When it comes to opening an online store, one of the key considerations that often arises is the cost involved in building and maintaining an e-commerce website. Understanding the e-commerce website cost is vital for entrepreneurs and business owners looking to establish a successful online retail presence.

By familiarizing yourself with the ins and outs of e-commerce website costs, you can make informed decisions, plan your budget effectively, and set yourself up for success in the competitive world of online commerce. In this article, we will explore nine valuable tips that can help you navigate the realm of e-commerce website costs and ensure that your online store venture is financially viable and sustainable.

Do you want to finally open your online shop? But you are not sure yet whether you have thought of everything. There are a few pitfalls that you need to be aware of before creating your online store. This can have costly consequences for you.

Therefore, in this article, I would like to tell you the most important things that you have to consider before you open your online shop. You can then better decide whether your idea is the right one.

I will introduce you to the 9 most important things about opening an online store.

Find the right shop software

The most essential element next to your product is the shop system that you use. This has to match the goals of your online trading. You can differentiate between two types of shop systems: cloud-based solutions such as Jimdo or Shopify.

Both are good to start with. Whereas Jimdo is more intended for small online shops that have only a few products. Shopify, on the other hand, is a solution that already offers a more extensive range of functions.

So you can use Shopify for smaller online shops but also run an online shop with many thousands of products.

Related: How do I create an online shop with Shopify?

In addition to cloud-based solutions, there are also self-hosted solutions. The best-known examples are WooCommerce, which is based on WordPress, and Shopware.

Self-hosted solutions bring certain flexibility with them, but you have to independently ensure that your hosting is high-performance for the requirements of the shop system and your needs.

Therefore, it is worthwhile to use a solution like Jimdo or Shopify to start with.

So that you can make your decision easier, I recommend reading my article Shop system comparison. There you will get a good insight into the best shop systems on the market.

Read Also: 5 Key Differences to Compare Shared Hosting vs WordPress

Find the right product & business model

What would an online shop be without products? Nothing! That’s why the product is an important part of your shops. If you know what product it should be, you have to decide what type of business model to choose. To name the most famous:

• Reselling
• Private label
• Own product

A reseller business means that you buy products from a wholesaler and resell these products to end customers. You resell products of another brand to customers. The margin that arises between the wholesale price and the retail price determines your margin.

Private label allows you to build your brand with your product. This means that a product from a supplier is adapted according to your specifications.

This adaptation usually takes the form of a logo or a slight change to the product. The private label business model is used by many Amazon retailers. You can e.g. B. can be found on platforms such as Alibaba.

Another possibility, but also the most time-consuming and costly, is to develop your product. To do this, you have to find a supplier who will manufacture a product exactly according to your designs and construction data.

This is only worthwhile if you have enough capital to finance the manufacturing process and the ordering of goods.

In addition, you not only have to pre-finance the order for goods but also find a designer/developer who will create your product according to your specifications.

In general, you should consider the following when choosing a product, which will make it easier for you to start as an online retailer:

• Minimum order quantity (MOQ) as low as possible: As an online retailer, you want to keep the minimum order quantity as low as possible. Your supplier, in turn, would like to set this as high as possible so that it is worthwhile for him. I will explain to you in a moment why you want to keep the MOQ low. Many suppliers require you to B. accept at least 1,000 pieces. It differs from product to product.
• Unit price as low as possible: Your product should have the lowest possible unit price. A high unit price means that your goods orders are very expensive. If the unit price is 20 euros and your supplier requires a minimum order quantity of 1,000 pieces, you have to finance at least 20,000 euros for each order.
• As light, a product as possible: A light product not only results in low shipping costs when you send it to the customer, but it also results in lower transport costs.
• Easy to transport: Smaller products are usually easier to pack and also easier to ship. Therefore, it is good to start with that you may not start with a bulky product right away.
• Avoid electrical appliances or food: electrical appliances and food are subject to many different regulations. You have to adhere to these so that you can even sell these products. the product offers a platform on which you can search for required certificates for product categories.

Ideally, all of these points should apply. Nevertheless, offering a more expensive, heavy, or bulky product can also offer a competitive advantage.

Find a reliable supplier

An important part of being successful in online trading is finding a reliable supplier. Here, too, you should keep a few things in mind. Your supplier should be reliable and also manufacture good quality products.

If you are looking for a supplier in the Far East, Alibaba is a very good place to go. At Alibaba, you can find suppliers for many different products. It is important to ensure that the supplier has been certified by Alibaba.

You can recognize this by the “Verified Supplier” sign. You also have the advantage that Alibaba offers a trustee service named “Alibaba Trade-Assurance”. You can use this to secure your payments to your supplier.

If you’d prefer to find a supplier, you can Who’s delivering what? To use. At WLW you can find suppliers from European countries.

Unlike Alibaba, WLW is a brokerage platform that does not allow you to process payments to suppliers. If you want to know what other options there are, you can open this in the article Online shop: where to find goods.

Financing your goods

The area of ​​online trading offers almost innumerable advantages. However, it is also important to point out the disadvantages. One of the disadvantages is the financing of goods. If you order goods, you have to pre-finance this. High unit prices of the goods and high minimum order quantities can quickly lead to very high sums that you have to provide.

Months can pass between the time you have to pay your supplier and the time your end customer pays you, especially if you are transporting goods to the Far East by sea.

Nevertheless, you should be able to finance your first order for your online shop with your funds. But also make sure that you still have enough financial means to invest in the shop system, the product photos, and product descriptions.

In the article online shop costs, you can get an exact list of all types of costs as well as a sample calculation.

If you are more experienced in online trading and regularly order goods, you can also finance your goods orders with trade credits. In this way, you can prevent your liquidity bottlenecks and scale your company better.

