What Do You Need to Know Before Opening an Online Shop?
Online shopping has already been the current trend in almost all parts of the world. Although it cannot totally replace the traditional way of shopping, a survey recently conducted by PCW Global shows that there is an increasing number of people who prefer online shopping. People prefer to buy items such as books, shoes and clothing, toys and other household items online over the traditional brick and mortar stores. With today's busy world, finding a great way to offer products and services to our prospective clients in the most convenient way is what we need to take into consideration when planning for a new business, especially an online business.
I personally buy a few things online including plane tickets, accessories, and some electronic gadgets. One of my friends here in Bitlanders, Rain Tajon recently revealed that she is fond of buying from online stores. In her blog post entitled, My January 2018 Financial Report, she stated that she purchased several books online in January of the current year.
In my previous post, 10 Small Business Ideas to Start this 2018, I have included Opening an Online Shop on the top 10 list. I am aware that because of the current work trend in the country, wherein most people are busy with their jobs, many are relying on online shops for their shopping needs.
As a business-minded person, I can see a great opportunity in this business. However, with a lot of competitors around, it is also imperative that we come up with a much better strategy than those that are available at the current time. Meaning, we should think of something new and unique ideas in order to have a place on the market.
Some people think that opening an online shop or an e-commerce business would be an easy thing until such time that they discovered they had missed out a lot of important things when they started.
What Are the Basic Things to Consider When Starting an Online Shop?
To ensure that we are heading in the right direction, I am presenting herein the basic things we need to do in order to have a smooth flow in our online business.
(1) Business Registrations and Permits
Image Credits: Philpad.com
This is the first thing that we need to work on when starting out an online shop. Just like a normal offline store, we should take into consideration the securing of necessary business registrations and permits so as to ensure the legality of our business. Our business will be under the jurisdiction of the law to where we are located. For instance, the business opened in the Philippines needs to register the name of their business with the Department of Trade and Industry (DTI), or Securities and Exchange Commission (SEC) and register with Bureau of Internal Revenue (BIR) for the issuance of official receipts. This would include the securing of Mayor's permit in their local government units.
Please do take note that though we are operating online, our clients have the right to asked for a receipt for whatever item they paid for. Moreover, please ensure that the products we are selling have necessary permits to be sold in the market such as from the Bureau of Food and Drugs (BFAD) for cosmetics and must have passed the International Standards of Operation (ISO) for other items.
For small businesses, we may refer to Barangay Micro Business Enterprise Act of 2002 for details on how we could avail of the income tax exemption arising from the operation of the enterprise for two years after registration and every year thereafter.
(2) The Product
Our products will consume the great percentage of our investment as this will be the lifeblood of our business. First and foremost, make sure that you are selling high-quality products. Additionally, we should consider the following:
We need to establish a direct relationship with the main source of our products. This will include the pricing, availability of the items and other terms and condition that we need to be assured of before entering a contract.
Our products should be packaged in a presentable manner so that our prospective client will be enticed to buy.
>>>Stocks and Inventory
Sufficient stocks should be considered thereby making sure that we won't run out of items. Acquiring an accounting and inventory software that would help facilitate our work is advised.
(3) Cash Flow Management
One of the common mistakes of some individuals is when they would place all the funds on the product without taking into consideration some small things that might come up along the way.
On procurement of supplies: Keeping an eye on the upcoming bills for our supplies should be one our priorities. If we could negotiate on having a 30, 60 and 90 days terms would be an advantage as we don't have to pour in all our collections at one-time payment. Thus, giving as an allowance and to place the fund on other equally important things.
On selling: As much as possible, we should see to it that the payment has been received before the delivery of the item. Especially if we are using online processors such as PayPal, Payoneer or other methods available in our area.
Moreover, if we will be adopting a Cash-on-delivery (COD) scheme, we should see to it that we have a trusted company or people to work with.
(4) Product Movement
It is important that the supplier we have is also committed to their words. Choosing the proper company or people who will supply the products is important. It is also better if you are the manufacturer of the goods you are selling.
>>>Delivery of Orders
Customers are the most important people in the business. Keeping on the promised time of delivery is one of the most important factors in online business. Schedules are very important especially that we are dealing with clients from other places. We should consider the shipment of the items when setting delivery dates.
>>>Bad Orders/Returned Merchandise
As a business, bad orders are inevitable. This is part of the operation. We should see to it that we have an allowance for bad orders or returned merchandise.
(5) Product Marketing
Our preparations and all the efforts that we had will be useless if people will not know that we are existing. Proper marketing strategies should be employed. Since we are an online shop or an e-commerce business, we need to have at least the following for the effective operation of the business.
This is where our products are presented. A website with a good and attractive design should be our main priority. Secondly, payment options should be clearly stated on the main page of the site. Having wide choice for payment would make the transaction faster and easier. You can create a website with Shopify.com, SimpleSite.com and a lot more other sites.
We are aware the people are more adept at visiting facebook than any other site. Having a facebook account for our business will assure that we are reaching a larger group of people that could see our products.
Pinterest is a site that could help us reach more people outside of Facebook. Having an account will certainly help us in presenting our products to a wider audience.
A large percentage of Facebook users are also on Instagram. Presenting attractive photos of our products on this site can help us reach out to more prospective clients.
On the final thought...
Planning the whole thing before jumping into this business would be a wise thing to do. Learn from the big players in the industry, learn from the mistakes of those who failed and create your own strategy.
Here is a video that would help you in setting up an online Shopify store. Enjoy watching!
Thank you for reading. Hope this post gives you some idea on how to open an online shop. Leave your comment below for further queries. So much so, sharing this content may also help others.
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Written for Bitlanders
by Sharon Lopez
Thank you for reading.
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Sharon Lopez is the owner of Online Working Solution.
A Blogger/writer and a Humanatic Call Auditor
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