has checked out, offer them more products to purchase.
* Checkout integration – Make sure your checkout page looks like it’s a part of your website, rather than as if they’re going to a completely separate page. Make sure the color scheme, logo and header match. Shopping cart drop-out rates can be as high as 50% if the shopping cart is poorly configured.
An eCommerce website can be hugely successful, with virtually no limit on the volume of sales you can do, unlike a physical store. Make sure you have a great eCommerce system set up, get your fulfilment system down pat and you’ll be ready to launch your first eCommerce site.