You need to know how to build an ecommerce website strategy, before you build your ecommerce website.
There’s far more to building your ecommerce website than uploading WordPress and Woocommerce and adding products. First, you need a clear business strategy, which is a little different to an ecommerce website strategy. Once you have a business strategy, you can start to answer questions about how that will translate to your ecommerce website strategy. When deciding how you will build your ecommerce website, you need to ask questions like what exactly will you sell? How will your shop work? Does it need any advanced ecommerce functionality? What kind of payment portal will you need?
There are many questions to answer, but here are my first five. You must answer these questions before you approach your website designer for a quote.
Question 1: What will you sell?
If you are selling physical products, will you drop ship or keep stock yourself? Keeping stock on hand means that some of your cashflow is sitting in your stock. Do you have enough money to do this? Where will you keep the stock? This directly impacts your ecommerce website because it will determine your promise to your customers. If you have stock on hand, will you guarantee delivery in 2-3 days? If the product needs to be printed or built, how long will your customer need to wait to receive it?
Let’s say you’re selling digital products – have you decided on a strategy to reduce piracy? You’ll never completely eradicate piracy, but there are things you can do on your ecommerce website to reduce it. It will depend on whether you’re selling downloadable images, PDFs, or videos (like online courses) or something else. Vimeo (used for videos and online video courses) has a great anti-piracy option but it can get pricey.
If you are selling time, how will your booking system work? Are you selling the time of various people (like a gym with several fitness instructors)? If you are a consultant, or maybe a lawyer or business coach, do you want to sell time on your calendar? Do you have a beauty salon and want an ecommerce website where visitors can book different treatments with different beauty therapists (each with their own skill set) in a limited number of rooms? The more variables in your bookings, the more complicated the system will need to be. The more complicated your system is, the simpler you’ll need to make it for your customer on the front end. You don’t want them to get confused and leave your website for your competitor!
Question 2: How will you price your product?
This is not about your profit margin. This is about how the structure of your pricing works and whether your products are customisable in some way. It’s a key question to answer when figuring out how to build your ecommerce website strategy.
Will your product be a single price per item without any extras, or is it a product with add-ons. Add-ons include things like customised engraving or printing, and they can be paid or free. Are you selling something that comes in different colours, but they’re all the same price? Or are you selling different sizes and each size is a different price?
Your ecommerce website might sell a simple base product that has a long list of choices the customer can make, and each choice adds a different cost to the total.
You are selling a chest of drawers (the simple base product), and people can choose from 2, 4 or 6 drawers. Then they must choose the finish – will it be varnished or painted or distressed (each of these is a different cost that gets added.) Finally, they can choose the drawer handles – do they want fancy, expensive handles, or the no frills, cheap versions?
Whatever your pricing structure is, you must know it upfront and be able to communicate it clearly. If you can’t explain it easily, you don’t understand it well enough.
If you are building a WordPress ecommerce website, different pricing structures will probably mean you’ll need different plugins. Some of the really great plugins cost money. Know your pricing structure upfront so you don’t get a surprise bill at the end of the build.
Question 3: Will you sell locally or internationally or both?
People are quick to decide that the whole world needs their product, so they’ll just ship it everywhere! Unfortunately, handling many different shipping options and currencies on an ecommerce website can create all sorts of problems. Selling locally is pretty straightforward and doesn’t present much of an issue. Selling internationally can be a headache.
What currency will you sell in? Rands, Dollars, Euros, or all of them? Do you want the store currency to reflect the country that your web visitor is in?
Your ecommerce website might show Rands when I’m browsing from South Africa, or US Dollars when I’m browsing from America, or Pounds if I’m in the United Kingdom. Should website visitors be able to switch between currencies using a selection box? If I’m in South Africa, I might want to see the dollar price because I want to tell my friend in the United States how much the product is?
Once you’ve decided on the currency (or currencies) do you have the right payment gateway/s to support your choice? If you want to sell in Rands, you’ll need a local gateway (i.e. PayU). If you want to sell in Dollars, you’ll probably want PayPal. We’re in South Africa and sadly, as of publication of this article, PayPal still doesn’t support South African Rands. If you only want one gateway to keep things simple, which do you choose? PayPal doesn’t work for South Africans selling locally as we can’t sell to other South Africans in Dollars. If you use PayPal for international payments, you’ll need to set your prices in Dollars and pay foreign exchange fees when you bring your money back into South Africa. The fees and bank charges can eat away your profits.
When considering local vs international, you’ll also need to decide if your website should be translated into various languages. You can’t sell to a country in a language their residents don’t understand.
This single decision has a lot of repercussions for your new ecommerce website. Each path has its own set of challenges and rewards, so it should be carefully considered.
Question 4: How will you handle shipping/delivery to your customers?
This is a particularly important question when deciding how to build your ecommerce website strategy. It follows on from whether you’ll sell your products locally or internationally. If you sell locally (shipping only within South African borders) the scenario is more manageable and more predictable. It’s much easier to find a courier (there are more options). It’s also far cheaper, and you have a better idea of when products will arrive at their destination. They will also arrive relatively quickly and, in this age of instant gratification, that’s a huge bonus.
But what if you want to ship internationally? It’s a big, wide world and the shipping charges change dramatically from country to country, and from big city to tiny town that no one’s ever heard of.
Whatever you decide, you’ll have to figure out how you’ll charge for it. If you sell small, light products locally, flat rate shipping is usually the easiest way to go. Even better if you hide the shipping cost in your product price and offer “free shipping”.
You will encounter bigger problems if your products are larger and heavier. You can’t afford to make mistakes with the shipping. It’ll cost you a fortune if you undercharge. If you overcharge, your customers might abandon their purchase. If you’re building a WordPress site, ideally you’ll need a courier that has a WordPress plugin that will calculate the shipping costs at checkout. Unfortunately, there are very few that do this, and those that do can charge high rates for the privilege.
Again, whatever you decide for your ecommerce website, there will be repercussions that could dramatically impact your profit margins.
Question 5: How will you drive traffic to your ecommerce website?
I ask this all the time. How will you get visitors to your brand new website? How will you drive traffic and get people to actually buy your product or service? Do you have social media channels already setup? Do you have an existing audience or will you build one from scratch? Have you thought about the cost of the Google Adwords keywords you’ll need to purchase? Are you hoping to use SEO (search engine optimisation) to get visitors onto your ecommerce website?
This is such a critical question to answer before embarking on an ecommerce website. These websites (and shops in general, whether online or offline) can be expensive to setup. You want to know upfront whether you’ll be able to sell enough to make your business profitable.
If you have answered all of these questions, you should have a basic plan for how to build your ecommerce website strategy. These questions can be intimidating but they all have answers. Answering them in full before you start will save you a lot of time and heartache in the long run.