And the tripwires to avoid along the way.

The world of online selling is full of folks who thought it would be the easier, softer way to run a business. The unspoken fantasy sounds something like “I’ll work in my pajamas at home, click a few buttons, get a PayPal account, build a website in five minutes, and the money will start rolling in.” And it’s true, it’s easy to start selling online. In the past five years alone, the friction of starting an online business has been reduced to almost nothing. For example, it used to take up to a month to open a merchant account and now you can get a merchant account instantly from PayPal or Stripe.

Because e-commerce set-up is easier than ever, there’s more competition than ever. This is why it usually doesn’t take long for new sellers to realize their real challenges—keeping their business and increasing profits. The good news is that succeeding in e-commerce doesn’t have to be so difficult. If online retailers take the time to properly set-up their systems in the beginning, far more businesses owners will be happy and more businesses will survive. In an industry where the ultimate goal is sustainable growth, this is my checklist for success:   

1. Think about your product catalog and set up fool-proof inventory management

Building and managing a solid catalog of products is paramount to the success of an online business. Know what your differentiators are—the uniqueness of your products, competitive prices, free shipping, or even how your products are bundled—so that your products can stand out from the hundreds or thousands of similar items.
Tripwire: Overselling (selling what you don’t have in stock), which can have such unpleasant side effects as bad customer reviews, low (or no) profit margins, awkward vendor relationships, and more. Even if you just start out selling on one channel, have a plan for syncing the price and quantity of your products across channels.

2. Channels—know when to push and pull


A little research on which channels will best reach your ideal customers goes a long way. If you’re selling from your own web site, you’ll need to consider how you will “pull” customers to your products, otherwise known as marketing (see No. 3). If you’re going to sell on marketplaces like Amazon and eBay, you’ll need to consider how best to “push” your products to a large audience, which means paying fees, competing with pricing, and possibly paying for fulfillment.
Tripwire: Being stuck in a rut. Remember that you can sell on both platforms and marketplaces and you can experiment with selling specific products on different channels as you see fit. An e-commerce business model that isn’t agile is missing the point of being online.  

3. Plan a budget for marketing

In the early days, online sellers are sure everyone’s going to love their really cool product idea. They figure they’ll just put it out there and all kinds of people will start buying it. But then they learn about buying cycles and competition and realize there are other sellers fighting for their territory. So if you know your widget costs you $5 and it costs you another $5 to market it, selling it for $10 is not going to work. Tracking competition is crucial and preparing for the costs involved in marketing can save your business. Consider how you’re going to get website traffic, how you’re going to manage and communicate with the people who are interested in the product, and how you’re going to get them to buy.
Tripwire: Denial, aka “if you build it they will come” syndrome. Don’t kid yourself—there will always be a cost to selling, whether that’s marketplace fees and expenses or exposure through Google AdWords. You will need marketing and the earlier you plan for it, the better your sales and profit margins will be.

4. Create streamlined workflows


Once the orders start coming in, day-to-day logistics can quickly become a nightmare. If you’re not integrating and automating sales information into your accounting, inventory, and shipping systems, you can spend dozens of hours each week on data entry alone. What does that mean? It means instantly and accurately syncing one set of order data throughout each operational area. For example, if you haven’t worked through how you’ll handle the process of pricing shipping and notifying customers of tracking information ahead of time, the simple task of doing so can require as many as a half dozen touchpoints. The same is true for entering sales info into QuickBooks and inventory management.  
Tripwire: The busywork blues. Unless you plan out workflow efficiencies, you’ll just be spending your time on nonsense. This will suck away your enthusiasm and your ability to grow the business. Trust me, it happens to the best of ‘em.

5. Build ironclad fulfillment

A fulfillment system that is well-managed, accurate, and fast is the backbone of an e-commerce business. Smart e-retailers know that in a world where customers compare prices in a nanosecond, good reviews are your greatest asset. Happy customers who write good reviews are a byproduct of well-managed fulfillment.
Tripwire: Bad reviews take businesses down. Customers write bad reviews because the product took forever to get to them, the wrong product was sent, or the product was bad or broken when it arrived. All of that is preventable if you nail it on fulfillment.  

6. Get your ship together


With so many carriers and costs to manage, it’s easy to peg shipping as another area where you can get lost in minutia, and it is. But many online retailers don’t realize that shipping is a place where you can actually tweak your profit margins for the better. With a system in place to instantly compare carrier costs based on geographic location, size and weight you can have more control over product profitability. Explore drop-shipping to take it even deeper. Great businesses are made in the details that most overlook.  
Tripwire: Settling. Don’t commit to just one carrier just for convenience sake. Play the field, look at different costs, and take control of your margins.  

7. Be accountable

Just because there’s no one looking over your shoulder asking about your financials and sales tax doesn’t mean you’re not responsible for every single sale and the accounting thereof. Excel spreadsheets are cute and all, but they won’t sustain your business. And tax compliance is not a worry you ever want to have, so take steps to properly track, validate, and pay sales tax properly with a proper accounting software and data automation so it’s all timely and accurate.
Tripwire: Lack of urgency. When business starts off slowly, it’s easy to cut corners on financial reporting and guess your way through sales tax compliance. But when business picks up, your finances will quickly bind up in a tangled mess.

Industry-leading e-commerce business owners have the forethought to plan for the inevitable challenges that come with growth, which include syncing multi-channel inventory, using strategy to choose channels, embracing marketing, mapping out workflow efficiencies, organizing fulfillment and shipping, and financial accounting right out of the gate. Before long technology will catch up with the selling masses and it will be even easier to list and sell products online. For now, online sellers who go out of their way to seek technological solutions to enable sustainability and growth will give themselves the edge over the competition and they will be the biggest e-commerce winners.


Webgility’s software helps online retailers manage accounting integration, orders, inventory, shipping and fulfillment.