How to Start an Online Shop from Scratch – Ultimate Guide, 2018

You must have decided to start an Online Shop because you may have heard it is very easy to “Sell Anything Online” whether a Physical or Digital Product and or Service.
Wait a Minute…
Obviously you can make an online shop yourself or by hiring a developer spending a few bucks and start uploading your Product details. But did you ever imagined where you can find your Buyers and how easily you can manage the complete selling process?

There are lots of Planning and Homework before starting an Online Shop. Do you know all these nitty gritty details properly? I guess No! and that’s why you came here. Read on the real game is starting.

Whenever you think of an Online Shop the first name comes in your mind is Amazon. Right?

Every entrepreneur dreams of to become Amazon one day. If you dig into the history of Amazon, you will find they first started selling hard-cover books only; later they included all essential things for daily needs one by one.

So, start concentrating on what you have to sell and how. In this Ultimate Guide I am going to show you the exact process of “How to open an online store step by step?”

Different Online Selling Models:

• You have some Handmade or Manufactured Physical Products to Sell
• You want to be Online Retailer to Sell other’s products
• You Sell Services Online e.g. any booking or Subscription service
• You want to Sell some Digital or Virtual Products like Books, Courses etc.
• You want to become “Drop shipper” to Sell other’s products.
• You want to build a Marketplace to gather other Sellers to sell their stuff.

In this following topic, I am going to cover the first option. All other options I stated above is somehow similar with it but has some additional customisation and tips. I shall discuss them later. Here I guess, you are a craftsman and made some unique physical product which you want to sell online.

What are the Physical Products?

Physical Products means Products which can be touched or tangible, solid, dust or liquid state in a container, build with some materials, has a height, weight and dimension and can be shipped to the customer after sale physically. These are not similar with other Digital or Virtual Products, which can be used, downloaded or subscribed immediately after purchase and payment.

Read more : 10 Tips for Choosing a Better Physical Products to Sell Online

How to Sell Physical Products Online?

Let’s say, you are an Artist who crafts some designer Jewelery or some decorative items. You want to Sell them online to potential buyers who appreciate arts and crafts.
In this scenario, you have two options available. Either Partner with or become Seller/Vendor at some Marketplace websites like eBay, Etsy, Amazon and so on or Launch your own online Shop.

There are Pros and Cons of both options available. I shall discuss them in details here.

9 Pros and 13 Cons of Selling at Online Marketplace

12 Pros and 5 Cons of Selling at Your Own Online Shop

Many people still think, just build a website and upload products (means Product Images and description from elsewhere). Buyers will automatically come, see their products and eventually Buy from them.

Simply this is NOT true. Lots of planning and hard work is involved in between.

When you start any form of Physical shop anywhere in this World, you must have some pre-requisites. Similarly, an Online shop has some. We can relate requirements and expenses online vs offline to the similar manner to remember easily.

 

Online Shop and Offline Physical Shop Similarity and Differences

Criteria	Physical Shop	Online Shop
Market	Local Market	Anywhere in the World
Land	Buy or Rent Property	Buy Hosting and IT Infrastructure
Name	Store Name/ Brand Name	Domain Name
Furniture and Decoration	Buy all or Hire Carpenters	Website Developer & Designers
Products	Buy/Make Physical Products in Bulk	Buy/Make One Physical Product and get Images and proper description
Selling Stuff	Employ Shopkeepers	Hire SEO Services
Advertisement	Banner, Hoarding, Paper, A/V Ads	Online Marketing, SMO, Email Newsletter
Payment System	Cash, Cheque, POS	Online Gateways, COD, Bank Transfer
Product Shipping	In Store	By Mail and Currier Services
Return & Fault Management	In Store or via Service Centres	By Mail and Currier Services or via Service Centres

I shall discuss now every criterion mentioned above step by step and how to get most out of them in terms of lower expense, availability, strategic planning and greater profitability.

Grab some coffee to understand every point clearly.

Planning Framework for your Own Online Shop:

Take some paper and pen to answer these 10 questions yourself first:

1. What I am going to Sell?

   Hint: Product Categories, Specific Products etc.

2. What is my Buyer’s Persona?

   Hint: Male/Female, Age group, Education, Literacy Level, Nationality, Mother Tongue or Language, Income level, spending habits, Most gathering places, hobbies and Technology awareness level. (This step is very important to depict your possible buyer group!)

3. How my Product/s best fit to them?

   Hint: Product Usability + Competitive Advantages over other same type products.

4. Have you set your Product Price yet?

   Hint: Set your Profit Margin minimum over 6% than purchase or production cost + Additional 10% for Shipping and Delivery + 2-3% for Gateway fees + Approximate 12-15% for overall Marketing. Or in total over ~35% on total product cost!

