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Subsequent to a talk we gave recently on the state of Ecommerce in South Africa, it made sense to collate some of the key points of the presentation into a single infographic.

Of particular interest to me, was the fact that while retail growth in SA is currently around 6%, online retail growth is more in the region of 30%!

With more and more South Africans coming online and becoming more comfortable using the medium for purchasing, the population is certainly becoming more web savvy and as a nation we’re adopting ecommerce very rapidly.

Craig Raw explains things quite well in this post about what he calls the “revolution” and I think he may just be right.

Here’s a list of questions to ask yourself about the product or product range you are thinking of selling online. By the time you are through you will know if you have a winner, a loser or simply a product that requires a little extra work.

1. Would I buy my product and is it of a high quality?

Your product should be something you believe in. You need to clearly see the benefits and attractiveness of your product in order to know how it will provide your customers with a worthwhile purchase. What’s more, if it a product you like and value, you’ll be far better at selling it. People will see the enthusiasm (and people see this – it’s not something you can or should ever fake), will see how keen you are to help them and solve their problems. If this is your focus throughout setting up and managing your shop, you are one big step closer selling successfully online. As selling online is becoming increasingly popular and the storefronts more and more advanced – you will need to offer a product that is of a high standard. Product quality (which supersedes price) is often one of the most important factors to take into consideration when your reputation is on the line and you are attempting to establish a lasting online presence.

2. Is it legal to sell my product online and do I need to acquire any rights?

There are many ownership and copyright laws that apply to products and brands so first things first – you need to be sure that you will not be implicated by your government (or the laws of your country) or another company / individual (because of their ownership or intellection property rights) when selling your products online. You can check this by contacting your manufacturer or supplier. There are also extensive rules, fees and licensing that applies to medical products, food, alcohol or precious stones for example. Make sure your product is legal and get the rights to sell it!

3. Have I researched my competition both online and offline?

Is it possible for you to compete and is there a market demand? These are the two most important questions you’ll need to shed a hard, realistic light on. In order to set the right pricing, packaging, merchandising, specials etc., you’ll need to intimately understand what your competitors are doing and how well they are doing it. Online buyers often research and make their choice of seller based on a number of factors including trust, credibility, attractiveness, ease of storefront use, pricing, availability and more. Just declaring “cheapest price” on your products isn’t going to guarantee loads of sales, as price is fast becoming less and less of a factor when browsing buyers are making decisions. This will call you to offer credibility and/or special attractions to cause a consumer to buy despite your pricing being lower or higher than the competition. Competition is healthy as it tells you there is a hungry market and it also tells you what you are up against. If your competition is lining their pockets, so can you, but – you’ve got to figure out how to differentiate yourself in as many ways as possible from them to secure your slice of the pie. If your product is saturated on the Internet you’ll need to really plan for a bigger budget for sales and marketing as you’ll be going up against some stiff and often very strong competitors that aren’t prepared to give up one sale or customer without a fight.

4. Do I have easy access to stock at any time?

With an online shop, good service is perhaps more important than it is in a real store due to the fact that customers expect a flawless process… so you never want to be out of stock if you can help it because that first impression is the one that lasts – remember the Cheese Shop in Monty Python that had no cheese?! Your customers will not end up shooting you but you will have definitely lost them forever if they find a product they want and they can’t buy it! You will need to have access to reliable and consistent stock levels at all times. One month you might sell 100 products, the next you might sell a 1000 in one sale. This may apply to each product and variation thereof. This logistical issue must be considered in terms of your capacity to purchase / manufacture excess stock and how long it takes, the product shelf life and where you would store your stock. If you opt to make use of a drop shipping service – where a third party does the shipping and often holds stock for you – the relationship, your agreed arrangement, the added costs thereof and the risk of dealing with a 3rd party must all be taken into consideration.

5. Will it be profitable to sell this product online?

Selling expensive items is generally more profitable, but can require more credibility to successfully sell. When you look at the price of your product, don’t forget to calculate direct and indirect costs of selling your goods. Bear in mind that shipping costs must be included when calculating a price – if your price and margin are low and the product fairly heavy your sales may suffer as customers might balk at the shipping fees. Your sales may actually eat into your already small margin as you attempt to augment that shipping fee to boost sales themselves. Remember that even the best selling products won’t earn you any real money if your margins are too small. Consider your targets to be sure that you’ll be smiling at your bank balance from month to month once your storefront starts ticking over.

