Create an online shop
Selling products and services online can have major advantages for businesses, leading to increased profitability and lower costs.
This guide tells you about the advantages of selling online, what you need to consider when creating an online shop and the consequences of getting it wrong. If you choose to work with a third party to build your online shop, this guide will help ensure you ask them the right questions.
The guide also explains some legal requirements and the pitfalls that you should be aware of, as well as how to make sure that customers can find your shop on the web.
Benefits of selling online
Selling online has a number of advantages over selling by traditional methods, including:
- Making savings in set-up and operational costs. You don't need to rent high street premises, pay shop assistants or answer a lot of pre-sales queries.
- Reducing order processing costs - customer orders can automatically come straight into your orders database from the website.
- Reaching a global audience, thereby increasing sales opportunities.
- Competing with larger businesses by being able to open 24 hours a day, seven days a week.
- Being able to receive payment more quickly from online transactions.
- Improving your offerings using the data gathered by tracking customer purchases.
- Using your online shop to showcase your products to existing customers.
Online selling will work best if you have:
- well-defined products or services that can be sold without human involvement in the sales process
- fixed prices for all types of potential customers
- products or services that can be delivered within a predictable lead time
Many businesses can run pilot e-commerce sites without significant investment. However, creating a fully automated online shop tailored to meet your precise requirements could be expensive.
Whatever form of online shop you choose, it's important to take a strategic view. If you launch a website that disappoints your customers or is overwhelmed by traffic, you risk damaging your reputation and losing sales.
Set up a basic online shop
Setting up a basic online shop and the equipment and hosting packages you will need including hosting and online payment system
The requirements for building a basic online shop are fairly straightforward. A simple setup allows you to sell a small range of products, providing photos, descriptions and prices as well as accept orders online.
A basic site is low cost and easy to create for a limited product range. However, be aware that the design and functionality may be restricted and it may be less secure than other more sophisticated options.
Equipment and facilities
The equipment and facilities you'll need include a computer, internet access, email, a website and hosting services. Having a firewall as part of your IT security will prevent unauthorised access to your website. A firewall is sometimes included as part of your operating system. See protect your business online.
You will need a hosting package for your shop. There are many website hosting options and e-commerce web-hosting specialists. It's worth shopping around for the best deal. While this service is not necessarily expensive, you tend to get what you pay for. It's important to study the service level agreement and the type of technical support on offer. You should be looking for round-the-clock support.
Ordering and payment systems
Most customers shopping online will want to pay by debit or credit card. You can create electronic mail-order forms, using one of the various web authoring software packages on the market.
These order forms let customers email their orders to be processed offline. If you already have a website, software can add e-commerce functionality. Some companies offer this free, on the condition that they receive a cut of future transactions.
If you want to accept card payments online, you will need to invest in a more sophisticated online shop. See accepting online payments.
Set up an online shop with an e-commerce package
Setting up an online shop with functionality such payment systems, catalogue management and order processing and the e-commerce packages that you will need
To create an online shop with functionality beyond the basics, you will need an e-commerce package. Functionality can vary, but you can usually expect:
- catalogue management
- enhanced order processing
- a broad range of design templates
An e-commerce package can provide you with a professional looking design, full ordering and payment functionality. It may also include value-added features such as account information, customer references and customer alerts. However, you should be aware that it may not suit you if you wish to offer more complex products and services.
You can expect encryption for secure ordering as part of an e-commerce package. Making sure checkout procedures are secure and user friendly are essential if customers are going to feel confident about ordering a product or service. Many people will abandon purchases at the checkout stage if the process is not quick and easy. Using Secure Socket Layer technology to collect card details (denoted by the 'golden padlock' symbol in your browser's status bar) is key to encouraging online sales.
Some e-commerce packages offer a degree of back end systems integration, ie they connect to your product database and accounts systems, streamlining the order process and keeping the website up to date. If you update your site content regularly, you will encourage customers to come back to you rather than switch to a competitor.
