Dave McEvoy 20min read
Dmac Media provide web development and digital marketing services to the Irish SME sector.
Over the last decade we have helped retailers of all levels create profitable ecommerce platforms. We service hundreds of customers across Ireland.
When it comes to ecommerce, our most successful customers have all followed a certain path. Over the last 11 years we have developed a solid business model for developing a profitable ecommerce website.
This article puts it all down in black and white and we are putting out there for anyone who wants to know how to crack ecommerce.
No, we don’t want your email! No there is no cost this is a freebie. If you find it useful, share it!
To help retailers to plan & launch their online shop profitably.
My ego says everyone! But this book will help the following people most:
1. Independent retailers with real world premises trying to branch out online.
2. Retailers with basic knowledge of how ecommerce works.
3. People who have tried it once, but it did not work out.
As a retailer you are probably sick of hearing everyone, from Gary Vaynerchuck to your Aunt Aggie, telling you that selling online is the way to go. That is obvious but what is less obvious is how you go about it without blowing hard earned reputation and your bank balance!
This section lays out the key steps and questions you need to answer before you commit anything other than your time.
As with every other challenge you face, this one is best met with solid research…
Use research to define your online offering every minute you spend here will save you time and money when you finally open your online door. Before spending money spend time digging into your market sector and how it operates online.
Are you coming to the party late or early? Are there well-established competitors? What are they doing well, what are they not offering?
Once you have an idea of who the main players are in the space, do yourself a solid and give them a road test. Buy something from their site and see how they deal with you as a customer. A lot can be learned from the way they manage your order.
With a firm grasp of the landscape you can now turn the spotlight on yourself.
Your research should give you a clear picture of:
What products you can sell online, to which customers and at what price.
If your competitors use sequential order numbers. Order something at the beginning of the month and again at the end. You can use the gap in the order numbers to estimate how many orders they get in a month. This is a much better indicator of success than how flash their website may look.
1. Who are your customers?
2. What is the average age?
3. Gender?
4. Location?
5. Budget?
6. Education?
7. Values?
Most of these are obvious but that last one can be tricky. What do your customers value? The quick answer probably sounds something like, Good customer service, reliable products, blah blah blah. The reality is that customers do not value these things any longer, they expect them as a standard! So, look closer. In my experience your customers can be categorised in two ways,Choice & Value.
Some customers come looking for the best that money can buy(choice). They look for things that are reassuringly expensive. Other customers come looking for the best that their money can buy(value). They still want the best possible value, but they want it within a set budget.
Assess your own customer base and consider where they are mostly choice or value led. This determines what your key marketing message should be. The better you understand your customers the more able you are to satisfy their needs online and offline.
Look at your pricing strategy in comparison to your online competitors. Are you selling at the high end of the market or the lower end? The most critical question is:
What is the margin?
Selling online is cheaper than operating a real-world store but that does not necessarily mean you can sell at lower margins. The cheaper operating costs are offset by other aspects like stiffer and broader competition, delivery, fulfilment and marketing costs. You need to make sure you have enough margin in your products to remain profitable on each sale.
This is one of the major reasons seemingly successful ecommerce websites can suddenly hit the wall.
If I am being completely honest any fool can sell online! The great outfits do it while making a profit!
Examine your pricing structure and select the products that you have a good margin on. This is where you can afford to spend marketing money & time. If you don’t have strong margins you need to take a long hard look at your business model. In my experience anything over 35% gross margin can give you enough room to manoeuvre but that is a rough ballpark.
What you have instore does not always need to sell online. In the early days it is good to be selective. Product research already forms a part of your real-world activities, your wholesale reps, brands or brand agents, trade shows and trade mags all clamour to tell you about their best sellers.
Your online research should build on this. Look back at your competitors and customers. Can you make a better offer? Can you offer a viable alternative to the market leader? Remember you need to do this while keeping margins solid so limit the amount of loss leaders you take on board.
You need to have a certain volume of products to get significant traction online so once you have a core product set selected look at them and look at products that compliment them. You are aiming for somewhere between 500-1000 product lines to get started. Don’t despair if this is out of reach to begin with. It is a target to work towards.
