We present the reality of online selling.
Running an online store involves far more than simply launching a website. Many eCommerce businesses fail due to poor marketing, low online visibility, pricing issues, strong competition, and ongoing operational costs.
There are a lot of things to consider before you begin running an Online Store. "A collaborative research project completed by Forbes, Huffington Post, and Marketing Signals, found 90% of all eCommerce (online only) businesses fail within the first 120 days of launch" (Comma Consulting)*1. The reasons given were:
We have found the following issues contribute to failure as well and should be considered before taking on a project.
Before starting, businesses should carefully consider expenses such as hosting, platform fees, advertising, shipping, and payment processing, as well as the time required to manage product listings and maintain the site.
Running an online store involves ongoing costs such as hosting, platform subscriptions, and website maintenance, which should be factored into your long-term budget.
Investing in an Online Store is not a one-off payment, each year you need to pay fees to keep the site running, called hosting fees. On average you will have to pay around $300 or more for website hosting. Shopping carts like Shopify charge a monthly fee based upon how many features you need. This can range from around $50 per month to $1000's per month. This does not include updates to your Website, that if you are uncomfortable doing yourself will need to be done by a trained professional.
Product pricing should account for ongoing fees and payment processing costs, as these can reduce profit margins.
Each year or month you will need to factor in the above fees into your pricing structure. On top of this are credit card fees, if you accept credit card payments this can be as high a 3% of a transaction. All these things will need to be considered when dealing with markup, and prices.
While SEO can improve visibility over time, most online stores need to invest in paid advertising early on to attract visitors and customers.
Although good SEO can help you be found on Google, it often in the early stages does not result in free customers. It is usually a fact that you will have to pay to get people to visit your site. This can be very expensive, i.e. on average to get one customer on your site, at the time of writing will cost between $1 and $2 per visitor. Some of these visitors result from accidental clicks, so in reality you are paying more than that per visitor.
Creating product listings can be very time-consuming, particularly for stores with large inventories.
One thing that most people do not consider is it takes a lot of time to add product listings, to price, format images, and generate descriptions can take between 15 min - 1 hour per product. That may seem a little steep, but it is not. Consider how many products you will need to add to your site, then calculate the time cost for adding them. This can blow out your project.
Shipping costs, especially for large or bulky items, should be factored into your pricing structure to maintain profitability.
Shipping for large and bulky items can be very expensive, you may want to sell an item cheaply, but if your shipping is not taken care of you could stumble, you will have to factor shipping into the pricing structure before you begin.
We can not guarantee financial success, but we will do our best to help. We create and configure professional eCommerce websites that are ready to sell online, including payment setup, promotional content, SEO enhancements, and basic shipping integration. We help businesses establish a strong online presence by setting up and customising their store, while guiding them through important areas such as policies, pricing, and shipping options. Our service includes assistance with the first 10 product listings to help get your store launched and operating smoothly.
We will set up the site to the stage that it is both able to add products, and process payments. This includes setting up payment processors like PayPal. We will investigate the best payment methods for you to use.
We will set up advertising banners and text, and any text descriptions that you want on your site, basically your promotional text describing your company. We do not however generate sales and returns policies, or any other policy document, although we can guide you through the creation process. After you have created your policies we add them to the site.
Where possible we add SEO schemas to your product listings and ratings, which help search engines to understand your content.
We will work on your first 10 products, images, and descriptions. But we do not add more than 10 product listings to the site, this includes uploading images for the additional listings, or creating product descriptions. This is due to the large amount of time it takes to add the listings to a store, usually 30 mins - 1 hour each.
We do not calculate your pricing, shipping, or markup, this is a mission-critical task that we are not trained in, however if you are unable to do it we can assist with basic formulas. We do however set up any shipping calculators you wish to use. Some stores can not calculate shipping (often the cheaper ones) and require you to add shipping into your prices.
*1 - THE TOP 10 REASONS WHY 90% OF ALL ECOMMERCE STARTUPS FAIL WITHIN THE FIRST 120 DAYS, Comma Consulting, viewed 20 October 2022 at <https://www.commaconsulting.com.au/articles/the-top-10-reasons-why-90-of-all-ecommerce-startups-fail-within-the-first-120-days>
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