6. Are there any additional costs to selling my product online?

Selling certain products might mean incurring extra costs such as specialised packaging, royalties, license fees, certifications and so on. Specialised packaging such as secure boxing or bubble-wrap would also incur additional costs. Consider also the possibility of swap-outs and returns. Again, shipping costs are often unforeseen until it’s too late, so know all your costs of sale before you commit to selling any product online.

7. Is my product conducive to online sales and delivery?

It’s true that anything can be sold online but for some products, the process of an online sale is simply not profitable and/or causes too much extra work. Consider for instance the size and weight of your product and how much it may cost to ship. Consider the nature of your product and whether or not it is too fragile to ship or whether it has an expiry date. Certain products come in a variety of options such as colour and size. This must be carefully considered when selecting products and offering your customer’s personalization (or what we call in the industry “upselling” options). As an online merchant you’ll need to bear in mind that some products, such as designer works of art, sports cars, custom jewellery, all have high visual or touch requirements (attached to a high price) and the consumer may wish to see the product live before they buy. Such products would be illogical for e-Commerce and cannot be expected to yield high online sales.

8. Will consumers trust buying my product online?

Why should the consumer buy from you and not the mall, another bricks and mortar store or a competing e-Commerce storefront? For a customer to spend money with you online, they need to be crystal clear that buying from you is well worth it on a n umber of levels. Is it more convenient to buy from you, will it save them time and money, is it hard to find your product elsewhere, is your product of the highest quality difficult to exact elsewhere, do you provide insured delivery, can they contact you if there is a problem or they need help, what do others say about your products\ and services? It all boils down to you building trust in your visitors to convert them into paying customers. These are just some of the questions in a potential customer’s mind when deciding whether to part with their money and give it to you! Consider the label or branding of your product and be aware that some work might need to be done to ensure that you further build trust this way. Provide information about yourself and the product. For storefronts whose products are more abstract – it is important that the sales process remain easy to use while clearly described so that consumers feel comfortable that what they see on the screen is what they will get in real life.

9. Is my product marketable online?

Is your target market reachable online, is there a sizable market out there hungry for what you sell and have you got a sold plan to drive as many of them to your e-Commerce storefront as possible? Many online shops open in a sea of competitors without any planned marketing! Let’s face it, it won’t matter what products you sell if your customers can’t find you! But before you even get to the stage of building your own storefront, you must determine what market you want to sell to. Once you know what kind of customer you want (i.e what kind of customer is ideal for your product), you’ll be able to determine their needs, their likes, dislikes, potential turn ons and turn offs and so on – commonly know as “User Profiling”. If you find then that your products appeal greatly but only to a few people, or the market that you are trying to penetrate has little access to the internet (such as pensioners or low income households) then it may not be enough to sustain a profitable online business. If you know there is a sizeable and willing market out there, there is so much that can be done freely to market yourself online to increase traffic through search engine optimization, affiliate marketing and viral email marketing (to name but a few). If you know you can use as many of these mediums as possible to communicate and attract a large online market of potential buyers, and all other factors taken into consideration, then you’ll know at least that you’ve got the right product to sell online!

Take Action!

Once you’ve selected the right product, make sure you use the right ecommerce software and webhost to create, sustain, run and support an effective e-Commerce storefront! PLAN your business and brand while RESEARCHING your product.

For the past 2 years, AlphaMaleShop has enjoyed a steady increase in sales and has expanded the number of products sold on the site. As South Africa’s biggest sexual health shop one would expect this shop to be run by an interactive team. Yet the shop is owned and managed by one person – a shining example of how DIY eCommerce software in action can work. Seeing the need to enhance sexual life and senses, the AlphaMaleShop has provided a product list that can changes the lives of men in need of sexual assistance.

Taking a closer look at how AlphaMaleShop is run provides key insights as to how to stay afloat with so many sites selling similar products all around you. So here are 3 quick lessons on how to ensure your only sales stay on the… rise!

