Taking business online

[momon121]

Hi

hope everyone is well and fighting fit. Like many I too have been affected due to COVID.

However thanks to many on this forum due to their advice I will now be talking my business online.

For those who are new on this forum my advice to newcomers are is that many individuals on this forum provide excellent advice and business hacks for survival and growth. Information is not readily available online or through any scholarly work.

For years I have been postponing to go online. Always trying to look for excuses even though I knew there was a huge potential as the COVID has proven to everyone.

Due to the high cost of shipping I always feared that customers would not want to pay the price. Thanks to the advice by many senior members on this forum I should proceed ahead as customers would be willing to pay the shipping if they wanted the service.

Fortunately I have managed to secure a deal with one of the couriers services, the rate is great but I will work keen and try getting volume required to negotiate better terms.

most of my competitors charge £3.99 so I will be competing against that and absorbing little before the volumes are reached.

Thank you so much everyone

 

[Simon-TP]

Best of luck with taking your business online.

 

[Mr D]

Could always build shipping into price and offer free shipping. Same overall cost to the customer and to you but comes across better to some customers.

 

[alan1302]

Online business are most trust worthy

In what way?

 

[Mr D]

Online business are most trust worthy

Rubbish.

 

[Nick Walsh Studios]

Make sure website has SSL

 

[momon121]

Yes thank you it is

 

[JEREMY HAWKE]

Could always build shipping into price and offer free shipping. Same overall cost to the customer and to you but comes across better to some customers.

I like that Idea @Mr D . It is absolutely stupid adding delivery to the price !

 

[Mr D]

I like that Idea @Mr D . It is absolutely stupid adding delivery to the price !

And very nice when buyers order multiple items - extra profit.
Around 1 in 10 of the orders I get is a multiple - a few are 3 or more items. 10 pounds worth of postage charged for a 3 pound postage parcel? Not going down well with customers.
3 times price with a slight discount for multiple? 6 pounds extra profit is nice and buyers do not complain.

 

[Alison Moore]

It depends on what you're selling and to whom as to whether it's a good ideal to charge delivery separately. For instance when selling expensive, or large items or selling to B2B or regular customers, people don't mind paying delivery, however if you're selling low price items or selling on eBay, it's better to absorb the delivery costs. Good luck with the online venture!

 

[momon121]

I have factored building shipping price into the cost but sadly it wouldn’t work and the slight increase will be noticeable by many.

As we work on such low margins and on high volumes and offer greater value than traditional pound stores we decided to have shipping cost transparent would
make it easier for our customers due to separate charges.

Suppose we do ship online about 100 parcels a week and I observed all the cost which is £4.99 that’s near enough £500 I will have spend from my own personal money to keep the service afloat and it wouldn’t make sense to continue with online service

 

[The Byre]

I have yet to understand why anybody selling any physical object is not online. They rent shops and pay silly fees for this that and the other, inc. exorbitant council rates and have to have sales staff and therefore have to charge twice as much as on online sales operation. Madness if you ask me!

I even buy building materials online and this week I shall be buying 50 fence posts online. In the past, I have bought anything and everything from steel sheeting in bulk, roofing materials, shoes, job-lots of odd stuff like cartons and bubble wrap, paint, glues, cameras, cookers, refrigerators, two cars, a large wood-burning cooking stove, everything except groceries - and of course loads of people buy groceries online as well.

Who are these people who are not online yet?

 

[Mr D]

I have factored building shipping price into the cost but sadly it wouldn’t work and the slight increase will be noticeable by many.

As we work on such low margins and on high volumes and offer greater value than traditional pound stores we decided to have shipping cost transparent would
make it easier for our customers due to separate charges.

Suppose we do ship online about 100 parcels a week and I observed all the cost which is £4.99 that’s near enough £500 I will have spend from my own personal money to keep the service afloat and it wouldn’t make sense to continue with online service

If building shipping price into item cost then shouldn't be any increase. A £9 item with £3 postage becomes a £12 item. No need for increased price.

Yes agreed don't fund shipping from your personal money. Get buyers to pay for it instead like you do the insurance, the utilities, the accountant etc.

 

[Scottishgifts4u]

When I started my website we charged £3.50 per order.

This worked out okay then decided as an experiment to offer free postage whilst upping our prices to compensate.

The volume of orders went up a vast amount.

Why don’t you try 6 months charging postage and switch to free postage and see what happens. You can always switch back if it’s not successful.

That’s the beauty of running your own business. You can experiment and if it doesn’t work switch to something else.

 

[Solly]

I get around that by using price breaks. Each additional item gets a higher discount.

 

[momon121]

I have yet to understand why anybody selling any physical object is not online. They rent shops and pay silly fees for this that and the other, inc. exorbitant council rates and have to have sales staff and therefore have to charge twice as much as on online sales operation. Madness if you ask me!

I even buy building materials online and this week I shall be buying 50 fence posts online. In the past, I have bought anything and everything from steel sheeting in bulk, roofing materials, shoes, job-lots of odd stuff like cartons and bubble wrap, paint, glues, cameras, cookers, refrigerators, two cars, a large wood-burning cooking stove, everything except groceries - and of course loads of people buy groceries online as well.

