The Complete Guide to Selling Online
How to Sell Online?
Advancements in technology and the internet have made eCommerce a necessity in today’s world. As a result, traditional businesses are being replaced by innovative practices and techniques and are moving online. Even if a business maintains a store or office front, their online presence is essential to thrive.
Running a successful online business entails more than just having a website or posting items for sale on an e-platform. To learn tricks of the trade, essential secrets, and key points, read this in-depth guide that our online accountants have developed working with our e-commerce clients.
Critical Elements of Selling Online
There are many critical elements of successfully selling a product or service online. Your time and money are two such important investments, its important to figure out whether selling online will work for you in the long run or not.
Our accounting team has listed various elements of selling online to help you decide whether an online business is worth pursuing or not.
- If your business is completely online you can have a flexible schedule to suit your needs. Whether you are selling a service or a product, having a completely online business saves you commuting time as well as flexible working hours.
- A successful online business makes you money even while you sleep, this depends on how good an operational eco-system have you built.
- E-Commerce platforms make it easy for you as a business owner to post your services or products online. You don’t need to develop a website or be an expert at using technology. These platforms come with built-in marketing apps and plenty of other add-ons that can help you promote your products or services.
- If your business is entirely online, then you don’t have to worry about storefronts. The extra overheads you would traditionally spend on setting up a store can be redirected to expanding your business online.
- Competition can be high if you are selling generic products online at average prices, which might require you to differentiate your product.
- It can be hard to distinguish your products from the competition, especially if they look similar.
- Many e-commerce platforms allow your customers to rate and review your products, so when a customer is looking for a particular product, they will most likely go for the product which has the highest positive reviews.
- Selling products online means that logistics, customer service, enquires, etc. need to be handled as soon as possible and in an organized manner.
How to choose the right eCommerce Business Model?
Before you decide to open an eCommerce business, it is imperative that you look at all the different eCommerce business models and evaluate the pros and cons of each. Every model requires different levels of investment in both time and money. Once you select a model, it will help you determine the structure of your business.
Speak to an experienced business accountant to help you decide which eCommerce business model is the best fit for you. A business advisor will provide useful advice by guiding you through the advantages and disadvantages of each business model to help you determine which is best suited for you.
Below are the different eCommerce business models:
- Dropshipping: What is Dropshipping?
Dropshipping is a popular eCommerce business model. As it doesn’t require sellers to place a large bulk of orders or keep excess stock, instead, your supplier will be responsible to manage the logistics of the products you sell.
How does Dropshipping work?
Step 1: Your customer places an order online on your website or online store.
Step 2: The order for that product is placed with your supplier automatically.
Step 3: The supplier receives and prepares the order on your behalf and sends it
directly to your customer.
Dropshipping is becoming increasingly popular for online businesses. However, not all products can be drop shipped and you don’t control logistics for your products. Hence, it’s important for you to understand your business needs before you select dropshipping as your trading structure.
- Wholesale Sourcing: What is Wholesale Sourcing?
Another eCommerce business model involves acquiring products from a wholesaler. This model is quite similar to the traditional retail business model. Sourcing from wholesalers is mostly used by brick and mortar stores and is being embraced by many eCommerce stores around the world.
How does wholesale sourcing work?
Step 1: Select which products you will sell
Step 2: Contact wholesalers who can provide the product to you
Step 3: Put product on your website or an eCommerce platform
Step 4: Customer places order
Step 5: You process order and ship to customer directly
The biggest advantage of sourcing from wholesalers is that you can purchase a bigger bulk of products at a relatively lower price as compared to what you would pay through the dropshipping model. Sourcing from wholesalers lets you enjoy higher profit margins.
After purchasing the desired quantity of products, you have to decide how you are going to store and ship it to the customers. You have the choice to make any kind of arrangement for storage, listing your products online for sale, and shipping them. You can also use third-party fulfilment services like Amazon FBA to ensure quality packaging and hassle-free shipping for your products. But do keep in mind that you would have to sacrifice some portion of your profit share to pay the third-party for their fulfilment services.
Even though sourcing from wholesalers model might require you to put in extra time and effort as compared to dropshipping but the level of profits expected are guaranteed to be higher than those expected from dropshipping.
- Sourcing from manufacturers: What is Sourcing from Manufacturers?
Sourcing from manufacturers is quite similar to sourcing from wholesalers business model but instead of purchasing a bulk of products from the wholesaler, sellers work with a manufacturer to create customized products and list them online for selling. You can even produce private label products if you work with manufacturers.
