Starting an Ecommerce Website? Answer These 11 Questions First.

Tips for more successful online shopping websites

Online shopping with tablet
Online shopping with tablet.

Ecommerce is big business. Year over year, online shopping continues to grow with no end in sight for increasing online sales. If you have something to sell, it is very tempting to want to grab a piece of that online market and start your own Ecommerce site, but creating a successful online store is much more challenging than just launching a simple website. Before you take this leap, here are some of the things you should know and the questions you must answer about your proposed Ecommerce website.

1. What are you selling?

The first step is to determine what exactly it is that you are offering for sale. Understanding what you are selling will help you determine what features your Ecommerce site must have. If your products have variables, like clothing items that come in different colors or sizes, then the ability for customers to select those choices must be included in the site’s feature-set.

2. What’s the online competition like?                                                 

Take a look at other sites that offer products similar to what you hope to sell. What are they doing right? Is there something that can you do better? Is there enough of a market to compete against this company and whatever head start they may have on yours? As a new Ecommerce site, you will be hard pressed to compete against the Amazon's of the world, and even a small, but very successful competitor can shatter your chances at success.

Understand what you competition looks like before you make an investment in an Ecommerce site and be sure that you can compete in that space.

3. How will you handle shipping?

Shipping is one thing that many companies struggle with when setting up an Ecommerce strategy. First off, the items you sell must be able to shipped, both legally and realistically.

If you sell antique furniture, it may be a challenge to get that in the mail. If you sell alcohol, certain places will not allow you to ship that product. 

Even if the items you offer are legal to ship and of a size that makes them easy to do so, those costs must be calculated into the prices or you must charge for it separately. This means you need to determine how those costs are calculated. Is it based on weight? Distance? Likely it is a combination of both. 

Many Ecommerce platforms allow you to tie into existing cost tables for major shipping providers like USPS, UPS, Fedex, etc. Even if your site will have this connection, you still need to figure out how you will handle the shipping of these items before you get started on site development.

4. How will you charge for sales tax?

Different states have different rules for sales tax, and the regulations surrounding online tax collection are a hotly debated topic. You will want to speak to your accountant about what you should do on your site regarding sales tax collection. At the very least, you will likely need to charge sales tax for any products shipped to the state that your business is actually located in.

5. Do you have inventory?

If you have a finite quantity of items for sale, you may want to use some kind of inventory control on your site so you do not disappoint customers who place orders for product you do not have available.

Many Ecommerce platforms have this feature built in, but not all of them do. If inventory is important to your business, be sure to look for a software platform that includes inventory control and management features.

6. What is your plan for customer service?

If you have customers, you will have customer problems. You need a plan to handle those problems, from answering questions to dealing with people who are upset. You want to make sure you have a plan for address customer service issues before a site is launched, not after it has gone live and those requests start rolling in. 

7. How about refunds?

One of the service requests you will likely field is dealing with upset customers may want a refund. How will you handle these requests? Who pays for return shipping? How about if an item is damaged in transit?

What is your policy for those situations? You must have rules in place for how you will address these problems before you begin selling online.

8. How will you process payments?

The whole point of selling products online is to get paid, so you need a way to do so. There are a number of 3rd party solution that offers these services for a fee.  Part of what you are paying for with these fees is security, which is a critical aspect of Ecommerce.

9. How will you secure your site?

There are rules for security compliance that all companies accepting sensitive information online, like credit cards, must adhere to. Failure to follow these rules can result in significant fines, not to mention the damage that will be done to your company’s reputation should your customers’ trusted information become compromised. Because of these security rules, you cannot simply accept credit card numbers through an unsecure form on your site. You must follow established protocols and secure these transmissions.

10. Do you need to connect to financial software?

If your site needs to report sales data to whatever financial software your company uses, that will be an important consideration as you evaluate possible Ecommerce solutions. If a platform does not already connected to your financial software, like Quickbooks, then you will need to have "middleware" developed that will make that connection for you. This custom development can greatly increase the cost of a project, so you should be mindful of this from the get-go of a project.

11. Is a 3rd party solution viable?

You can build an Ecommerce solution from scratch, but in this day and age, that is rarely the best course of action. There are many 3rd party platforms and CMS options that allow for robust Ecommerce functionality. In many cases, these platforms will help answer many of these questions posed in this article. They will include modules for shipping, sales tax, inventory control, and more – and they will connect with payment processors to handle transactions in a safe and secure fashion. You can also consider whether an existing Ecommerce marketplace, like eBay or Etsy, may be a better choice for you to get started with than setting up your own site.

In Closing

Ecommerce can be a powerful addition to your company’s sales initiatives, but as common as online shopping has become, there are still many questions that must be addressed in order to do it correctly. By asking the 11 questions covered here, you will be on your way to determining what the best direction may be for you company’s Ecommerce aspirations.

Edited by Jeremy Girard on 1/7/17