Selling Online For Dummies E-Book

Paul Waddy

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 681

Veröffentlichungsjahr: 2025

Beschreibung

Transform your ecommerce ideas into profitable reality with this page-turning new handbook

Online shopping is more popular than ever, and ecommerce is now a multi-billion-dollar industry. Isn’t it time for you to claim your share? If you’ve been wondering how to start an online business, or get your current business thriving online, this comprehensive guide shares everything you need to know.

In Selling Online For Dummies, ecommerce advisor and online shopping guru Paul Waddy shows you exactly how to get started in setting up your online shop. With an expert’s eye for business, and an easy-to-understand take on the technical stuff, Waddy takes you from digital start to finish as he discusses topics like: 

• Finding hot products to sell, working with suppliers and managing your inventory
• Building a website from scratch by choosing the right developer and platform
• Marketing your site with smart SEO, paid ads, and organic marketing strategies on Google, Instagram, Facebook and TikTok
• Understanding the user experience and creating happy, loyal customers
• Dealing with payments, currencies, taxes and duties

It’s time to take advantage of the commercial opportunities waiting for you online. Selling Online For Dummies is a must-read that will help you turn your great idea from virtual to reality.

Leseprobe

Selling Online For Dummies®

To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Selling Online For Dummies Cheat Sheet” in the Search box.

Table of Contents

Cover

Title Page

Copyright

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Where to Go from Here

Part 1: Getting Started with Selling Online

Chapter 1: Introducing the Business of Selling Online

Getting Started with Ecommerce

Creating Your Online Store

Delivering a Great Customer Experience

Marketing Your Online Business

Ready, Set, Go

Chapter 2: Selling Online in a Nutshell

It’s Never Too Late To Get Started

Say What? Understanding The Lingo

Chapter 3: You’re onto Something: Assessing Your Idea

Building an Ecommerce Business Plan

Creating a Brand Versus Stocking a Brand

Chapter 4: The Secret Sauce: Sourcing Products and Buying Stock

Finding Products to Sell Online

Dealing with Suppliers

Parting with Your Money: Buying Stock

Importing Your Products

Forecasting Sales: How Much Stock Do I Need to Order?

Chapter 5: Taking Stock: Inventory Management

Storing Your Inventory

Using Warehouse and Inventory Management Systems

Packaging and Labelling

Treating Your Stock Like Gold: Knowing Its True Value

Part 2: Full Steam Ahead: Building Your Online Store

Chapter 6: The Starting Line: Legal Matters and Registering Your Online Business

The Legal Stuff: Protecting Your Customers and Your Business

Pick a Name, Any Name: Naming and Setting Up Your Business

Understanding Sales Tax and Import Duties

Chapter 7: Choosing a Platform for Building Your Website

Building an Ecommerce Platform: The Essential Elements

The Lay of the Land: Exploring the Different Platform Options

The Choice Is Yours: Choosing a Platform

Chapter 8: Navigating an Ecommerce Website

Website Architecture

Getting to Know the Customer-Facing Front End

Looking Under the Hood of the Back-End

Piecing Together an Ecommerce Workflow

Chapter 9: The Blueprints: Designing Your Online Store

Designing with Style in Mind

Choosing a Theme for Your Store

Making a Great First Impression: The Homepage

Creating Category (or Collection) Pages

Perfecting Your Product Pages

Designing Your Shopping Cart and Checkout

Using Images and Media on Your Website

Boosting Your Site with Winning Words

Chapter 10: The Reward: Receiving Payments

Using Payment Gateways and Paying Merchant Fees

Considering Other Payment Methods

Processing Subscriptions and Recurring Payments

Preventing Fraud

Part 3: All About the Customer: Providing a Positive Customer Experience

Chapter 11: Understanding the User Experience

Differentiating between UX, CX and CS

Generating a Positive User Experience

Maximising Your Conversion Rate

Summing Up the Customer Experience

Chapter 12: Customer Service: Happy Customers Are Loyal Customers

Delivering Great Customer Service

Building Trust Using Customer Reviews

Connecting with Your Online Customers

Setting the Bar: Metrics and KPIs

Chapter 13: From Here to There: Order Fulfilment

Picking and packing orders

Shipping Solutions for Online Retailers

Offering Shipping with a Difference

Tracking Your Orders

Chapter 14: Closing the Loop: Returns

To Refund or Not to Refund Returns?

Creating a Returns Policy and Returns Page

Guiding Customers through Lodging a Return

Keeping Returns to a Minimum

Processing Returns and Balancing Inventory

Part 4: The Next Big Thing: Marketing Your Ecommerce Business

Chapter 15: Digital Marketing: A Beginner’s Guide

Digital Marketing 101

Learning the Marketing Lingo

Building Your Marketing Plan

Moving through the Marketing Funnel

Starting from Scratch: Growth Hacking

Converting Website Traffic into Sales

Chapter 16: The Search Party: Finding New Customers

Acquiring Customers through Digital Marketing

Using Search Engines to Grow Your Business

Choosing a Paid Media Channel

Digging for Gold: Analytics and Data

Discounting to Generate Sales

Chapter 17: Sticky Customers: Customer Retention

Retargeting Versus Remarketing

Managing the Relationship with Your Customers

Chapter 18: Getting Social: Social Media and Influencer Marketing

Exploring the Different Social Media Platforms

Developing an Organic Social Media Strategy

Measuring Engagement

Making the Most of Influencer Marketing

Part 5: The Part of Tens

Chapter 19: Ten Things to Understand About Selling Online

You Have Plenty of Time to Get Started

You Get Out What You Put In

Paid Media Is Not the Only Marketing Channel

You Can’t Sell to Everyone

Sales Are for Vanity, Profit Is for Sanity

Start with Enough Cash

Offer a Broad Range of Products from Day One

Trust Is Everything

Ecommerce is a Numbers Game

You Can Do It!

