5 things to consider before opening an online shop

By Monica Ng

It’s the beginning of a new year and perhaps you’re finally ready to open your own online shop. Congratulations! With an increasing number of consumers shopping online year-on-year, buying everything from fashion, accessories, home wares, electronics and even food, it’s an exciting time to start selling online.

With so many different websites and platforms offering 'quick setup' ecommerce options,  it may be confusing deciding how to actually start and which platform you’d like to sell on. Plus, there are a few other things worth considering before you open the virtual doors for business.

Here’s my tips:

1. Do some market research.

• Determine if your product is something that customers regularly purchase online (price, size and materials of your product may be a factor here).
• Determine who your target audience is and figure out their preferred online shopping platforms (see #5 below for some examples!).

2. Think about finance.

• Ask yourself what percentage stock do you want to sell directly through your online shop, versus alternatives such as wholesale or consignment to other bricks & mortar or online retailers?
• Check out postage costs through couriers or Australia Post - some postage fees can be prohibitive to customers buying online.
• Factor in the time you'll spend photographing products, uploading product listings, preparing items to post, and even going to the post box or lining up at the post office for each and every order.
• Think about associated costs like tech support, product photography or graphic design if you don't DIY.
• Look at any fees associated with your chosen platform (see #5 for some guidance here).

3. Think about branding your online shop.

• Do you have existing business branding that will be applied to your online shop?
• Consider how tech and design savvy you are in terms of actually setting up an online shop. Do you have any friends/family who can help you?

4. Marketing and promotion

• What is your marketing strategy to drive customers to buy online?
• Do you have a strong following on social media prior to launching your shop, or are you just starting out? If the latter, how will you build your following?
• What online or offline channels will you use to promote the online shop?

5. Decide where to set up shop!

With so many different websites these days, it may be confusing deciding how to actually start and which platform you’d like to sell on. Here’s a guide to some of the key ones for creative businesses.

Etsy

Etsy is an online marketplace dedicated to selling handmade, vintage items and supplies as well with millions of unique items from shops in over 200 countries.

Pros:

• Easy to set up a shop. If you don’t know much about HTML and CSS, no problem! With a standard shop template there are options to customise your shop and the choice to link to your social media accounts
• Etsy has an extensive sellers handbook full of articles, interviews, online labs and livestream videos dedicated to all aspects of the shop ranging from branding, photography, graphics, marketing, wholesaling and Search Engine Optimisation (SEO) to name a few.
• Large and growing community, where you can join teams and contribute in the forums to ask other members and shop owners for advice, “heart” (favourite) items and shops and curate treasuries. Joining in the community can in turn bring more traffic and even sales for your shop!
• Ability to accept different payments via Paypal and direct checkout includes using credit/debit cards, Etsy gift cards etc.

Cons:

• With so many Etsy sellers, there is a lot of competition and its product categories have become saturated. Furthermore, Etsy broadened its definition of “handmade” in 2013, to include manufactured items, which may make it difficult for your items to stand out amongst the crowd.
• Customisation options are limited, with all shops following the standard shop template, shop owners can only customise shop banners and a profile page.
• Although the fees appear small, they add up. Etsy collects a $0.20 listing fee, which covers a 4-month listing period and then charges a 3.5% transaction fee. In addition, to this if the customer pays with Paypal, you also lose their fee from the total transaction price. If you have a high turnover of inventory and re-list products often, at some point it may be more economically feasible to pay a monthly flat rate on a different platform.
• Customers must have both an Etsy and a PayPal account to make a purchase. Signing up for an account may deter some customers and they may not end up purchasing your wares.

Big Cartel

Founded in 2005, Big Cartel is home to over 500,000 shops allowing makers, crafters, designers and other artists to set up an independent store to sell their products.

Pros:

• Ability to customise your shop – from simply changing the fonts, graphics or colours to modifying the HTML and CSS directly you have complete control over how you wish your shop to look. In addition, you can add slideshows to show off your new look book or sale promotions or even add custom pages such as an artist’s biography or FAQ page.
• When customers land on your site – there are no shops or advertisements to distract or lead them away to another shop, it’s just your shop.
• Offers a fully functioning free and paid plan options. Perfect for new shop owners, from free to paid plans starting at $9.99, $19.99 or $29.99 a month, each subsequent plan allows you to list more products and access additional functions such as inventory management and more data in your visitor statistics.
• Sales history is private. All sales information is only available for your eyes, so snooping competitors can’t get a look in.

Cons:

• Shops have to generate own traffic. Although there is a shop directory, most shops would need to drive traffic to the shop from social media, blog or other channels. As a new shop, this may be difficult as your fan base may be small. Also there is no search bar for customers to find you and your items.
• Not much of a community. Unlike Etsy, where there is extensive support system such as teams, forums, live labs etc it may be difficult to reach out to fellow shop owners for support and advice.
• No Phone or chat support. Big Cartel only offers email support Monday–Friday from 9am–6pm.

Shopify

Shopify launched in 2006 and today is home to over 120,000 shops that use the platform to sell online and to power retail sales in person.

Pros:

• Completely customisable shopfront. There are many store templates to choose from (both free or paid) and you can design your own template using HTML and CSS.
• Good value if you sell a high volume of high value items, as Shopify charges a flat fee per month and a transaction percentage depending on which plan you choose.
• Customer service is clearly at the heart of Shopify. Customer support via phone, live chat or email is available 24/7 as part of its monthly fee.
• Offers a range of payment gateways for checkout. Shopify can directly accept payments or else there’s the choice of checking out over 70 gateways to accept credit card payments.
• App store for third party apps. Adding more functionality to your store can help improve your sales, improve bookkeeping by integrating accounting features and allowing wholesale customers access to different pricing to name a few.

Cons:

• Shopify's fees per month can be expensive. Although they offer a 14-day free trial, the least expensive starter plan starts at $14 with other higher value plans available if more features are needed. In addition to the flat rate per month, there is an additional transaction fee, which may make it expensive especially for new shops starting out who may not sell that much in the beginning.
• Final payment must be taken in the shop’s default currency. Although goods can be browsed in their own currency, customers may get a surprise when the final payment is taken in another currency.
• Reliance on multiple third party apps can get messy. With varying levels of support, quality and costs, managing these may get complicated when you don’t have the option to customise to your liking.

Starting an online shop or have experience with one of these platforms? Tell us on Facebook, Instagram or Twitter.

{Note that this post was not sponsored by any of the businesses mentioned}.

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Monica Ng left her accounting career at the end of 2013 to run Geometric Skies, her Etsy jewellery business, alongside her jewellery and object design studies at the Design Centre in Sydney. Find Monica on Instagram @geometric_skies or at her blog.