Your online journey should start with research, but the real secret is to make research a part of your working week. The internet is in a damn big hurry, so it is best to keep your eye on the ball.
With the basic research in hand it is time to start work on the website itself. At this stage you are going to get out there and look for platforms and partners that can deliver. This can be frustrating as you are going to be hearing and seeing lots of different opinions on what is best for you. You can minimise the confusion by having a solid design brief.
All our ecommerce projects start with a brief. This gives your potential providers a clear view of who you are and what you need.
Here are the elements you need to outline to create a good design brief:
1. Business description.
2. Target market.
3. Logo & colour scheme.
4. Website Elements.
5. Suitable imagery.
6. Websites that provide inspiration.
Let’s look at each of these in detail:
This is the nutshell description of your business a short paragraph (circa 200 words) that describes your retail business. Include business age, location and retail sector (Fashion, Jewellery, etc.) Include the motives for getting into ecommerce as these are not the same for everyone. Are you trying to sell into new markets? or just looking to increase footfall and brand awareness?
Who are you trying to sell to? This is where the research pays off. You should have a solid idea of who your preferred customers are. This will help ecommerce consultants or providers understand the challenges you will face as well as giving pointers on the style and trends within your target market.
Are you developing an independent brand? or are you using your existing branding? This is a common question and for us the answer is simple. If you use your existing branding it will increase brand awareness for your real-world store as well as giving the new ecommerce a head start as your existing customers are more likely to engage.
Creating a new brand for your ecommerce website is not wrong it just takes longer to gain traction with customers as you are an unknown entity.
Whichever approach you decide on you need to give as much information on your branding as possible. It will have the biggest impact on the overall look and feel of your ecommerce website.
As a bare minimum you should provide a copy of your logo and the colour scheme you use for instore POS or advertising. For bonus points give samples of other advertising or design work you have (Flyers, bags, etc) The more detail on the branding the better.
If you are going with a new brand you should engage a graphic designer to develop that brand prior to starting your ecommerce website.
Now we are getting to the details. You need to identify the key messages, products or product categories you want to promote. Think of it like designing the home page.
At this stage it is a good idea to revisit that all important research and review some of the competitor websites. Pick out elements or features you like and create a Wishlist. Do not get to hung up on style as that should be unique to you rather than a copy of your competitors.
Your best friend at this stage is a pen and paper.
Take out a few blank pages and literally start doodling. Sketch out what the key elements should be for the following pages:
1. Home page
2. Search results page
3.Product details page
4. Checkout
This is not about getting it right; it is about getting your own thoughts on paper. A little energy here can provide a clear picture of what you need from your platform or partner.
Good imagery can make or break your customers first impressions. That home page banner is important! For banners and promotional imagery, you should be using pictures that reflect your customers own values as well as your brand values. Aim for consistency.
Sourcing imagery can always be problematic but sites like Shutterstock and iStock provide royalty free options. Having an idea of imagery that will work for you is a huge help when creating the final design for your site.
These are websites that excite you! They do not have to be ecommerce; they do not have to be in your sector they just need to inspire you. Reference websites for style and tone are helpful. Pick 3 of your favourites and include them in your brief.
If you have worked through all of this, you have a solid idea as to what your site should look like and how it should function. That coupled with solid research gives you much more confidence when it comes to selecting platforms or partners.
Your website platform will dictate how much sanity/hair you are going to lose in your first year as an ecommerce retailer. It is important that the platform suits both your retail model as well as your ability. There are a growing number of solutions on offer and we would have to double the size of this article if we want to cover them all.
To keep things simple, I am going to give you my two cents on the most popular platforms and give you a breakdown on the three ways you can setup each. We will finish it off by talking about custom builds (warning that is what Dmac do so watch out for a sneaky sales pitch).
WordPress is the single most popular website platform in the world. Woo-commerce is a plug in that allows you to add an ecommerce functionality to WordPress.
Pros
1. It is widely supported and there is a large developer community to lean on for advice.
2.It can integrate with your existing WordPress site
3. It covers a wide variety of complex product types
Cons
1. It is a plug in to to a website system that is not designed for ecommerce and can be difficult to manage from an administrator’s perspective
2. As with WordPress you must keep it updated. If you fall behind, you are wide open to hacking and compatibility issues.