Unlike dropshipping, you will be required to make an initial financial investment as you have to create a product from scratch. This model allows sellers to build their own brand and sell their own unique product which we believe can be very beneficial if the seller has long-term plans to continue their business operations online.
However, there is a lot more to consider when adopting this business model because product development requires management of multiple factors like packaging, testing, designing, and much more. Sourcing from manufacturers might be the perfect option for you if you plan to establish your business as one of the market leaders in the long-run.
Selecting the types of products to sell online:
There are generally two types of products you can sell online:
- Commoditized products: What are Commoditized products?
Commoditized products are products that are high in demand. They can either be physical or digital goods or services. These products are needed by almost everybody. Commoditized products cover the major portion of total online sales. For example, cellphone chargers, tissue paper, toothpaste are commoditized products.
- Niche Products: What are Niche products?
Niche products are goods or services that are targeted at a specific customer base. These products are usually made in small batches or may just be created on specific demands of the customers. Leather Ipad cases, gold-plated mobile covers, handcrafted jewelry are some of the many examples of niche products.
An online seller can sell both types of products to increase their profit percentage. Commoditized products have a lower profit margin as there is more competition. Whereas, niche products usually enjoy a higher profit margin as competition isn’t as big.
We recommend startup online businesses to offer a mix of commoditized and niche products to their customers along with providing an on-brand experience to increase their chances of success. It makes it easier for customers to choose a range of products from a single store, instead of spending time and effort to look for similar products from different online stores.
How to select the best products to sell online?
Selecting which products to sell online can seem like a daunting task, that is why our accountants have created a product brainstorm checklist to help you navigate through the vast amount of options selling online can provide.
Here is a step-by-step guide to help you choose the best products to sell online:
- Identify or develop a product that fills a gap in the market.
Identify a gap in the market, you should draw inspiration from your personal life to see what products can make your life easier. The product or service should address a particular problem or fill a gap in your target market.
For instance, an online trader has multiple screens to keep an eye on. The trader might struggle to keep up with personal texts or emails on their cell phone as looking away from the fluctuating prices for a single second might make him lose money. To cope with this, traders should have a gadget that makes it easier to manage their phone call, texts, or their schedule. An electronic watch that synchronizes and optimizes with the cellphone might help. This is exactly how a seller should identify a problem and offer his service by offering a product that is able to address the problem efficiently.
Your product doesn’t need to be extremely sophisticated, huge or complicated, a simple yet effective item can do the trick. After all, your product should be something that is simple to use to help customers save more time.
Startup online businesses struggling to generate new product ideas can find opportunities by:
- Offering improved and advanced product features for existing products
- Pinpointing a new target market that has not yet been realized by the competitors
- Identifying unique product positioning and marketing
Speak to our startup accountants to learn more about lucrative opportunities and product investment in the eCommerce industry to increase the profitability of your online business.
- Select products that you and your target market is passionate about
Getting a business up and running is not as simple as one assumes. It requires hard work.
We recommend new sellers to find products that you and your target customers are passionate about. Your passion will not only increase the chances of your success but will also help develop a brand image that communicates your passion to the customers in a unique, meaningful, and engaging manner.
- Search for products with high branding potential
Once you have successfully identified the best product you should now work on developing a brand that can make a place in the competitive online market space.
Developing an eye-catching and memorable brand will require you to put in extra time and effort to research and get a comprehensive understanding of your target market.
Here are some questions you can work around to develop an effective brand:
- How do you plan to position your product in the market?
- How will you address the target audience?
- How do you plan to design your webpage to deliver your brand message to your target audience?
- How will you price your product?
Just remember that you increase your chances of success multiple times if you are able to leverage your product to create a purpose in the community.
- Be trendy in your approach
You can also make your online business successful by using an emerging market to create a name for your brand. To do this you will need to keep a close eye on the latest updates and trends on new products and services. Stay updated on the latest trends and then launch your product to capitalize on new trendy products before they hit their peak sales.
- Identify and develop products for niche segments
Serving niche segments can transform your business into a success story. This is because customers of niche segments are easier to engage. Developing a product for a niche segment can be highly profitable for your business because you develop a product that addresses the concerns of a highly passionate segment of the target market. Also, niche segments typically don’t have very high competition, so it’s easier to develop a brand name and brand loyalty.