Chapter 20: Ten Useful Online Tools

Ecommerce Platform: Shopify

Data Monitoring: Google Analytics

Email Marketing Platforms: Klaviyo (or Emarsys or Mailchimp)

Product Reviews: Okendo (or Yotpo)

Customer Service: Gorgias (or Zendesk)

User-Generated Content and Influencer Marketing: Foursixty

Accounting Software: Xero

Competitor Evaluation: SimilarWeb

Trending Products: Google Trends

Scheduling Tools

Chapter 21: Ten Things to Check Before Going Live

What Problem is Your Product Solving?

Is Your Margin North of 70 Per Cent?

Do You Have Enough Stock?

Have You Got a Budget?

Do You Have a Plan to Get Organic Traffic?

Is Your Paid Media Strategy Ready?

Have You Set Up Your Email Automations?

Do You Have Your Content Plan Ready?

Do You Know the Lingo?

Have You Got Your 12-Month Product Roadmap Ready?

Appendix: List of Abbreviations

Index

About the Author

Connect with Dummies

End User License Agreement

List of Illustrations

Chapter 3

FIGURE 3-1: Google Trends search results for ‘smart watches’.

FIGURE 3-2: Google Trends search results for ‘DVD’.

Chapter 8

FIGURE 8-1: An ecommerce order workflow.

FIGURE 8-2: A basic ecommerce customer-service-oriented tech stack.

Chapter 15

FIGURE 15-1: The marketing funnel.

Guide

Cover

Table of Contents

Title Page

Copyright

Begin Reading

Appendix: List of Abbreviations

Index

About the Author

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Selling Online For Dummies®

Published by

John Wiley & Sons, Australia Ltd

Level 4, 600 Bourke Street

Melbourne, Vic 3000

www.dummies.com

Copyright © 2025 John Wiley & Sons Australia, Ltd

The moral rights of the author have been asserted.

ISBN: 978-0-730-39452-5

All rights reserved. No part of this book, including interior design, cover design and icons, may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording or otherwise) without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Legal Services section of John Wiley & Sons Australia, Ltd, Level 4, 287 Lonsdale Street, Melbourne, Vic 3000, or email [email protected].

Cover Image: © LumiNola/Getty Images

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Introduction

My mission is to help change the lives of the founders I work with, using ecommerce as my vehicle, and my vision is to be the best at what I do.

I write this book to deliver on that mission and support Australian business owners as they strive to understand ecommerce, helping them launch a successful online retail component to their business.

Ecommerce might feel like it’s peaked, but it hasn’t even come close yet. Globally, ecommerce sits at roughly 20–22 per cent of total retail spend, and I think in ten years it will reach 50 per cent, which is still only half of all retail spend … though 50 per cent is massive.

All I have to do is look at my three daughters, who can use a computer or iPad like a pro, and the concept of digital evolution is affirmed in my mind. In other words, as their generation grows older, it is inconceivable for me to believe that they will shop less online than today’s adults. They will shop online far more.

As you read this book, I want you to feel excited about your new future. I’ve lost count of the number of people I’ve coached who have gone from making little to no money, even struggling to pay rent or afford dinner, to becoming multi-millionaires. This is not a get-rich-quick book, but a genuine path to the ecommerce glory that lies ahead if you follow the advice I lay out for you here.

About This Book

While researching this book, I realised that there are very few centralised hubs of information for people looking to start and build an online business. It’s still so new that ecommerce is barely taught in schools and universities. Sure, you can study marketing or business, but it really is hard for an online entrepreneur to find all the information they need in one place. In this book, I aim to provide a single tool that has all the information you need to succeed in ecommerce.

I’ve drawn on my own experiences of starting an online business (many years ago!), then selling on marketplaces like eBay and Amazon, and finally becoming a coach to many online retailers. I’m lucky enough to have been exposed to many different types of products that are sold online, from furniture through to alcoholic and non-alcoholic beverages; from fashion and leather goods through to perfume, health and beauty products. You name it, I’ve probably helped sell it.

I intend for this book to be a foundational guide to ecommerce. In other words, I’ve approached the subject of ecommerce in a step-by-step way to emulate the path you’d take when starting your own online business. This book explains holistic ecommerce principles and strategy — it doesn’t just provide you with tips to grow your sales revenue. You’ll discover how to find and price your products, what a good profit margin is, how logistics work, where to find customers and how to make sales.

I’ve worked with so many business owners, from start-up stage to $300 million a year monsters, and they all come to me to understand the principles of good, profitable ecommerce. With this book, I aim to provide a simple, easy to follow, easy to act upon resource to guide your ecommerce journey.

Foolish Assumptions

While writing this book, I assume you have little or no knowledge of selling online, other than knowing what it is — and even if you don’t, I’ve got you covered.

I also assume I am writing for people who want to find out what ecommerce is, so they can either:

Start an online business from scratch

Seek a career in ecommerce (but first upskill by improving their understanding of online retail)

Join in the conversation about the digital evolution while building their general knowledge

You won’t need to have a website, or even a product idea — I can help you with that. Just come in with an open mind and a laptop or device to check out some of the websites I send you to, and bring with you an appetite to discover how to sell online — the right way.