5. Have you fixed some budget investment for building your shop?

   Hint: Plan minimum for 2 years before seeing any profit and add 30% buffer (means extra cash in hand) over your total budget. Remember not any big business grew overnight!

6. How you will deliver products to the buyers?

   Hint: Think about where you want to serve and find currier and postal services which are available to the area; compare rates and contact them. If COD (Cash on delivery) supported or not

7. How you will replace or give service to faulty and damaged products?

   Hint: Product Insurance by Currier, Service centres /home service staff or return policy.

8. What are some competitors’ websites and why you like them?

   Hint: Search your product category online and take close looks to some websites. You can get an idea which are selling better and why. Write what thing you like in which website and why.

9. How you planned to develop your website?

   Hint: Hire Developers and Designers or DIY (Do It Yourself). YES, it is possible to DIY in very low cost and technical complexity. I shall show you how later.

10. What are your plans on Marketing?

    Hint: SEO, SEM, Online Advertising, Lead capture and Email Marketing. Don’t worry if you can’t answer these now; I shall help later on these all.

 

If you have completed answers for all the above questions, Congrats! you have done your Basic Business Plan. If you stuck on any question you can freely ask me anytime at comment section of this post.

Now I shall go back to the Requirement Table section above and discuss them one by one.

Market for Your Online Shop

As you relate with Physical Shop in a proper local Market or Bazaar, Your online shop is not bound to a specific location and only to serve a handful of customers. Anyone can open any online store anywhere in this World but you need to consider some hurdles and obstacles when selling online as follows:

• Delivery of Product: You have to rely on Currier services to deliver your product. So, make sure which one you are going to partner with. Are they will Pick-up the product from your location and deliver anywhere in this world? Or they only serve some local market? Consider charges and fees also.
• Product Restriction: There are restricted products in some Country and Culture. Check before selling with your target country administration.
  Currency Conversion: Is the currency of your targeted country is convertible to your local currency? If yes, then proceed otherwise don’t.
• Language: Check whether the country speaks the same language as you or other. If not same, then you have to use Translation service and your website or shop needs to support Multi language. Also, your Customer care service needs the same language speaking staff to communicate with buyers.

 

Hosting & IT Infrastructure for Online Shop

For Online Shop, you don’t need to buy or rent a large, costly place in the market area. You can start from your home also. Before starting your online shop get permission or business licence from your local Government authority to avoid legality questions afterwards.

I have mentioned your IT (Information Technology) setup similar to “Land” to remember easily. Here come the most complicated requirement Hosting and IT Infrastructure where most people freak out in fear of heavy investment.

Please don’t freak out! I know how difficult it is to invest a large amount on something as a Start-up. I shall show you all the ways from least to the most expensive setups and why and when you need them. Stay with me.

Our main goal for this blog post to know how you can start an online shop. There are various ways to do this as follows:

1. Using “FREE Website Template”:

Most of the well-known website hosting providers give you access to “Easy to Edit” Website Templates. You can use this templates to build a website yourself and add some product pages with images and description text. Then you can add “Pay with PayPal” button beneath the product description or beside the image. PayPal only needs your email address linked to your bank account to receive payments for your products.

This is the most basic and cheapest option to build your e-shop. It is suggested when you have only 1-3 types of product in your inventory to sell and have an extremely tight budget. Later when you save enough money to move on you can go for other options like below.

Here are some Hosting providers who provide Free Website Templates:

• SiteGround
• BlueHost
• DreamHost

Advantages are : This option is Least Expensive. You can only have Simple Basic Features, Basic Technical Knowledge required.

Disadvantage: Not much Upgrade-able.

2. Using “Drag-and-Drop” Website Builders:

There are some Drag and Drop website builders which can be used to build simple online shop with some basic features like shopping cart, payment gateways, product and order management features. These are very easy to use and little technical knowledge required. But it provides stunning looks and better user experience.

Integration with other Software and Web-Apps are possible but requires extra money to use them. These are some Online Website builders as follows:

• Wix
• Weebly
• SiteBuilder
• Simbla

Advantages are: Initially Less Expensive, Simple features, Very Low Technical Knowledge required,

Disadvantages are: Up-gradation costs Money

3. Using “Online Shop Builders”

Now we will learn about some online e-commerce shop builders. These are user-friendly and easy to use. They are focused to small and medium sized sellers to build and manage their online shop themselves.

These Online Shop Builders are recommended if you want to build your Brand image yourself and give your customers a nice and professional shopping experience.

Many times other Marketing tools like Email Newsletter, Blog, SEO and other promotional and analytical tools are included in packages and available as Add-on services. Following are some Best Online Shop Builders available in the market.

