How to Run a Successful E-Commerce Business from Start to Finish
1. Establish an Idea
The very first thing you need to do is figure out what you’re going to sell. Do you want to sell products or services? If you’re having trouble thinking of an idea, do a little research on popular e-commerce industries. Online tech support services, dating websites, and online stores selling goods such as electronics and tobacco are some popular industries today. If you’ve decided to sell products, you’ll need to obtain a supplier’s agreement on all of the products that you’ll be selling.
2. Create a Business Plan
Now that you know what you’re going to sell, who are you going to sell it to and how are they going to find out about it? While a business plan will help put your new e-commerce business into perspective, it’ll also come in handy when applying for a merchant account — but we’ll get to that a little later. A standard business plan should include:
A description of your business
A description of the product or service you’re selling
An analysis of your target market
An advertising strategy
A six-month sales projection
A description of your management team
3. Find a Web Hosting Server
Your next step is to find a website hosting service provider. The Web host is what will allow you to make your site accessible online. You need to consider many things when choosing a host. Do they have what you need to build your website? Look into how much bandwidth they offer. How much uptime do they warranty, and do they reimburse you for any long time downtime? Do they have a support team and what’s the availability of their support team? Compare prices and, of course, read reviews.
4. Design and Develop Your Website
After you have somewhere to host your website, you can begin designing and developing it. I could go on for days about this topic, but I’ll stick with some of the most important factors. Once you’ve decided on an effective layout and color scheme, here are some aspects to keep in mind:
Keep font faces clean and simple, and try to avoid fonts that are too over the top, such as Comic
Sans and Kristen ITC.
Write detailed product descriptions that will make your customers want to buy what you’re selling.
Display multiple photos of your products highlighting different features. Also, make sure the image
size isn’t too small.
Include About Us and Contact Us pages. The About Us page will help your customers get to know
you better, and the Contact Us page will give them a way of getting in touch with you if they have
any issues.
5. Apply for a Merchant Account
Now that your website is up and running, you need to find a payment processor that can help you open up a merchant account — a special kind of bank account provided by acquiring banks that allows businesses to process credit cards. Since you are processing card-not-present transactions, acquiring banks will automatically label your business as “high risk,” so you should find a processor who works with high risk merchants. When applying for a merchant account, you’ll have to provide documents for the bank’s underwriting process. These documents may include:
Résumé or CV
Business and marketing plan
Supplier’s agreement
Personal bank reference letter
Photo ID
Utility bill
Certificate of incorporation or sole proprietorship documentation
Credit card processing history (if applicable)
6. Get a Shopping Cart
Once a bank approves you for a merchant account, you’ll need to find a shopping cart to integrate into your website and payment gateway. A payment gateway is a web application that encrypts and sends transaction information from your website to the bank for approval or denial. Not all shopping carts are compatible with all payment gateways, so be sure to get your cart after you get a merchant account and payment gateway. Ask your merchant account provider what shopping carts work with their gateway, and if they have any modules to make the integration process easy.
When picking a shopping cart, make a list of features that are most important to you. Here are some features to consider when choosing a cart:
Payment options (e.g. debit/credit cards, electronic checks)
Multiple currency processing
Shipping options (e.g. USPS, UPS, FedEx, pick up in store)
Multiple images per item description
Allow customers to write product or service reviews
Printable invoices
Sales reports
7. Learn How to Prevent and Fight Chargebacks
There will come a time when a customer feels you’ve wrongly charged them. When this happens, they may contact their credit card issuing bank and request a chargeback, asking for their money back. Chargebacks result in a loss in the approved funds, as well as having to pay a chargeback fee. There are several reasons why a customer would file a chargeback, including:
They didn’t receive the products or services they purchased
The cardholder didn’t authorize the transaction
The amount on their credit card statement is different from the amount at the time of the purchase
When the customer received the products they bought, they were damaged or not as described
on your site
A high chargeback ratio could mean losing your merchant account and payment processing abilities. MasterCard and Visa have different requirements, but it’s a good rule of thumb to keep your chargeback ratio below 1%. However, there are ways to prevent chargebacks.
Always deliver your goods as advertised on your site
Customize your billing descriptor so the charge is recognizable on the cardholder’s statement
Email customers an online transaction receipt and require them to email or fax a signed copy back to you
Call the customer to verify the transaction and purchase
Provide a toll-free telephone number so your customers can call you directly with any questions
Use a delivery service that requires a signature upon receiving the goods
Even if you do all that you can to prevent chargebacks, it’s inevitable that they will happen. When they do, be sure to dispute them. When a customer files for a chargeback, your acquiring bank will notify you, and you’ll have three days to dispute it. Each credit card association requires different documents when disputing chargebacks, but supporting documents should include:
A signed invoice
A signed delivery receipt
A copy of the credit card and/or a photo ID
8. Market Your New E-Commerce Business
OK — Now that you’re website is up, and you’re able to accept credit cards online, you need to let people know you’re open for business. Social media is an excellent (and free!) tool that lets you reach a global customer base. Create a Facebook page for your online store and offer promotions and deals. Ask for customer feedback and respond to all comments in a timely manner. Use Twitter to join in on a larger conversation. Create a blog. Use Pinterest to help maintain a consistent brand for your business. Social media marketing helps advertise your business, and it also helps boost your SEO ratings.