Icons Used in This Book

To keep you on your toes, I throw in useful icons throughout the book. I use these icons to draw your attention to key points, little tricks or quick wins, and shortcuts and warnings. The icons are pretty self-explanatory, but here’s a summary of what they mean.

If this were a textbook and you were studying for an exam, you would highlight these parts. These are the key messages that will serve you well as you grow your ecommerce knowledge.

This is what I call the gold. Hold on to these tips; they’re often time-savers or money-makers!

I use the warning icon when I am highlighting a common mistake or something you need to look out for, so try and keep an eye out for this one — the chances are you’ll be learning from one of my mistakes!

When you see this icon, I may well be talking about stuff that you can brush over, as it’s usually extra information that explains technical features of the ecommerce world. However, some of these extra details may speak to you, depending on your store.

To help you understand how ecommerce works in real life, I add a few examples so you can start to imagine how the decisions you make may play out for your business.

Where to Go from Here

I’ve written this book in a logical order, beginning with starting your online business, including exploring your product ideas, then moving on to pricing your product, choosing an ecommerce platform so you can build your store, and launching your business and finding customers.

The key to succeeding in ecommerce is to build a well-rounded business that focuses as much on product and brand as it does on marketing. So, I recommend you read this book from front to back, and then keep it with you as a guide you can refer to throughout your ecommerce journey. In this book, I aim to help develop you into a well-rounded ecommerce professional, equipped with all the tools to succeed in selling online. At the same time, if you need answers to a particular thorny question, remember to peruse the index and the table of contents to see where you might find the information you need. You may also find that the Appendix is a useful reference if you forget a crucial abbreviation (ecommerce is full of abbreviations, from AOV to RRP!).

I wish you well on your journey towards selling almost anything you choose online, and I look forward to playing a part in that journey — one that may be life-changing in the most exciting of ways.

Part 1

Getting Started with Selling Online

IN THIS PART …

Understand the stages of the ecommerce journey, from finding products through to marketing.

Develop a strong foundation for ecommerce success.

Evaluate your idea and figure out product pricing.

Source, buy and import products to sell.

Manage your stock levels with inventory management.

Chapter 1

Introducing the Business of Selling Online

IN THIS CHAPTER

Getting the ecommerce ball rolling

Navigating your ecommerce journey

Preparing for ecommerce success

Unless you’ve been living under a rock, you’re probably familiar with the concept of selling online, also known as ecommerce. Someone who sells online might also be known as an online retailer, as opposed to a traditional (bricks and mortar) retailer. Selling online has been a game-changer in the retail landscape because it’s given the average person a leg-up into the retail industry through its low barriers to entry. As an example, you don’t need to fit out an expensive physical shopfront when you sell online, and you won’t need to rely on fickle foot traffic.

This book isn’t about building a nice-looking online store, though that aspect is a good bonus. In this book, I aim to prepare you, the reader, for ecommerce success by helping you build a thriving online business. I’ll be sharing the ecommerce fundamentals that I’ve used to help coach some of the best online brands in the world. And in this chapter, I take you through a summary of what I will cover throughout the book.

So, what are you waiting for? Put your thinking cap on … it’s time to start planning for success in your new career.

Getting Started with Ecommerce

The first part of this book lays down the foundations for ecommerce success. In Chapter 2, I break down the essential elements of selling online. I dive into the different types of online selling and where it all began, as well as the difference between physical and digital products (you can sell more than shoes and sofas online — consider subscriptions, courses and audiobooks, for example).

One rule tends to be consistent no matter what business you’re in: Bad ideas don’t work! In Chapter 3, I help you assess your idea for your online business so that you understand what makes for a good idea that can translate to online sales success. I help ensure you’re selling products that solve problems, rather than just selling products for the sake of it.

When you have your ideal products in mind, Chapter 4 turns to the nitty-gritty of sourcing these products. I show you where to begin your hunt for products, and where you can meet some world-class manufacturers that you can begin real conversations with. And then, after you find the products you want to sell, Chapter 5 dives into inventory management, one of the most complex parts of running an online business — you need to start storing your products in a smart and efficient way from day one.

Creating Your Online Store

It may sound boring, but before you start piecing together your online store you need to get your legals in shape — though the fun part is choosing a domain name, or your ‘www.something’. In Chapter 6 I help you get started with choosing your business name and securing a domain, as well as all the admin behind the scenes.

In Chapter 7, I move on to helping you choose an ecommerce platform that’s right for your business — in other words, picking the engine that’s going to power your new online business. Some great options are on the market, and I show you the pros and cons, and the bells and whistles, of your options. After choosing the right platform, you need to understand what it takes to build a beautiful, high-converting online store, with a great user experience — which is where Chapter 8 comes in and I take you on a guided tour of a typical online store (both the customer-facing front end, and the engine room, or back end).

Chapter 9 is all about establishing the blueprint for success, in terms of the design of your online store (your website). I talk you through the ins and outs of designing and building an online store (and how your ecommerce platform can help you keep it simple, stylish and well suited to your target market). Images and words are both part of the conversation here as you seek to make sure your website’s content — and your products — appeal to future customers.

Part 2 concludes with the reward of receiving payments in Chapter 10, which I’m sure will motivate you to move forward. I also cover how to use payment options to attract and acquire new customers, for example in international markets.

