The process involved in setting up your own online store bypasses many of the requirements in building a traditional store, primarily those that have to do with building or using a physical infrastructure where customers are allowed to visit.
That does not mean, however, that the other aspects of commerce are replaced by easier processes too. For instance, if you have your own products, buy them from a manufacturer, or accept consignments, you need a place to store them. Many small online businesses offer products that the store owner — often working alone or with some help from a friend or family member — makes themselves. In such cases, the store owner typically keeps the products in an area of their house. For bigger stores that keep more or bulkier products, warehouses or rented storage units may be used.
Comparatively, where you keep your products may be a lot easier to handle than how you send them to customers. If you don’t believe that, think about this: shipping is the last role you play in the transaction, so what you do in that last part of the deal has an effect on whether you have gained or lost a customer for life.
If you get into this business without thinking about shipping and logistics, you will find out the hard way how these things matter a lot. It may be easy for the first few purchases, but as your business grows, you’ll need to sit down with a rep from a courier service. And to track your transactions more accurately, you’ll need shipping software.
Cost of shipping
The cost of shipping is often the deal breaker. Many shopping carts are abandoned at the last minute when the price suddenly jumps after adding the shipping fee. Especially if your items are available at a brick-and-mortar, a customer would rather drive to that store than buy from you if your shipping costs are absurd.
To combat this problem, don’t include shipping as a way to make a profit. If you must charge customers for it, charge them the exact amount it costs to ship the item to them. If your profit margin is high and you can afford to absorb the shipping costs, offer free shipping; FREE is always a come-on for customers.
To make sure customers know exactly how much they must spend, include shipping cost per item on your store display.
As for returns, if the product is defective, you must shoulder the cost to ship it back to you and the cost to send the replacement to the customer. If it is no fault of yours, however, (the customer dropped the item in water, damaging it) you are justified in letting the customer foot the shipping bill.