Setting Up For Ecommerce
E-commerce is growing at an alarming rate in South Africa, with a reported growth rate of 30-35% every year.
With e-commerce currently only counting for 0.4% of the South African retail environment, and $600 billion spent online buying goods internationally, one doesn’t really need to do much maths to work out that this is a lucrative opportunity.
If you own a business selling products, or even services, consider setting up an online store. Here are some of the things you need to think about:
The hit rates on your site probably haven’t been a huge focus to date - so long as customers can find you it has probably served its purpose. However, if you invest in an online store you’re going to need to work on attracting potential customers to come and browse. Before you launch your e-commerce platform, research your site stats, and consider some online marketing techniques that will boost your presence. This could be anything from pay-per-click (PPC) ads and sponsored links through to email newsletters or social media.
The online purchasing system
There is no need to build an e-commerce system from scratch, unless your requirements are very complex and specific. There are many software options out there, not to mention companies that will provide you with a hosted e-commerce solution that includes everything you need to get going - a template to list your products, a shopping cart, check-out procedure and a stock management system. Check out www.shopify.com or www.snaply.com, a local alternative. You will need to think about how you are going to take payments - in order to receive them directly you will need an Internet Merchant Account from your bank. This is an admin-intensive process, and not available to all vendors. Another option is to use a third party provider; customers will pay into this account and you will be paid monthly. There are transactions costs in both instances. Risk of fraud is still a reality, despite online pin systems like 3D secure, so if you use a payment gateway provider, make sure that they screen every transaction for various fraud indicators.
If your online business is small, you can probably get away with mailing out orders to your customers. You can provide them with the option of delivery by courier (safest option) or post (less expensive, though use tracking for your parcel). Delivery costs will be a major factor concerning how viable your online store will be - unlike in the US or UK, where delivery costs are negligible, South African consumers need to be assured that the total online purchase cost is worth their while. As your store grows, you could consider turning to a third party fulfilment house, or go for a drop-shipping solution straight from the manufacturer.
Consider how you will handle returns and other post-purchase issues that crop up in traditional retail environments. You’ll need to factor in these costs to your planning, so you’re not surprised by them. Selling online requires every bit as much customer service as offline, if not more.
There’s no doubt that setting up your 'Clicks'n mortar' store is cheaper and easier than going the bricks'n mortar route, and, so long as it fits in with your overall business strategy, there really should be nothing stopping you from going out there and claiming your share of the online retail pie. Go get those tills ringing!