There are special providers for trade credit such as B. Fulfin, who specialize in this type of loan.

In addition to trade credit, you also have the option of interim financing orders for goods with credit cards. Some business credit cards such as the American Express Business Platinum Card offer you up to 60 days as a payment term.

So you can bridge some time and can reduce the time in which you have to pre-finance the goods. You should only use this method if you are sure that you can settle your credit card bill immediately. Otherwise, you face high lending rates.

Certificates and declarations of conformity

Many product categories are subject to national or European regulations. One of the most famous is z. B. CE certification. There are also z. B. the RoHS that you can find on electrical appliances.

Most product categories are subject to regulations that you should know before you have your product manufactured. Especially if you order your product in the Far East, the supplier is not necessarily familiar with your local regulations.

That’s why you should take care of it yourself. On the product page, you can find out if your product requires a specific certification.

If you find out that your product is subject to a certain regulation, that doesn’t mean that you shouldn’t manufacture this product. Find out which certificates you need and how much they will cost. There are agencies like QIMA that specialize in this.

As soon as you have received the necessary certificates, you can create a so-called declaration of conformity. The declaration of conformity shows that your product conforms to all national and international regulations.

Tip: You should always have a pre-shipping inspection carried out every time you order goods. This pre-shipping inspection is in German pre-loading inspection checks on-site – at the supplier’s – through a random test of whether the goods meet the required quality standards. Only after a successful pre-shipping inspection will the goods be sent to your warehouse.

A pre-shipping inspection is always a worthwhile investment. You don’t want a 40-foot container with faulty parts to arrive at your warehouse. Many different agencies offer pre-shipping inspections one of these agencies is QIMA.

Create appealing product images

Having good product images in your online shop is essential. The product photo is still the most popular medium for familiarizing oneself with the product when shopping online.

Customers cannot pick up the product in an online shop, so the impression they get is with the product images.

You should have these product images taken by a professional photographer. You can either find a photographer for product images locally or a provider to whom you send your product and they will create the images

Remember that your product images also contain lifestyle images. Lifestyle images are images in which people use your products. If you are z. For example, if you sell a yoga mat, the customer should see the yoga mat in use.

It is only with these lifestyle images that people’s emotions are triggered. If the effort is too great for you to hire a model for a photo shoot, you can also create photo montages with your product.

Meaningful product descriptions

Just like the product images, the product descriptions are important. They can give even more details about your product and resolve any customer objections.

That’s why you should have your product descriptions written by professional editors if you don’t have the editorial skills.

You have to note that your customers don’t want to know the functions of your product, but the advantages. The advantages are always focused on the outcome.

This means that when you sell yoga mats, you are not selling a yoga mat made of 2 cm thick foam, but you are selling a yoga mat that helps your customers get fit and convince them in the yoga class.

Open online shop: legal and product liability

Now we come to the less beautiful topic that concerns the area of ​​online trading and that is the legal aspects and liability. Please note that if in doubt, you should seek professional help from a lawyer.

Basically, as a company, you have to be liable for your products. If the manufacturer of your products is outside of Europe, you as the importer must be liable for the product and its safety.

It is therefore advisable to take out product liability insurance. You can find out more about product liability here.

In the case of a partnership, you must be liable for your private assets in the event of liability. In the case of a corporation, liability is limited to the company’s assets.

However, it can also happen to you with a corporation that you are privately liable if negligence is found. There is also the tiresome issue of legal certainty.

Legal security is an issue that you should take seriously, which is the country in which a warning is issued. Otherwise, a warning can quickly flutter into your house.

For this, it only helps to use the services of the dealer association or the IT law firm. These will help you to create the right legal texts that must be part of your online shop.

They also inform you about which terms, brand names, or product categories are currently at risk of warnings.

In addition, as a shop operator, you have to take the GDPR first. You store sensitive customer data that you have to store and process under GDPR.

Here it helps you to use an inherently legal shop system and GDPR-compliant, such as B. Jimdo. Shopify can now also be used in a GDPR-compliant manner.

Open the online shop and register your business

Registering a business is an important step so that you can even open an online shop. You must always register a business if you have any profit intentions.

This is fulfilled with the opening of an online shop. You can start as a sole proprietorship and, if you are successful, find a UG or a GmbH.

So if you decide to open an online shop, go to your trade office and register a trade. In this article, you will find instructions on how to register your business.

Read also: Why should you have an online shop created?

FAQ – Frequently asked questions

What do you have to consider when opening an online shop?

There are a few things you need to be aware of before you can create an online store. I hope this article has informed you about the most important elements.

Which business do I need for an online shop?

You can start an online shop with a small business. You can also use the small business rule if it offers advantages for you.

How expensive is an online Store?

The greatest costs arise when ordering the products. You also have z. B. Costs for your shop system. In the article Online Shop Costs, I presented the important cost drivers of an online shop for you.

How is an online shop structured?

Nowadays you can use a shopping system like Shopify that offers you all the important functions for your online shop. It is a cloud-based solution that is easy to use without having to use a complicated open-source solution.

Conclusion

To wrap up, opening an online store can be a game-changer for your business, and by implementing these nine valuable tips, you’re setting yourself up for success. Remember, choosing the right shipping software for your small business is crucial to ensure smooth operations and customer satisfaction. Look for reliable options like ShipStation or Easyship that offer seamless integration, data automation, and cost-effective shipping solutions.

By leveraging the power of technology and adopting these best practices, you’ll be able to streamline your processes, optimize your shipping strategy, and deliver a superior customer experience. So, take these tips to heart, embark on your e-commerce journey, and witness your online store flourish. Your dream of running a successful online business is within reach, so start implementing these tips and watch your business thrive in the digital landscape!