We have listed down 10 ideas sellers can utilize to develop niche products for selling online:
- Healthy, organic foods
- Handcrafted beverages
- CBD products
- Men’s jewellery
- Subscription packages
- Veterinary products and animal food
- Organizers and personal planners
- Animal cruelty-free cosmetics
- Camera equipment attached to high-speed drones
- Fitness wear
- Keep looking for growth opportunities
As an entrepreneur, you have to push your imagination in order to search for new lucrative business opportunities. Figure out what traditional practices and norms need to be changed or updated. Search for opportunities that can improve the lives of the people around you. Stay updated on the latest business trends to discover new business opportunities.
Ensure that you follow an organized and informed approach when searching for the best products to sell online. An organized approach can help you make your business successful in the long-run.
After completing your product research and selecting which products to sell, you need to execute the following before you begin the next steps:
- Conduct extensive market research
- Finalize products you wish to sell after research
- Identify your customer base and segment your audiences
- Decide what eCommerce platform or websites you are going to use
- Create high-quality product descriptions and packaging
- Finalize a marketing strategy to sell your products
Video: How To Sell Online?
Watch the video to learn how you can sell your products and services online and which platform is beneficial for your business.
What is eCommerce?
eCommerce is an umbrella term that covers anything that involves selling and buying goods or services online.
What makes eCommerce the perfect choice to begin with?
eCommerce allows anyone to sell products. Depending on which eCommerce business model you choose to implement, you don’t need huge amounts of money to begin your venture. eCommerce also enables the seller to not be bound by store timings, your products are available for purchase 24/7 in the digital realm.
But what makes eCommerce so great? The success and popularity of eCommerce is primarily owed to two reasons.
- The barrier to entry is extremely low
eCommerce offers people to trade with minimal risks involved. Unlike brick-and-mortar businesses, individuals can start marketing and selling their product without making heavy capital investments. Opening a physical store requires businesses to spend money on things like rent, repairs, furniture, staff, inventory just to name a few.
- Audience reach
Unlike the limited audience reach and distance barriers associated with running a brick-and-mortar business, eCommerce provides sellers with an opportunity to connect and sell their products to audiences around the world. You are not limited to one specific region, district or vicinity. eCommerce also allows sellers to hone in with their target market and sell their niche product no matter how customized or specific it is.
The two most popular eCommerce Platforms are:
Details for selling on Amazon
Amazon is the world’s largest eCommerce platform. Reports suggest that Amazon generated about $2.8 billion in the third quarter of 2018. The number of Amazon users increases every year. According to a study released by Marketplacepulse, in 2019 there were upto 2.5 million sellers on Amazon. It is estimated that at least 25,000 sellers on Amazon earn more than $1 million in sales and about 200,000 sellers who earn more than $100,000 in sales.
Related: Learn the secrets to starting and growing a business selling on Amazon curated over the year by our Amazon Accountants, in our article here. We also share the best tools being used in the industry .
Everything you need to know about selling products on Ebay
With over 182 million users worldwide, eBay’s platform handles over 250 million searches every day.
Ebay brings together buyers and sellers from across the world onto a single platform. According to eBay, their Cross-border sales constitute about 20% of total sales, which makes it an intense competitor for Amazon.
Ebay is an auction platform for purchasing and selling products online. It’s a haven for retailers around the world as it allows them to sell their goods and services online. Statistics reveal that over 50% of auctions on eBay lead to higher sale prices as compared to its ”but it now” price option.
The total fees for sellers are divided into four sections on ebay: insertion fees for product listing, final value fees, advanced listing upgrade fees and supplemental services fees.
You can learn more about eBay’s fee structure by visiting their website.
Our eCommerce specialist accountants have observed that sellers who use professional high-quality pictures of their products tend to grow their revenue faster. As your products will only be displayed on a screen, it’s critical to take high-resolution pictures from all angles. Ensure that there are no shadows or glares that might compromise the quality of the picture. Having better-detailed descriptions tends to inflate revenue growth even faster.
Social media platforms
Social media platforms are becoming as popular as eCommerce platforms to conduct business nowadays.
The best social media platforms have been stated below:
- Facebook: All there is to know about selling on the Facebook Platform.
As the world is becoming more plugged in, having a business Facebook profile is as important as having a website, if not more. Statistics by Sprout Social reveal that over 1.62 billion users around the world use Facebook on a daily basis. Due to the sheer number of users on Facebook, it has the potential to be a great avenue to sell products online.