• BigCommerce
• Volusion
• Shopify
• Lemonstand
• 3dCart
• Sparkpay
• Jumpseller
• Freewebstore

Advantages are: Initially Less Expensive, Simple features, Very Low Technical Knowledge required,

Disadvantages: Every additional customization needs Money

4. Using “Open Source” E-Commerce Applications

Many people will say Open Source E-commerce software’s are free to start but to be true they are Not. Because you need moderate technical skills to modify and customize these scripts according to your needs and if not possible you have to hire Developers and Designers to do so. Also integration with other software’s and services requires much skilled programmers if plugins and add-ons are not available for free.

These are most common Open Source ecommerce scripts available:

• WooCommerce on WordPress
• OpenCart
• PrestaShop
• Hikashop on Joomla
• Magento

Advantages are: Highly Customisable, Most Features,

Disadvantages are: Moderate Technical knowledge required, Upgradation requires Skill and Money.

5. Using “Full Fledge E-Commerce Solutions”

Custom build highly configurable e-commerce systems to run on enterprise scale which needs to manage a large user base.
Example: Oracle Commerce Cloud, Magento Enterprise Edition, Demandware, Hybris, IBM Websphere, Intershop and other custom solutions.

These are Most Expensive and  Suitable for higher level Enterprise, requires more Money, Resources and Manpower. Highly upgrade-able and customisable.

These are for Enterprise level sellers who have stable team of different customer serving employees and huge customer base and already established their brand image in the online marketplace.

Domain Name for Your Online Shop

As your offline business or shop needs a name, same applies for Online Stores. This is called Domain Name. Previously there was limited choice of domain extensions like .com, .net, .org, .biz etc. available but currently you can choose from a large new generation variety of names like .store, .online, .shop and generic country code level domain extensions like .co.uk, .in, .it, .dk etc. if you like to have as per your market location.

5 Useful Tips to choose a Domain Name for your Online Shop as follows:

• Make it recognisable and Brand-able: When someone hears the name first time, there must be some uniqueness in your name. Because if you use www.best**some-category**.com or similar it would be not recognisable from other similar product sites.
• Make it short and correctly Pronounceable: Name must be easily pronounceable for any language speaking people where you are going to expand your market. If you can’t find any short name then you may add some typo or suitable preposition like best, top, etc. or addition like global, local, country or location name afterwards.
• Avoid Numbers, Hyphens: If your Domain Name contains any numbers or hyphens it will be likely forgettable by users because usually, we don’t remember such little things.
• Research beforehand to avoid using other’s Brand name: You must research online enough before choosing your domain name. If already any company uses this name with different extension, it is better to avoid that name because later it might create some legal problem and if not then SEO or Ranking your Brand online must be competitive and tougher.
• Protect Your Brand: If financially possible register other common extensions of your desired domain name also. It will help you to protect someone stealing your Brand identity later and as some advanced SEO technique you can make some different “Landing Pages” for that domain which point to the main domain of your Brand or product.

 

Website Developer & Designers

You need furniture and decorations for your shop. Similarly, your online shop needs some furniture means User Interface (UI/UX) and decorations means “Design Flow”. Here comes the crucial part. As I have suggested earlier you can make your online shop with 5 different options. If you know some basic technical skills, then you can try yourself otherwise you have to hire some developers and designers from freelancing sites like Freelancer, Elance, Upwork etc.

Read this topic 18 Useful Tips For Ecommerce Website Design: Convert Visitors To Buyers  to know more about Designing Principals.

Products to Sell Online

This is the main ingredient which earns you everything. Maybe Money, Fame, Reputation and so on. Back in 2014 InsiderMonkey released a comprehensive study report on “The 10 Best Selling Products Online” . Nowadays everything can be sold online and people are struggling to find the best “Niche” or Category of products which can possibly make a lot of money online. But wait we are talking about creating your own online shop so, you must have finalised which products you want to sell. Keep this below tips in mind when choosing and finalising your product niche.

10 Tips for Choosing a Better Physical Products to Sell Online

Hire SEO Services instead of Selling Staffs

As you know in Physical Stores you have to employ Shopkeepers and Sales person to interact, guide and convince visitors to buy any product from your shop. Similarly, online shops require the same but in a different strategical way. This is done by Search Engine Optimisation or SEO. Let’s be clear in that. We all use search engines like Google, Bing, Yahoo, Ask, Baidu etc. every day whenever we want to find anything online. So, whenever anyone finds any product it must show in search engine results page. These results are not simply showing up. Although it is the job of search engines to show the results. Every search engine works on different algorithms which determine whom to show and whom to not. Our job is to help search engines to meet their algorithm requirements to show our website in different search results.

This is Not an easy job and can’t be handled by one himself. Because only Google checks over nearly 200+ criteria and values different websites differently. These algorithms are not known publicly and change frequently. However online marketers worldwide guessed and found much secret logic of these constantly changing algorithms by different experiments which are combined called SEO (Search Engine Optimisation).

