How to start an online retail business in 5 steps
Starting an online retail business is an exciting business adventure and we’re here to give you 5 simple steps to help make your business dream a reality. With a bit of research and planning, establishing your store in the online sphere has never been easier.
Identify what you want to sell
Narrowing down what you want your business to sell is one of the first things you need to take when setting up your online store. Do some research to find a niche in the market, an opportunity where there is a genuine need for a product that doesn’t exist or can be done better.
When you discover what kind of products you want to sell and have identified there is a need for them, you will also need to make sure that your potential customers are prepared to pay for the product. You want your product solution to be realistic and attainable to keep your business going.
Do your product research
There are a whole host of different types of products that you can sell online. These are three of the main types that online retailers commonly sell:
- Physical goods– these are material items which you will need to have manufactured. These are often stored within a warehouse and then shipped out to your customers directly. Be careful of creating low-profit margins if you don’t manage your stock correctly.
- Digital Downloads– this set up allows for customers to digitally download the product to their digital device like audiobooks and online courses.
- A specialised service– this is an important channel for anyone who can offer their specialised skills remotely and online. An example is online life-coaches, teachers and even personal trainers.
Spend some time understanding the requirements of the different type of products and take note of the kind of resources you are going to need to help get your business going.
Get your marketing sorted
A key to creating a successful business is having a marketing plan in place. You want to let your potential customers know all about your products/services and that your online store doors are open for business!
If you find the idea of doing your own marketing a bit overwhelming there are online digital marketers available that you can outsource to. However, if you decide to tackle your own marketing there are an assortment of online courses and platforms available to help. These are some which are worth checking out:
Setting up shop
Your website is your virtual shopfront, so you need to make sure all the right steps are in place to make it user-friendly. Before you take your first orders, do a test run to get familiar with the sales process to iron out any kinks. Get your family and friends to go through the purchase stages and ask for their feedback on what works well and what needs to be improved.
The next all-important step is ensuring you have a competent ecommerce platform in place.
These are a few to check out:
Organise your business insurance
Just because your business is based online doesn’t mean that it is free from potential risks. It is a common misconception that a home contents insurance policy extends to provide cover for retail stock and business assets that you store at home.
This is often untrue, so it is important that you take a look at your PDS or policy wording. You may need to consider a separate business insurance policy that would cover these assets as part of your business operations and not your personal belongings.
These are some of the types of business insurances you may need to consider to protect your online store:
Public and Product Liability*
Public Liability insurance covers legal fees and compensation costs if a customer, member of the public, or a supplier claims against you for injury (when not covered by the ACC). or damage to their property as a result of your alleged negligent business activity
If you sell products that you make, you may need to consider Product Liability insurance. Product Liability insurance protects your businesses against claims by third parties relating to property damage or personal injury (not covered by the ACC) caused by your products.
Contents and stock*
Provides coverage for loss of or damage to items such as business equipment, stock, plant and machinery, records and furniture belonging to you at the insured location. This is a separate policy to your personal home contents insurance.
Relying on your online systems and networks to run your business means you need to protect them against cyber-attacks and crime, something which should be part of your business plan.
Cyber Liability insurance safeguards you from claims and supports your profitability in the event of a cyber breach or attack.
If you decide to deliver products to your customers you need to consider protecting your portable business assets like mobile phones, laptops and payment equipment such as EFTPOS machines.
Portable equipment or general property insurance covers you for loss and damage to your tools and equipment due to theft, fire and other perils listed in the wording,
anywhere in New Zealand..
Getting your business insurance sorted has never been easier. With BizCover, we provide a hassle-free online insurance experience providing multiple quotes from some of New Zealand’s leading insurers, so you can compare and save on your policy in minutes.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.