Selling On-Line – Getting started

Introduction
The current economic climate increases the probability that lots of people will lose their jobs. As a result there is likely to be an increase in the number of businesses starting-up and looking to sell or trade on-line.

If you have aspirations to be the new Next or Marks and Spencer’s, the internet provides an ideal opportunity to have a go and test the waters.

Hold on, you might be shouting at the screen, I’ve looked into this selling on-line stuff and it’s way too expensive! How can I give it ago, without spending lots of money?

Well, try this for size. It is possible to trade on-line without it costing the earth and I am going to show you how.

So, where do you start – how can you do this….

Plan to Succeed
First and foremost you must have a product to sell and a sound business model in which to operate.

Ask yourself the following simple questions:

1. Will people buy the product?
We have all seen some of the crazy things people have sold on eBay – these are usually one-offs. You probably want to choose products that appeal to a wider audience and will remain appealing for a reasonable period of time. Often the more expensive an item is the longer it will take to sell – this could have implications for cash-flow.

Remember that you have to persuade people to buy your product. This means thinking about the sales pitch that you are going to make (on-line or in person) and choosing ways to best promote your product and your eCommerce site.

2. Are other people selling it?
The more competition you have the more pressure there will be on price and the harder it will be to make sales. Having a new or unique product, a distinctive brand, better customer service, more attractive packaging etc. may help you to differentiate yourself from rivals. Or you could try and find a unique product.

3. How much do I need to sell it for?
It’s okay being able to locate a product, but are people willing to buy at a price that you need to sell at.

Don’t just think about what the product costs you to buy. Remember there may be storage costs, shipping costs to you and from you to the customer, website costs and professional services fees (e.g. an accountant’s bill) to consider.

When you have clearly identified the product and your marketing message, why this great product will change your life you can start looking at the website and associated technologies to enable you to sell on on-line.

Taking Payment
One of the most aspects of trading on-line and the area that the B2B Centre gets most questions about is taking payment: the actual transaction.

Fortunately there are a number of low cost options for taking payment.

Some businesses may already have PDQ machine (and therefore a credit card merchant account) that could be used. It is important to understand the implications of taking credit card numbers on a website and the need to comply with the PCI (Payment Card Industry) compliance rules.

If you don’t have a PDQ machine then the easiest options for taking payment are eBay and Google checkout. Both systems enable the setup of simple accounts to take payment from the end user.

Options for creating simple payment facilities are;

1. Web Host on-line selling toolkits
A large number of web hosts provide easy creation tools for creating websites and a number of providers now enable selling of products, providing easy links into payment providers.

For instance 1 & 1 Internet Ltd. provides an easy create e-commerce toolset from around £10 a month. The toolset enables easy integration into eBay for selling on via multiple platforms.

These on-line tools will vary in functionality and number of products that can be listed. They are a great way to start for a small business as they have tutorials at hand, help and support and a raft of easy to define templates to provide a professional look and feel.

2. “Buy Now” buttons
If using eBay or Google to provide your on-line payment services, both sites provide the ability to generate “buy now” buttons that can easily be added to a product purchase page within a website.

This is probably one of the simplest forms of enabling eCommerce within an existing website structure. This facility enables the user to browse a product on a web page, click on the “Buy Now” button and be passed through to the payment provider to take payment. When the payment has been successfully made then the client is passed back to the website to continue purchasing.

The button is styled by the payment provider and in the case of Google and eBay they provide a tool to enable the end-user to place information about the product e.g. colour, size and cost.

3. Use eBay / Amazon
Both sites provide very cost effective ways to manage and operate an online ecommerce presence. You can set up a shop within eBay or list items as an Amazon supplier. Both tools take a commission fee dependant on how much is transacted from each order processed.

When embarking upon these methods you need to decide which business model best describes the product you are selling. For instance the majority of users buy from eBay because they perceive they are receiving a bargain – the environment expects users to bid against other users to obtain the product. eBay expect a certain level of selling on the standard site to have happened before they let you into the shop environment.

Amazon operates a “buy at this price model. Users expect to see items that are available for sale with no bidding. Amazon has two types of user account, standard seller or a Pro-merchant subscriber account. The Pro-Merchant account is aimed at people selling more than 30 products a month and enables bulk uploading of products. It incurs a monthly fee (of around £28) to add product.

When using either system ensure you understand the costs involved in using the systems. Both eBay and Amazon take a percentage off the selling price and charge a fee for selling.

Amazon
Individual seller: 89p per item – closing fee of 17.25% standard items and 11.25% for electronic / photo items

Pro Merchant Subscriber: monthly fee of £28 – closing fee of 17.25% standard items and 8.05% for electronic / photo items.

Ebay
The structure for charges on eBay is complex and depends on whether the items sells, how much it sells for. To view costs follow this link: http://pages.ebay.co.uk/help/sell/fees.html

All three methods for selling on-line provide a start to e-trading and can provide services to a small business for many years.

When Should I Upgrade?
The approaches outlined above are great ways to start. As your business develops then you will want to introduce greater sophistication in the way you use eCommerce and the internet.

For instance you may want to create effective “joined-up” marketing campaigns, optimize effectively for search engines and incorporate features such as cross selling and gift certificates.

When your site reaches a specific critical volume, it is probably time to invest more money into its development and move to a specific ecommerce selling solution, such as Actinic, Magento or Shop Creator.

When this point is reached please feel free to contact the B2B Centre in order to carry out a requirements specification exercise (West Midlands SMEs only) to outline the required functionality to be used by the site.

James Pennington is our specialist eCommerce advisor.