Have you ever thought about opening an online store or storefront?
You may already be running a small business looking to relocate or expand online. Or maybe you are just looking to open and run your own online store.
How to start an online store
Although this process may sound a little intimidating, it doesn’t need to be. That’s because there are a number of ways you can start an online store that works for you and fits within your budget.
We’ll review some of the most popular options in this article as well as answer some questions that often arise when planning and opening an online store.
Let’s dive into a question related to something every small business cares about: budget.
How much does it cost to start an online store?
Well, there is the process and price of setting up an online store.
Next, there are the processes and costs associated with ordering inventory and managing other aspects of your online business such as shipping, payment collection, search engine optimization (SEO), communications management, and security. The tool you choose to help you set up your online store will determine many of your costs as well as when and how you actually pay to use the software.
Online Storefront Software
It is made by many tools, such as Facebook, Instagram, and Square Free To create and manage your online store (more on this moment).
They make a profit from every sale you make. Facebook and Instagram take 5% per transaction or a flat fee of $0.40 for shipments of $8 or less. Square takes 2.9% + $0.30 from every transaction you make on their platform.
Other tools, like Shopify, are also online storefronts but they manage things like payment and shipping as well. Hence the basic fee for setting up your online store (after completing your free trial). So the price for this type of tool can range from the free version to around $300 per month, depending on the size of your store and the features you need. Specifically, the Shopify plans are $29 per month, $79 per month, and $299 per month.
There are also tools like WooCommerce which are free to start using but will always require a number of additional costs, such as your online store host, domain, theme, and more. This could easily cost you upwards of $130 a month.
Finally, there are integrations that help make online storefronts possible — connecting to your other business tools, like your marketing software or CRM. For example, you can integrate DepositFix with HubSpot to accept Stripe and PayPal payments using HubSpot forms.
With integration, you can…
- Accept payments on your HubSpot-enabled landing pages.
- Allow your customers to stay on your website during the checkout process.
- Add custom fields to your forms.
- Segmentation of HubSpot contacts using payment fields.
- Use HubSpot email workflows to send receipts.
- Manage billing from CRM.
- Create subscriptions and fees with HubSpot workflows.
DepositFix integrates with any HubSpot plan and comes at a cost of $158 per month.
With all that said, it is clear that the answer to this question is not definitive and dry. However, it is also clear that there are many tools available that can be customized according to your needs, goals, budget, and the product/service you are selling.
How to start an online store for free
As an entrepreneur, you might be wondering, How to start an online store without money?
These days, you can: 1) harness the power of social media marketing to create a free online store or storefront on Facebook and Instagram, or 2) implement a free online storefront program that only charges for each transaction.
As we covered above, popular tools for this type of online boutique include Facebook and Instagram as well as free software like Square.
For the sake of this article, we are going to review how to start an online store on Facebook. (Since Facebook owns Instagram, this is the same process for creating an online store on Instagram.)
How to start an online store on Facebook
To start an online store on Facebook or Instagram, you will need to use Facebook Stores.
What is a Facebook Store, you ask?
What is a Facebook or Instagram store?
Stores on Facebook and Instagram are online storefronts. Here, visitors can explore and purchase products directly from Facebook and Instagram.
Stores are customizable so you can be sure that your online store is branded and features the products you choose. Additionally, you can customize:
- All featured products
- Collections (organized groups of products you offer)
- Pictures and cover image of the storefront
- Distinctive colors
- How customers reach your online storefront (eg via Facebook and Instagram profiles, Instagram ads, In-feed Story, Live, Reel)
Customers can also save products to their profiles, place orders (via the app or after being redirected to your website), DM you with questions, track shipments, and request support from your team.
Here are the steps you’ll need to follow to actually get your Facebook (or Instagram) shopping up and running:
- Make sure you are eligible to shop.
- Create or use an existing catalog (containing information about the products you are looking to advertise and sell on Facebook or Instagram).
- Create and design your storefront with Commerce Manager.
No matter how you choose to set up your online store, you’ll need to decide what you’re selling – and what inventory you need (or don’t need) to offer customers.
How Much Inventory Do Companies Need to Start an Online Store?
When selecting your online store’s inventory, buy across a range of different styles rather than a lot of one style.
For example, select one style for the product. Then buy a couple of selected products in a few different sizes (often known as a ‘package’) – eg, two sizes small, two sizes medium, and two sizes large in the same style and color.
In other words, instead of buying the “deep units” (five small sizes, ten medium sizes and five large sizes in different shapes and colors), stick to the “breadth” of styles so that you have plenty to offer your customers.
This will help you in being able to test the best products, styles, sizes and colors among your customers. You can always add more styles, sizes, and colors as soon as you know there’s a need – that way you don’t waste any dedicated budget.
to sum up, A good rule of thumb when it comes to stock is to pick one style in one color and then get two of each common size (depending on the type of product, this will likely be two small, two medium, and two large).
Another way to think about the process of creating your inventory if you are just starting out is to allocate a quarter of your budget to inventory.
Finally, if you have been in business for some time, You can build your inventory budget and on previous purchase data To determine how much of each item you sell and at what price. The more product you sell at a higher profit, the more valuable that item will be – meaning, the more important it is to stock, advertise, and present that product through your online store.
This inventory discussion leads us to another question – Is Stocking an Online Store Always Necessary?
Despite what you might assume, the answer is No.
Enters: drop shipping.
How to start an online boutique with dropshipping
A 2019 study by Grand View Research predicts that the global dropshipping market size will grow at over 28% annually through 2025.
Dropshipping when the business owner The third party pays the wholesale price of the product. Then the customer pays the retail price of the product (which is more than the wholesale price). After that, you get the difference / profit.
Dropshipping is profitable and valuable because it allows for low costs and does not require business owners to stock any inventory. Business owners can also easily test different types of products between customers and scope.
To start an online dropshipping business, follow these steps:
- Select the market you want.
- Decide what types of products you’ll sell (find a niche!).
- Select the third party/supplier you will use (aka your wholesaler).
- A tool like Shopify makes this easy because it has a feature that you can use to connect Oberlo to your online Shopify boutique and then select your suppliers.
- If you’re not a Shopify user or want to avoid Oberlo, you can always do a search to find other wholesalers that meet your product needs (like Faire) and contact them accordingly.
- Select your online boutique software, create your storefront, and highlight the products you will sell.
- Conduct market and competitive research to determine product pricing and shipping costs.
- Register your business and start selling.
Start your online store
Starting your online store doesn’t have to be intimidating or a huge expense. Follow the steps above and keep the answers to the questions we reviewed in mind when creating your online store. And then, sell.