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The e-commerce market continues to expand, and there is no sign of its growth slowing. In the US alone, 16% of all retail sales were made online.Those who want to set up an online business themselves can consider selling physical products, as this is a relatively simple way to sell online. Your upfront investment needn’t be large, and the world is big enough for someone out there to be interested in the products you’ve got to sell.
Here’s our step by step guide on how to start selling online, paving the path for you to celebrate your first sale. We’ll give you an overview of the advantages and disadvantages of the best ways to sell online, so that you can find out in advance which method suits you best.
- Pros and cons: is e-commerce right for you?
- Step 1: Market research and product selection
- Step 2: Creating your business plan
- Step 3: Choose your selling platform and set up your store
- Step 4: Finding suppliers
- Step 5: Plan your marketing
- Conclusion: the most important factor for how to sell online?
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Pros and cons: is e-commerce right for you?
For some, selling products online is a dream job. For others, the excitement of starting an adventure fizzles out after a few months, and they realize that e-commerce is not their calling – even if it was a success in financial terms. Think about the following pros and cons to see if this is the right thing for you.
|Working from home. Save the time you’d spend on your commute and have an extra half an hour in bed or with your family.||Setting up an online shop and winning customers on the Internet takes time. The profits of your online business won’t compete with your last salary at first. You need patience, the right product, and a good strategy.|
|You’ll be in a position to increase your income independent of work hierarchies. Unlike when you’re employed, you decide how much you want to earn – more work equals more money.||There is no fool-proof formula for success in the world of e-commerce. Acquiring know-how through self-study and learning from your mistakes is a must. You must be patient and persevere.|
|You have the freedom of choice, at least when it comes to deciding which products to sell online. Combine personal interests with business. Ideally, you’ll enjoy your work, rather than it being a chore!||One of the most important things when considering how to sell online is realizing that you won’t generate a ‘passive’ income at first. All the work which generates and supports income has to be done by you. Later on, you could consider hiring to delegate these tasks, but you’ll still need to stay involved.|
|Unlike starting a ‘normal’ company, selling online doesn’t need much start up cash. You can start with little to no investments.||From finance, marketing, and sales to product selection, you’re responsible for everything. If you run your business on your own, you must be prepared to take this on. It’s no easy feat.|
You’ve decided you want to learn how to sell online? Don’t rush into it but figure out a step by step guide instead. We’ve got one prepared for you.
Step 1: Market research and product selection
Product and market selection are arguably the most important factors in learning how to sell on the Internet. Reflect on how the market is changing before committing to an idea. Using different methods of market research can help: Conduct surveys of potential customers, read current market studies, and analyze competitors.
Beginners in the online business world often incorporate too many of their own interests and neglect to find out whether there is demand for their product.
If you find online shops that sell the same type of products as you plan to, consider this good news. Some competition shows that you have discovered a lucrative market niche. If there is too much competition, however, you should reconsider. If the market is already saturated, it will be difficult for you to start selling online.
When selecting your products, also consider the possible margin. Demand is good, but if high prices don’t follow through on the market, you may end up making very little profit – or even none at all if you’re unlucky or badly prepared.
In order to be considered worthy competition, it is a good idea to look for a small niche of products. Instead of opening an online shop for accessories, you could specialize in socks; instead of selling different types of tea, you could sell only green teas.
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Step 2: Creating your business plan
You may feel tempted to skip this step. After all, you’re not looking for investors or a bank loan. However, it is essential totake time to create a business plan for your online store when thinking about how to start selling online.
A good plan will force you to think through all the important steps for getting started and beyond. Writing everything down can help you get an overview of everything you need and call attention to things you haven’t considered. You will also be able to recognize the strengths of your company better.
A business plan is an important guide for the beginning. If you consult a start-up advisor or tax consultant for financial planning, they can use your business plan to understand your project and make more reliable predictions.
You will find detailed information on how to create a business plan in this Business Plan Guide.
Step 3: Choose your selling platform and set up your store
Your business plan should determine which sales platform you choose for your products. There are several different ways to sell online, and some platforms are suited better than others.
The fastest way to set up an online store, and find out for yourself how to sell online, is to use social media. Use Instagram, Facebook or Pinterest as your platform; you don’t need your own website. A “Social Buy Button” is a service offered by IONOS. In a few clicks, you can set up your social selling system. You don’t even need to be tech-savvy.
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Your own online store or blog
Having your own website will give you more chances to sell. You can design it in the way you want, and use more marketing channels than just social media.
It isn’t hard to set up a website for your store thanks to website construction packages. IONOS has an e-commerce website builder, which helps you create a website tailored towards selling online.
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If you have basic IT skills and want a more individual feel, you can also use the content management system WordPress in combination with the WooCommerce plug-in to get your store online easily. You’ll have to take care of the hosting and domain registration yourself. If you don’t want to worry about maintenance and hosting, it’s best to book a ready-made WordPress solution with WooCommerce or a managed WordPress hosting.
Regardless of whether you use a managed package for your website or have it programmed by a developer: you need a name for your company and a domain name.
Online marketplaces: how to start selling online
A third way to sell online is via online sales platforms such as Amazon, eBay or Alibaba, also known as online marketplaces. The advantage here is that it doesn’t take much effort to get customers to visit your shop – you benefit from the traffic of the respective platform. The disadvantage is that you often have to pay commission and are limited in the design of your shop page.
We have compiled an overview of the best online marketplaces so you can see their pros and cons for yourself.