Basically, SEO rules are divided into two broad categories as On-Site-SEO and Off-Site-SEO. I shall talk about some basic techniques here because it is a tremendous area to discuss. It is recommended to handle by professional hands if you seriously concerned about SEO. Remember SEO is a continuous process and you have to invest large amount and time to acquire a better position in Search Engine Results Page (SERP).

Check this Article to know about On-Site SEO and Off-Site SEO.

Advertisement or Online Marketing, SMO, Email Newsletter

As you promote your physical shop by various tools and techniques like Hoarding, Banner, TV Ads, Handbills etc. There are strategies to follow to promote your online shop. When you launch your first online shop, then nobody knows about it and they won’t buy anything from you. You have to follow SEO strategies discussed above also at first I suggest you start some paid promotion or advertising because SEO takes the time to show the results but Paid Promotions works faster.

Know more about SEM or Search Engine Marketing Techniques here.

Take a Time Travel and get back to the planning framework, where you have answered 10 questions yourself. These questions will help you to decide what strategies you are going to take from below.

Payment System for Online Shops

As you know retail physical shops take payment by cash, cheque, or via Debit Card/ Credit Card by Point Of Sales terminals but in the case of Online Shop you need to integrate Payment Gateways. Payment Gateways are two types like Global and Local gateways. PayPal, Skrill, WorldPay, Payoneer, Authorize.net, Payza, 2Checkout etc. are leading Global Payment Gateways which allows accepting payment from almost any International Banks. Local Payment Gateways are Country Specific. Like in India there are PayU, CCAvenue, PayTm, Citrus etc. in UK SagePay, CardStream, in Russia WebMoney, in China AliPay etc. are examples of Local Payment Gateways. Also, you can use BitPay as a payment gateway for BitCoin which is a Virtual Currency accepted Worldwide if you prefer.

You must read this article on : 12 Questions to Ask before integrating your preferred Payment Gateways.

Product Shipping

You have learned enough basics for your online shop. Now it’s time to think about Product Shipping. There are two works you have to do here. One is Packaging and Labelling and another is handing over the package to some mail or Currier service.

Remember while packaging, the cost depends on Size, Weight, Dimension, Insurance (if any), Pickup Location and Destination location of the Package. So, carefully you need to pack the product to avoid damage and frequent replacement. Plan on packaging material beforehand and calculate charges considering above attributes to finalise the Currier charges.

You need some accounting software to process billing or you may have the accounting, billing and inventory management system build-in your online shop. So, make ready a printer to print invoices and shipping labels to fix on your product packaging.

For Product Shipping, you have 3 options available to implement in your online shop.

1. Free Shipping: This is the best option when you have already calculated your shipping charges and added with your product price. A lot of buyers get confused and abandons the purchase if they find it difficult to calculate the shipping cost.
2. Flat Rate Shipping: This option is hassle free when you have calculated the maximum shipping charge and you have clearly mentioned and add it to your product price. Any buyer from any location has to pay the same rate as shipping fee.
3. Variable Shipping: This is done real-time contacting with your shipping partners with some API integration provided by your preferred courier service. In this case, the shipping charges are calculated as per the provided address of the buyer. Here customers from different locations can get different shipping rates.

You must update the status of the Product shipment to notify customers about where is the product now. You can do this by email or SMS or some tracking system inside your shop or via Currier websites.

Return & Fault Management

This is a very important step. Many new online shop owners do not plan it when they launch their shop. They think it will be managed when scenario occurs.
This is a big mistake!

You must plan your product return and fault management system even before calculating your profit.

The most annoying thing happens when customers buy any product online, they are not able to physically check them before deciding to purchase. They only decide to see the image or video if provided and reading the customer reviews and testimonials. So, many times customers are not happy with the product after the purchase and want to return the product. If they return either you have to replace the item or product (if there is any fault) or fully refund the customer unless otherwise declared in your “Return Policy”. In both cases, you have to consider some loss. The worst thing can happen if you don’t wish to replace the product or don’t want to refund the money. The angry and unsatisfied customers can write negative comments elsewhere throughout the internet and can file complaints about you at various consumer forums. That will ultimately ruin your business completely!

Check this 8 Important Tips to Efficiently Handle Product Return and Fault Management for your online business.

So, plan your return and fault management policy beforehand and show it openly in a page at your online shop. Here are some important tips to remember when you make your return policy as follows:

 

Whoops! You just completed reading a huge article which gave you nice and easy to remember tips to plan everything for your online shop. If you learned something new, please don’t hesitate to share this article on social networks. If you need more information, please comment below. If you need other “Smart Techniques and Tips” please do subscribe to our blog. If you want consultancy and development service for your new online shop, please connect with me.