Delivering a Great Customer Experience

In Part 3, the focus turns to the people who will be visiting your online store — in other words, your customers. However, you also need to understand the importance of both the user experience (UX) and the customer experience (CX) to ensure you build a business (and a website) that focuses on both essential factors. Chapter 11 covers the onsite experience — the performance of your online store — and helps you understand what it takes to build a site, and a shopping experience, that can turn website visitors into customers.

Customer loyalty is a huge part of ecommerce, so Chapter 12 dives into some of the strategies for ensuring your customers stick around. Loyalty can be generated by introducing whizz-bang loyalty programs, but you can also generate loyalty through good old-fashioned customer service (CS). I break down what online shoppers expect in terms of communication channels and query response times, and I share some options in case you add a customer service platform to your ecommerce platform.

Returning customers are a sign that something is working well behind the scenes, so in Chapter 13 I look at shipping, logistics and order fulfilment. And while it’s great to get your orders out fast, returns are a part of life when you run an online store, so in Chapter 14 I look at the ever-evolving space that is reverse logistics — in other words, handling those dreaded returns. I also break down the ultimate ecommerce question — to refund, or not to refund?

Marketing Your Online Business

Things get spicy in Part 4 as it’s time to get your brand out into the world and market your business. In Chapter 15, I break down the beast that is digital marketing, which gives you a foundation for moving forward into advertising — which is exactly what I cover in Chapter 16, where I look at customer acquisition through paid media strategies such as Facebook and Instagram (Meta) ads, as well as Google ads, and how to use these tools to win new customers. I show you how to interpret the data from Google Analytics — a must for any serious online retailer. I also consider search engine optimisation (SEO), and how you can use SEO strategies to rank highly in search engine results, thus driving organic (or free) traffic.

Keep your website’s content SEO-friendly. By all means skip ahead to Chapter 16 to help you get the text right if you’re in the design phase (Chapter 9), although I recommend finishing the book before you commence your site build (and then referring back to the relevant chapters as needed to help you on your way).

Chapter 17 shifts from customer acquisition to customer retention — one of the keys to a sustainable and profitable online business, given that it’s usually cheaper to retain a customer rather than acquire a customer.

Part 4 concludes with Chapter 18, where I look at a topic that’s equal parts valuable and fast-moving — social media. Understanding your target market is key, as well as knowing how to reach your customers and talk to them. I focus on organic (free) social media strategies, including which channels to use, whether it be Facebook, Instagram or TikTok. Chapter 18 also looks at influencer marketing — is it a myth, or can you make serious money using influencers? I break this question down, with options for beginners to make use of influencers from the get-go.

Ready, Set, Go

In Part 5, I get ready to wave to you as you sail off into the ecommerce world — but before you go, I give you some parting advice that I’ve gathered along my own journey, including ten things you need to understand about ecommerce, my top ten favourite online tools and my top ten things to remember before you go live! And just as you’re thinking you’re all done, I pop in a bonus Appendix listing common ecommerce abbreviations that it helps to recognise.

You can grow a one-person online business into a business that turns over $100,000 a month. In this book, I hope to set you on that path, and help you change your life!

Chapter 2

Selling Online in a Nutshell

IN THIS CHAPTER

Understanding why ecommerce is worth your time and energy

Getting to grips with ecommerce abbreviations

Considering some useful tips before you get started

Making sense of online sales channels

Exploring the scope of ecommerce, from physical to digital products

The practice of selling online, commonly known as ecommerce, is simply the electronic sale of goods and sometimes services, both physical and digital. In hindsight, electronic commerce may not be the best title for the industry — it has very little to do with electricity — however, there you have it.

Put even more simply, I’m talking about selling goods and services via an online store or marketplace. What’s a marketplace, I hear you ask? Good question! I’ll get to that later in this chapter as I take you through what selling online involves — from the boring stuff (like understanding the lingo of ecommerce) though to the fun stuff (such as exploring the different sales channels you can use).

It’s Never Too Late To Get Started

It’s never too late to begin your ecommerce journey. In fact, there’s never been a better time to start! It’s easy to believe that it’s all been done before, but it hasn’t, and there’s always room for healthy competition.

Online retail is adapting and changing so quickly right now that savvy online retailers have plenty of great opportunities to get ahead of the game. For example, one of the criticisms of online retail has been the lack of personal touch. Time and time again, you’ll hear traditional retailers (I won’t call them dinosaurs), who typically haven’t taken ecommerce seriously enough, say that consumers want a face-to-face service — which is something online stores can’t compete with, right? Wrong! Nowadays, a smart new online retailer can gain a competitive edge by switching their live chat customer support service to face-to-face video support (for a more personal service), or adding a slick bit of intuitive AI-driven (artificial intelligence) search capability so that visitors can find what they’re looking for — sometimes before they even know they need it!

For a relatively low cost, a whole range of technological advances are out there and ready for online retailers willing to give them a go.

One of my favourite things about being an online retailer is hearing the continuous stories of new online entrepreneurs: people who have bootstrapped, or growth hacked, their way to success. You don’t need to have millions of dollars in the bank or a chain of 50 retail stores to succeed; the barriers to entry are low enough for a shrewd operator to make a successful living in ecommerce.

The average cost of fitting out a nice retail store in a good location may reach thousands of dollars before you’ve even bought your stock or hired your staff, whereas an online retailer can very cheaply open an online store on a platform such as Shopify or BigCommerce — sometimes even getting started for free, and only paying a monthly fee if they decide to continue past the free trial. The opportunities are there for the taking!

