How to start an online store

If you are new to selling online, this article covers the three basic requirements on how to start on online store. Something to sell. Somewhere to sell it. And a system to manage payments and delivery. Every online store has at minimum those three capabilities, so we’ll share ideas on where to start. 

How to start an online store

How this guide raises your game.

  1. Learn about Print on Demand and Drop shipping, the fastest ways to find something to sell online.
  2. Where you can go online to set-up your online shop, or sell via an online marketplace.
  3. A quick introduction to suppliers who can help manage payments and deliveries. 

Online stores, also known as D2C (direct-to-consumer) stores can seem quite complex, but all online stores start by meeting three very simple requirements. Without these three things, you cannot have an online store.

Firstly, they have something to sell. Then, they have somewhere to sell it. And finally, they are able to manage payments and delivery

To start your plan on how to start an online store, you should first be able to define what those three things are for you as part of your online store strategy

Fragile delivery

You need something to sell

This could be something you already make at home, and you are looking for an opportunity to make some money from it. Something like handcrafted jewellery or home decorations.

In that case, you are probably going to be looking at selling your products on a site like Etsy.  

The challenge with this sort of online selling is it will be difficult to grow in scale.

What if demand for your products takes off? How will you find the time and space to make more of your items? In effect, your ‘factory’ to produce the good is limited by your ability to make the goods themselves.

So, a more scaleable solution to “something to sell” to start a D2C store is to find someone who can make your product for you. And ship it to your customers.

The two most common online selling methods you’ll come across are drop shipping and print on demand. 

E-Commerce package delivery

Drop shipping

Drop shipping is where you have an agreement with a wholesaler to buy goods from them at wholesale prices. But you don’t order from them until a consumer orders the product from you through your store – where you charge a retail price. Your store is essentially an intermediary between a consumer and a wholesaler.

It’s an attractive sounding model because you make the profit between the retail price your customer pays and the wholesale price you pay the drop shipping company. And you don’t have to have any cash tied up in stock. And you don’t pay for these goods until you place an order. 

The challenges though are you still have to find customers who want to buy the products you are selling. You have to find a drop shipping company who are reliable enough to send out the right goods to your customer. Because if an order goes wrong, the customer will come back to your store to sort it out. And any refunds, or returns, is something that you will have to manage.

Print on Demand

Print on Demand is a variation on drop shipping. It requires you to have some sort of creative or design skill OR someone you can outsource this too.

In this model, you create designs that then get printed onto a variety of items such as T-Shirts, hoodies, coasters, stickers and phone covers. You ‘sell’ the products in your store, but the order is sent to the print on demand company to handle printing, shipping and customer delivery. So similar to drop shipping there’s no charge to buy stock in advance.

We sell some Print on Demand items through our own shop. You can find out more about Print on Demand suppliers in this article

Challenges

The challenge with print on demand still goes back to being able to find the customers and create designs that they will want to buy.

It’s also a very competitive marketplace with literally millions of designs available. On one site, we recently saw 800 varieties of Bondi Beach T-shirts for example.

Print on Demand can be lucrative, but you do need good marketing and creative skills as well as selling skills to make it work. And you need a lot of patience. 

Three brains e-Commerce symbolic open shop sign

You’ll also find that because you are using someone else’s software system to run your D2C store, you will have less control over the way your store looks. And how it operates. Most of the Print on Demand operators will offer some degree of customisation on the ‘front-end’ of the store. Logos and cover images for example. But it will be more limited than if you ran your own online store. 

It’s likely you will also operate the store with the POD company’s URL domain set-up. So even if you drive traffic to the store, if you eventually decide to set up your own URL, you will not be able to take the domain authority search benefits with you.

You will often be able to set your own prices in your D2C store, which can be around 20% of the retail sale price. However, if you start to grow your brand, you may well find other suppliers who can offer better margins. Print on Demand is a great place to set out on the D2C journey, but it does come with limitations. 

You need somewhere to sell it

There are two options to choose from. You can create your own online store. There are software packages available that are relatively low cost and run off a template system so that anyone with basic internet skills can set them up. The most commonly used ones are Shopify, WooCommerce, and Big Commerce. If you have a WordPress website, WooCommerce is often bundled in. For more advanced users Magento is a commonly used e-commerce platform. We cover these options in more detail in our article on D2C Marketing and website

There are differences in how each system delivers, but what they do for your D2C store is usually quite similar. We’d recommend you pick the one that feels right for your business if that is the route you plan to go through.

However, if you are new to e-commerce, we would recommend the second option which is selling through third party sites.  Print on demand is especially helpful here, and on most of the following sites, you can create a reasonably good looking ‘shop within a shop’ for little or no cost. 

There are other options – Amazon Marketplace and E-Bay for example – and we cover those in the section on online retailers

You need to manage payment and delivery

If you use a third party site like the Print on Demand examples above, payment and delivery is managed for you. This takes away the challenge of managing these, but also takes away an element of control over your store. It can create a disconnection with your online customer.

Payments

If you manage your own D2C store site, you will need to make sure you have a Payment Gateway set up. This is a piece of online software that manages the customers payment details in a secure way. It links from your website and ensures that the payment is managed to minimise the risk of error or fraud.

You can set ‘rules’ to help reduce the risk of fraudulent transactions – e.g. from stolen credit cards or from malicious users. The software provider will generally take a % fee for each transaction to cover there costs. This is typically between 1% and 3% so make sure you have this factored in to your business model.

There are many payment gateway providers and it’s worth looking at reviews from existing customers. Here are three we’ve used in the past that are worth checking out.  

We cover the topic of D2C payments processing in more detail in our article on order to delivery.

Credit card payment

Delivery

It’s likely your online customers won’t live nearby so you will need help with deliveries. Logistics and delivery companies can help you set up storage, packaging for shipping and access to a courier or postal service.

For businesses starting out in e-commerce, drop shipping is a good place to get started since the drop shipping company takes care of storage and delivery. It does mean less control for you over those elements and it may impact on your margin, but it takes a lot of complexity out of e-commerce.

Finding a drop shipping company that meets your market niche can be challenging. There are some recognised places to start looking, and all the sites below are well known as places to connect with potential drop shipping partners.

D2C warehouse

There’s obviously much more to running an online store. But if you want to get started with D2C, having a product to sell, somewhere to see it and the ability to manage payment and delivery are your minimum requirements.

And if you want to be really successful in the long-term, you need to spend some time planning out your online store strategy. which is what we cover in our next article. 

Three-brains and e-Commerce

We have worked on many e-Commerce projects and have good experience across strategy, working with retailers and building D2C stores. We know how to connect these expertise areas back into driving your brand marketing and growing your sales. 

If you want to know more about how we can support your e-Commerce to grow your business  through our coaching and consulting services, click the button below to send us a message.

We can coach you to reach the top of your competitive game.

D2C Online Store Status dashboard
Click to download the pdf

Downloadable D2C status dashboard

Setting up an online store needs you to define your strategy and plan, work out the sales and marketing and also set up the whole operational side of the business including the finances and the delivery / supply chain model. It can be complex to manage.

That’s why we’ve used this project dashboard to great success in the past to have a simple one-page summary of the key actions require to set-up and manage a D2C online store. Download it here or from our resources section. 

Powerpoint and Keynote versions of this document available on request. 

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