A step-by-step guide to starting an online store for your small business

So, you’ve decided to sell your products and services online. It’s the right time to make the move. The past year has propelled the growth of e-commerce, with a record number of Canadians shopping online. According to one source, e-commerce sales growth in Canada is expected to rise 7.7 per cent in 2021.¹

The process of selling online may seem overwhelming, so we’re here to help you get up and running with this step-by-step guide.

We’ll be covering some key steps to help you start or transition your small business online:

• defining your target audience;
• choosing and customizing a store in an e-commerce platform;
• setting up online payments;
• optimizing orders, inventory and shipping;
• testing your online store pre-launch.

Let’s get started!

Define your target audience and their expectations

First things first: you simply cannot know your customers or new buyers well enough. Your future success depends on understanding them. So, ask yourself…

• Who is my target audience? What do they buy? How do they buy? When do they buy?
• How does my target consumer access the web – on a laptop or mobile device?
• What is the distinct value of my product or service? Is it unique?
• How many products and services do I want to sell online?
• What are my competitors doing? What can I learn from them?
• What are the new and emerging trends in my industry?

Every answer will take you one step closer to better understanding what you’re selling and who you’re selling it to. And these answers will ultimately enable you to answer the most important question – will they buy my product or service?

Choose an e-commerce platform: Build your success story online

Creating your online store is about bringing your vision to life. Most top-rated e-commerce platforms provide a suite of tools and options to help you sell, ship and even manage inventory. In the comparison chart below, we’ve included Shopify, Wix, GoDaddy and WooCommerce to provide you with a range. But don’t stop there. The best e-commerce platform is one that fits your business needs today and tomorrow.

[ See our chart comparing the features of Shopify, Wix, GoDaddy and WooCommerce ]

Discover even more options that can simplify the purchase process for you and your online shoppers.

Design and customize your branded website

E-commerce platforms enable you to choose from a range of themes – essentially storefront layouts – so you can match the look and functionality of your online store to your brand.

You can customize your site with your own photos and logo, and can further personalize it with your desired colour scheme, accents, fonts and so on. Working prototypes give you a risk-free way of test driving a theme before you buy.

As you work through the design, think about where you love to shop online and why. Your favourite online stores likely offer a unique balance of information, ease and visual experience. Like them, you’ll want to arm your online store with every competitive advantage. Here are just a few online storefront essentials worth considering:

• Photography and illustrations. Do your products or services need a stand-out visual presentation (clothing and decor)? Or are they more straightforward or informational (plumbing supplies)?
• Descriptive copy and content. Write in a way that is clear, informative and compelling. If you can inject some personality into your writing, all the better.
• Your story. Why did you start your business? What makes it unique? What do you hope to achieve? Why are you passionate about what you do? Consumers love hearing about who you are and what motivates you.
• Engaging video content. Some products don’t need video support – but if a little show and tell will help, video is hard to beat. Video production can be quite modest – especially if you veer towards a more instructional presentation. Developing bite-sized videos can help you showcase your business and your personality.
• An enjoyable shopping experience. How many products are you going to sell online? Will you offer a large selection of products? You’ll want to include a filtering option in your online store, in addition to sorting products under easy-to-review themed categories.
• Customer reviews and social sharing. Positive reviews can reassure consumers and help to solidify their decision to purchase. But as a business owner, you also have to be prepared to quickly respond to negative comments.

Set up online payments

The next area for us to explore is online payment methods. This is an important element for everyone – you and your customers most of all. At its simplest, online payments require a “payment gateway,” for when a customer decides to buy from you, as well as a merchant account, where your money is deposited.

Payment gateways

A payment gateway is the online version of the card terminal in brick-and-mortar stores. It accepts purchase and payment details from customers and authorizes financial transactions.

Safety and security are key – and they’re getting more important with every passing year. Payment gateways use advanced encryption to deliver customer payment data to the payment processor. Within moments, the payment processor connects to the various credit card brands –such as VISA, Mastercard, Amex and PayPal– confirms payment and moves money into your merchant account.

What is a merchant account?

