You have a great idea for a product…now what? You need to get your product to consumers but that is far easier said than done. Many businesses and ecommerce startups choose to first test their product on a 3rd party marketplace such as eBay, Etsy or Amazon prior to hosting their own online store. In this post, we will explore why companies decide to start selling their product on a 3rd party site and how to make a successful transition to your own website.
Benefits of selling on a 3rd party marketplace
Exposure – websites like Etsy and Amazon get a lot of traffic. In fact, Quancast shows Amazon had 77 million unique visitors last month. Being a vendor on a marketplace means that you can potentially reach millions of users who have access to your product 24/7.
Marketing – typically, an emerging company has a conservative budget and can get in a catch-22 when it comes to acquiring customers. A huge benefit to hosting product on a marketplace is that the marketplace has the budget, software and man-power in place to get your product in front of customers. “Smaller stores without the budget or marketing capability to establish their own eCommerce website and software can also benefit from joining a marketplace” (Clarity-ventures).
Reduce Risk – Even the best product may not be ready for the market. The ‘try before you buy’ model is applicable to small business owners as well. The upfront cost of selling on a 3rd party marketplace is minimal compared to launching your own store.
Ryan Moran is a great example of having a successful venture on Amazon. He has hit over a million in profit and understands the value in 3rd party marketplaces. However, Ryan notes that selling on a marketplace is not a long-term solution. “Amazon is not the end goal; it is your starting point. If you forget that Amazon is a launching platform, you will approach this business incorrectly” (Ryan Moran).
Transition to your own store
There can be a lot involved when it comes to hosting your own site. From layout and plugins to cart recovery and shipping software, your site needs to make the buying process as simple and seamless as possible. With the long ‘to-do’ list, starting a new store can be overwhelming. However, we found a great article in Business News Daily to use as a reference.
If you are ready to make the move, here is your check-list according to BusinessNews Daily:
- Product to sell: Most importantly, small business owners need something they can sell. The good news is that with the Internet, this can be basically anything. Big or small, expensive or cheap, any item can be sold online. Also, since the business is run online, e-commerce owners have the option of selling “soft” goods: those that can be downloaded straight to a customer’s computer, like new computer software.
- Domain name: Before a small business can start building an e-commerce website, it needs a domain name. This is the online address at which shoppers can find the business’s website. Most online business domain names end in either “.com” or “.net”. The domain name selected should match, to some extent, the business’s name.
- Web hosting service: You’ll need a Web hosting service to publish the website online for shoppers to see. These servicesstore the data files that make up websites, and then upload those files to the Web for viewing by those who visit the site through its official domain name.
- Website: The website will serves as a business’s online home. The website, which can be created with the help of either Web hosting services or e-commerce software, must feature the products the business wants to sell, and must offer a way to sell those items directly to consumers. The website’s design should encourage shoppers to stay and make purchases. It should also include links to the business’ social media pages, ways to subscribe to electronic newsletters and deals, and offer places to learn about other news going on in the company.
- Shopping cart software: In order to sell items from an e-commerce website to customers, you need shopping cart software. These programs give shoppers the chance to search the business’ inventory to see what’s available, select items they want to purchase and eventually buy them. In addition to assisting with transactions, many shopping cart software options include additional features for controlling inventory, setting up shipping and calculating taxes.
- Merchant services provider: Since online businesses can’t accept cash payments via the website, they need a merchant services provider to handle their credit and debit card needs. This service acts as a link among the business, customer andcredit cardcompany. It processes the payments and actually takes the money from a credit card account and places it into the business’s account, also known as a merchant account. Most merchant service providers offer this type of bank account, which acts as a holding location for the debit and credit card payments an e-commerce business collects. Once the funds have been approved, the merchant services provider transfers the money, minus a commission, to the business owner’s bank account. Without a merchant services provider, a small business has no way of collecting money from customers.
- Marketing:All successful e-commerce businesses have a strategy for attracting customers to their sites. Without a carefully thought-out plan, turning a profit becomes much more difficult. Various marketing options online businesses have at their disposal include search engine optimization(SEO), pay-per-click advertising, and email and social media campaigns. (We dive into marketing a little more below!)
While online business owners do need a number of things to get up and running, the good news is that there is a one-stop shop for nearly all those needs. E-commerce software simplifies the process of opening an online store by walking owners through each step of the process, including registering a domain name, designing a website, uploading and managing inventory, connecting to a shopping cart and providing secure payment options for shoppers.
When choosing e-commerce software, small business owners should consider a number of factors. The software should incorporate all aspects of creating and maintaining an e-commerce website, such as hosting, website design and SEO integration. In addition, business owners should ensure the software offers a shopping cart capable of accepting a variety of payments, including credit cards, PayPal and eChecks. Finally, the software should provide top-notch security, such as fraud and secure socket layer protection, to give consumers peace of mind that their personal information won’t end up in the wrong hands.
Most e-commerce software providers charge online businesses a monthly fee for their services. While most of the top software providers waive a setup fee, monthly costs can range from $15 to $300 a month depending on several factors, including how large the online store is and how many of the software’s services the business owner needs.
Our sister site, Top Ten REVIEWS, has done extensive, in-depth reviews of numerous e-commerce software options. Their top three options are:
- Volusion, which offers advanced security and back-room tools, and integrates with Amazon.com to help boost sales
- Shopify, which features a searchable customer menu for targeted marketing campaigns and a lot of flexibility to grow with your business
- Shopping Cart Elite, which can create a customized online store for businesses with a lot of useful shopping cart and administrative tools
Once you have your online store built, you need to ensure your buyers have the same quality shopping experience as they did on the 3rd party marketplace. This is where shopping for the right tools for your store come in to play. Shoppers are looking for personal experiences, which is where your store can have powerful impact.
The ability to not only access, but act on data like browse behaviors and historical data is pivotal to building a successful store. This is where a solution like Kevy is valuable. Kevy is a tool that houses all of your eCommerce marketing in one platform, allowing you to save time and money for your marketing budget./
There are several different software solutions to consider before building your tool kit. The key is to research and know what features are most vital to your success. If you have any questions about transitioning to your own store, feel free to contact us. We are happy to help!