6 Tips for Building a Web-Based Store
By TY MCMAHAN
Four years ago, Jared Madsen started a company that makes bicycles built for five. He sold his bikes—which had two wheels and a rear bucket big enough to tote four children—wholesale to shops around the country.
But today, 90% of sales at his small business, Madsen Cycles, in Murray, Utah, come from an online store that took his Web designer half a day to embed within his company’s website.
The company’s bikes are now sold by him directly to consumers for about $1,485 apiece, at what he describes as a “way higher profit.” He declines to specify his markups.
Mr. Madsen says he initially thought the online store would just fill in “holes” where he didn’t have distribution. But the benefit to him in the end, he adds, was that the Web store made it possible for him to dramatically reduce his reliance on third-party shops.
As a result, the online store is now his business’s main source of income.
Have a company website? If you’re not using it to sell your goods or services, then you could be losing out on an opportunity to boost your company’s bottom line.
Forrester Research says online shopping has surged in recent years and is continuing to grow. U.S. online retail sales, which rose 12.6% to $176.2 billion in 2010, are expected to grow at a compound annual rate of 10% through 2015, the research firm reports.
Building an ecommerce platform within your company website doesn’t have to be complex or expensive. A number of new services—such as such as Goodsie, Shopify, Storenvy and Weebly—now make the task easy and affordable. You can use these services to design a store, upload product, create shopping carts, manage fulfillment and more, —all for as little as a few dollars a month.
Older platforms such as eBay and Etsy allow merchants to sell direct to consumers with benefits such as built-in site traffic. But these new services give merchants more control over the look and feel of their online stores.
“I wanted to have some sort of online presence or shop, but I thought it would be too much work and I couldn’t do it on my own,” says Kimberly Lash, who uses Goodsie to sell vintage clothing at ShopAmour.com. “I thought eBay felt like just selling clothes. You couldn’t build a brand or company. There’s tons of traffic and people are already going to the site, but you can’t create a brand.”
The cost to use the new Web-store services ranges from as little as $5 up to $179 a month. Both Storenvy and Weebly are “freemium” services, offering the basic platform for no charge. The services can be free because the platforms make their money selling additional features, such as more storage. Storenvy charges monthly fees of $4.99 to link a store’s own domain name and $2.99 for a discount code feature. Weebly charges $5 to link a domain name. Goodsie offers the first month for free, then a flat $15 each month for all features.
The Shopify platform is the most feature-packed and also the priciest. The company charges $29 a month and a 2% transaction fee for all e-commerce features and up to 100 products. The company says its most popular offering is $99 plus a 1% transaction fee and up to 10,000 products.
We spoke to executives at Goodsie, Shopify, Storenvy and Weebly, as well as Tom Davis, global head of e-commerce at footwear and apparel company Puma.Based on their suggestions, here are our tips for using these services to create an online store:
1. Invest time, and possibly money, in taking good photos.
Photography is the “dirty little secret” of e-commerce, according to Mr. Davis. “[Customers] can’t touch and feel your wares, so your photography needs to be an important element.”
Merchants should professionally photograph as many details of a product as they can afford.
Goodsie Chief Executive Jonathan Marcus recommends shooting each product individually, as well as while it’s being worn or used by a model, in order to show how big the product is.
2. Use a voice that matches your brand.
“There’s a fine line between cute and strategic,” says Mr. Davis. For example, a flower shop may describe marigolds as “perfect for fall and a favorite for moms,” while an electronics store may provide a more technical description of products. Merchants should also consider how their descriptions might surface in search-engine results, he adds.
3. Experiment with the layout, and mix it up.
The new services, which emerged within the past five years, provide hundreds of templates for the arrangement of products on the page, as well as a wide variety of different colors and fonts. “Change things every two to three weeks over three months and see what drives the best results,” Mr. Davis says.
Goodsie’s Mr. Marcus adds that stores need to be thoughtful about what products fit together on a page. For example, an apparel company may consider arranging items that make up an entire outfit.
4. Figure out the payment gateway.
This is the trickiest part of creating an online store, according to Mr. Davis. Store owners will need to set up a merchant account with a bank to link funds from the credit card company or a third-party processor like PayPal, which lets customers use its merchant account under certain terms, usually with very little setup required. PayPal does not charge a setup fee.
Currently, Weebly stores only accept Paypal or Google Checkout to process payments. Goodsie offers those services, as well as Braintree Inc. and Authorize.net, a Visa Inc. company, to accept credit card payments. Shopify offers dozens of payment options.
PayPal accepts all major credit cards with no setup or monthly fees. The service takes a 2.9% fee per transaction on monthly sales up to $3,000. The rate reduces as monthly sales increase. Google Checkout charges the same. Authorize.net charges a $100 set-up fee, a $20 monthly fee and 10 cents per transaction. Most services charge about $10 per chargeback in the event a refund is issued.
5. Try to make online shopping feel like an experience.
“Do you have the right boxes? Do you have packing foam? How do you want merchandise to be presented when your customer opens the box? Remember, that’s the only one-on-one you’re going to have with a customer,” Mr. Davis says. He suggests offering gift wrapping and sending hand-written thank-you notes to add a more personal touch to the e-commerce experience.
Alternatively, you can outsource fulfillment. Shopify integrates with third-party fulfillment services such as Fulfillment by Amazon, Shipwire and Webgistix. The cost of this can range for tens of dollars into the thousands depending on the product and volume of shipping. Those who choose to outsource fulfillment should do several trial orders with a service before committing to a provider, Mr. Davis suggests.
6. Promote heavily.
With the growth of social media, these e-commerce platforms have baked in Facebook and Twitter integration so the store and individual products can be “Liked” and tweeted across the social networks. This requires registering for those services separately. The e-commerce platforms will ask the usernames and passwords of those separate services to sync the store. Gaining a following on services like Facebook and Twitter is a good way to alert customers to new products or specials, and to gain customer feedback, and potentially evangelism.
Goodsie and Storenvy have tools to “port” an entire store to Facebook, enabling shopping directly through the social network. They say the process is as simple as installing an application and all products are automatically imported into a Facebook store. Store owners lose some control over the look of their store on Facebook, of course, however.
Storenvy also combines all stores built on the platform into one big marketplace. It claims its stores are making almost 15% of their sales through the marketplace rather than through direct traffic. Goodsie also plans to launch a similar marketplace.
A similar version of this story appeared previously in Dow Jones VentureWire.
Write to Ty McMahan at email@example.com
Carol Topp, CPA