Online retail has grown rapidly, with the tailwind of COVID-19 behind it — and even though that growth has steadied, it’s still on the rise. Online retail is no flash in the pan — the way consumers behave is changing forever rather than temporarily, and you can be a part of it.

A brief history of ecommerce

Although it could be claimed that ecommerce in its earliest forms (such as the introduction of electronic funds transfers) dates back to the late 1960s and 1970s, in this book I’m focusing more on products that are sold online (rather than the transmission of data, such as through electronic lodgements of tax and other information).

In the 1980s and early 1990s, companies such as the Boston Computer Exchange created online marketplaces for people to sell their old computers. Fast forward a few years to 1995, and you saw the launch of the online marketplace Amazon (which you’ve probably heard of — and if you haven’t, I suggest you put this book down and google it!). In 1999, another giant was founded: the enormous Chinese online marketplace, Alibaba. The two founders of these companies, Jeff Bezos and Jack Ma, sit high in the rankings of the wealthiest people in the world. So, you’re in good company.

Today, many of the largest companies in the world either operate or power ecommerce businesses. Take for instance Shopify, which powers online stores all over the world. Or consider the story of Afterpay, the Australian ‘buy now pay later’ start-up, which was listed on the Australian Securities Exchange in 2018 at less than $3 (AUD). By early 2021, it had reached $156! These companies are dominating their fields on the back of strong ecommerce growth.

When you’re weighing up business opportunities to invest in or start yourself, I liken it to property investing: if you follow the railway lines being built, or the major shopping centres or malls being built (in other words, if you follow the investment in infrastructure), there’s a fair chance those areas are on the up.

The kinds of products you can sell online these days also hints at the limitless opportunities of online retail. For example, here is a list of Shopify’s ‘Trending Products To Sell’ from early in 2021:

Peel-off face masks

Nail polish

Exercise bands

Water bottles

Blankets

Yoga and Pilates mats

Kayak accessories

Jigsaw puzzles

Kitchen and dining room furniture

Rugs

Board games

Laptop skins

WHO ARE THE BIG PLAYERS IN THE ECOMMERCE SPACE?

Although Amazon, eBay, and Alibaba are the big three in many people’s eyes, it may surprise you to hear that Alibaba isn’t even the biggest ecommerce player in China anymore — that award goes to JD.com, another online marketplace. You may also be surprised to discover that eBay and Alibaba aren’t higher placed, but it just goes to show how many enormous ecommerce businesses are out there today, and that’s testament to how many smart companies have pivoted into selling online and tapped into the huge growth that has been occurring.

As it stands today, here are the 10 largest ecommerce businesses in the world, according to Forbes:

AmazonJD.comSuning Commerce GroupAppleWalmartDell TechnologiesVipshop HoldingsOtto GroupGome Electrical AppliancesMacy’s

The list contains something for almost everyone, from the sublime to the ridiculous. Almost anything can be sold online, and there is sure to be a demand for it.

Although no one has a crystal ball, it is conceivable to predict that, within 10 years, ecommerce will overtake traditional retail in terms of its share of consumer spending.

What’s all the fuss about: Why start an online store?

Hopefully by now you have whetted your appetite for ecommerce, or at least further fuelled your fire — and with good reason. Ecommerce equals opportunity for all, and what you are faced with is a fairly level playing field, or free market. Whether you’re a multinational or global business, an experienced retailer with multiple stores, a Ma and Pa-style business with a local store, or a first-timer selling bohemian crystals, heated dog mats, shoes or all of the above, there has never been a better time to start an online store.

The COVID-19 pandemic of 2020 brought about a seismic shift in how consumers spend their money. In case you were living off the grid during the pandemic, you’ve been living under a rock, or you’re simply too young to remember the pandemic by the time you pick up this book (because it’s been labelled a classic and kept in circulation for eternity), COVID-19 is a virus that ravaged the world in 2020 and continues to present problems at the time of writing. It forced the closure of international borders and localised lockdowns of people around the world due to its contagious nature and the lack of a widely accessible vaccine. With border closures, lockdowns and the ongoing risk of contamination came the closure of retail stores in waves.

So, what did people do when they couldn’t leave their homes to go to the shops? They picked up their smartphones and tablets, or logged on to their desktop computers, and they shopped — online — in a massive way.

The shift from physical retail (also known as bricks and mortar retail) to online retail was already in progress in most parts of the world, but it accelerated quickly during COVID-19, bringing years of growth from this sudden disruption to retail in six short months. The result has rapidly generated huge wealth for some online retailers. The United States Department of Commerce reported considerable growth in ecommerce sales when comparing 2019 to 2020, and the chances are that this growth will prove to have nudged ecommerce sales (as a proportion of all retail sales) far ahead of its projected longer-term growth pre-COVID.

Some industries boomed more than others. In somewhat of a strange lottery, homewares, DIY and books grew at unprecedented levels, while businesses that focused on parties and events struggled. In other words, anything you could do at home became more important to consumers. As travel restrictions came into place, people were forced to spend more time at home, and so they began to critique their surroundings and spend money improving them.

In Chapters 3 and 4, I’m going to talk about the importance of choosing the right products to sell online, including ways to view trending products and how to source them, to give your online store the best chance of success.