If you plan to utilize Facebook for your business, speak to a good social media advisor to get your FB business page up and running.
Businesses can utilize Facebook by:
- Integrating their online store with their Facebook business page
- Posting links of their products on their FB Timeline and Photos
- Generating traffic back to the online store you have integrated with your Facebook business page via Facebook Ads
- Connecting you with potential buyers via Messenger. It now supports payments as well.
- You can also utilize the Facebook Marketplace to list your products
Related: Did you know Facebook was thinking to launch its very own digital currency ‘Libra’? Learn more about ‘Libra’ and what it could have been on our blog here.
- Instagram: Everything you need to know about selling on Instagram
Instagram, like Facebook, is an extremely popular social media platform. According to the 2020 statistics revealed by Oberlo, Instagram has over 1 billion monthly active users with 71% of the total users on the app are under the age of 35. It is actively used by young entrepreneurs and many leading businesses to maximize their sales and reach. It has been estimated that Instagram can generate over four times more interactions as compared to Facebook. The study also reveals that Instagram assists over 80% of its users in buying a specific product or service.
Selling on Instagram involves uploading constant content to engage with potential customers. Instagram is more visual then other social media platforms, so it’s essential to include your website and other important information in the Bio. However, keep your descriptions short to keep customers engaged. It’s also crucial to add relevant hashtags to each post, this is how you will generate traffic towards your IF business page.
To market and sell your products on Instagram, our startup accountants recommend:
- You can utilize a third-party application like Shopseen to create your Instagram business page. Third party application services can help turn yourIG account into a digital shopping place. The third-party service providers can synchronize your inventory directly to the IG business page.
- You can also put price tags on your product posts to make your Instagram shoppable. By adding product price tags, you can make your Instagram business page look more like a shopping magazine.
- Pinterest: Everything you need to know about selling on Pinterest
Pinterest was initially a platform for artists like textile designers, but over the past few years, the pinterest community has grown to include various types of users with interests like writing, cooking and baking, painting, sketching and much more. Stats released by KPCB reveal that Pinterest is the ideal platform for shoppers in the US and has a user turn rate of 55% which is much higher than the turn rate of Facebook and Instagram, which is only 12%.
Statistics also reveal that sellers who provide artwork and jewellery are most likely to earn much more than other users selling different products on Pinterest.
To begin selling on Pinterest, you’ll have to make a seperate business account. You can also use Promoted Pins to help advertise your products. By advertising your products, you give people the opportunity to follow your business account and purchase your products.
For every product you want to sell, you should have a separate pin for it. The pins for related products should be put on the same boards.
- Reddit: Everything you need to know about selling on Reddit
Reddit might not be the first social media platform of choice for many people who wish to pursue online selling, but with over 330 million active monthly users, Reddit might be the perfect choice to expand your market reach and increase your sales.
Almost half of the content added on Reddit contains promotions and external links. You can add promo links on your product description to let the target audience view your products and see what they have to say about them.
- Whatsapp: How can you use Whatsapp to sell online?
With over 2 billion users worldwide, Whatsapp is one of the most popular applications in the world. Whatsapp is becoming an essential component of communication in the business world as it allows businesses to provide proactive customer support.
Studies reveal that an average user visits whatsapp about 23 times on a daily basis. The statistics on whatsapp usage also reveal that whatsapp is opened around 34.5 billion times by users all over the world.
As the business competition gets tougher day by day, more businesses are now considering whatsapp as one of the essential components to integrate into their marketing strategy to maintain a healthy level of communication with their customers and other businesses.
Whatsapp opens multiple new ways to ensure customer communication and satisfaction by staying connected with the customers, sending timely notifications on purchases or sending pictures of your products to let customers view your product in detail. It also lets you send voice notes to your customers, keep your customers updated on deals and discounted packages along with dealing with any kind of customer query.
If you are using Whatsapp for business, you can keep other businesses and customers updated on anything by activating automated notifications. Automated notification features can send out templates, greeting messages or pre-written replies to deal with any kind of customer or business query.
Whatsapp provides a very user friendly interface that lets you organize all your important conversations and chats into specific groups with limited audience. Plus you can also keep track of your messages to check whether they have been sent, delivered or read by the recipient.
Clear House Accountants are professional Accountants in London, who have trained an expert team of e-commerce accountants in their Accounting firm. Our Accountants help new and growing online businesses to stay compliant while implementing smart solutions to enable them to grow faster.