An Australian entrepreneur recently earned more than $20,000 in online sales in just four days, only to stop taking orders and sell the business. Ultimately, the shop made money, but the curious tale should encourage other entrepreneurs to ask some serious questions before launching an ecommerce website.
Mat Carpenter’s story is, one supposes, mostly positive. Mat, who seemingly hates glitter, opened his business, Send Your Enemies Glitter, almost as a joke. For $9.99 the company would send one of your many enemies an envelope full of glitter with the hope that when the recipient tore open that envelope the sparkly contents would spread everywhere and create a nightmarish, albeit shiny, mess.
Turned out that the joke was on Mat. Orders poured in — perhaps thanks in part to the site’s foul-mouthed promotional copy — meaning that Mat had to personally handle gobs of glitter. That, it seems, was not worth it.
The site stopped accepting orders, and replaced the checkout with a message. “Hi guys, I’m the founder of this website. Please stop buying this horrible glitter product — I’m sick of dealing with it. Sincerely, Mat.”
In the end, Mat was able to sell Send Your Enemies Glitter for $85,000 on Flippa. The new owners are already accepting orders again, and they’ve even dropped the price for mailing a glitter bomb to just $4.99.
If you’re about to start an ecommerce business, you might be thinking that you would not be too upset if it turned out like Send Your Enemies Glitter. But in the off chance that your online shop doesn’t go viral, wouldn’t it have been better to ask a few insightful questions before you got started?
What follows are 14 questions you may want to ask yourself before you launch an ecommerce website. The aim, however, is not for you to read through these like a checklist, but rather to use these questions to help you ask questions of your own — the proper questions, if you will, for your new business.
1. How Much Do I Expect to Sell?
Having a business plan before you launch your website is important. For example, if you don’t know how much you expect to sell, you also won’t know how much to invest. You might over or under spend on hosting, web development, or even on inventory.
Why not have a realistic idea of how you expect the business to grow? Look at competitive sites or try to get market estimates from industry sources like trade associations.
2. How Will I Build the Site?
Often entrepreneurs will start an ecommerce business for one of two reasons. Either they have a passion for a product or industry, or they have the technical skills to build an ecommerce website and want to use those skills to earn money.
In the latter case, building the site will be relatively easy. But in the former, you’re going to need help. You might need to hire a web developer or choose a software-as-a-service (SaaS) solution that provides easy-to-use templates to get the site up. If you hire a developer, you’ll almost certainly get a more customized site, but you will also pay more.
Also, consider what your site will need to do. Send Your Enemies Glitter had one product and just one page on the whole site. It was, no doubt, much easier to develop than a site selling a few hundred products.
3. How Will I Manage Site Maintenance and Updates?
Before your ecommerce site goes live, you’re going to want to have a plan for how to handle updates to the site platform or any related software or services.
4. How Will I Host the Site?
SaaS ecommerce platforms will include the hosting; there is nothing more to do for most businesses. But SaaS is not the only option. Hosting a site on the cloud has become very inexpensive, so it is worth running the numbers and deciding what makes sense for your business.
5. How Will I Put Products on the Site?
This question might sound obvious, but actually getting products loaded into an ecommerce platform can be a significant challenge.
If you have ten products, manually entering product information and uploading product images won’t be too bad. But if you have a few hundred products, all of that data entry will get old, quickly.
Is there an automatic or programmatic way to get products up on the website?
6. How Will I Manage Inventory?
Once products are up and active on the site, how will you manage inventory? If you only sell online from this one store, it won’t be too bad. Brick-and-click retailers will need some way to reconcile inventory from a physical store with items sold on the virtual one. And if you plan to sell on marketplaces like Amazon, how will those sales impact inventory on your main site?
7. What Kinds of Payments Should I Accept?
What sorts of payments will your new ecommerce business accept? There are credit cards, PayPal, and even Bitcoin. How will the payment options selected impact the site? Will you need a special checkout form? What about plugins or extensions to support those payments?
The aim of an ecommerce business is to sell goods or services electronically. That won’t happen unless you’ve got the payment processing figured out.
8. How Will I Protect Customer Information?
When you are thinking about payments, don’t forget to consider how you’ll protect customer information. The Payment Card Industry (PCI) has a standard that you’ll need to meet if you are going to accept payment cards. And there are also considerations beyond payment information. Customer addresses and emails are also private. How will these be protected?
9. How Will I Collect Sales Tax?
Sellers in the United States may need to collect sales taxes for many jurisdictions. In the past, online retailers only needed to collect sales tax for states or jurisdictions in which they had a physical location, so an online seller in Colorado only needed to collect sales tax in Colorado.
Now ecommerce businesses may be required to collect sales tax for every buyer’s state, county, or city. You’ll need to know what you’re responsible for and how you will take care of that responsibility on your new ecommerce site.
10. How Will Order Fulfillment Work?
Once the site is up and orders are rolling in, how will you process and fulfill orders? Will you need to check a dashboard to learn when an order comes in? Will you get an email about every order? How do you process the order or print the packing slip? Do you need a physical box? Which carrier will deliver the package?
11. What Kinds of Customer Service Will I Provide?
How will customers ask questions or express concerns? You want to take great care of your customers and ensure that they have a great shopping experience, but how will they get a hold of you? How will they interact with you? You need to know the answers to these questions before you start selling.
12. Will I Integrate Reviews and Comments?
Reviews, ratings, and comments can help to build trust. Shoppers who are unfamiliar with your business might be willing to give your site a try if there are positive reviews both on your site and on other sites. How will you integrate these? Will you use a third-party tool or rely on something built into your ecommerce platform?
13. How Will I Attract Shoppers?
Mat Carpenter built his site, sparked some interest, and attracted a lot of customers. Will you be able to do the same? Will you need to include a blog on your site? Links to social media? What will make your site stand out on search engines?
14. What Other Questions Should I Be Asking?
Hopefully these questions got you thinking about your new ecommerce business in a way that will help you avoid some problems. But the most important questions to answer are not necessarily the ones listed here, rather they are the specific-to-your-own-business questions that you need to ask yourself as you launch your new ecommerce site.