Econsultancy has just published ‘Selling online: a how to guide for small businesses‘, which provides a step by step guide for SMEs.
The report was written by entrepreneur and e-commerce consultant Trevor Ginn, who founded online retailer Hello Baby in 2007.
I’ve been speaking to Trevor about the report, and his e-commerce tips for small businesses…
Can you tell us about the guide?
Having run Hello Baby for the past two years, I’ve learned a lot about setting up online shops; online marketing and e-commerce essentials like setting up payments solutions, payments and software selection.
I was keen to write a book on this in the past but have never gotten round to finishing it, so this guide is a good way of using the knowledge that I’ve picked up to help small businesses selling online. It’s relevant to any small business, with or without an online presence.
There are a lot of small businesses out there that don’t sell online, or don’t do it well, and there is a lack of knowledge out there about the opportunities available.
The aim of this guide is to provide a single point for SMEs to find out about the various areas which they need to know to set up online or improve what they are doing already.
It can take time to acquire the necessary knowledge to set up online, with a lot of digging around to find out, and the aim here is to give them a leg-up.
The idea is not to reproduce existing reports, bit to give a good overview of the issues which affect small businesses. Each section could be expanded into a report of its own, but the idea is that people can read this and find more detail elsewhere if they need to.
What kind of issues do small businesses have with e-commerce?
There are a lot of poor websites that could be improved, or underperforming due to a lack of SEO knowledge – some haven’t even gotten to the first step of optimising their websites.
Smaller shops that are struggling because more people are shopping online. There are issues with technical know-how, where people know about retail, but aren’t clued up about e-commerce. It can be difficult when there is no one in the organisation that understands it.
What are the easiest wins for SMEs starting to sell online?
Optimising the website, improving the content and building links can be done in-house and can produce valuable results.
Also, depending on the type of business, selling on the eBay and Amazon marketplaces can be very valuable for driving additional sales.
At Hello Baby, we sell more on eBay and Amazon than we do direct from our website. If you have a website, people have to find you, trust you, the website has to be usable. These things are not always easy to achieve.
On eBay and Amazon, these issues are taken care of for you, the user experience is there, and SMEs can piggyback on this and get their products on front of their user base.
It’s also a good first step for small businesses that are thinking about selling online.
How can small businesses with little known brands get customers to trust them?
There are a few things that retailers can do, but ultimately trust can only come with experience of using the site.
A good-looking website is important, as users will make judgements based on first impressions, and so is relevant information on returns, delivery and so on should be made clear, and T&Cs clearly displayed. Providing clear contact details is another must.
Also, one way to get around this issue is to use the eBay and Amazon marketplaces, where buyers are covered.
I think you can only get around such concerns by producing a compelling offering for customers that looks good and works well.
It’s like going into a business meeting wearing shorts, you don’t do it. You have to look presentable for people to take you seriously.
If marketplaces like eBay and Amazon are so effective, is a website even necessary for SMEs?
Yes, a website is really important, I think that people should sell on as many channels as possible to maximise their sales. Retailers should use all the tools in their arsenal. If we didn’t sell across multiple channels, our revenue would be much smaller.
Selling on marketplaces is a good way to start online, but it can also drive traffic to your website.
Should smaller etailers offer as many payment methods as possible?
The common wisdom is to use multiple payment methods; PayPal, Google Checkout, credit and debits cards etc.
For us this works. Though the sales through Google Checkout aren’t that significant, we take more than half of the payments on our website through PayPal. There is that level of cover for customers which can deal with any concerns about trust.
In my experience, people are keen to use PayPal.
What are the issues around payments solutions that SMEs should be aware of?
With card and other payments, smaller and inexperienced retailers need to realise that it isn’t cleared funds, and that these transactions can be reversed.
They need to understand how the system works, the level of cover they have, and whether to accept certain transactions. I’ve found that the card companies are very bad at explaining this to retailers, providing help with these issues and the best settings for their business.
I’ve had issues with cards in the past, and I’ve learned that it’s important to understand the circumstances under which you’re covered.
Retailers need to get the balance right – if you cancel everything that isn’t 100% right, then you risk losing a lot of sales, but there is also the risk of losing money on fraudulent transactions.
You have to come to a decision about whether a transaction is fraudulent or not, and whether you should accept it. I look for things like odd email addresses, or any unusual orders – and will sometimes phone customers up just to get an idea of whether they are genuine or not.
Since 3D Secure was introduced, the levels of fraud have gone down a lot, and it isn’t much of a problem for us anymore.
It’s important for SMEs to have an idea of how these things work, but in my experience credit card companies are doing very little to help people, and the same applies to PayPal.
For example, PayPal will not cover retailers for transactions where the buyer hasn’t registered their address, but there is no way of refusing payments in this instance,
In the case of SagePay, I had to ring up and talk to them to find out the best security settings for my type of business.
What are the challenges around delivery?
There are a range of different delivery options, depending on the size of the retailer, from taking items along to the post office, to saving time by getting a franking machine, right through to automated systems.
For us, this automation is vital, as we need to be selling from a single inventory across a number of channels
If you have a shop and a website, as well as using eBay or other marketplaces, then this is very hard unless you have a decent stock management system.
I find that many systems tend to be stronger for some channels than others, so you need to find the best balance you can at an affordable price.
It’s been said that you either get a system and mould your business to it, or make the system fit your business, and the difference is three zeros on the end of the price tag.
How can SMEs market themselves online with a limited budget?
One thing is to get your business noticed by selling on various marketplaces.
SEO is also a way to get traffic in at a relatively low cost. By spending time creating effective content and building links, you can gain valuable traffic.
It’s worth investing the time optimising your site for the search engines In my case, I read the Econsultancy SEO guide and spent time doing it myself. It’s well worth it, as it’s a gift that keeps on giving!
For Hello Baby, the iPhone app we developed for a few hundred pounds has delivered 300-500 visits a day to the website.
There are other ways too; newsletters and emails are all cost effective though I haven’t used other things like affiliate marketing thanks to the relatively high set up costs.