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How to Start Selling Online

Donna Fuscaldo
Donna Fuscaldo

Selling products online is more popular than ever. Here's how you can get on the e-commerce bandwagon.

  • There are several ways to start selling products online. You can use a marketplace, an e-commerce platform or add a shopping cart to an existing website.
  • For new sellers, marketplaces like Etsy and Amazon Marketplace are easy, affordable options.
  • E-commerce platforms make it easy to set up an online store quickly. They have built-in tools to help you accept payments and manage inventory.
  • This article is for individuals and business owners who want to sell products online.

Selling online is more than setting up a website and uploading product images; it requires passion, expertise, and marketing chops to succeed. The good news is that there's a bevy of tools to help your online shop be a success. Follow these five steps to get started selling goods online.

Editor's note: Looking for e-commerce or shopping cart software for your business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

 

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How to sell online

Before you can start selling online, you have to devise a plan for how you're going to do it well. The quickest way to fizzle out is to throw random products on a website or online marketplace and pray for the best.

"A good e-commerce business is a cross-section of two disciplines," said Mike Nunez, the chief communications officer at Incfile. "You are passionate about it and are really good at it." Nunez pointed to Beverages Direct, an online merchant that specializes in root beer and hard-to-find beverages. The owner had a real love for root beer and was able to bring a level of expertise to his shop that others couldn't. "Find the differentiator and find the thing you love. That's a business," said Nunez.

Once you know what product or products you want to sell, you can get busy setting up your e-commerce business. Here's a list of steps you'll follow to start selling online.

1. Name your business and your domain.

Choosing the names of your website and domain is almost as important as choosing the products you'll sell.

You want it to be easy for potential customers to find on the internet.

You don't want potential customers to get messed up spelling it wrong in queries or pronouncing it incorrectly to Alexa.

Pro tip: One way to boost traffic is to include search engine optimization keywords in your domain name. If your selling sneakers, get that in the name.

2. Choose your venue.

Selling a product online is easier when you use an e-commerce platform or an online marketplace like Etsy or Amazon Marketplace. They exist to help small businesses set up shop and begin selling. There are also standalone stores you create on your own website.

3. Decide which payments to accept.

Accepting payments on your online store can be easy or complicated, depending on how much you want to do.

If you're operating your own website and want to process payments, you can work with a payment processor to add a shopping cart, a payment page or a payment form. This is a third party that handles the payment transaction when a customer makes a purchase online. In a matter of seconds, the payment processor communicates between you and the bank to ensure there are enough funds to make the purchase. It also employs security measures to ensure it's not a fraudulent payment method. Popular payment processors for online businesses include Square, Stripe, and PayPal.

If you use an e-commerce platform like Shopify, payments are usually built in. Some allow you to work with a third-party payment processor, but they may charge you an extra fee.

If you have a physical store where you already accept credit cards, your existing payment processor should be able to support your online sales. And, if you signed a contract with them, you may actually be contractually obligated to use them as your online processor.

When it comes to the type of payment methods your e-commerce store should accept, the more the better. You absolutely want to accept credit cards and debit cards, but you should also consider digital payments such as Apple Pay, PayPal and Google Pay. When running an online store "you need to accept more than credit cards," said Tory Brunker, director of product marketing at Adobe. "We recommend PayPal and some of the other broadly used payment methods."

4. Figure out your shipping.

Amazon has made free shipping and speedy delivery commonplace, but not every e-commerce store can afford to offer it. It's important to figure out shipping costs and the impact it will have on profits before listing your rates. It's a balancing act. You don't want to lose a sale because shipping is too expensive, but you don't want to lose money because you gave everyone free shipping.

"You have to find a way to deliver value and consistently exceed expectations," said Brunker. "Capturing and keeping customers is absolutely critical, particularly right now as people value speed and convenience above all else." [Read related article: A Small Business Guide to E-Commerce Shipping]

5. Get the word out about your online store.

You can have the best e-commerce website in the world but if nobody knows about it, its worthless. Social media sites such as Facebook, Instagram, Pinterest, and Twitter are all great platforms for building awareness about your store. Brand building is a big part of online selling success.

Key takeaway: Selling online is a multistep process that requires you to make decisions about your business name, online location, payment method, shipping and marketing.

Which platforms are best for selling online?

Options abound when selling online. You can join an online marketplace, use an e-commerce platform or add a shopping cart to your website. The right choice for you may depend on the number of years you've been in business and your goals for your enterprise.

"There are plenty of marketplaces to choose from when you're not ready to become a small business," said Meghan Stabler, vice president of product marketing at BigCommerce. "Once you're a small business and have a unique set of products you want to sell online, you can pick an e-commerce platform."

Established retailers that already have websites can also DIY the operations by setting up a web store on their site using a shopping cart, but if time is of the essence, an e-commerce platform will have you up and running quickly. A hybrid option is to do two or more options, for example, you may sell products on your own website and on a marketplace.

Key takeaway: Online marketplaces are typically used by people who are just beginning to sell online. An e-commerce platform is suited for businesses that want to get online quickly. Web stores are best for established merchants who already have websites.

There are several different e-commerce marketplaces where you can sell trending products. Some cater to niches, while others are generalists. Here are three of the most popular options.

Amazon Marketplace

Amazon runs an e-commerce marketplace that enables businesses to sell products to its more than 150 million U.S. customers. In exchange for that access, Amazon charges a monthly fee and also tacks on a per-item referral fee. Online shops can pay extra for Amazon to handle shipping.