Online retail may seem to be everywhere, but it is still very much in its infancy, not even accounting for half of retail sales globally. In fact, it’s nowhere near half: most countries sit at 10–20 per cent of total retail sales, with China leading the way at around 35 per cent. The good news is that it’s never too late to start out as an online retailer, no matter when you’re reading this book. Surely at some point there will come a time when online retail overtakes physical retail to become the norm (when we may have to push our children to visit an actual mall, or remind them what one is), but we’re not there yet.

Say What? Understanding The Lingo

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<h1>Say What? Understanding the Lingo</h1>

<p>Writer’s block.</p>

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Only joking! You won’t be asked to write or understand HTML. Which, by the way, is a code used by web developers to build websites and other cool things. More technically, HTML stands for hypertext markup language, or the language of websites. You can keep your coding course under wraps for now; however, you will need to know some online lingo in order to truly understand your future business (or communicate with your business partners).

Ecommerce loves abbreviations, perhaps more than many industries. To give you a head start, here’s a rundown of some fancy shorthand that is going to help you in your pursuit of ecommerce greatness. Don’t worry, the context of the following abbreviations will be covered throughout the book, so you don’t need to understand them all now.

AOV:

Average order value

API:

Application programming interface

ASP:

Average selling price

CMS:

Content management system

CRM:

Customer relationship management

CRO:

Conversion rate optimisation

CS:

Customer service

CSS:

Customer service software

CTA:

Call to action

CTR:

Click through rate

CVR:

Conversion rate

CX:

Customer experience

Dev:

Web developer

Ecom:

Ecommerce

HP:

Homepage

GA:

Google Analytics

LTV:

Lifetime value

NPS:

Net promoter score

OOS:

Out of stock

OTB:

Open to buy

PIM:

Product information management

ROAS:

Return on ad spend

RRP:

Recommended retail price

SEM:

Search engine marketing

SEO:

Search engine optimisation

SKU:

Stock-keeping unit

SOH:

Stock on hand

UI:

User interface

UTF:

Unable to fulfil

UX:

User experience

Understanding the abbreviations on this list can save you lots of time and energy. If a client comes to me with an idea for an online business, I give them this list of abbreviations and ask them to explain them to me. If they can’t describe them all, I suggest they go back to the books and make sure their foundations are a little more solid before they get started.

So, there’s a few to get you started, and there are plenty more where they came from. I’ll explain the meanings in context throughout the book, and the chances are you’ll hear these terms in your own research, or from suppliers and partners. In fact, as I was writing this chapter, I was discussing with the babysitter how I wish I could speak another language, and her comment was that ecommerce is another language. An exaggeration, perhaps, but not far from the truth! (If ecommerce were a language, it would surely rival Klingon as the least cool language in existence though.)

Understanding the terminology is a key part of creating an online store. It is essential for you to get a solid grasp on the lingo before you get started if you intend to be successful.

Things You Need To Know Before You Start

There are a few things you need to know before diving head first into starting an online store. It’s not as simple as paying someone to build you a website and throwing some money at Facebook ads. In fact, this is a pretty sure recipe for failure.

I get approached all the time, by friends and strangers alike, with ideas for the next big thing to sell online. I can tell you with 100 per cent certainty that I can pick an online business that is destined to fail within five minutes, because it’s easier to fail than it is to succeed.

Often, people come to me with half-baked ideas for websites without having given the proper time or respect to researching the industry. I wouldn’t take my shovel outside and proclaim to know how to dig a pool (even though my wife thinks I should). Instead, I give proper respect to the years of training it takes for a pool builder to develop their craft. It’s no different in most industries, including ecommerce. If you’re getting close to launching an online store and you can’t tell me your ROAS, your AOV or CVR (for a reminder, refer to the preceding section), then park your store and get back to the books (this one, hopefully).

Understanding the ecommerce industry is boring. It’s not cool and it takes time, but it is essential if you want to succeed. You must understand the industry before you try to master it. I always consider myself an ecommerce operator, not a fashion brand, cosmetics brand, or whatever other industry I’m operating in. You may be selling essential oils, with particular expertise in how they benefit people and their surroundings, but if you’re hoping to make money selling online then you must also be an ecommerce expert, whether you like it or not.

One of my screening questions to potential new brands I work with is ‘tell me what you know about ecommerce’ because the conversation usually focuses on product, and while product is very important, it is undiscoverable without the right foundations. Some great partnerships exist between product people and ecommerce people who marry the two sets of skills together, but thinking you can master ecommerce with a great product alone is fraught with danger and risk.

Starting an online business requires, at the very least, a basic understanding of the principles of ecommerce. This book will detail many of these principles; however, here I’m going to share a few pointers to help you avoid some common pitfalls, including some of the warning signs that I see when listening to ecommerce pitches.

Be patient: Don’t start before you’re ready

This is absolutely my golden rule. We’ve all made the mistake of starting before we’re ready, or putting unrealistic time frames on our start date, but it’s crucial to follow a well thought out plan that includes a business plan and a budget, as well as your own personal preparation and education.

The temptation can be to rush into listing substandard products on your site, or listing products before you’ve built the ideal website, or even listing them before you have the funding to start your business, but launching a sub-par experience for the customer is a sure-fire way to damage your online reputation and blow the chance to make that great first impression. Your online reputation can be a hard thing to improve as negative reviews will sit there for years and years and years.

Take your time, don’t rush, read as many books as you can, listen to as many podcasts as humanly possible (particularly ones that share case studies on other ecommerce start-ups) and kick off your online business when you are 100 per cent ready.

