Here’s the truth… you NEED to be selling online.

The high street is disappearing, local businesses are starting to feel the pinch and consumers don’t even blink. They just get their smartphone out and buy whatever they want. In seconds.

You probably know this already and there may be a few different things holding you back. This article is for you if one of those things is: ‘I don’t know how much investment it’ll take’.

Like anything in life, you could spend a whole lot of money on this or you could start up relatively cheap, so let’s look at the options and which one is right for you.

What Will You Need?

The obvious one is an e-commerce store. This could be a platform like ‘Not on the High Street’ or ‘Etsy’ or ‘Amazon’ or ‘Ebay’ – these come with issues though (we’ll get into those). You could host your own e-commerce store built on a ready-made e-commerce CMS like ‘Woocommerce’ or ‘Shopify’ (we’ll get into these too). 

Or you could go the whole nine yards and get an e-commerce agency to design and code you an all singing all, dancing Magento 2.0 type effort (you’ve guessed it – more on these in a sec).  

Then you’re gonna need marketing.

Because it’s no good having an e-commerce store filled with goodies if nobody ever visits. It’s crazy to me but there are people out there that think to build a website is where the transition ends – you haven’t even started at that point… believe me.

For the high-end option here, you’re gonna need fulfilment software and a host of other things too but I’m going to bundle all that together because those things are 100% necessary.

If at this point you’re thinking that I haven’t mentioned stock – i.e. you’ll need something to actually sell in order to sell online – then yeah, you’re right. But we’re going to exclude that because… well, let’s not be silly – of course you’ll need stock.

The Etsy Model

As mentioned, there are three main options when you’re deciding to set up and start selling online.

The first is selling on somebody else’s platform. I.e. ‘Etsy’ or ‘Amazon’.

Whilst this option is good for those that are risk-averse. They have minimal set-up costs, some of the marketing is (kind of) done for you and best of all it’s quick.

Seriously, open a new tab and you’ll be selling online in less than an hour

online shopping

This type of e-commerce comes with a few MAJOR drawbacks though. Sure, the start-up costs are small but these platforms will take a percentage of everything you sell. Meaning if you have even a modicum of success, then over the course of year one, those potential start-up/build costs will look tiny. When compared to the amount of turnover that doesn’t make it into your profit margin.

A friend of mine sold £60,000 of her own self-made product on ‘Not on the Highstreet’ last year and paid £20,000 in fees. That’s just bad business for her.

Yes, some of the marketing is (kind of) done for you. These platforms have millions of users every day so you won’t have to spend fortunes on awareness and reach. BUT what makes you stand out from the other million vendors also on that platform? How do you create up-sells or market specific products seasonally? A/B test layouts and written copy or target specific audience demographics?

You can’t.

The pros with this option are that you don’t need much in the way of digital expertise. Or to use a web/marketing agency for their expertise, it’s pretty much just click and go. The issues are that I believe it’s way harder to make this model work, it’s not hugely scalable in my opinion. And, any success you do have will be taxed heavily by the platform’s percentage fees. Not to mention you’re shackled slightly when it comes to marketing options so real growth will always be an uphill struggle.

The Shopify Model

The next option is having your own site (i.e. www.yourbusinessesecommercesite.com – don’t call it that) which has been built on a CMS – something like WordPress (woocommerce) or Shopify or Wix.

Whilst these options may take a little longer to build and the start-up costs will be relatively much bigger than those we’ve just covered. There’s a host of reasons that setting up in this way could be for you.

In terms of technical know-how, you’re gonna need some but you can set up a fully operational e-commerce site on these platforms without ever typing any code (it will help a lot if you can though).

If you're shackled with your marketing options, real growth will always be an uphill struggle.  

Let’s start by looking at the cost involved with this type of set up. If you can do it yourself, you’re looking at your basic hosting and domain fees plus a few SEO and e-commerce plug-ins (probably no more than £100 each). OR, an agency like Keyk can fully set this type of website up for as little as £7,000.

