How To Choose The Right E-Commerce Platform
E-Commerce is taking over every sector of the market. Online sales currently account for 13.7% of retail sales worldwide. If that doesn’t startle you enough, consider how little time it took for the e-commerce sector to grow to that percentage. With those numbers,It’s no wonder e-commerce is a popular sector for small businesses. It’s a business model that makes sense if you want to launch a small part-time business you can run from home with the right e-commerce platform.
A big part of putting together your e-commerce business plan consists of evaluating different online platforms for selling your products, especially understanding how fees will impact your profit margin. Online shopping platforms have become so streamlined, providing customers with a safe and reliable shopping experience. You can use platforms that allow you to build a customized online store or list your products on a popular marketplace to make them easy to find. Here HJR Global’s breakdown of the 5 most popular e-commerce platforms that you can use to make your business shine.
Amazon is probably the number one e-commerce platform for all types of businesses. Anyone from small time business owners to major companies can be found on Amazon. Typically, Amazon offers sellers two selling plans: the ability to sell an unlimited number of products for $39.99 monthly or a fee of $0.99 per every item sold. While this is a great option for many new businesses and sellers who are just starting to break into their respective market, it’s not necessarily the best choice because of the cost and how much profit you retain.
Walmart isn’t just your neighborhood supermarket anymore. They also have an e-commerce platform that is becoming increasingly popular. Instead of charging a flat fee per month or per item, Walmart only charges its sellers a referral fee. This can be a good thing or it can be very expensive. Depending on the category of the item you are selling, the fee could be anywhere from 6% to 20%. For example, items in their “Apparel & Accessories” category come with a 15% fee while those in “Cell Phones” and “Consumer Electronics” only require an 8% fee. Products within the “Jewelry” category come with the highest fees at 20% while “Personal Computers” only require a 6% fee. As an e-commerce platform, you have to weigh whether the cost of the percentage charged for a referral is worth the profit from your product.
Etsy is a really popular e-commerce platform that’s been around for some time. It functions as an online consignment shop. Every vendor sets up their own Etsy store and they direct customers there. Etsy, as an e-commerce platform, does things a little differently than either Amazon or Walmart. Etsy takes a 5% transaction fee from each sale and they also take the exact amount specified for additional services like gift wrapping and shipping. These fees could add up to a significant amount, depending on your product pricing, but Etsy is still a popular place for online entrepreneurs to sell their wares because of it’s organic, DIY feel.
Shopify is another popular e-commerce platform. People like Shopify because of the customizable plans available to companies. Sellers on Shopify can take advantage of several different plans, ultimately giving them the chance to pick the one that works best for them. The basic Shopify plan is available for $29 per month, while the standard Shopify rate is billed at $79 per month. The advanced Shopify plan can get pretty expensive, usually available at $299 per month. Shopify also has their own pay system, so business owners need to be aware that any payments made outside of Shopify Payments are subject to varying fees of 2.0% for the basic plan, 1.0% for the advanced plan and 0.5% for the advanced option.
These are not the only e-commerce platforms that you can use. For example, Magneto is nearly as popular as the first four platforms named above. However, Magento is a much more complex tool. Magneto functions more like a stand-alone store for your business as opposed to your products on their platform. It’s favored by some larger companies, which probably explains the cost. You can get the open-source version for free, but it’s best to hire a developer to configure your store. In order to get a functioning Magento website can be pretty costly, typically costing between $20,000 and $40,000.
Understanding Where To Sell
Selling your products online can be extremely lucrative if you have the right type of product and you find the perfect e-commerce platform. However, the platform that is best for you depends on a number of factors and you might need to really examine your plan before you immediately jump on to one of the platforms. Sometimes it’s best to have a partner that can help you determine what’s best for your small business. HJR Global is happy to help with anything from planning to finding funding for your business. Contact our team today!