Small Business eCommerce 101

This advice comes from working with online businesses since 2001, helping eCommerce self starters grow from zero to over a million dollars in annual revenue. It gives a macro view for those planning to build a business selling products or services online, at the small to medium enterprise level. The recommendations won’t apply in every case, but it will help in understanding the challenges and choosing an approach that works for you.

Choosing a Platform

An eCommerce platform is the software that enables you to sell online. There are many options but before you go comparing price and features, you should understand the main categories to narrow the search to your type and size of business. Starting small…

Hosted eCommerce solutions like Shopify or Squarespace remove the complications of managing the technical aspects, such as your store’s security, hosting and payment processing by providing an all-in-one service, normally for a subscription fee.

They provide a dashboard for managing content, catalogue and design and support most common payment methods. The predetermined offering may not work for those with unique needs, such as a non-standard business model or product type. This approach is best for those with a small catalogue, looking to get set up and start selling quick and easy, but the power to customise can be limited and may cause complications in the long run.

eCommerce Addons exist for most popular content management systems (like WooCommerce and Shopp for WordPress) allowing you to sell through a full featured site which you control. The costs of the software itself is limited to a setup and/or licence fee, but the cost of development, hosting and security make this a middle tier solution.

Adding eCommerce directly to your site makes sense for businesses that are more than just an online store or have a need to integrate the shopping cart with other site features, selling membership for example. This approach will allow an experienced developer to customise pretty much any aspect of your store’s operation or design to suit specific requirements.

Self-Hosted eCommerce platforms like Magento provide many advanced features “out of the box” while still giving complete control to the store owner. These systems will normally require higher end hosting and may require specific experience to configure and maintain the system effectively, therefore there’s more setup and ongoing expenses.

This type of platform gives store owners a range of powerful tools without being locked in to a specific model, for example the ability to connect large catalogues with external systems, to keep the online shop in sync with brick-and-mortar store operations and stock management. Their power is matched by their complexity and it’s advisable to find a developer (or agency) with specific experience to avoid getting drowned in configuration issues before you even begin selling.

The other thing to consider when choosing between the Addon or Self-Hosted approach is that the former is a content management system (CMS) with ecommerce attached, the latter is an ecommerce system with a CMS attached, so there will be limitations on whichever side is not the primary focus for the platform. For example ecommerce templating systems might not deal well with content other than basic pages, products or catalogues, where ecommerce addons might struggle to deal with complex catalogues or sales channels. If your needs are somewhere in the middle, you’ll need to figure out whether its easier to start small and build, or go big and pare down.

Taking Payment

Offsite Payment Processing options like PayPal and Stripe are often the first choice for starting an online business. They take care of the security for handling customer credit cards and charge a percentage and/or flat fee for each transaction (with minimal or no setup charges) and you can withdraw your balance as you wish.They may have tiers of service for handling the entire transaction through your site (if it’s supported by the ecommerce platform) but the most basic option is to send customers off-site to approve payment.

A common perception is that sending customers to an external service may break the continuity of the checkout process and risk cart abandonment, but if you’re just starting up it may actually be beneficial to rely on a recognised brand to establish trust.

Payment Gateways like Eway process transactions from your ecommerce platform and deposit directly into your bank account. They charge higher service fees and require you to have a merchant account with your bank, which comes with it’s own costs and conditions. Their per transaction fees are usually lower, so using a payment gateway can actually end up cheaper overall for a business with high transaction volume. Processing onsite allows greater freedom for developing your sales process, but you’ll need to ensure security of the transaction which increases the requirements for development and hosting.

Lastly, beware of banks offering bundled payment gateway services, because they may not be supported by your ecommerce software. A few major banks will have support in some platforms, but if you change either the platform or bank as you grow, you’ll have to find a new gateway provider too, so it’s easier to go with a dedicated and widely supported third party.

Domains, Hosting and Security

Choosing a domain isn’t rocket science, but be aware that the domain name and how it relates to your products or content is a factor for where your site will rank in Google searches, e.g. shoesbyjoe.com will have an edge over joe233.com. It’s not as big an edge as it used to be, but worth considering. Secondly think about where to register your domain. Your domain will exist for the life of your business and some providers make it difficult to transfer, so it’s advisable to use a third party provider instead of just going with whoever manages your hosting, email or ecommerce, because you may outgrow those arrangements. At least ensure that the domain service is separate and they make it easy to transfer away.