Manage your expectations: the chances are your store will go through a quiet start, particularly if you are self-funded or bootstrapping the business. This is normal — even the best stores have to start somewhere.

Good product is key

It doesn’t matter how great your website looks, or how slick your marketing is — if your product isn’t in demand, it’s going to be hard to succeed in ecommerce. In the earlier section ‘What’s all the fuss about: Why start an online store?’ I talked about the impact of COVID-19 on certain product categories. Certainly, there was a mix of good planning and good luck but, aside from waiting for the next global pandemic, it’s important to plan to sell products that are going to help your store boom!

In most of the successful online businesses I have seen or worked with, the common theme is a great, trending product. A good product makes everything easier, and the reverse applies — there are some first-class websites that don’t translate into high revenue earners because the product is simply wrong, or too niche.

In Chapter 3, I discuss methods for selecting trending products — products that people are actively searching for. If you have a product that is not in demand, it’s going to make it hard for your business, no matter how slick your website is.

It’s a good idea to find products that your customers want to buy, not products that you hope they want. Crystal dog bowls may seem like a great idea but if they aren’t in demand, they won’t sell. Or, if you’re selling them at $100 and other stores are selling them at $20, you’re going to find it hard to move them. Find a good product that sells, and make sure your offer on that product is competitive. Get to know all your competitors for any product you launch and see where you rate among them on price and quality.

Facebook is not always the answer

Possibly the most common question I get from start-up online sellers is about how to grow their Facebook ROAS (return on ad spend). They wonder why Facebook is guzzling their money so hungrily, but their bank account isn’t growing. Facebook is a great marketing channel to complement your overall strategy, but at its worst it can be a greedy channel that sucks up money and spits out sales you were going to get anyway. Anyone relying on Facebook as their sole marketing channel is in trouble. Actually, anyone relying on any one marketing channel is in trouble.

Traffic to your website needs to come from a variety of channels that complement each other. In Part 4 I explore some of those channels.

Typically, if I’m asked about improving the Facebook ROAS for a new business, I ask a few questions, such as ‘What are your organic channels?’, ‘What growth hacking techniques are you using?’, ‘How many SKUs (stock-keeping units) do you have?’ and ‘Why did you choose that product range?’ There are almost always other reasons your business is not attracting the sales you’d hoped. Facebook is one way of getting visitors to your store, but it is not the tool to get them to purchase. In Chapter 11, I’m going to review some tools for turning visitors into customers, through what’s known as improving the UX (user experience) and optimising your website for conversions.

Know your numbers

The last thing you want is for your promising online business to run out of money. Some of the best ecommerce operators I know have a background in finance or at least a very strong understanding of the basics of accounting and finance. You need to know your profit margins for each product, and exactly what price you need to charge for your products, in order to have a fully scaled and commercially viable ecommerce business.

If you don’t know the difference between revenue, profit and cashflow, it’s a good idea to brush up. It can make all the difference to how you understand and manage your business.

Here are some of the key numbers you will need to know (plus some more abbreviations!):

Capex (capital expenditure):

Funds used to purchase assets or equipment, or pay for building a new website. This will be your initial outlay when starting your business.

COGS (cost of goods sold):

Probably the most important financial figure in ecommerce, and also the most butchered. Your COGS should include the cost of your goods, plus the freight and other costs incurred to land the goods into your country and/or property. Your COGS is the reverse of your profit margin. So if your margin on a product is 70 per cent, your COGS is 30 per cent. COGS is a must-have KPI (key performance indicator) for any product buyer.

Gross profit:

Gross profit is your sales, less the expenses incurred in making those sales. So things like the cost of your goods, or the freight to deliver the goods to your customer. Not included, though, are things like wages or rent. Try and consider only costs directly attributed to the sale.

Net profit:

Net profit is your revenue minus all your expenses. What you are left with is your net profit.

Net profit margin:

Your net profit margin is your net profit expressed as a percentage of your revenue. It’s a key metric because raw numbers can be misleading — many retailers make the mistake of focusing on gross sales over net profit, but net profit is what you take home at the end of the day. Your net profit is a great barometer of how your company is performing and trending over time.

Opex (operating expenses):

These are your day-to-day running costs, like wages and marketing.

Revenue:

Your revenue is your sales, generated from your normal business activities. It’s the amount before any costs are taken out — except tax. Usually, any sales tax is removed from your revenue reporting.

Knowing your way around a P&L (profit and loss statement) and a balance sheet is a great financial skill to have. The numbers play an important part in ecommerce and serve to tell you how much you can spend in certain areas to grow profitably. Without understanding these numbers well, you leave yourself open to costly mistakes, such as believing your business is growing but not being able to take home any more money — which is the difference between making a profit and generating cashflow.

Introducing Online Sales Channels

There are different kinds of sales channels to suit just about any business or individual. Whether you’re selling your boyfriend’s old size 32 Levi’s that he just won’t fit into anymore (despite what he thinks), or you’re wholesaling product all over the world and you want to make it easier for your clients to log in and place orders, the chances are that there’s an online sales channel for you. Wholesale trade is the practice of a supply or manufacturing business selling products to a retail business, which then sells them to the end customer. People often refer to wholesalers as an intermediary or ‘middleman’.

If you think about all the times you’ve used the internet to purchase something, it can seem pretty ridiculous how many options you have. I’ve bought and sold cars online, found a breeder for my Rottweiler, studied from afar, paid my council rates, sourced cheaper gas and electricity … and I can’t remember the last time I bought clothes in a physical store. The breadth of industries that can prosper via some form of online sales channel is enormous!

