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Preparing for eCommerce success

23rd July 2020

3-minutes read

How do you know if your business could run a successful eCommerce website?

During the Covid-19 lockdown in 2020, many businesses closed their doors, furloughed staff and limped along for a few months, reducing costs as much as possible in response to a dramatic downturn in income.

Retailers selling non-essential items were hit hard. But so were B2B operators who previously relied on enquiries and orders for their goods and services.

During lockdown, business owners from all sectors realised that an online revenue stream - based on selling their products directly from a website - would at the very least, ease the financial pressure they were feeling.

Online sales during lockdown shot up… and not just for obvious purchases like hand sanitiser!

Fundamentally, two key things happened:

  1. People who had previously never bought anything via the Internet started to shop online.
  2. And people who had previously bought online started to spend on a wider range of products.

This new pattern of behaviour established during lockdown will now be habit for some people. Covid-19 accelerated the growth in online sales, which was increasing each year anyway.

So what does this mean for your business?

Should you consider how to offer your goods and services online, paid for on your website by a customer with a credit card?

Perhaps. But there are some key things to consider first before you commission your new eCommerce website and if you don't, you're going to run into issues later on.

In this article, we address a key question:

How suitable are my products for eCommerce?

Not everything is suited to online selling and so you need to understand whether your target market is likely to buy your products online.

Suitable products tend to share four common features:

Homogenous

Branded products are identical, irrespective of where they are purchased, and these are often good candidates for an eCommerce website. A consumer is more likely to purchase an item from your website if they understand exactly what they are buying. Books are a good example: a novel bought from one website is identical to the same novel bought from any other and so, in the consumer’s mind, there is no uncertainty about what they are purchasing.

Conversely, personalised items (as well as products that need to be tried or tested before purchase) are not so well suited to online selling. Shoes and spectacles, for instance, are more difficult to sell from an eCommerce website because the consumer is uncertain about whether the item is exactly right for them.

Shippable

Fulfilling online orders is often the area of eCommerce that causes website owners most difficulty. Small, lightweight items are easily shipped and do not involve a high delivery cost that may deter online sales. To this end, many website owners incorporate the delivery cost within the price of their products so that they are able to offer "free delivery”, which stimulates online orders.

Bulky, heavy items cause problems when it comes to delivery. If a product is a low-value item, will a £10 or £20 additional delivery charge be acceptable to the consumer?

Inexpensive

Consumers’ tendency to buy online is strongly related to the perceived risk of making that purchase.

A normally cautious consumer might adopt a more carefree "why not?” attitude when purchasing an item for £6.99. The same person would be more reticent when spending several hundred pounds.

Although high-price products do sell on the Internet, you have a natural advantage if you sell lower value items and you can consider £10 - £50 as your "sweet spot".

Margin

For high street retailers, fixed overheads are more significant than for an online retailer. But for eCommerce operators, the cost of sale is higher than their high street counterparts.

If you plan to run an eCommerce site, you need sufficient profit in each transaction to be able to accommodate this cost of sale.

Specifically, you need margin to cover typical eCommerce trading costs, which are things like:

  • Marketing spend on Google AdWords and Facebook advertising
  • Transaction costs from the company that manages your customers’ online credit / debit card transactions
  • Delivery costs, if you’re not able to pass these on entirely to the customer
  • Fluctuations in exchange rates, if you’re selling abroad
  • Staff costs (or time costs) involved in picking and packing each order

If your products don’t meet all four criteria, it doesn’t mean that you can’t sell online. But considering each of the factors is an important part of your eCommerce preparation and it may encourage you to sell just a selection of your overall product range online, if you have some that naturally suit online retail.

If your products don’t fit these four criteria at all, or if your business sells services rather than products, perhaps look for a different product base entirely.

You could source products from elsewhere - maybe from an existing supplier - and front an online retail operation that generates income for you and your supplier.

Jeremy Flight

Jeremy Flight

Technical Director

Jeremy Flight

About the author

This article was written in July 2020 by Jeremy Flight, Technical Director at Rubiqa.

He has worked in the web design industry since 1999 and has helped many private businesses and public sector organisations with complex website projects. As the technical lead at Rubiqa, he is the primary contributor to our software products and is involved with projects relating to website design, eCommerce, database systems and mobile apps.

Away from work, Jeremy is a qualified cricket coach and works with junior players at his local club. He is also interested in property investment, golf, photography, playing the piano and holidaying in France.

Connect with Jeremy Flight on LinkedIn

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