Hosting your own shop has many challenges, so get experienced advice to guide your decision. The cheapest option is what’s called Shared Hosting (at about $20 a month), where your site runs on a server with many (possibly a few hundred) other customer’s accounts. This might work for simple shop addons using PayPal or the like, but the limitations of shared hosting will cause problems for dedicated ecommerce systems, they don’t have the performance for bigger platforms like Magento and may not satisfy the security requirements for processing customer’s credit cards. Moving up to your own server can be expensive and you might need extra support to manage it, but compare it to the potential of losing revenue due to downtime or customers abandoning your cart due to poor performance.

It can be tricky finding a provider that will satisfy the trifecta of great support, technical capacity and value for money. In the Australian market, I can recommend Crucial for great value commercial hosting and Micron21 for the higher end.

Search Engine Optimisation (SEO)

SEO is the practice of structuring your site to be easily indexed and found on search engines like Google, but SEO services may also include paid search marketing (SEM) and analysis of site usage. That usually involves testing and drawing insights from traffic data to find incremental improvements that will help your customers find your products faster and ensure they follow through with the sale (i.e. conversion).

It is an industry in itself and there’s many resources and services to hone your site to the nth degree. Unfortunately due to these practices being so important yet relatively esoteric, there’s a lot of snake-oil offers or providers who say they “do SEO” but don’t have a considered approach, some provide no clear benefit but present as if they’re a mandatory addon to your platform or hosting. In my opinion there is no magic bullet automatic solution, it requires active and ongoing monitoring and analysis to do well and you need to be sure there’s a measurable relationship between cost and return. It pays to do your research and if possible find a provider you can trust and work with them to achieve results. When done well, it can be a major boon.

Starting out there’s some simple steps that don’t require a dedicated provider. First, find a trusted SEO plugin or addon for your platform, such as Yoast SEO for WordPress. Make sure you’re tracking visits with something like Google Analytics and use Google Webmaster Tools to check that your site is being indexed properly (you don’t have to do it yourself, just make sure someone is doing it). When planning your content, be aware of the main ranking factors for at least Google, since it holds around 65-70% market share for search, these change from year to year but the biggest bumps come from some pretty common sense measures. If people find your content relevant to their search and useful, they’ll click on your search results, link to your site, share your content on social media and spend time looking at your content. These interactions indicate your site is relevant to their search, which is basically what search ranking algorithms are trying to detect. If you can provide high quality, focused and relevant content and your site is structured according to current best practice you’ll be off to a strong start.

Planning for Growth

Regardless if you’re setting out to build a company or just a side business, obviously you’ll need a strategy. Digital Strategy is a field that has evolved to replace more traditional marketing approaches that weren’t comprehensive enough for the myriad of ways online business is done today. It’s not a science in itself but a grouping of disciplines and methodologies to apply in order to find an audience, build engagement and convert visitors into happy customers, then continue that relationship beyond the checkout screen to innovate and improve your level of service and customer satisfaction.

Your digital strategy is formed like a business plan, by looking at strengths and weaknesses and identifying actions and technologies that will implement and test your assumptions. Some key questions to begin planning would be;

  • What are the appropriate channels to communicate with and learn from potential customers?
  • How can you extend your brand identity into content and interactions with the audience?
  • Where does your customer’s experience with your brand begin and end?
  • Are there points along that journey where you can build a stronger relationship?
  • How can you enable customers to share your brand with new audiences?
  • What information is available to draw insight into the effectiveness of these activities?

A prominent component of Digital Strategy is the understanding and practice of improving Customer Experience (CX), but it can also cover issues of brand identity, social media, content strategy and marketing. Direct marketing via email is a common example where having a strategy can be important, because if used poorly it can alienate your market. Look at the cycle of customer engagement, as they go from disengaged to interested and active and how needs and interests differ between new and existing customers. If that evolution can be defined properly, marketing can be automated to send the right message at the right time, which can also include previous customers or people who failed to convert, to recover a lost sale (i.e. re-marketing).

 

I sincerely hope this helps get you started and please comment if you find the advice useful, or to offer corrections.

If you’d like to contact me to provide consulting or development on your eCommerce projects, view my deets.

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