If you use a broadband connection, you can also receive orders in real time and update your website automatically. Be aware that some internet service providers offer combined web hosting and software packages, so it's worth doing some research.
Set up an online shop designed for your business
A custom-made online shop built specifically for your business can offer a good shopping experience for your customers and integrate with your systems
A custom-made online shop can provide your customers with a rich, interactive shopping experience. There is a huge range of options for design and functionality that can be built into an online shop designed for your business.
Features can be added to help you achieve specific business goals. A full purpose built e-commerce website can be a powerful tool for a business with a large product range and a focus on online sales.
Having a bespoke online shop can also make the running of the business smoother. Software can be integrated with your existing systems to trigger order confirmations and automatically dispatch goods and replenish stocks.
You will need the help of a web design and development company to define your technical requirements, design and build the website and integrate it with your existing systems. This can take time, locks you into one service provider and be very expensive.
Alternatively you may want to look at low cost options such as open source shopping cart software packages like Magento, NopCommerce, X-Cart, Zen Cart, osCommerce, OpenCart and PrestaShop. These programs enable you to set up a sophisticated e-commerce website that has a wide range of options, features and support - even if you have only basic computer skills.
Plan to set up an online shop
The practical issues involved when planning to set up your online shop, including delivery, online payments, customer care and security precautions
Before building your website, you must create the right processes and procedures to support it and put in place the resources to deal with orders.
You need to work out how to:
- deliver your products or services - see fulfilling online orders
- collect payments
- maintain security and demonstrate this to the customer
- let customers contact you
- comply with relevant regulations
Test your website and processes thoroughly. A soft launch allows you to test it before giving it stronger marketing support. You also need ensure you understand e-commerce contracts. See selling online: consumer contracts.
You'll need to ensure good customer care by delivering goods or services in a reasonable time. See manage your customer service.
You should be ready to deal with calls, emails and queries about delivery - consider whether you need extra staff. Find delivery methods that keep charges low.
Customers should be provided with contact details in case something goes wrong including:
- your business name, address, phone and fax numbers
- an email address for enquiries or orders
- the name of the person to contact in the first instance
Customers may be wary of paying online. Reassure them by providing a secure area on your website for placing orders and giving debit and credit card details. This can prevent late payment problems and helps to safeguard your cashflow. Read more about accepting online payments.
You may also wish to offer other payment methods such as invoicing, or paying card over the telephone.
With the use of encryption technology, virus-scanning software and a 'firewall', e-commerce transactions can be as secure as offline ones. It's important to create confidence in your shop. A professional-looking website with an explanation of your security precautions will help.
Consider how to:
- handle debit and credit card details safely
- ensure key online information cannot be defaced or altered fraudulently
- preserve the confidentiality of customer data
The law and selling online
The legal position and the relevant legislation to consider when selling online, including data protection, consumer protection and electronic commerce
If you are selling online, there are a number of pieces of legislation you need to be familiar with. These are designed to ensure customers' personal data is kept secure, goods and services meet quality and suitability standards and online contracts are legally binding.
The Data Protection Act 2018 regulates how you use and protect personal information held about living people, eg in customer records. The Act affects information that you have on computer as well as any paper-based records. To comply with the rules you need to comply with the entirety of the Act and in particular with the following six data protection principles. These require that:
- the processing of personal data must be lawful and fair
- the purpose for which personal data is collected must be specified, explicit and legitimate, and not be processed in a manner that is incompatible with the purpose for which it was collected
- personal data processed must be adequate, relevant and not excessive
- personal data processed must be accurate and, where necessary, kept up to date
- personal data processed must be kept for no longer than is necessary for the purpose for which it is being processed
- personal data must be processed in a manner that ensures appropriate security of the personal data, using appropriate technical or organisational measures
In order to comply with the Act and the GDPR, you must ensure that you provide customers with certain information. This could be contained in a 'privacy notice'. See privacy notices under the GDPR. This privacy notice information should be provided to your customers at the point in time when they provide you with their personal information. It makes sense to do this when they make an online order or account.
