Launching an Online Store in 2022— it’s easy, right?
I had always dreamed of designing and building my own online store. Ever since I first connected onto the Internet I soon realised that at some point this tool would become integral to our way of life.
Today you can open an online store within a matter of minutes. Seriously website applications like Shopify and marketing places like eBay and Amazon all allow you to set up your own online store in minutes.
The ultimate question, I believe, is whilst we have these tools that enable us to open an online store without much thought. Should we?
Is it easy to launch to an online store in 2022?
The Building Blocks
I’ll start off by saying one thing.
An online store is a business and like any business you’re going to need some kind of business plan in place. Whether it's a 1 page short form or a 250 page masterpiece.
Your business plan is the bible for what your business does, how it does it and why your business is even in business.
Without a business plan and believe me I’ve launched a couple of businesses in the past with no plan and no idea of where we were heading let alone measuring the predicted levels of success, you are flying by the seat of your pants and can expect a harder and longer journey.
Remember what gets measured, gets done.
Suppliers
Whether you have control of the manufacturing process of your product or not you’re going to need suppliers, unless of course you’re selling digital downloads — but even then you’re going to need to find a source of new digital content.
Opening an online store with nothing to sell isn’t a good move. Sure you can build an email marketing list but if there is nothing to buy you’re not going to make much in the way of revenue.
With suppliers you’re going to need to find them, contact them, negotiate the terms and spend time getting to know how they operate.
Suppliers will always be looking to get the best price for them, trust me on this, they will use all kinds of words such as “can’t let it go for that price”, “if you order more we can lower the price”.
Working with suppliers means working in bulk, which brings me nicely onto the next area.
Holding stock vs Dropshipping
This should probably of been at the top, decide on the format that your online store will take. Are you going to be holding stock? or will you act as a dropshipper.
Holding Stock
Stock in any business whether on the high street or online is a risk.
The major risk of holding stock is that your cash, the lifeblood that your business will depend on, is tied up in that stock. So until you shift/sell that stock your cash flow is going to be hindered.
Offers such as 75% off are common place on the high street and even online retailers are offering a 40% off in some sectors. This isn’t because they are doing you a favour, believe me they are still making a profit on those discounts, they are just converting as much of the stock as possible into cash.
Holding stock does have its benefits;
- you can negotiate better terms with suppliers,
- you’re in control of getting the products to and from your customers,
- you have assets which can be sold to sure up the business in the event of cashflow shortages.
Drop-shipping
Drop-shipping is essentially the process of selling goods online but not holding any of the stock.
Essentially an order comes into your online store and you then place that order with your suppliers. Often the supplier will white label the shipping enabling it to appear like its from you.
Drop-shipping is perfectly legal and sounds like the ideal e-commerce solution.
However, draw backs such as certain products being out of stock, no control over delivery times and more importantly unfavourable terms with your suppliers means you won’t be making much of a profit.
Remember as a business, online or on the high street, your goal is to make a profit — everyday that you’re in business.
Marketplaces
In 2011 words such as omnichannel and multichannel were common place within the e-commerce world. Everyday it seemed each major online retailer was knocking out an awesome strategy that grew their business by 200%.
The driving force behind some of this multichannel growth was websites such as eBay, Amazon and Play (now Rakuten).
Each marketplace allowed businesses too, essentially, open an online store on that marketplace website.
The end result, business growth. Of course you will often find the products were usually a few pounds dearer on these sites due to listing fees, however if you went direct it was usually cheaper.
If you’re considering an online store you may want to think about the strategy you’re going to employ to grow the business. Are you going to go down the route of a multichannel strategy or an omnichannel strategy?
Remember you will need someone to oversee this and handle the numerous enquiries you will get from these new marketplaces.
Competition
As part of your business plan you will have a section in there about some of your competitors and will no doubt of carried out a SWOT (Strengths, Weaknesses, Opportunities, Threat) analysis of some of your competitors and the wider market place.
In 2021 it was reported that there was between 12 to 24 million online stores, according to digitalintheround.com. This number is only going to get bigger and therefore the competition a lot more volatile.
You’re going to need to think about how you can differentiate your online store from that of the competition. Whether its speedy service, enjoyable UX design, free gift or something similar.
Differentiation is the way you’re going to win the battle when it comes to your online store.
I’ve mentioned just a few pointers that you will want to consider when launching a new online store. An online store sounds simple enough but there is a bit of ground work you need to do before you hit that launch button.
If you’re thinking of launching an online store and , take action and do it, just make sure you’ve put in the ground work at the very beginning.
Resilience is success.