A merchant account is a unique type of bank account that enables you to accept online debit and credit card payments. Once money is received in the merchant account, it is then sent to your bank account.

Choose your payment options

The range of payment options includes the major credit cards and debit cards, PayPal, e-wallets and one-touch payments.

Online consumers want optimal shopping experiences and one of the key things they look for is common payment options. The best “bundle” of payment options for your business will depend on the following:

• What your customers expect. While offering debit card and credit card payment options is table stakes at this point, you may want to also consider other options like digital wallets.
• Your budget. Payment method providers all charge fees of one kind or another. It pays to compare providers.
• What you are selling. Bigger ticket items may require you to go beyond debit card and credit card payment options by offering financing and pay-later options to your customers.

Now let’s have a look at the types of payment options you can offer:

• Instant pay options, like VISA, MasterCard and Amex debit or credit cards are basically the bare minimum you should offer customers.
• Credit pay and pay by finance for large purchases. Some customers may appreciate being offered credit pay or financing, plus offering flexible options like these can be a competitive advantage. Examples of finance and credit providers include Klarna and PayPal.
• Digital wallets and cardless payments, such as Apple Pay and Amazon Pay, help meet the demands of today’s customers for fast and effortless ‘one-touch’ purchasing.

Optimize orders, inventory and shipping

Your order management system enables your business to receive, process and ship orders to customers in an organized way. It helps you fulfill orders and manage inventory.

Efficiency and scalability are the hallmarks of a good backend process. As more and more orders come in, you’ll want to process and ship them as quickly as possible.

Manage your inventory: Plan ahead

Effective management of inventory means never being without product or selling what you don’t have in stock. Most small businesses just starting out will likely take care of inventory on their own. However, things can get more complicated as your sales grow or if you’re managing inventory for both an online store and a physical store. Your next step is to look into an inventory management solution that integrates with your point-of-sale system.

Put your orders in the right order

Organizing and prioritizing incoming orders will help you deliver on your customers’ expectations. Let’s look at the most common processes:

• First-in-first-out, or FIFO. An efficient and simple solution for small order volumes. This process is a good starting point for those new to online retail.
• By delivery speed and/or distance. Next-day deliveries obviously take precedence, but you may also want to consider prioritizing orders that have farther to travel.
• Customer-service focused prioritization. Successful e-tailers, big and small, prioritize exchanges or replacements – especially when it comes to repeat or loyal customers. It underscores your commitment to responsive customer care.
• Product deliverability and availability. What if you find that certain products are selling out fast? Or you’re sourcing stock from multiple suppliers? Ship when all items in an order are in stock. You’ll save on shipping costs by consolidating items into the fewest possible shipments.

Choose a shipping strategy

Just like the products you sell and the customer service you offer, how you handle shipping can make all the difference. User-friendly shipping can help boost sales and increase customer loyalty. Think of it as a strategy and not just a business function. When choosing your shipping strategy, start with these key areas of consideration.

Free shipping: is it a must?

With free shipping being quite common, you may think that it’s mandatory that you offer it to customers. Not necessarily. You may decide that you can’t afford to offer complimentary shipping, or you want to use it sparingly during select times and promotional periods. While free shipping is a good thing, it’s not the only thing. In some instances, online shoppers want to receive their purchases quicker, and they’re willing to pay for premium service. Also, depending on your target audience, flat rate shipping may be a good alternative as it gives customers clarity on shipping costs while streamlining your shipping expenses.

Offer real-time shipping rates

A big pain point for many online stores is figuring out how much to charge customers for shipping. Real-time shipping quotes, provided by all major shipping partners, show customers the actual amount they will be charged. Customers like real-time shipping quotes because of the transparency – they know they’re not being over charged. As a business, you also benefit as you won’t lose money on the shipping portion of the sale.

Real-time quotes can be based on destination, size and weight of purchase, shipping speed, plus the total cost of the order and number of products purchased.