The Consumer Contracts Regulations require you to give your customers specified information before they place an order. You are also required to send the buyer an order confirmation and give them a 'cooling off period' in which they can cancel their purchase if they wish.
The E-commerce Regulations are designed to ensure online contracts are legally binding. They specify what information about your business and contract you must share with online customers and sets out guidelines for advertising and promotions. Read more about selling online and the law.
If your business is a limited company or limited liability partnership (LLP), under the terms of the Companies Act 2006, your website must show:
the full name of the company or LLP
the registered office address of the company or LLP
the registered number of the company or LLP
the place of registration of the company or LLP
if the company is being wound up
the VAT number (if VAT registered)
membership details of any trade or professional association
Helping customers find your website
An outline of the techniques used to help customers find your online shop including search engine optimisation and pay-per-click advertising
For your online shop to be effective, customers must be able to find it easily.
There are a number of things you can do to steer customers towards your website, including:
- Improving your website listing in search engine results through search engine optimisation (SEO).
- Getting your website listed prominently in web directories or through online advertising like pay-per-click and paid search advertising.
- Using social media and online communities to engage with your customers, build a community around your brand and help improve online visibility for your product or service. If contributing to social media sites remember to link back to your website when appropriate.
- Publicising your site through related websites - many individuals go to sites after seeing a link, an advertisement or a mention on another site.
- Adding your website address to all emails, letterheads, stationery and business vehicles.
- Using email marketing.
- Getting into local online business directories, such as those produced by Chambers of Commerce in Northern ireland.
When choosing your internet address (URL) or domain name, make it simple and easy to remember.
If you want to build your audience, it is essential you are listed in web directories and search engines. This can be a time-consuming process but you can get your website listed or improve your search ranking by:
- Thinking about how people will look for your site - pick key words and include them in your page title and content. Seek objective feedback.
- Establish reciprocal links - many search engines rank sites according to how many other websites link to them. However, there are risks involved with this.
- Writing a description of your site and the services it offers and placing it prominently on your home page.
You could also consider choosing a search marketing agency.
Avoid online selling pitfalls
How to avoid the problems associated with e-commerce websites, such as inaccurate information, poor navigation, late delivery and lack of customer support
Many e-commerce websites fail because of basic mistakes that are easily rectified.
Customers will be put off by:
- out-of-date or incorrect information
- difficult site navigation and purchasing processes
- poor customer fulfilment and late delivery
- lack of customer support
- lack of business information
- poor visual design
So it is essential to:
- Make sure all information on your website, especially on prices, is up to date.
- Monitor the information you provide on a regular basis.
- Make it easy to find and purchase products.
- Make sure that resources and procedures are in place to support your website. This will ensure that orders can be processed promptly, emails can be responded to quickly and helplines are manned by the appropriate staff at reasonable times.
- Have your website professionally designed.
Remember - when selling through an online shop, you don't normally have any personal contact with your customers, so you need to try harder to find and keep them.
Build trust with your customers
There are further steps you can take to increase the chances of visitors placing an order and to make them feel more secure about buying from your site. These include:
- making your site easy to navigate and user friendly
- giving a 100 per cent no-quibble money-back guarantee if they don't like or want the product
- making sure photographic images on your site are accurate and show products in their best light
- hiring a customer service representative who can give advice on the phone to customers on more complex or expensive products
- making ordering procedures straightforward and quick
- confirming orders immediately by email
- being honest - eg, telling the customer if you can't deliver on time
- providing a way for customers to track down the progress and availability of their order
Growing export sales through our online shop - Christies Direct (video)
Colin Christie, Managing Director of Christies Direct, discusses how the business has successfully grown its export sales through their online shop.
Christies Direct was established in 1992. It has now become a leading supplier of dog-grooming products. Their website is the third most visited pet-grooming website in the world, and online sales account for 30 per cent of their business turnover.
Here, Colin discusses how Christies Direct manages their website. This includes how they process their orders, choose their export markets, manage online payments and handle customer service. Colin also shares his tips on key things to consider when managing an online shop.