How to get started in ecommerce
Seven steps to move your business online and reach new customers
As local and state leaders continue their work to determine the best strategy for slowing the spread of COVID-19, some states have tested a variety of options for reopening certain businesses closed as a result of government orders. However, the combination of uncertainty and lack of customers making their way into physical stores has had a major impact on businesses across the country. Many brick-and-mortar businesses have determined the only way to remain open and serve customers is to transition operations to online ecommerce, which is something several businesses will do for the first time.
U.S. consumers will spend $709.78 billion on ecommerce in 2020, representing an increase of 18%. Brick-and-mortar retail spending, however, is expected to decrease 14% to $4.184 trillion.
US Ecommerce 2020, eMarketer, June 2020
For brick-and-mortar businesses suddenly struggling to figure out how to bring their stores online during this unprecedented time, there are several key considerations. Here are seven steps that can be taken to quickly establish an ecommerce presence and continue reaching customers.
1. Set up an online platform
The first step for any business owner considering ecommerce is to research the platforms available to determine which best fits the needs of your business and your budget. There are a number of cost-efficient ecommerce providers that allow small businesses to get up and running in a matter of minutes. A full list of the ecommerce providers Avalara works with can be found here.
When evaluating ecommerce platforms, there are a number of factors to consider, including multiplatform operations, shipping and fulfillment features, security measures, and compliance capabilities. If your business is transitioning to online for the first time, simplicity in functionality both on the back end and customer facing features will likely be top of mind. Most ecommerce platform providers have several different plans designed to best fit your business. When deciding which plan is best for you, keep in mind the following:
How many products do you plan on selling? If you’re not planning to sell a lot of products, a simpler plan with lower rates may be suitable. There is no product limit for many providers’ main plans.
What features do you need? If you’re looking to have a site that enables customers to view your products and make purchases, a simpler plan is likely the best fit. However, many businesses find it’s beneficial to include additional features that contribute to positive customer experiences, like customer loyalty plans, abandoned cart recovery, and more.
Note that during this time, your business may not have the luxury of conducting extensive research on multiple platforms, and instead may need to rely on something that works now. Fortunately, there are providers that offer out-of-the-box functionality that will enable you to get your basic store up and running quickly.
U.S. retail ecommerce sales are expected to total $668.5 billion in 2020 and grow to $969.7 billion by 2023.
US Ecommerce 2019. eMarketer, 2019
2. Determine which products you’ll sell online
Given the necessary timeliness of your efforts to transition store functions to ecommerce, it’s important to prioritize which products you’ll be selling online, so your most profitable and in-demand products are available for purchase as you launch your website. It can feel like you need to have every product in your store available immediately, but by prioritizing the most popular products first, you can get your online operations up and running then begin fulfilling orders while adding additional inventory.
3. Diversify your payment methods
Setting up your accepted payment methods is a crucial part of converting a browser into a buyer. Consider which payment methods are the most commonly used and accommodate for the largest number of customers. Fortunately, most ecommerce providers offer integrations with the most common payment methods like Visa, Mastercard, PayPal, Apple Pay, and more. If you’re still unsure of which payment methods you’ll need to accept, a good rule of thumb is to incorporate the same payment methods you offer through your in-store point-of-sale system.
4. Set up your shipping and returns functions
Once you’ve outlined your products and set up payment methods, the next step is to ensure you can get products to customers. Shipping, fulfillment, and returns can be a major roadblock for many small businesses making the transition from brick-and-mortar to online. A key feature that should be included in your ecommerce platform capabilities is shipping options, including drop shipping, printable shipping labels, and pre-setup shipping providers.
If you’re fulfilling orders yourself, consider using a shipping app like ShipStation, which helps automate shipping for merchants of all sizes, and offers small businesses discounted shipping rates with USPS, UPS, and FedEx.
If you’re concerned about how to fulfill orders or that your current warehouse might be unable to fulfill orders, consider using an outsourced provider, like ShipBob, which processes orders for thousands of ecommerce brands.
It’s also worth pointing out that your storefront can serve as a temporary fulfillment center during this time: It serves the dual benefit of getting product to your customers quickly while simultaneously ensuring all that instore inventory doesn’t go to waste. This is a model that works quite successfully for big-box retailers like Target.
Shipping costs are often something brick-and-mortar retailers haven’t had to consider when it comes to pricing, so be mindful of a product’s shipping cost and be sure it’s clearly displayed in the shopping cart. Be transparent about shipping costs throughout the shopping experience and avoid the risk of having customers abandon their cart if they discover a shipping cost “gotcha” at checkout.
5. Consider how you’ll manage sales tax compliance
More than 40 states now require online sellers that reach an economic threshold to register, collect, and remit payment on sales made into the state. This means you need a solution that charges the correct sales tax rate for every transaction and supports accurate, timely remittance to tax authorities.