Compared to the free-ness of the previous option, this might seem quite steep. But, remember the percentage of sale isn’t going to sting you anywhere near as much – usually, around 2.9% per transaction when using something like Paypal or card payment plug-ins. And of course, your site is being built by an expert. Somebody that understands conversion and other factors vital to success.

So, over the course of that first year – we’ll use my friend as an example again. £60,000 turnover, minus the £7,000 start-up cost, around £25 a month for running the site. That leaves £50,700. The fees on transactions would take off around £1,500 for year one meaning that if she’d have taken my advice and backed herself she’d be sitting on £49,200 profit as opposed to £40,000.

That’s £9,200 more without selling even one extra product.

Now of course there’s slightly more to it because this disregards marketing costs – which in the interest of honesty, you CANNOT do. But believe me, if she was to spend even half of that extra profit on good marketing campaigns – then her profit margin would be even bigger.

Whilst we’re on the subject, this model also allows for far more versatile marketing. As it’s your site that you own, the world’s your oyster.

SEO? Yeah, you’ll need it. Content Marketing? You bet. Social Media? It’s your site do what you want. Google Ads? Now you’re talking serious growth. The options are limitless, contact a marketing agency and get an expert to help and you can achieve things that simply aren’t possible using another businesses platform.

ecommerce on mobile

Bespoke Magento Model

Now, if you’re not an already established business, or an entrepreneur with some money to throw at this. This is probably not the option for you. Just as a qualifier, I used to work for an agency that specialised in this sort of website build and they wouldn’t even talk to customers with a budget of less £50,000.

Which is why I won’t be using my friend as an example for this one. Spoiler: She’d be broke.

For most businesses that aren’t already selling online, this model is an upgrade once they’ve made the previous one successful.

It’s the most expensive, slowest to launch and needs a hell of a lot of add-ons to really get the most from it – so why would anyone choose this model?

The answer is pretty simple. Uniqueness. Anyone with any sales ability will tell you that the key to sales is your brand. A bespoke website built from the ground up with your brand in mind will increase sales. It just will.

That customisation also enables you to try new things, disrupt the market and challenge the industry as well as your customers – it’s a high-end model that deserves some big ideas and new thinking. If you’re not there, that’s fine – not too many are.

website analytics

Marketing

I’ve touched on it a few times already but one definite cost when you start selling online is going to be marketing.

The realisation that you’re a tiny fish in a massive (really crazy massive) ocean will hit you pretty fast. Marketing is the only way you’re going to carve out your little audience and start growing it.

I could write 100 blog posts on how much or little marketing can cost and obviously, my advice is that you go to a marketing agency (of course it is, I own one). You could do it yourself and if you have the passion for it, then great! Go get it. You’ll save yourself some fees.

However, if you’re unsure then be careful, because Google Ads and Facebook etc. are not money printing machines and you can just as easily throw your entire marketing budget away, as you could generate any sales. I genuinely think it’s worth using an expert as the fees usually pay for themselves in the long run.

As a rule of thumb, budget around 10-20% of your projected profit for marketing. This will usually do two things. Increase that profit margin exponentially and enable your business to grow at a much faster rate.

Summary

You could start selling online today and it could cost you as little as a £0.00.

I’d never recommend this though, as you’ll be battered by fees and percentages for as long as you’re selling your products online. Take my friend as an example – she doesn’t sell online anymore, it’s disheartening.  

Realistically, you can set up an online store, with everything you need to scale and be hugely successful – including marketing. For around £7,000 up front. You’ll pay next to nothing in transaction fees and your profit margin will be much bigger.

And best of all, at that price; all of the work is done for you by experts that really understand e-commerce, conversion optimisation, design and digital marketing – vastly increasing your chances of success.  

As I started this blog with… you NEED to be selling online, it’s achievable and so is making it a huge success.

Want to talk? – contact keyk here.

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