A new era has launched in the past months. An era in which retail businesses can no longer rely on physical trade alone but must also rely on electronic commerce – or e-commerce. The problem is that many are simply scared to go into e-commerce and are afraid of losing on both ends. In this article, we will try to answer the most important questions before getting started in e-commerce!
E-commerce is the digital equivalent of physical trade. In both cases, there’s a seller who offers goods and a buyer who requests to purchase said goods. The difference is in the configuration only. That is, electronic trade is carried out through a website that mediates between the parties instead of a store and seller.
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That is, all the rules you’ve known so far will remain in place. You must price correctly, and photograph the products well, but above all – provide good service that will ensure that buyers will return again and again to purchase specifically on your website.
But still – it’s not the same.
So, let’s briefly go over the important questions for you:
- Who manages the sales through the website?
- How are online transactions carried out?
- What are the operating costs of a website?
- What taxation expenses are there in internet sales?
- Is e-commerce economic?
We hope you find the answers to these questions helpful to you while making decisions for yourself.
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Who Manages the Sales Through the Website?
Just as you have a seller in the physical store, we also have to have a seller in e-commerce. But, unlike the physically present seller in the store, our online seller is the website itself. The website must provide as much relevant information as possible and move the various users towards a purchase.
Despite everything stated above, an e-commerce shop still needs a human employee, a professional webmaster who will manage the website and take care of the marketing. But it is possible to outsource website management services so that you pay 25% of what a full-time employee would have cost.
How is the Transaction Carried Out Online?
E-commerce transactions are carried out in a configuration where the customer first pays for the product they want to purchase (by transferring the credit independently) and only after that does the business owner handles the actual order.
If an order is accepted on the website, the money is already in your hand, and you will receive an email with the order details and an address to send the package by mail. You will have to send the product as soon as possible and make sure that the customer is satisfied and comes back for repeat orders.
What are the Operational Costs of a Website?
The costs are divided into two:
- One-time setup costs – the cost of developing the platform (varies between every website).
- Day-to-day operational costs – distributed over several main areas.
Day-to-day operational costs include:
- Holding a website address – $3 per month.
- Website hosting – costs ranging from $50-500 per month.
- Website maintenance – costs ranging from $100-500 per month.
- Website management – costs ranging from $500-$2,000 per month
- Credit clearing – costs ranging from $50-100 per month + clearing fee.
- Internet marketing – costs ranging from $1,000 or more…
Generally, if you make a deal with a website management company, it should include all expenses except for marketing (about $2,500 additionally per month). Marketing expenses will increase according to the scope of results (return on investment). The more you earn, the more money you will spend every month on marketing.
What Taxation Expenses are there for Online Sales?
There is no special taxation on e-commerce. That is, your trade website is an integral part of the business and every sale through it requires a receipt tax invoice as you are used to in the physical store.
But, there are advantages in e-commerce compared to physical commerce – there is no property tax, no signage tax, no rental expenses or handling employee shifts. Everything works 24/7 with no need for human contact for most of the time. Also, there is no physical limit to the location of the store, and you can sell all over the country and even abroad with the exact same configuration.
Is E-commerce Economic?
We are, of course, a little biased but of course, it is. Especially today, especially now, e-commerce is the most important thing for your business. The volume of online sales is steadily taking a bite out of physical sales. Furthermore, businesses located across the country or even on the other side of the world “steal” your old and loyal customers who have purchased from you for years.
Besides that, of course, this is a fairly economical business. As a company that manages hundreds of websites, we know how popular they are and what their growth rate is every year. As such, we can say wholeheartedly that this is indeed a financially correct step for any retail business, and it probably is for you as well.
But it’s still recommended to call us for a free consultation to get an accurate forecast in accordance with your business. Hope you’ve had a pleasant read, see you!