Ways of selling online – a quick comparison
You’ll have noticed that there is no one method for how to sell products online. Each method has its advantages and disadvantages. Social selling, for example, means that you can present your products very quickly and easily. On the other hand, you’ll have a limited range of e-commerce functionality. If this is important to you, a web store may be the better option.
|Platform||Effort||Functionality||Product range||Price||Suited to|
|Social selling||low||low||low||$||Small businesses and start ups|
|Blog||low||low||low||$||Small businesses and start ups|
|Online store||high||high||high||$$||Small to large businesses|
|Online marketplace||mid||mid||high||$$$||Small to large businesses|
In addition to choosing a sales platform, you’ll need to think about shipping logistics and payment methods. There are several options in this area, too.
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You’ll usually be responsible for shipping, unless you use drop-shipping, i.e. you do not operate your own warehouse, but have your goods stored and shipped by third parties. This is possible, for example, when selling via Amazon Marketplace, and a great option for planning how to sell online smoothly.
Logistics via shipping service provider
If you are responsible for storing and shipping your products yourself, you must choose one or more shipping companies. Check with the providers for special rates and regulations for online retailers.
Instead of filling out labels manually, you can use online shipping systems. In the best case, you’ll integrate them with your online shop via an interface. In this way, customer addresses are read directly from the shipping tool. You can also use the tool to track the progress of the shipment and trigger pick-up orders.
Cooperation with fulfillment providers
If you do not want to ship your products yourself, you have the option of hiring a shipping fulfilment provider. You’ll send your products to the supplier’s warehouse. By integrating a fulfilment application into your shop, the service provider is informed automatically when you make a sale and will organize shipping without you needing to act.
Payment methods for successfully selling online
There are lots of options for taking payments from your customers. It is a good idea to offer several options, as not everyone will want to use PayPal, but others won’t want to shop without it. PayPal currently has 325 million active users, 43.3 percent of whom are based in the USA according to statistics gathered by SpendMeNot.
Payment by credit or debit card is a good option to offer, but it’s a little old fashioned. Payment providers such as PayPal, AmazonPay, or Stripe provide a safe option for you as a vendor because they offer seller protection. They also ensure the shortest delay between outgoing payment from your customer and you receiving this payment. These services are also convenient for customers to use. Many customers prefer to pay via these providers because they do not have to submit their credit card details online.
Each payment method has advantages and disadvantages. You can find out which one is best suited to you in our overview of payment methods in online shops.
Regardless of which payment methods you choose, you have to integrate them via interfaces or SaaS. Many online shop plug-ins already include a payment function as a standard.
Step 4: Finding suppliers
If you manufacture your products yourself, you can skip this step. If you don’t, then you face the challenge of finding a suitable supplier for your products. Depending on factors such as quality, you’ll want to select your supplier carefully.
Lists of suppliers can be easily found on the Internet. Alibaba and WorldWideBrands are well-known platforms on an international level, and for US specific lists, take a look at CleverWholesale and SaleHoo.
The decision regarding a supplier is key to the success of your business The platform itself does not say anything about the quality of the wholesaler. Therefore, check exactly with whom you might do business in the future.
- Contact them personally, by phone or email: Is the supplier easy to reach and do they answer promptly? Are they friendly and service-oriented?
- Order some product samples of the things you are considering for your range to get an impression of the quality.
- Ask for special conditions for regular orders to check the flexibility of your potential supplier.
Depending on the product, it may be a good idea to work with a local manufacturer. Many local producers offer wholesale supply in addition to their retail shop. In this case, take the opportunity to get an impression of the product and the retailer on site. A personal relationship is still the best basis for negotiating ideal business conditions.
Step 5: Plan your marketing
You’ve got the grasp of how to sell online. Your online shop is ready and all service providers are integrated? Great! Your social selling system is set up? Amazing! Now, you’ll need to take care of marketing and advertising for your products.
As you’re selling on the Internet, you have many marketing options available to you, which you can combine as you wish. However, you should consider your product and your target group when choosing your strategy. For example, a lifestyle product for a young target group can be marketed well through Instagram, whereas a useful household product may be better sold through GoogleAds or good SEO.
Get an overview of online marketing methods and gain experience in potentially suitable marketing formats with a small budget first, before investing larger amounts.
If you notice that you are not getting good results, don’t give up immediately. Instead of burning through your budget with ads, it may be worthwhile to hire a service provider who, based on their experience, is much more goal-oriented and experienced.
As a cost-effective marketing measure, you can maintain your own pages and profiles in the major social networks such as Instagram or Facebook. Network with people who are interested in your product and may contribute useful content.
In addition, publish informative and detailed articles on your website to reach users who may google information on your products or related items.
Once you’ve got some hits on your online shop, you can also try to stay in contact with customers via email marketing in order to generate a (re)sale at a later date.
Don’t underestimate the effect of offline marketing to draw attention to your shop. Go to trade fairs, for example, and distribute flyers or postcards with a QR code to your online shop in places where your target group is. Cafés, doctors’ surgeries, libraries – there are countless possibilities. Take business cards with a link to your online store with you when you network at industry meetings and conferences. Organize unusual offline activities offline activities such as flash mobs and showcase them online – you’ll have a good chance of going viral.
Conclusion: the most important factor for how to sell online?
The process of selling products online is simple. If you go through the steps described here, you will soon be selling your first products on the Internet. But what’s the likelihood of sales flopping?
The success of an online shop with physical products depends on many factors. As simple as the basics of product sales are, the trickiest part is getting your sales right. You have to develop a feeling for the market, for product trends, and other opportunities.
Knowing how to sell products online is not something you pick up overnight. But if you are willing to invest time, learn continuously, and appreciate customer feedback, you have the best chances for building a lucrative online business.
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