1. Find a Niche Market

A new online shop will often try and stock a wide variety of products in the hope of making enough sales to cover costs. This is a sign of insecurity and often customers pick up on this. AlphaMaleShop only sells around 20 products, all focused and sorted in dedicated male sexual health needs. Each product has been carefully researched and the unique features are clearly displayed. Knowing your target audience will enable and empower you to offer the very best products addressing first their need and then their want.

The greatest challenge in setting up this shop was sourcing the correct products. 6 months was spent building relationships with suppliers and finding the right products at the right price. This research and preparation phase is often overlooked and many online shops fail to make an impact with browsers leaving within the first five to ten seconds. By knowing your product you will have a greater likelihood of knowing and appealing to your target market.

2. Be Cheaper than the Rest by offering Value

Negotiating rates, stocking up in bulk and finding cheaper sources are ways to keep your own prices down. Many merchants put a high mark up on each product and sell fewer items. By keeping your mark-up low, you can earn more by simply selling more. You will also develop a happy client base much faster.

Where it might be impossible to offer prices that are even a little cheaper – it may be wise to create packages of products or offer and extra reason to buy from you. This may be a special or supporting a good cause. AlphaMaleShop offers such competitive prices that it does not need to run promotions. It makes use of displaying regular retail prices for customers to compare.

3. Market Your Product Daily

Most merchants fail to even begin online marketing. Those who are serious about selling online and making an impact in the market will need to invest both time and money in online marketing. AlphaMale shop has explored and perfected Search Engine Optimization copywriting as well as worked with Google to make it a high ranking site with a strong online presence. AlphaMaleShop simply believes that each day something can be done to improve their hit rate. Acting on this has proven that it’s a must!

With more and more people joining the online shopping mall, theAlphaMaleShop is looking forward to continued sales into the future. Their greatest challenge in the face of increased competition will be to always offer the best prices on the market and maintain the high level of customer service they have become known for.  Check them out at www.alphamaleshop.co.za

What is 3D Secure?

In an effort to curb the occurence of fraud 3D Secure is an XML based protocol used as an added layer of security for online credit and debit card transactions. It was developed by Visa to improve the security of Internet payments and offered to customers as the Verified by Visa service. Services based on the protocol have also been adopted by MasterCard, under the name MasterCard SecureCode, and by JCB International as J/Secure.

As the most advanced online fraud protection, 3D Secure should not be confused with the Card Security Code which is a short numeric code that is printed on the card. It is a unique concept that is fast becoming part of all leading online trading sites and will certainly assist in the promotion of increased online sale.

Do I Have to Use It?

Although eCommerce can exist as it has without such security in place, 3D Secure adds another authentication step for online payments. Merchants are encouraged to use 3D Secure to achieve higher coverage against possible fraud losses. When a merchant does not use 3-D Secure they are however liable for fraudulent transactions even if the transaction was properly authorized.

Fraud will however continue as criminals have excellent adaptive skills. The internet is possibly the safest place to use ones credit card but aside from 3D Secure, a merchant should still carefully check all transactions for possible indications of fraud and catch it before it causes loss.

With complete 3D Secure integration due by November 2010, ShopDirect merchants can now opt to include this protective layer depending on their product type, cost and experience with fraud.

Look out for the announcement of this upgrade and ShopDirect will be able to tell you exactly what you need to get your shopfront linked up to this great tool!

How to resize an image online from Ross Allchorn on Vimeo.

A vital part of planning any business venture is the preparation of a budget covering both the start-up phase and first year of operation. You should also extend this to cover the next few years, at least in draft form, allowing for reinvestment and growth.

The costs incurred can be understood in three groups, including: once-off initial expenses, recurring costs and other incidental costs due to growth or other reasons (e.g. equipment failure, etc).

Four Important Things to Budget For…

1. Budget Your Time
Even though it is your business, that doesn’t mean your time is free. Running and online shop is a time consuming business; you may find it helpful to keep a diary of how you spend your time, initially, as this can help you to become more time (and cost) efficient in the future. Decide how much your time costs or how much it would cost if you had to employ someone to do the job. Perhaps you could even include the minimum wage in your budget plan and make sure this is covered. If it takes you ten minutes to prepare a parcel for dispatch, then apply the appropriate proportion of an hour’s pay.

