Having an online store has become essential for businesses to thrive and reach a broader customer base. However, creating a successful online store requires careful planning and attention to detail. Too many times we’ve seen big online shopping platforms boast about how easy it is to sell online without mentioning the preparation, research, and expenses that are required to do it properly.
In this article, we will explore some critical factors that every aspiring online retailer should consider before diving into the world of e-commerce.
Product Information and High-Quality Visuals
One of the cornerstones of a successful online store is presenting your products in the best possible light. High-quality photos and engaging visuals can significantly influence a customer’s decision-making process. Investing in professional product photography is a smart move, as it creates an aura of credibility and enhances the overall shopping experience.
Alongside images, ensure that you have detailed product information, providing crucial details about the product’s features, benefits, and use cases. This information helps potential buyers make informed decisions, leading to higher customer satisfaction and fewer returns.
Navigating the Complexities of Shipping
The two most common methods for shipping are calculated shipping and flat-rate shipping. Calculated shipping involves dynamically calculating the shipping cost for each individual order based on factors such as the product’s weight, dimensions, destination, and preferred shipping method. This method provides a highly accurate shipping cost that reflects the actual expenses incurred by the store for each shipment. Customers are charged based on their location and the specific products they order, resulting in a fair and transparent shipping fee.
While calculated shipping requires more setup and integration with shipping carriers, it ensures that customers pay the actual shipping cost and can lead to greater customer satisfaction. Online services such as ShipStation help simplify this process though accurate weights, dimensions, destinations, and even the details of your shipping materials are still vital to properly offering calculated shipping no matter which service you choose to use.
On the other hand, flat-rate shipping offers a fixed shipping cost for all orders, regardless of the size, weight, or destination. This method simplifies the shipping process for both the store and customers, as the shipping fee remains constant regardless of what’s in the cart or where it’s being shipped. Flat-rate shipping is straightforward to implement, making it an attractive option for small businesses or stores with relatively uniform products. However, it might lead to instances where the shipping cost significantly exceeds the actual expenses for lightweight or small orders, potentially resulting in lower profit margins for the store. Nonetheless, flat-rate shipping can be used strategically to encourage larger orders, as customers may feel incentivized to add more items to their cart to make the most of the fixed shipping cost.
Offering flat-rate shipping with a tiered pricing structure is a popular variation of the flat-rate method, designed to strike a balance between simplicity and cost-effectiveness. With this approach, the online store sets a higher base price for the first item in the order and then applies a lower additional fee for each subsequent item added to the cart. The tiered pricing structure encourages customers to purchase multiple products simultaneously, increasing the average order value and improving the store’s revenue. Simultaneously, it simplifies the checkout process and reduces cart abandonment rates by providing transparent shipping costs upfront. Store owners must strike the right balance in setting the base price and additional fees to ensure profitability while encouraging customers to make larger purchases. By fine-tuning the pricing tiers and regularly monitoring performance, online stores can create an effective shipping solution that benefits both their bottom line and customer satisfaction.
Choosing the right Payment Processor
Traditional brick-and-mortar retail tends to be dominated by companies such as Moneris, ATB, or whichever bank the business is using for payment processing. These companies also offer eCommerce plugins and tools allowing companies to utilize their existing payment processor with their online store. These services tend to have lower fees per transaction but will also have monthly and yearly costs associated with them making them potentially more expensive than services that charge higher transaction fees if your store doesn’t have enough monthly transactions.
For businesses just starting or those not generating enough sales to justify the monthly costs of premium services like Moneris or their bank’s payment processing, opting for solutions like Square, Stripe, or PayPal can be a game-changer. The transaction fees tend to be a little higher than the banks (As of the writing of this article, all three services were about 2.9% + 25 cents per credit card transaction) but they have no setup costs or monthly expenses, making them ideal for small to medium-sized businesses with limited budgets. These tools also tend to be easier to set up as they are designed for small businesses and online sales.
We’ve found that the breakeven point for traditional merchant processors with their monthly fees is about $10,000 in credit card transactions per month. If your store is averaging less than this per month, Square, Stripe, or PayPal usually work out to be the more affordable option.
Customer Support and Return Policies
Customer support is a vital aspect of any successful online business. Make sure to provide multiple channels for customers to reach out for help and be prompt in responding to their inquiries. Additionally, having a transparent and fair return policy will help build trust and encourage potential customers to make a purchase. We recommend to all of our online store clients to have a Shipping and Returns FAQ to give customers quick answers to the most common questions they receive and reduce time spent answering calls or emails about orders.
Building an online store can be a rewarding venture, but it requires careful planning and attention to detail. The famous quote by Benjamin Franklin holds true to this day. ‘If you fail to plan, you plan to fail.’ By ensuring your product information is comprehensive, embracing reliable payment processors, and addressing shipping complexities, you’ll be well on your way to creating a successful online store that stands out in the competitive e-commerce market.