In the following sections, I introduce you to a few of the most common online sales channels.

D2C: Direct to consumer sales

This is probably what springs to mind when you think of a typical ecommerce business. Direct to consumer (D2C) sales are when a brand or manufacturer sells items directly to consumers without the need for an intermediary (like a wholesaler or a retail store). D2C sales can be applicable across a whole range of industries, whether it be a winery selling wines online without going through the local liquor store, or your favourite fashion brand starting a website and taking customer orders, rather than, or in addition to, stocking retail stores.

Many early online shoppers favoured online shopping for the perception that there were discounts to be had thanks to businesses cutting out the person in the middle, who needed to make a share of the profits. Going direct to customers allowed manufacturers to reduce their retail prices, rather than having to cut in the wholesalers.

Platforms like Amazon and Alibaba are examples of online marketplaces where manufacturers can engage in D2C sales by creating their own stores on the marketplace and listing their products so that customers can place orders directly with them. In many cases, selling online via D2C channels has opened up a huge new revenue stream for manufacturers who were previously focused on B2B (business to business) revenue (I talk about B2B sales in the upcoming section ‘B2B: Business to business sales’).

D2C channels have put a lot of strain on the traditional wholesale customers of manufacturers, as often they can end up competing against one another. I’ve seen this happen to a business I was involved with. We had placed a large order of men’s footwear, only to see that our manufacturer had also listed the same styles on Alibaba at half the price we were selling them for. Pricing rules and other agreements and restrictions are sometimes agreed upon to ensure that manufacturers don’t undercut their wholesale customers. On the flip side, a lot of wholesalers have gone further upstream or become more vertical and explored creating their own brands or manufacturing plants as a way to enjoy D2C benefits. Going vertical (or upstream) is essentially going back up the supply chain to source your product. If you’re a retailer buying from a wholesaler, you might skip the wholesaler and try and go directly to the manufacturer.

B2C: Business to consumer sales

Business to consumer (B2C) sales are when businesses like Walmart stock multiple brands to sell on to consumers. The business is not manufacturing the goods themselves but buying them from manufacturers, before on-selling them to consumers.

In an online context, think of websites like Revolve, Zalora, The Iconic, or the digital versions of retailers like the above-mentioned Walmart. Most of these kinds of businesses are likely to have their own private labels as well. In other words, labels or brands that they have created, where they source its products from a manufacturer to increase the profit margin.

One of the criticisms of larger B2C businesses is that they use the sales data from the brands they stock to then go and copy their products to sell themselves. They may then use their significant buying power to get discounts from the manufacturers of the copied products, which allows them to undercut the original brand they stocked. If this happens to your own manufactured products, you need to regain control, put an end to the business relationship and rethink your strategy, or shift more towards selling online only rather than stocking other businesses.

Typically, a B2C online store carries desirable brands, which is often a method to attract customers to their online store, at potentially a lower cost, as customers are actively seeking the brands. If you are contemplating starting your own brand, you may have to work a little harder or spend a little more money to bring traffic to your store and alert people to who you are.

A common mistake that many new online retailers make is to think that once your online store is open, there will be a natural procession of customers waiting for your virtual doors to open — but there isn’t, and it can be a lonely place unless you actively start acquiring visitors. Part 4 explores sales and marketing in more detail to ensure you get people clicking on your online store.

B2C retailers may make a little less profit per product than a D2C business (as they are effectively the intermediary), but this is not always the case, and it varies from industry to industry. Some of the largest online retailers in the world are B2C businesses — think Walmart, Target or the Zalora websites across Asia.

B2B: Business to business sales

Although not the focus of this book, the flexibility of many ecommerce platforms allows for businesses to sell to other businesses — business to business (B2B) sales; in other words, a wholesale distributor can offer products online to retailers to buy, and then on-sell them to individual customers. An example of this might be a manufacturer receiving wholesale orders through a website, or from its stockists or distributors. This method has allowed for sales to be made from the office, with less dependency on travelling salespeople or print catalogues.

Online sales portals are commonplace these days, such as Shopify’s wholesale application, where retailers can log in and order stock from their wholesale supplier without needing to visit their showroom or meet with a salesperson. In fact, there are plenty of applications out there that do exactly that; for example, Shopify has a native platform for wholesale, and Joor is another one I have used.

Wholesale trade conducted through online channels allows for a reduction in friction. The buyer can log on at any time and place an order whenever they want, from the comfort of wherever they are. I was recently part of an ecommerce build for a B2C business with 150 stores across Australia, and as part of the scope of its website build, the business constantly repeated the need for their stores to be able to log in to the website and place stock replenishment orders; in fact, they were more excited about the potential of this service than the opportunity the new website provided them to find new customers across the country who had never seen their stores!

Online marketplace sales channels

An online marketplace is exactly as the name suggests: a platform to bring together sellers and buyers in a common environment. Sellers can be retail merchants or individuals, and they are open to selling virtually anything lawful.

When you hear the term online marketplace, the obvious ones that come to mind are eBay, Amazon and, more recently, Facebook Marketplace. Some marketplaces are free, like Facebook Marketplace, while others charge a commission for each item sold or a monthly subscription fee.

Some online businesses offer a hybrid model that includes a D2C or B2B website, as well as offering a marketplace where brands can list additional products. An example of a hybrid model is Zalora, which buys stock up front from brands under a traditional wholesale model but also provides a marketplace offering.