Be prepared to spend time on your online shop. Slow management, poor merchandising and a lack of simple marketing techniques can cause your shop to become very quiet. Whilst your financial budget does not really need to worry about time as a factor if you are willing to dedicate to your venture, you will need to allow for time on a regular basis to offer a great shopfront and a high level of service.

2. Budget for The Right Software

There are likely to be costs associated with your shopping cart setup and hosting. Any necessary professional services such as design or marketing will also be extra. Even if you choose a free car system (or a DIY package), you may incur costs associated with hosting, security, integration and possibly software licensing.

For shopping cart packages that are all inclusive, make your choice on software quality and support offered. Be cautious in this area, as unexpected hidden costs later on could prove damaging to your business! It is common for both up-front costs and regular monthly (or yearly costs) to be incurred in this area. Be sure of exactly what an all inclusive package is going to give you before making your choice. Start shopping around now and compare options for competitive rates and features.

3. Budget for Stock and Equipment
Will you require new hardware or equipment to trade proficiently? Are you using your personal computer and printer? If so, might you need to replace them for business use in the future? – If so – allow for these costs from day one!
Will you need specialized hardware (e.g. label printer), or will you need capital to purchase packing materials or stock for your online shop?
Are you also the manufacturer? Will you cope with larger orders? Make sure that your goal matches what is physically possible.
Will you need to purchase stock upfront? Factor this cost into your set-up and project clear goals to make back the money within realistic timeframes.
If you are planning to purchase stock upon demand, or to use a drop-shipper to provide this portion of your service, then be very cautious – online shoppers tend to be very impatient and are accustomed to rapid dispatch and delivery of their goods!
When accounting for Postage and Packing costs, factor in postage, cost of materials and then round up slightly to ensure that you do not lose out – remember that it takes time to pack goods property and well packaged goods are more likely to arrive in the condition which the customer will expect.

4. Budget for Banking Charges

One of the most underestimated groups of costs is those associated with banking (or payment processing). While most business bank accounts come with a free period, make sure you examine and account for the costs which will eventually apply.
There will also be initial fees and monthly subscriptions associated with Internet Merchant Accounts. Your payment provider may levy similar charges in addition to per-transaction charges. Look for a package that offers this included in one price and don’t be fooled by cheaper option that result in high excessive costs.
You must balance projected income against these costs, and account for per-transaction charges within product pricing. For example, you would not want to offer a product for sale at R10 if the minimum charge for processing a transaction was R12!

You have researched your customers and product -  now Prepare a clear and detailed Budget with no stones unturned! As you do so, realize that every bit of money you will be spending is your investment. Begin right away by ploughing in the time you will be spending on your active shop to do sufficient research with software providers, banks, shippers and manufacturers. Consult someone you respect and trust on you budget. If you plan to sell in excess of R10 000 a month we recommend that you consult your accountant for a professional eye.

A clear and high-quality picture is not an option. As the customer makes their purchase from a remote location, they will want to know what the product looks like and ideally be able to gauge what size it is. The merchant has the important responsibility to maximize the selling potential of a displayed product and pictures are not the only important consideration.

A customer could email you to ask for details and specifications but this would lower your sale conversion as it destroys the impulse effect. Most browsers also do not have time to wait for your response. Having all the information at hand will make your buyers feel at ease that you have a good understanding of your product. It will also make them certain that they are buying something they really need.

By making all the correct information available, you open yourself up to more sales as you can present specifications and features that the potential buyer may not have been aware of. You aso put the customers mind at ease.

As you improve your shopfront management, here are two ways you can begin to improve your information:

1. Have a look at 5 competitors’ shopfronts. Have a look at the same or similar products that they have for sale and check out how they have merchandised them. Do not copy text word for word, but learn from what they have done that is both good and bad and maximize your selling areas to be even better.

2. Have someone that has never used your shop browse it in search of a specific product. Let them make notes on any questions and ambiguities. Try and rewrite the information so that all these issues are dealt with. If necessary add attachments of diagrams, sketches or video along with the product specification. Write clearly and make it simple. Some technical terms and products can confuse browsers.