3. You must work within the framework of Woo-Commerce so there are limits to the customisation you get.
DIY:
With some time and effort it is possible to take a do it yourself approach to setting up Woo-Commerce I would recommend trying your hand at setting up a standard WordPress website to whet your appetite. If you manage that reasonably well there is no reason not to have a go.
Go Pro:
Selecting a professional web designer to deliver a Woo-Commerce platform brings cost but also saves a lot of time and energy. Make sure they have a good portfolio of Woo-commerce work before you get started. You are just getting started and the last thing you want is to be their guinea pig!
Shopify is one of the fastest growing ecommerce platforms out there. It has a low entry cost and plenty of features. It does take commissions on your sales but all in all it is probably the best avenue for people starting from scratch.
Pros
1. Low cost monthly subscription which allows you to dip your toe without breaking the bank.
2. Very easy setup and onboarding
3. Solid knowledge base and plenty of support for the platform
Cons
1. This is a shared platform, so you never own the site. You are paying a subscription once you stop you lose the site.
2. Custom functionality is not an option you can only work within their system.
3. As well as your monthly fee Shopify take a percentage of your transactions (between 3-5%) this gets expensive when you start to get volume.
Approach
DIY:
This is a no brainer, Shopify is a DIY platform and with a little help from their support centre you can make real progress. Great option if budgets are tight.
Go Pro:
The only reason to go pro is if you want a look or feel that is not on offer with Shopify’s default themes. Make sure they are a registered Shopify company before you engage (you should be able to find them on the Shopify Partner Network).
Magento is one of the oldest and best-known ecommerce platforms. It is a massively powerful platform that allows for international sales with multiple language, currency and store options. It is a mammoth platform.
Pros
1. Great reporting and management tools
2. Gives you the ability to scale-up operations (adding currencies / languages)
3. Widely recognised and supported.
Cons
1. If you are a beginner or a small operation Magento can be intimidating and difficult to manage.
2. It is a big platform and requires a lot of resources. It can have serious speed issues if your hosting basic.
3. Not intuitive to set up so you will always require professional help.
Approach
DIY:
You would have to be crazy to go DIY with a platform of this scope. I have never come across a DIY Magento that functioned correctly.
Go Pro:
The best option without a doubt. Again, make sure they have plenty of Magento Clients and a solid support structure for you to lean on.
Custom builds are bespoke ecommerce platforms that deliver specific functionality or a custom look & feel. First timers should be a little shy of this option as it is easy to end up with what you want but not what you need.
Pros
1. Complete flexibility on both customer experience and administration options. It is built around your requirements.
2. Can be continuously upgraded and improved
3. Ability to deliver bespoke features and functions.
Cons
1. You need to have a clear picture of what you want the system to do. Assumptions can be expensive
2. Extras cost extra. You generally need to pay for amendments and updates.
3. You are tied to the development company that creates the platform.
Approach
DIY:
If you can do this yourself then you are a fully-fledged web designer congrats! If you do not know your way around jQuery, CSS and languages like PHP then best leave it alone.
Go Pro:
The only real option for this type of project. This works best for retailers who have tried other platforms and want something more specific to their business.
I recently spoke at a series of digital marketing conferences. I asked each audience the same question:
“Do you have a good relationship with your web designer?”
The answer at each event was the same out of a collective audience of 1000 people there were only four companies that liked their web design company.That is a damning statistic for my industry but not a surprising one. I want to dig into the reasons for this stat with you because if you can understand why it happens it will make it easier for you to manage your web design company.
Firstly, as a rule, good web developers are not great communicators. They tend to think in straight lines and deal with specifics. They can struggle to communicate in non-technical terms, and this can leave you scratching your head.
Web Design is a hybrid industry. Web Designers need to have a solid grasp of programming and software development principals whilst at the same time being expert at visual design and aesthetics. Someone who is equally good at both disciplines is incredibly rare. Generally, web designers tend to have strong technical or strong visual skills but rarely both.
