Even though ecommerce only makes up one percent of retail sales in South Africa, it’s still a big and booming industry. You may want to start selling your wares online, or have a great idea for a store. Question is, where do you even get started?
Starting an online store is actually quite easy, but maintaining it is another beast altogether. It’s not just about slapping a plug-in onto a WordPress site and going for it. As is the case with any company, there are a few more steps to take into account when making your dream store.
This, to me, is a given, but to a lot of people it’s not something they’ve really thought about. The big ecommerce stores, such as Raru, Takealot, and YuppieChef didn’t just start “for fun.” All of them required a lot of planning, blood, sweat, and tears (I should know, I did this for 10 years).
An ecommerce store is going to take up a lot of your personal time. Yes, personal time. It doesn’t matter whether you’re a one or one-hundred person operation. Be prepared to sink an incredible amount of hours into your idea.
Remember that one time you shouted at a retail clerk for a slight change in price, a late delivery, or something utterly meaningless by all accounts? You’re going to be that clerk now. Welcome to hell.
Another point that goes without saying. Get your business registered, all of your documents sorted, and make sure everything is 100% legal. In fact, even though your company may be small and new, make sure to motivate for VAT certification. It’ll help you out in the long run and you’ll need it if you’re going to be importing any products.
Are you selling any physical items that are made overseas (even if there’s a supplier in SA)? Get an import licence. Now.
Make sure you have a bank account for all of your business needs. Go into the bank and speak to a business manager. Explain your plans for the store and what you’re looking to do and see what’s best for you. When it comes to banking, always, always shop around. If doesn’t matter if you’ve banked with XYZ for the past 20 years or cousin Frikkie has recommended ABC, see what’s actually right for you.
Make sure you’ve got a way to track all of your expenses, whether it be 22Seven or Pastel.
Oh, and if you’re going to have a payment gateway then you’ll need a Merchant account with the bank as well.
This one may be a cardinal sin to take into account now, but to me it just makes sense. There are a number of payment gateways to choose from, such as MyGate, PayFast, and PayU. Some of these will require Merchant bank accounts (which can cost you an additional R800 per month) and include you handling security.
Now I’ll stop with the pleasantries and start telling you things you definitely need to know and do.
Here’s the largest and most enjoyable part of the process: choosing the platform that’s right for you. There are hundreds of ecommerce platforms out there. Some of them are good. Some of them are bad. Mostly, they’re all functional.
The biggest tip I can give you here (especially if this is your first store) is to not go for a custom solution and have your nephew in high school build it. You’re only screwing over yourself, no matter how much HTML he may know. Go for a pre-built system and try to break it. Test the bloody hell out of it. Put it aside and try another solution. You’ll very quickly start to realise which pieces of software has the functionality you want and the functionality you never knew you wanted.
I’ve touched on this before and will more than likely always recommend going with OpenCart for smaller to mid-rage stores and Magento for larger establishments. Don’t just install a WordPress ecommerce plugin because you know how to use it for writing posts. Get out of your comfort zone, get out there, and test all of the options available to you.
Never, ever stick with one courier for all of your needs. Always keep a backup in your pocket because things will go wrong and no one is immune to bad deliveries.
Also, never just go with the cheapest option to save a few Rands. Over the years, I learned that the cheaper the price, the cheaper the service. As with ecommerce platforms and gateways, choose a courier that’s right for you by testing out their services. Go and speak to them in person, explain the kind of products you want to sell. Do not let any courier strong-arm you into dealing with them exclusively, no matter how attractive the pricing or opportunity may be.
(I once had a courier sales rep come see me and start getting very aggravated (in my house) because I wouldn’t give him all of my business. Needless to say, I never dealt with them at all.)
After a few months, take your delivery data to the couriers and renegotiate the pricing. See if you’re shipping large or small parcels, overnight or long haul and tailor to that.
Don’t kid yourself when it comes to free shipping. Most customers will actually pay for shipping their items, regardless of what any survey says (hey, humans lie!). You’re more than likely not going to be able to take on Takealot and Raru in the beginning with free shipping, and that really is okay.
Don’t try to bankrupt yourself by selling a 20Kg bag of dog food for 10% profit and ship it for free to Mrs Voster who lives in Van Zylsrus.
There is something you’ll need to accept: Almost everyone makes a loss on shipping. It’s a necessary and unavoidable evil.
You’re going to have website policies that comply with the Consumer Protection Act (CPA) and the Electronic Communications Act. At some point, you will have a problem with a customer, or sale, or anything else and you’ll need to protect yourself. Get a lawyer to look over your terms if need be and make sure they’re clear, transparent, and easy to read.
Don’t be Mango.
With ecommerce, grow small. Don’t try and list thousands of products at a time. Each of them requires they be in the correct category, have product tags, images, and a description. Not to mention you don’t want to be shipping 300 parcels a day with only two staff members. I hate using this word, but “scale” accordingly.
This newfangled thing called social media is probably going to be around for a long time. It’s a great marketing tool, but don’t be a tool when marketing. Act like a person, engage with your audience, and don’t just tweet, or post, or Instagram things and walk away. These platforms do take a lot of time and effort. If, for some reason you don’t have time for it, hire a capable social media manager.
Oh, and don’t post drunk slurs and racial statuses. That shouldn’t even need to be said.
Google Analytics is going to be your absolute friend when running an online store. You’ll be able to see how long people visit your store, what they’re looking for, and significantly more. And the Conversions Ecommerce system is pure gold.
Take a look at what analytics your ecommerce software can offer. How many people have item X in their wishlist. At what stage do people abandon their carts. It’s not often people will complain about a store to you so analytics will be your guide.
You’re only human and you can’t please everyone. You’re going to have times when you do need to relax your own rules in order to make a situation right. Be careful, though, as humans will take advantage every time you relax a rule. I’m human and I’ve done it.
There needs to be a balance of when you put your foot down and when you can let a few things slide, whatever they may be.
If you can’t stand other people, are generally unpleasant, or don’t know how to overcome difficult situation then do not start an ecommerce store. You’ll be dealing with clients, suppliers, and couriers all of the time. If you’re rude, arrogant, or an asshole, then no one will want to deal with you, regardless of how much money you throw at them.
Actually, just don’t start a business in general if you’re any of the above things.
And that’s it. If you can manage all of these things then you should be fine.
Feature image: Serge Kij via Flickr