New Zealand is currently in full lockdown to combat Covid-19, with many businesses exploring how they can still serve their customers in a rapidly evolving landscape. As a result we’ve had a number of inquiries about how to set up an online store/ sell online.
We have developed this overview to help businesses who are thinking of selling online identify what steps they need to take.
First off let's talk about the current environment as at the 31st of March 2020. We are living in times of rapid change and constant uncertainty and what is relevant today may not apply tomorrow.
In New Zealand we have a four level alert system for Covid-19. We are currently at Level 4, which means everything is closed, apart from essential services. The definition of essential services is a moving target, while writing this post some electronics/ technology stores have been given the go ahead to sell some products online.
I have talked to a number of our USA clients who have similar lockdowns in place. But for the sake of clarity I’ll only talk about the New Zealand situation.
The key part of being in Level 4 as it relates to business development is that in most cases you are not able to sell online (unless you are deemed an essential service). However, that doesn't prevent you from preparing to sell online when the level is downgraded and restrictions are lifted. Now is a great time to plan and ready your business to hit the ground running as soon as the threat level allows.
What You Need
With all that in mind let’s get started on what you need. When working with our clients we talk about each of these parts in-depth, but to summarise:
1. Products to Sell
While this seems obvious, Covid-19 has majorly disrupted supply chains of products and raw materials. While you may have a stockpile of products you can sell, if your distributors cannot supply you with new products your inventory will run out, having a negative impact on your ability to meet your client’s expectations. It’s important to have a solid stock inventory process locked in and plans in place to handle running out of stock.
If you make products you need to make sure you either have enough materials for the foreseeable future and/or open supply lines to acquire more materials if needed.
Food producers are (generally) considered essential services and have food available for shipping. If you are a food producer you may be able to sell online at Level 4.
2. Product Information
Even if you can’t sell today it’s well worth preparing by making sure you have product titles, descriptions, prices and images for everything you want to sell as soon as your supply lines open up again.
It is also important to plan how your products will be categorised. Think of how your customers would intuitively group your products and go from there. As a general rule don’t have more than eight primary (top) categories as that gets confusing for people. You can always use sub-categories or even sub-subcategories to allow your customers to browse products.
3. An Online Sales Channel
“Online Sales Channel” can seem like a clunky way to say “Website” but in 2020 there are far more ways to sell online than having your own website.
Marketplace websites like TradeMe, Amazon, eBay, Etsy, Facebook Marketplace and many more all offer ways of selling to millions of people. However their popularity is also an issue - how do you make sure you stand out in a busy and crowded marketplace?
For this reason many marketplace sellers graduate to their own online store. An online store gives businesses control over their branding and user experience.
At UpShift we use Shopify for most of our online store builds. Shopify is one of the world’s most popular online e-commerce platforms and has brilliant functionality and support. However it can require a reasonable amount of custom development if businesses want to tell unique stories or have a customer experience outside of standard online store functionality.
We have also built a number of smaller stores using Squarespace. Squarespace doesn’t have the same functionality or flexibility when it comes to e-commerce, but it allows for flexible designs with minimal custom development that can save on the initial build costs.
4. A Delivery Method
The most successful online businesses are ones who can guarantee delivery in a timely manner. Having a fast and reliable delivery method is super important and something that customers value highly.
At Level 4 non-essential deliveries have been put on hold so our freight network can concentrate on food, medicine and other essential supplies. For many businesses this means now is the time to plan your delivery methods for when the threat level is reduced.
In normal circumstances our clients use a range of courier and freight services to deliver their products. What works best often comes down to the nature of the product and the location of the customers - small vs bulky, fragile vs sturdy, local vs national vs international etc. etc. Some products like medicine or alcohol have further restrictions or requirements for shipping overseas.
Spending time now planning the delivery method that works best for you, your products and your customers will really put you on the front foot once you’re able to sell online again. It’s not glamorous work but is a key component of customer satisfaction and business variability.
5. A Payment Method
There are two main methods of taking online payments:
Payment Services: Stripe, Paypal, Apple Pay etc.
Merchant Gateways: DPS, eWay etc.
Payment services are all-in-one services that process payments on your behalf. They are easier to set up but have higher fees and often delay/ bundle payment processing. This means that instead of getting each payment as a distinct amount in your bank statement you will receive a bundle of all payments from a certain period of time. This can make account reconciliation more challenging.
Merchant gateways are generally run through banks using a credit card merchant account. They have lower fees but require more setup. In most cases you’ll need to have your website reviewed by the bank to make sure it meets certain requirements (all e-commerce websites built by UpShift meet these requirements.)
Both Shopify and Squarespace connect to Stripe & Paypal out of the box. Shopify Payments is the default payment method within Shopify & runs on Stripe.
It’s worth noting that payment fees can be 3-6% and should be factored into your product pricing. Have a close look at the fee structure of any payment method you’re planning to use.
6. A Way to Reach Your Audience
This is the crux of selling online and something that’s radically different from the bricks & mortar mindset. If a physical retail store is located where there’s passing traffic (foot or vehicle) people will naturally find their way to it. But every online store starts in the wilderness, with almost no one knowing it exists.
The reality is it can take a long time or a lot of money to build a large online customer base and only a fraction of your audience will purchase on any given week. For many large online retailers their customer list is king and they’ll invest years and thousands (even millions) of dollars into growing it.
The following can all be used to raise awareness of an online store:
Social media friends and followers
Industry contacts or communications
Alignment with complimentary businesses/events
Banner advertising on websites
If you haven’t got an email list or social media presence now is the time to start building them. Keeping in mind that you need people’s permission to email them directly and you need a marketing plan which doesn’t swamp people in content they’re not interested in.
Putting it All Together
Even as an overview this can all seem daunting. But take it one step at a time and you’ll get to launching your online store:
Can you sell online at Level 4?
Secure your products and supply lines.
Document product descriptions, prices and images.
Categorise your products.
Choose your online sales channel/s.
Choose your delivery method/s.
Choose your payment method/s.
Develop your audience in preparation for your launch.
Build your online store.
UpShift provides consultation, design and development services to help you take your business online - please don’t hesitate to contact us if you need some help, advice or practical support.
Photo by rupixen.com