Alibaba, the Chinese e-commerce giant expects to facilitate the sale of $420 billion worth of goods this year, up from $170 billion in 2012. The company founded by Jack Ma in his apartment 15 years ago has become the largest online seller on earth, dwarfing companies like Amazon and eBay. Their main business – the Alibaba marketplace – connects small and medium sized businesses with buyers inside and outside of China. While Alibaba’s success is unique, the form part of a largely trend – namely the rapid acceptance of online sales by consumers across the globe.
In the U.S., over 6 percent of all retail sales take place online, a number that will continue to grow for decades. Selling online has gone from something novel to a must have sales channel in a little more than a decade. Yet only about one quarter of small businesses actually sell their products online today, a figure that has barely budged over the past four years. If you are among the millions of small businesses owners that still aren’t selling online, it’s time to change that. It is inevitable that within a few short years ecommerce retail sales will comprise between 10 and 15 percent of all retail sales in the country. Those sales could make the difference between making profits and losses.
Once you have decided it’s time to sell online, you need to choose the method of online sales best suited for your business.
Sell on eBay
- Upfront fees – eBay doesn’t charge any upfront fees for their stores.
- Ongoing fees – eBay stores are offered as a monthly subscription-based service. The fee ranges from $15.95 per month to $199.95 depending on the level of services and the payment method used. The more expensive plans allow businesses to list more products without paying an insertion or listing fee.
- Transaction fees – eBay charges two variable fees – one fee when you list a product for sale and another fee when you successfully sell a product. Insertion fees range from 5 cents to 25 cents depending on the package. Fees charged on the sale are a combination of a fixed amount and a percentage of the value.
- Savings tip – If you aren’t sure if an eBay store is right for you, the company allows you to list up to 50 items per month without signing up for a subscription. The transaction fees are higher, but it’s worth it if you just want to list a few items to try it out.
Use a hosted ecommerce solution
Hosted ecommerce solutions offer the best of both worlds – a customized website under your domain name with proven technology managed by the vendor. Instead of building your own system on your server, these solutions give users the impression that you have built a custom system while using the reliability of proven software and hardware in a well-provisioned data center. Companies like Big Commerce and Shopify cater to small businesses.
- Upfront fees: Usually none
- Ongoing fees: Most hosted solutions are sold as a monthly or annual subscription service. Starting at around $50 a month, they are affordable for almost any size business.
- Transaction fees: Lower priced subscriptions sometimes charge a per transaction fee. Additionally you have to pay the credit card processing fee no matter which subscription package you choose.
Build your own system
If you don’t feel comfortable working with an existing solution, you always have the possibility of building a custom ecommerce solution for your website. A team of developers can program a system that meets your precise requirements.
- Upfront fees: Developing a robust, fully customized e-commerce website can cost tens of thousands of dollars.
- Ongoing fees: These car vary tremendously from dozens to thousands of dollars per month
- Transaction fees: The fees to process payments can’t be avoided. Your custom solution will need to integrate with a payment processing company’s software.
- Savings tip: Wait on building your own system until your volume justifies it.
If you still aren’t sure which platform is best for your business, choose the least expensive option to get started. Conduct a test for three months without much fanfare to teach yourself the basics of online selling. After this initial test period revisit the issue of identifying the optimal platform and then proceed full steam ahead. Millions of customers are waiting for you online!