If you have many products, it is better to use an industry standard classification system to categorize your products. This will make the shopping experience easy!

The goal of good merchandising is to have all the information related to the product available on the website, so that the customer can take a positive buying decision instantly.

Taking inspiration from some of the most effective sales campaigns in history, a ‘Call to Action’ has proven success in marketing online.

As a merchant one should never assume that the prospect knows what they should do next. Offering a clear start to finish process is crucial. A good eCommerce software system will embody this concept and offer an easy to use check out. Getting the prospect there is however something that you as a merchant need to take control of. This can be done through the use of powerful copy throughout your storefront.

There are many points to consider when creating copy that sells. One of the most important ones is to provide a clear instruction or invitation that will result in a customer following it in order to receive a clear benefit. This is known as the ‘call to action’.

The fastfood industry makes constant use of this strategy as it attempts to excite the impulse of the buyer. Television sales adverts also make constant use of a direct message urging the prospect to take action. The use of persuasive langue sends out the message that you are serious about online sales and that you are confident that your product is worth buying.

Without lowering the standard of your brand or making your site look like a garage sale, the careful placement of button and banners that encourage click-through can be the difference between average and excellent sales! A site making use of a ‘Call to Action’ has far greater potential to get browsers to buy.

Successful Examples

Creating the right product combination and offering a good service that differentiates you from similar shops is the starting point to sourcing the right ‘Call to Action’. Here are a few popular ones:

• Pick up the Phone and Call!
• Buy Now!
• Sign Up here!
• Join the Forum!
• Check Out Here!
• Buy One get One FREE!
• Buy Today and get FREE Delivery!
• Limited Stock!

Optimize your shopfront by making use of a standard or creative ‘Call to Action’ that best suits your products and brand. Send out a strong and clear message to ensure that you step ahead of the high ecommerce competition.

Tip 2: Find one or two reasons that customers would buy specifically from you and promote these adequately throughout your shopfront!

There may be a few reasons why your shop is better than another shop selling the same or similar products. Be sure to do the research and discover what the competition is up to and exactly how they have positioned themselves. This is crucial in realizing your unique selling point.

A unique selling point might not be what your personal taste would hope for or want it to be. Rather, your target market’s specific needs should inspire the unique selling point so that you can cater to what they are looking for.

Your unique selling point may be anything - but here are a few common examples that work:

• Rare or Specialised Product Range

• Fast Shipments

• Free Shipments

• Discounts

• Free Gifts

• Unbiased Product Reviews

• Wholesaler Prices

Highlighting this can most effectively be done through:

• Sales focused copy

• A clear and effective design

• Banner adverts

• Content pages

• Tweets on Twitter

• Email Campaigns

Creating a clear selling point and using it effectively will give your store an identity. It is your up-front value proposition, the essential value that is woven into the marketing strategy and core purpose of any eCommerce website.

Ladies Choice

Without trying too hard, Edyn has found a place to call its own by catering to a specific market of women and being reasonable enough to engage the gifting market. The shopfront does not try to sell a million products with many differing variations. Rather, it focuses on products within a limited price and style range – proof that having a good understanding of your market is crucial in eCommerce!

The Edyn Collection also scours the fashion capitals as well as more obscure geography for fashionable, stylish and unique costume designer jewelry. Budding jewelry designers are invited to create collections for Edyn making it a platform for the exposing of new talent to a discerning and receptive market. The experience and confidence inspired from this wonderful approach makes Edyn so much more than just an online shop.

Best of the Best

Each Edyn item captures the true spirit of world class design and uniqueness to ensure exclusivity. With their own design studio which also specializes in custom design jewelry and colours – clients can customize pieces to their requirements. With collections in wedding and fashion jewelry, the Edyn Collection is able to cater to a wide variety of tastes and styles.

The Edyn Collection aims to be the go-to website for fashionable women looking for designer jewelry which is exclusive and stylish.

Most of all, this shopfront has secured a sturdy online presence and is a leader in the local search engines when searching for items from costume jewelry necklaces to complete wedding jewelry sets.  With sites like this trading in a competitive online market, there can be no doubting that eCommerce is only going to grow exponentially in South Africa.

Check them out: www.edyncollection.com