Words of wisdom for small businesses venturing online


By:  Rob Cameron

Thinking of setting up shop online? E-commerce accounts for a growing share of retail spending and is an essential part of the customer experience. More than ever, people are researching, browsing and making purchases via retailers’ websites and online marketplaces such as Amazon, Etsy and eBay.

It has become the norm for consumers to first research a product online before purchasing it in a store. Other times, they find the product in a store and then head online to find the best price.

Small businesses looking to get an edge on the competition can look to larger established omnichannel retailers such as Indigo and Roots as examples of successfully managed businesses with both an in-store and online presence. They can also look to successful brands such as menswear retailer Indochino and eyeglass retailer Warby Parker, both of which started out online before establishing storefront showrooms.

The good news for small businesses is that omnichannel retailing can happen on any scale — and has never been easier. But that does not mean throwing caution to the wind — creating an experience that is convenient and appears seamless to the customer can be more difficult than it looks. It requires upfront work, learning new skills and asking the right questions.

Step 1 – Is e-commerce right for you?

Consider three things: you, your customers and your product. If your time and resources are stretched thin, expanding online will require you to work longer, take time away from your existing brick-and-mortar operations, or bring on additional staff.

Next, consider current and potential customers. Will selling online allow you to sell more to existing customers and/or reach new ones? This can be difficult to predict, but if your business deals in unique products or you have a customer base willing to go out of their way to buy your products, read on.

Finally, consider what you’re selling. Is it a product that can be easily and inexpensively shipped? Can you offer the best price online? Is it a one-of-a-kind product that should be seen in person? Artisan honey or gourmet dried mushrooms from a countryside store would be easier to sell online than solid pine furniture, for example.

If you only said yes to two or three of these questions, here’s the good news – you can easily get up and running with an e-commerce site with little or no risk to your business. Starting out with a few items and a basic site gives you time to assess the market and learn. The cost of jumping online is low when compared to signing another three-year lease on a store. Once you start to prove some success, you can ramp up your efforts and investment.

Step 2: How do you get there?

Many businesses sell over multiple channels. Selling on eBay or Amazon is usually best if you are selling a brand-name item – but only if you can do so at a competitive price. Etsy is a useful platform for artisan and one-of-a-kind products and provides merchants with a large base of customers seeking this type of offering.

If you are going to sell on your website, you need a shopping cart that integrates into a processor like Moneris for payments. There are a lot of choices out there and your website developer might even have a preference in mind. A popular choice is Ottawa-based Shopify, which allows small businesses to quickly create branded online storefronts, customize design, integrate shipping, keep track of merchandise and accept payments. Shopify and many of its competitors offer a variety of templates to choose from and are priced on a month-to-month basis using tiered pricing models.

Step 3 – What about payments?

If you’re already selling in-store, using your processor for online payments will simplify the accounting side of your life, and you can get a better deal from using the same company for all selling channels. You should also be sure to ask your payment provider about security. There are different tools you can leverage to make sure you’re not being shopped by robots or fraudsters.

For small businesses starting out online, if it sounds too good to be true, it probably is. You can ship a good that was purchased with stolen credit card information, only to have fraud reported days or weeks later by the cardholder. You can ask your customers to enter the address associated with their card and to provide the three-digit number found on the back of a card for added security. Card brands also offer verification tools such as Verified by Visa and MasterCard SecureCode to help enhance the security of online transactions.

Step 4 – Inventory, shipping and returns

Most major shipping services have programs designed for small businesses that can be integrated into your e-commerce platform, automatically calculating shipping costs and allowing you to print labels and provide tracking numbers for customers.

In many cases, shipping the product out does not mean the transaction is finished. Free or inexpensive shipping options and generous return policies enhance the customer experience and are often necessary to attract more customers, but they can affect the bottom line. Return rates for online sales can be up to three times higher than for brick-and-mortar stores, and not all items returned can be resold.

Once your small business takes off, you can explore the feasibility of drop shipping. Drop shipping refers to when a store doesn’t keep the products it sells in stock, but ships them directly to the customer from a third party. If you are shipping products from your own storefront or warehouse, consider a platform that manages payments, inventory and other aspects of the business both in-store and online.

There is no question that establishing an e-commerce presence can grow sales from existing customers and help you attract new ones. However, while setting up an e-commerce platform may be as easy as a few clicks, like any change to your business, it should be done in a thoughtful and informed way.


Drew Sauveur
Author: Drew Sauveur

Local business owner and resident of Durham Region

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