by Mike Periu, President, Proximo, LLC |
If you know you should be selling online but don’t know how to start, it’s time to try one of these 3 e-commerce solutions.
Alibaba, the Chinese e-commerce giant, expects to facilitate the sale of $420 billion worth of goods this year, up from $170 billion two years ago. The company, founded by Jack Ma in his apartment 15 years ago, has become the world’s largest online seller.
The company’s main business—the Alibaba marketplace—connects small and medium-sized businesses with buyers inside and outside of China. While Alibaba’s success rate is unique, it illustrates a key characteristic of a larger trend—namely, the rapid acceptance of online sales by consumers across the globe.
In the United States, 6.4 percent of all retail sales take place online, a number that will certainly continue to grow for decades. Selling online has gone from something novel to a must-have sales channel in a little more than a decade. Yet only about one-quarter of all small businesses actually sell their products online today, a figure that’s barely budged over the past four years.
If you’re among the millions of small-business owners that still aren’t selling online, it’s time to change that. It’s inevitable that within a few short years, e-commerce retail sales will comprise between 10 and 15 percent of all retail sales in the country, and for many small businesses, those sales could mean the difference between profits and losses.
Once you’ve decided it’s time to sell online, you need to choose the method of online sales best suited for your business. Here are three ways to go.
1. Sell on eBay
eBay has been around for long time and remains a solid option for people who want to sell online. Here’s why this solution is a small-business-friendly option:
- Upfront fees. This online marketplace doesn’t charge any upfront fees for their stores.
- Ongoing fees. eBay stores are offered as a monthly subscription-based service. The fee ranges from $15.95 to $199.95 per month, depending on the level of services you choose and the payment method you select. The more expensive plans enable businesses to list more products without paying an insertion or listing fee.
- Transaction fees. eBay charges two variable fees—one fee when you list a product for sale and another fee when you successfully sell a product. Insertion fees range from five cents to 25 cents depending on the package. Fees charged on the sale are a combination of a fixed amount and a percentage of the product’s value.
- Savings tip. If you aren’t sure if an eBay store is right for you, the company allows you to list up to 50 items per month without signing up for a subscription. The transaction fees are higher, but it’s worth it if you just want to list a few items to try it out.
2. Use a Hosted Solution
Hosted e-commerce solutions offer the best of both worlds—a customized website under your domain name with proven technology managed by the vendor. Instead of building your own system on your server, these solutions give users the impression that you’ve built a custom system while using the reliability of proven software and hardware in a well-provisioned data center. Companies like Big Commerce and Shopify cater to small businesses. Here’s the lowdown on this ecommerce option:
- Upfront fees. There are usually none.
- Ongoing fees. Most hosted solutions are sold as a monthly or annual subscription service. Starting at around $50 a month, they’re affordable for almost any size business.
- Transaction fees. Lower-priced subscriptions sometimes come with a per-transaction fee. You also have to pay the credit card processing fee no matter which subscription package you choose.
- Savings tip. Avoid plans with separate transaction fees for using their system. It’s worth paying a little more to avoid them.
3. Build Your Own System
If you don’t feel comfortable working with an existing solution, you always have the option of building a custom e-commerce solution for your website. A team of developers can program a system that meets your precise requirements. Here’s what you need to know before you get started:
- Upfront fees. Developing a robust, fully customized e-commerce website can cost tens of thousands of dollars.
- Ongoing fees. These can vary tremendously from dozens to thousands of dollars per month
- Transaction fees. The fees to process payments can’t be avoided. Your custom solution will need to be integrated with a payment processing company’s software.
- Savings tip. Wait on building your own system until your volume justifies it.
If you still aren’t sure which platform is best for your business, choose the least expensive option to get started. Conduct a test for three months without much fanfare to teach yourself the basics of online selling. After this initial test period, revisit the issue of identifying the optimal platform, then proceed full steam ahead. Millions of customers are waiting for you online.
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Mike is a seasoned executive with experience in finance and management. He is the founder of Proximo, LLC. a leading provider of small business education and training services in both English and Spanish. Mike Periu is also a leading national voice for individual empowerment through financial education and entrepreneurship. He has been interviewed over 500 times in national and international media, including NBC, Univision and CNN. Visit Mike on Google+: https://www.google.com/+MikePeriu
[via American Express Open Forum]