Sales tax calculation may be built in, but many ecommerce platforms use tax rate tables, which aren’t a reliable solution due to frequent rate changes, missing product taxability information, and the use of ZIP codes for rate assignments. In the United States alone there were more than 34,000 tax rate and taxability changes and 115,000 sales tax holiday rule updates in 2019, making updates nearly impossible to track on your own. ZIP codes don’t always align with tax jurisdictions and rate tables tend to show the highest rate per ZIP code, leading to potentially overcharging customers for sales tax.
Close to two years after the South Dakota v. Wayfair, Inc. ruling by the Supreme Court, 57% of respondents were still unaware of the ruling, its connection to sales tax requirements, or the possible impact on their business according to a recent survey.
Accessing accurate tax rates is just the beginning. Your business must file and remit payment to tax jurisdictions every month, quarter, or year based on the required filing frequency. Multiple deadlines, forms, and rules come with filing returns so a seamless solution should use the same transaction data from your POS or accounting systems. Otherwise, filing returns becomes a time-consuming, error-prone manual process. Finally, as states implement and refine economic nexus laws, plan to track your cumulative sales (including tax-exempt transactions) in each state where you sell online so you can keep up with obligations.
Choosing a solution to automate your tax compliance is critical when evaluating an ecommerce platform. Look for the following features when assessing your options:
- Highly accurate calculation with real-time rates, updated automatically from the cloud to help ensure you’re charging the correct rate every time
- Product taxability based on geographic location to set up product tax codes, enabling you and your customers to feel confident your products are taxed at the correct rate
- Seamless returns filing and remittance to save you time and money by minimizing human error and meeting required deadlines
- Reporting capabilities to track sales and monitor economic thresholds; robust sales tax solutions — like Avalara — track your sales against state thresholds and alert you when you’re approaching a threshold, thus eliminating the need to manually compare your sales against the economic thresholds in 43 states.
Sales tax may not seem like a significant aspect of moving your store online but staying on top of your obligations as your company expands is critical to maintaining compliance. Neglecting it can negatively impact customer satisfaction and cost you time and money.
6. Plan your online marketing strategy with social media
Perhaps one of the most important steps in this transition is communicating how your business will now be selling. This is where social media posts and advertising come into play to be certain that customers are in the know about your online strategy. On the upside, most brick-and-mortar shops are already using social media to market to their customers. However, businesses must over-communicate the change in operations to ensure regular customers are aware of the new selling channel, and to capitalize on the expanded customer audience you can now reach.
Social media can be used to promote your new online presence and as a platform to advocate for your business’s distinguishing factors and unique value-add. Use this opportunity to tell your story and highlight the characteristics that make your small business stand out to consumers. Not only are consumers turning to social media to learn where they can continue making regular purchases during this time, but they’re especially inclined to support small businesses.
The percentage of retailers in North America using social media as a source of ecommerce nearly doubled in a year’s time — from 17% in 2017 to 33% in 2018.
Social Commerce 2019. eMarketer, 2019
Another option, when using social media, is to go beyond your marketing efforts and consider using social selling platforms as a complement to your newly formed online store. In today’s social network-driven society, social media platforms are no longer just an avenue to increase brand awareness, but an opportunity to connect with customers and make sales in the social threads customers are already sifting through.
Comment selling platforms are blending content and commerce to convert social media comments into sales and automatically invoice shoppers from their social media timelines. By leveraging this method of “headless commerce,” or separating the front end and back end of an ecommerce application, businesses can easily combine their social media marketing and online selling for quick sales conversions and limited friction throughout the browsing and shopping experience. Through social selling capabilities, businesses can save customers time they would otherwise have to spend sifting through websites to find the items that best fit their wants and needs.
7. Preview, test, and publish your store
The final step to bringing your store online is to ensure every function of your site is operational. Double-check each function by asking yourself these questions:
Does my checkout work? Make sure orders work across all payment methods; your shipping options and charges are correct and visible; the items and price in your cart are correct; discounts/promotions apply correctly; and tax is calculated once shoppers enter their location. While often overlooked, ensuring sales tax is calculated correctly in real time is critical to maintaining a positive shopping experience, and also helps prevent your business from being at risk of tax audits down the road.
Is content presented in a professional manner? Proofread all copy and double-check that spelling and grammar are correct across the website. It’s also important to check images, videos, and other forms of multimedia across platforms to make sure they don’t interfere with the customer experience.
Does my store work on various channels and internet browsers? Consumers want to access products online whenever they choose from whatever device they are on. Testing your online site for functionality across channels is important to ensure that you’re not turning away potential customers who are unable to access your site.
At a time when more and more businesses are at risk of closing their doors due to uncontrollable circumstances, ecommerce provides a viable alternative that, if executed on quickly and decisively, allows business owners to keep their operations up and running. Businesses can take advantage of this unexpected time to explore new selling opportunities and ways to further serve their customers — something they might have otherwise not had the opportunity to do. Fortunately, technology that exists today allows businesses of any size to quickly ramp up online operations, reaching a broader audience, and supporting sales tax compliance, all while incorporating the necessary functions needed to provide a comprehensive, frictionless online shopping experience.