  • Amazon's Professional selling plan costs $39.99 a month.
  • The Individual selling plan is $0.99 per unit sold. This plan is for business owners who sell less than 40 items a month.
  • There's also a per-item referral fee. The fee is based on the product category.

Etsy

Geared toward sellers of crafts, jewelry, and other homemade items, Etsy has become a huge marketplace, providing sellers with access to more than 40 million people.

  • Etsy charges a $0.20 listing fee per item. Listings remain live for four months or until they sell.
  • There is also a 5% transaction fee and a 3% + $0.25 payment processing fee.
  • If you make a sale from one of Etsy's offsite ads, they take a 15% cut.

Walmart Marketplace

Geared toward more established merchants, Walmart Marketplace puts your products in front of millions of consumers. Walmart screens merchants before including them in the marketplace and just like Amazon, offers fulfillment services.

  • Walmart Marketplace charges a referral fee per product. The fee varies, based on the product category. It takes a 15% cut on apparel and accessories, baby and beauty products, and books. Cell phones, cameras, and consumer electronics have an 8% fee.

Key takeaway: Online marketplaces are an easy way to set up an online store and give you access to millions of customers.

E-commerce platforms help business owners set up an online shop in no time. These platform operators also help merchants list and sell their products, manage inventory and accept payments. Here are two popular options.

Shopify

Used by more than 1 million businesses, Shopify is a popular e-commerce platform that offers its customers a full suite of services. Merchants can create an online store, sell products on social media and marketplaces, and manage product inventory, payments and shipping. Shopify charges a monthly subscription.

  • The Lite plan costs $9 a month, but it's designed to be used with an existing website. For the full platform experience, you'll need the Basic plan or better.
  • The Basic plan costs $29 per month, followed by its mid-tier offering at $79 a month and its Advanced package at $299 per month.

BigCommerce

From creating an appealing online store to running your social media marketing, BigCommerce is another leading platform for online selling. Its pricing is comparable to Shopify.

  • The Standard plan lowest cost plan coming in at $29.95 a month. The mid-level service costs $79.95 a month while the highest-end plan is $299.95.
  • All the plans have unlimited storage, bandwidth and staff accounts, and there are no transaction fees.

Key takeaway: Established merchants who want a full-featured online store that can be set up in a hurry turn to e-commerce platforms like Shopify and BigCommerce. 

Which types of products are profitable to sell online?

Not every online merchant has a passion for the products they sell; many take advantage of a trend or sell ancillary items for a popular product.

Take the COVID-19 pandemic. With people working at home and worried about their health, certain product categories are skyrocketing. "Medical goods and loungewear are really hot right now," said Brunker. "We're starting to see a surge in convenience goods and things that make people comfortable at home."

Bruckner said there's also increased demand for housewares, particularly decorating items, workout gear and equipment, and materials for home improvements. You may not be able to sell wood, but you could hawk items that are necessary for DIY crafts.

Key takeaway: Many online merchants find it profitable to capitalize on trends.

Benefits of selling online

In today's market, having an online presence is a requirement for retailers of all sizes.

"It's absolutely essential that small businesses get online," said Stabler. "To not only survive but thrive, you have to reach your shoppers wherever they may be. There's an opportunity for small businesses to go global in a way they never did before."

There are plenty of other reasons to take your business online. Here's a look at seven important ones.

1. Cheaper startup costs

Anyone who runs a physical store knows the costs associated with operations. From rent to utilities, there's a lot of overhead costs. When you set up your store on the internet, you don't have to worry about a landlord or electric bill. Nor do you have to hire staff to collect cash, stock the shelves and manage operations.

Sure, you have to spend the money to set up a website and accept payments online – whether that's an e-commerce platform or another solution – but its typically a lot cheaper than brick-and-mortar costs.

2. Freedom to move – or stay where you're at

When you sell products online, you aren't stuck in a specific location – your e-commerce operation allows you to sell to customers nationwide and even across the world. For instance, you can sell surfboards from your warehouse in Indiana – you aren't required to set up shop on the coast. All you need is access to the internet, email, and phones to keep business going.

3. Reach more customers

There are no barriers to shopping when you are doing it online. That presents a big opportunity for a small business owner to reach a whole new set of customers. It may cost more to ship products internationally, but selling online can boost demand and thus sales.

4. It's easy to scale

The internet is nimble and so too is an online store. Thanks to the digital nature of e-commerce, it's very easy to track product sales, decide which are doing well, and then add and remove products in real time.

5. No more store hours

The internet is on 24/7, which means you're always open for business. Even as you sleep, orders can come in. That can expand your sales and improve your profits since there is no downtime.

6. Better margins

Without all the overhead associated with a physical store, you can offer your products online at a lower price and still make a profit. When you sell online, your margins tend to improve as the cost of doing business is lower.

7. Track sales and shipments

Thanks to analytics software, inventory management and logistics tools, it's easy to track your online sales. That can inform your decision about what to sell and how to improve customer relations, price your products, and track delivery rates, all of which will improve efficiency and the bottom line.

Key takeaway: Running an online store can help you reach new customers, improve your margins and increase sales, all the while having flexibility to run it from wherever you are.

Donna Fuscaldo
Donna Fuscaldo,
Business News Daily Writer
See Donna Fuscaldo's Profile
A lifetime New Yorker, I am a veteran finance and business journalist that has contributed to several national media outlets including Forbes, Investopedia, and Bankrate.com. I have spent my career providing consumers and business owners with advice and guidance to help them navigate the world of finance. As a senior finance writer, I report on all aspects of finance from managing cash flow to choosing the best accounting software.