With many bricks and mortar sites forced to temporarily close last year as a result of the COVID-19 pandemic, many have taken the tough decision to never open again and move everything online. As a result, the ecommerce industry has exploded with fresh engagement.
Although many businesses have their own website, 35% of businesses feel that their operation is simply “too small” to warrant a website. However, Nasdaq estimates that by the year 2040, 95% of purchases will be made via ecommerce.
So why not get ahead of the trend? Here are our top tips for getting your business correctly trading online.
Start off with financials
Whether you are starting a business online or developing your current one, it is important to know the different types of funding opportunities available.
Bank loans
Like any other business, getting a loan from the bank is probably one of the most common ways to access finance to run your ecommerce business.
To have a good chance of getting a bank loan, you’ll need to convince your chosen bank that your business will succeed and the risk of it failing and losing money is low.
However, if you fail to make the required repayments, your property and/or equipment could be at the risk of being seized. And, of course, no bank loan will come without interest, which is determined by the value of the loan taken out, the length of your borrowing, the current rate set by the Bank of England and whether or not your loan is secure or unsecure.
Private investing
Another option is to seek private investment, which involves selling a stake in your business to an individual or firm. This might be a high-net worth individual – often known as ‘angel investors’ – a venture capital firm, or another type of investor.
In exchange, you give them a share in your business’s profits. This means you’ll have no loans or interest to pay off, but you’ll need to hand over some level of control over the decisions you make.
Crowdfunding
If you are launching your business online, it is important to build some connections, and crowdfunding can be one of the best ways to do so. With platforms like Kickstarter and Indiegogo, people have the ability to invest small amounts in order to help launch businesses or products.
In addition, crowdfunding allows you to develop a following who are passionate about your business or product.
Although some crowdfunding platforms such as Kickstarter offer “reward” programmes to encourage people to invest, business owners retain all stakes in their businesses.
Rules and regulations
Although you don’t need any special license to trade online, you do need to follow a set of rules regarding how your customers place orders and even delivery cost.
Since the Brexit transition period came to an end, the previous distance selling rules are no longer in effect – instead, the Consumer Contracts Regulations apply.
If this is a new ecommerce business, you should also make sure you understand your tax obligations, including income tax, corporation tax if you’re running a company, and VAT once you pass the £85,000 registration threshold. Talk to us for more information on this side of things.
Websites
If you do not have a website, your first step is to create one. This is where your finances come into play.
You can hire a web developer or agency, or if you would like to have a crack at it yourself there are many DIY platforms, which include WordPress, Wix and Squarespace.
One thing to remember is although a more aesthetically pleasing site may impress visitors, the key to trading online is to provide good content and a user-friendly experience, which provides key information that consumers are looking for.
Remember, there is no need to start with the full shebang overnight. Start off plain and professional and develop it online.
Keep your website up to date with new product releases and stock prices, and don’t forget to add testimonials – there is no better way to market your product than word of mouth.
Enable online payments
In order to make any money online, you need to set up a secure online payment system, which will facilitate the payment from your client to your business safely.
You could do this by setting up a payment gateway that connects with your merchant bank account, or through an all-in-one gateway and account option like PayPal.
In the meantime, think about how your return or refund system will work. For example, are you going to offer a 100% money-back guarantee or stick with store credit?
Improving visibility
One of the main ways to improve your return on investment is to exploit all the SEO tools available to rank within the first few results on Google or any other search engine.
Platforms such as Google Search Console, Ahrefs and Semrush are just a few that you can use to improve your SEO.
Through the back end of your website, you should be able to see how many people are visiting at any given time.
At James Scott, we can ensure you are prepared for launching your business online. For more information, speak to us.