If you work with strong technical developers, their understanding of user experience and aesthetics is limited, and they will struggle to understand the importance. Inversely the people with strong visuals wont necessarily be able to fathom the best technical solutions to maintain solid websites speeds and stability.
Now that you know all this, how do you select a good web partner?
There are some things to consider...
Do they have in house graphic designers, developers and project managers? Are they all the same person? If you work with a company that has a dedicated design team you are way more likely to get a great result. Equally if they have a lot of resources your less likely to be left waiting.
They should be able to give you a step by step guide to how they approach your website project. Ideally you will want to see proofs of the proposed sites along with estimate costs and timetables. If you allow them to be vague about the process you are asking for trouble.
Look at the companies track record and ask some questions:
1. Have they worked in my industry before?
2. How long have they been in operation?
3. What type of success do their customers enjoy?
If they have experience on their side they will have dealt with problems and pitfalls and can help you avoid them, if they have been operating a successful business for more than 3 years, they are more likely to be a stable company. There is nothing wrong with giving a new outfit a chance but make sure you understand the risks.
The days of build the website and disappear are long gone but unfortunately many design companies still do not have proper after-sales and support. You should expect a certain amount of your fees to cover ongoing support for the ecommerce website as you are going to need to change things as you grow. Ask for a service level agreement before you take anyone on. If they don’t have one you need to think long and hard about engaging with them.
Make sure you check in with retailers or other business’who have worked with this company in the past and talk to them directly about how they delivered. This is the most important step before selecting a partner. It is to late discover they suck at customer service when they are halfway through your project.
Resource management is the last thing many retailers think about when planning a new website. An ecommerce website will require management on an ongoing basis, and you will need to ensure both time and money are available to get to that profitable place you are hoping for. From my experience here are the areas you need to allow time for:
Your web design team will need you to give them feedback on the look and feel of the site as well as the proposed structure. On average a retailer should set aside no less than 2 hours per week for liaising with developers and designers. The average ecommerce website takes 2 months to create so that boils down to a total of 16 hours.
Once you have the right platform in place you should give yourself at least 40 hours to load all your product information. Add 8 more to set up couriers and fulfilment process and you are looking at a total of 64 hours of your time in getting a solid solution in place.
Management of the website can be broken down in the following way:
The chart above gives you a percentage split that other successful retailers use to generate results. Ideally you will appoint someone within your organisation to champion the ecommerce platform. If you are honest you are not likely to have the time to do it yourself. Putting someone in charge of the project allows you to focus on the critical aspects while someone else is keeping the lights on. Every successful online retailer has in one way or another put these resources in place. If you do not intend to do that stop now before you waste more valuable time and money.
With all your research done and dusted you are bursting at the seams to get moving. In this section we are going to cover the practical issues you need to address. At this stage you will have either selected a web design partner or signed up to an ecommerce service. Now it is time to set up shop.
There are five areas you need to work through:
How you group your products is critical to good conversions. Your categories should be based on your customers shopping behaviour. Retailers often make the mistake of setting up categories to match their epos or supplier breakdowns, but they are rarely appropriate for customers. Ideally you want to break down your categories along the same lines as the uses for your products.
For example, if you run an outdoor clothing store that sells Casual and Formal. You might want to categorise the formal wear under headings like Weddings, or Mother of the Bride while casual can be more specific to the product type, aka tops, leggings etc.
The real trick with category management is trial and error no matter where you start it is likely to change as your customers change.
Product management is a more intensive task than category management. In the real world you put the product on the shelf price it and its job done. When putting your product online you have a bit more work to do. Each product should as a minimum have the following information:
1. Descriptive product title, for example if you are selling a sleeping bag called “Thermarest Questar 20” your product tile should be “Thermarest Questar 20 Sleeping Bag” I know that sounds basic but look around and you will be surprised how many retailers miss this.
2. Good product imagery, your product image should be sharp and where possible have a white background. For bonus points you should load multiple images of the product. At this stage most retailers start to worry about photography costs but, your manufacturers and suppliers have already spent thousands of euro on product photography. They did not do this to keep it for themselves they want you to display their products. Reach out to your suppliers and ask permissions to use their images. In 12 years of creating ecommerce websites I have never heard of a supplier denying a retailer its imagery.