Explore a range of delivery options

Your shipping strategy should include a range of delivery options for shoppers. Let’s discuss some of the most popular:

Standard delivery is the most popular choice of small businesses. Regular delivery service balances good pricing with an acceptable level of speed. In the case of Canada Post, this could range from up to two days for local delivery to 4-9 days for delivery across Canada.

Priority or express delivery appeals to many consumers – especially during hectic gift-giving times of the year. They’re willing to pay more to ensure their gifts arrive on time. Same goes for same-day shipping – a good option if you sell perishable or time-sensitive goods.

Mixed delivery options provide customers with different delivery speeds. For instance, you could offer free shipping for slower deliveries and charge a premium for expedited delivery options. At the end of the day, it’s about giving customers choices.

In-store or curbside pickup is a great option if you have a physical store. It also helps you save on shipping costs. The use of in-store and curbside pickup has grown exponentially since the pandemic started.

Local delivery is an option you may want to consider offering to customers located within a specific geographic area near your physical store or warehouse. Typically, businesses that offer local delivery do so as a free or nominally priced shipping option.

Find a trustworthy and flexible delivery partner

The right delivery company can positively impact your customers’ satisfaction – and your reputation. The benefits of having a partner that delivers reliably and on time are obvious. But there’s another level of customer expectation that more businesses should take into account – offering a range of delivery speeds. Customers love having options. The size of the company’s delivery network in a place as big as Canada is key. And increased flexibility in when and where customers can receive their deliveries is emerging as another game changer.

Learn more about Canada Post’s range of delivery options and how they can help you meet your customers’ changing needs.

Don’t forget your returns strategy

According to research, 80 per cent of Canadian online shoppers will stop shopping with a merchant after a bad returns experience.² Your returns policy, when clearly communicated, can drive conversions and keep customers loyal.

Focus on making returns easy and convenient – the two things that consumers value most. If your customer wants to return an item, offer to email them a printable return label. Have a physical storefront? Give them the option to return the item in store. A delivery partner with a large network of drop-off locations, like Canada Post, can make the returns process hassle-free for your customers.

Pre-launch your store

You don’t want to be fixing issues once your online store goes live. The time to optimize is before the official launch.

All major e-commerce platforms offer a test mode feature. Use it to look at everything from your customer’s perspective. It may be a good idea to invite friends and family to test drive your store as it will give you a different perspective.

Ask them to take the complete “customer journey” – from browsing for products to the checkout process and even placing a test order. Here’s a list of what they should be paying close attention to along the way:

Test for user-friendliness

• Is your website fast? Do images load quickly?
• Does it feature simple navigation?
• Are there too many products featured?
• Is the content easy to understand?
• Is the design attractive and engaging?
• Do all the links work as they should?
• How does it look on a smartphone, tablet and desktop? On different browsers?

Test the checkout process

The checkout process deserves its own set of tests. Here are three of the most important areas to review:

• successful and failed transactions;
• refunds and cancelled orders;
• fulfilled and partially fulfilled orders.

Avoid common mistakes

These are the most common mistakes to steer clear of when starting an online store:

• not knowing your target audience;
• choosing the wrong e-commerce platform, or thinking you need to create your own website;
• not using a scalable website platform – you should always plan for your future success;
• website design, imagery and content that doesn’t differentiate your business;
• complex navigation and a complicated checkout process;
• limited selection of delivery options or unclear shipping prices;
• poor customer service;
• not testing your store before its launch.

Your future is waiting

Transitioning to online can be an exciting new chapter in your business’ success story. An online store can enable you to offer an easy, convenient and fast shopping experience to your customers. As more Canadians turn to online shopping, there’s never been a better time to go digital. The opportunities are virtually limitless. As you plan for the move, always keep the needs and expectations of your customers in mind. They’ll inform every decision you make – from choosing the right e-commerce platform to the most attractive shipping options.

[ Looking for ways to promote your new online store? Here are some marketing ideas to help you attract new customers. ]

Sources:
¹ “Retail e-commerce sales growth in Canada from 2018 to 2024”, Statista.com, December 2020.
² Canada Post. 2019 Canadian Online Shopper Study, CPC 19-201, April 2019.