Creating an online business is one of the best ways for entrepreneurs to start out. There are no overhead costs and most third party shops are free to use if you’re a seller. But getting an online business started can be tougher than a traditional brick and mortar thanks to the lack of sidewalk traffic--not many consumers are going to walk past your store and enter out of curiosity. So how can you make your online business work?
Online advertising is a must if you’re serious
There are different ranges of advertisement packages that one can purchase on any multitude of sites. From Facebook to Google, the options are truly endless; as is the potential traffic. Online advertising doesn’t have to cost you an arm and a leg, but you may find that you have better responses from wide-reaching advertisements as opposed to smaller audience packages.
Open a digital store front
Sites such as eBay, Etsy and custom domains are perfect for opening up online shops. They’re often free to sign up for and free to use. If you use a custom domain, though the purchase of the domain name could cost a pretty penny, you’ll have the option of completely customizing your store and its layout. If you’re not savvy with web design, hiring a designer may be beneficial.
In time, the revenue you bring in from products and services will outweight the monthly costs of a custom domain.
Don’t charge too little, and remember shipping
Often times, online stores fail because owners aren’t sure what to charge for products. Generally, you want to cover the cost of materials and most of the shipping. Most people charge according to how many hours it takes to create the product; for instance, one store may charge $20 for a product because it takes two hours to complete and order, summing up to $10 an hour. If you’re not sure how much the products are worth, an hourly model like this may be the simplest way to determine price.
Likewise, don’t lose all of the money you’re making with shipping. While things such as priority shipping and next-day options are awesome, they can be extremely costly--especially if you ship internationally. It’s a good idea to factor these things in as you determine price.
Sales and coupons will benefit your store
Though many online store owners are afraid that coupons and sales will ultimately hurt business, the opposite is generally true. Major retailers often hold big sales right before the holidays like Labor Day, and usually have some sort of flash sale every now and then. Consider offering free shipping coupons (especially on a minimum order total) and holiday sales to bolster business. While you may not make the most money during the sale, anyone who loves your product will come back to pay the full price after the sale is over.
Online businesses come with a lot of positives and very few cons--however, the more complicated you make your business, the harder it will be for it to succeed. Keep things simple by opening a simple digital store front, creating a simple (and transparent) pricing model, and offering specials for loyal or new customers.