3.Product descriptions is where you can separate yourself from your competitors. The more content you create here the more Google will like the product page. As a minimum you need a basic description of the product. Do your best to make it unique, avoid copying from other website as that just gives them credit. If you struggle with what to write here are four quick pointers:
a. Describe the product physically (colour, size, shape)
b. Describe the product function (what does it do)
c. Describe the ideal customer for this product
d. Give your opinion of the product (yes you can have one)
4. Price & Variations for the product. Whether you are integrating directly with your epos for this or manually managing it you need to make sure you accurately reflect the product options available.
This is the bare minimum for each product. Yes, this is a lot of work, but you only have to do this for the products you want to sell. There is absolutely no point investing in an ecommerce website unless you plan to follow through on the product content.
How customers pay for your products is a tough decision as it impacts on the all-important margin for you. You need to strike a balance between customer comfort and commercial cost. If you are working with an ecommerce service like Shopify, you will be limited to their payment partners and their percentages. If you are creating your own platform then you have free reign to choose. Payment processors generally operate under two methods:
Redirect Payments
These processors take the customer away from your site to their own platform (think PayPal) to complete a payment. This makes it very simple to set up but can also impact the user experience. You lose control of that final step.
Direct Card Payment
This method keeps the customer on your site and handles the payment process by sending the payment details in the background. This gives you complete control of the process including error tracking but can be more costly to implement.
Over the last decade Dmac have integrated with dozens of payment processors and have seen varying results. For what it is worth here is our top three:
Global Payments (formerly Realex)
Direct Card method. Great technical team to support your integration. Excellent fraud and payment management portal and solid track record. Downside is you need to create a separate merchant account with your bank so it can take time to setup.
Stripe
Another direct card method but also provides remote options for the less technical. Solid platform very easy setup. They use an integrated payment process and merchant account so set up takes minutes. Down side is the percentages are higher on transactions.
PayPal
PayPal still benefit from massive trust with the general public. If you have a PayPal account, you will generally go with that as a preferred payment option. Like stripe it is an aggregated account and process and yes, they have higher percentages.
Selecting delivery partners is an area that retailers have traditionally gone with on a basis of cost and while I understand that this matters you need to consider something bigger. This is the last mile of your customers experience. Your marketing and website have done a good job. The customer is looking forward with anticipation to receiving your product. If you have gone with the lowest possible cost for delivery you are likely to get the lowest possible service. The people that put your product in your customers hands have a direct impact on that customers opinion of your business.
Do not skimp on this customer experience. A good courier will provide tracking numbers, address management and good communication with your customer (SMS & email updates) You need to select a partner that will improve your reputation not damage it. When selecting a courier make sure you know how they operate. Find out who else they deliver for and buy something from them. Assess your how your courier behaves at grass roots.
Delivery charges can be managed in two ways, Flat rate & weight based. Weight based gives you accuracy, but it lacks transparency for your customer as they won’t know true delivery costs until they get to your checkout. Flat rate allows you to advertise your delivery costs at the early stage of the customer purchase process, but you can take a hit on deliveries that are outside the standard rates.
In our experience the flat rate wins more business that the more accurate weight basis but that is not a golden rule it all comes down to the type of products you are selling.
Finally make sure that whatever your delivery costs are that you add mark-up to the cost for the customer. Most retailers cannot afford to lose out on delivery charges so if you are being charged €5 per parcel for delivery you need to be charging €6 as a minimum. Remember you have a time cost for picking and packing and that should be offset by delivery costs.
If you have got this far you deserve kudos. Ideally you are now better prepared to get your online shop right the first time. In case you were skimming here are the key takeaways from this piece:
Learn as much as possible about your customers online behaviour and define what products are most likely to return a profit.
Make sure you give yourself enough time to get your products and categories up and running. Choose a champion within your business to take the lead.
You need to have a plan for marketing and promotion and creating unique content should be at the very core.
The only way to succeed online is to start. I guarantee that you will make mistakes, take wrong turns and learn a lot as you progress but that is the nature of online success. The most successful online operators from Amazon to Asos operated under a policy of launch and learn. Don’t be afraid to make mistakes.