Who are these people who are not online yet?

Hello Mr Byre I’m one those sad individuals who haven’t yet transitioned online yet.

Besides staffing wouldn’t the cost be similar online all? If the online ventures do well you also need bigger unit/warehouse, pay utility bills, tax etc

Do school me My Byre because I’m on knew to the business world and I’m still learning.

 

[momon121]

I get around that by using price breaks. Each additional item gets a higher discount.

How does that work ?

 

[momon121]

When I started my website we charged £3.50 per order.

This worked out okay then decided as an experiment to offer free postage whilst upping our prices to compensate.

The volume of orders went up a vast amount.

Why don’t you try 6 months charging postage and switch to free postage and see what happens. You can always switch back if it’s not successful.

That’s the beauty of running your own business. You can experiment and if it doesn’t work switch to something else.

Your product items possibly allow you absorb and grants you to build shipping prices into your items. It’s slightly tricky for me. Suppose on average an item cost me 70p and I re-sell it for £1 possible I can add 5p or 10p across the board to help me possibly offer free deliveries. What you think ?

 

[momon121]

It depends on what you're selling and to whom as to whether it's a good ideal to charge delivery separately. For instance when selling expensive, or large items or selling to B2B or regular customers, people don't mind paying delivery, however if you're selling low price items or selling on eBay, it's better to absorb the delivery costs. Good luck with the online venture!

Thank you so much - I’ve tried to absorb the cost but it’s extremely difficult unless I increase my selling price

 

[Mister B]

Your product items possibly allow you absorb and grants you to build shipping prices into your items. It’s slightly tricky for me. Suppose on average an item cost me 70p and I re-sell it for £1 possible I can add 5p or 10p across the board to help me possibly offer free deliveries. What you think ?

Being honest, if I were buying for £0.70 and selling for £1.00, I wouldn't bother. By the time you have factored in lost goods, returns, your time etc etc you will make nothing at all. All of this of course is assuming that you're not VAT registered, which will make the situation even worse.

Mister B

 

[momon121]

Being honest, if I were buying for £0.70 and selling for £1.00, I wouldn't bother. By the time you have factored in lost goods, returns, your time etc etc you will make nothing at all. All of this of course is assuming that you're not VAT registered, which will make the situation even worse.

Mister B

We are not VAT registered yet however I will take on bored regarding your comments to see if I can revise the prices to make it more feasible and sustainable

 

[Mr D]

Your product items possibly allow you absorb and grants you to build shipping prices into your items. It’s slightly tricky for me. Suppose on average an item cost me 70p and I re-sell it for £1 possible I can add 5p or 10p across the board to help me possibly offer free deliveries. What you think ?

You know what you charge for the item. You know what you charge for delivery.
Add them together, that is your price with no charge for delivery. Same cost to you, same cost to the buyer. No increase in price.

 

[Mr D]

Being honest, if I were buying for £0.70 and selling for £1.00, I wouldn't bother. By the time you have factored in lost goods, returns, your time etc etc you will make nothing at all. All of this of course is assuming that you're not VAT registered, which will make the situation even worse.

Mister B

Buying at 70p I'd be looking to sell for £4 plus.
Or else find better priced items.

Low pricing goods can be great but can end up selling too cheap if not careful.

There are sellers who set price based on competitor pricing, not on whether something is profitable at a particular price.

 

[Scottishgifts4u]

As an example if I was buying for £1.

I used Royal mail so some items were large letter and I would sell for £3.20 (approx. £1 postage)

Others were small parcel so it would need to sell for £5.50 (approx. £3 postage)

One thing to consider is if you build in postage and the customer orders several items then that's more profitable than a flat rate of postage.

Those margins were tight and it was only because it wasn't my main source of income that made it worthwhile. Remember all the other bits and pieces such as printing costs, packing costs, payment provider, bank charges every little thing even down to buying rolls of Sellotape. Selling online isn't quite as cheap as you'd think. You'd be surprised and probably shocked how it all adds up.

One thing I did when I started and was grateful for. I bought an online shopping programme outright for a few hundred pounds added my items to it and put it online. It wasn't the greatest website and I paid a developer to tweak it but it was MINE.
It cost £100 a year for the hosting fees to keep it up and running on the net supposing I didn't sell a single thing.
I'm not even sure if you can do that nowadays.

 

[Mr D]

As an example if I was buying for £1.

I used Royal mail so some items were large letter and I would sell for £3.20 (approx. £1 postage)

Others were small parcel so it would need to sell for £5.50 (approx. £3 postage)

One thing to consider is if you build in postage and the customer orders several items then that's more profitable than a flat rate of postage.

Those margins were tight and it was only because it wasn't my main source of income that made it worthwhile. Remember all the other bits and pieces such as printing costs, packing costs, payment provider, bank charges every little thing even down to buying rolls of Sellotape. Selling online isn't quite as cheap as you'd think. You'd be surprised and probably shocked how it all adds up.

One thing I did when I started and was grateful for. I bought an online shopping programme outright for a few hundred pounds added my items to it and put it online. It wasn't the greatest website and I paid a developer to tweak it but it was MINE.
It cost £100 a year for the hosting fees to keep it up and running on the net supposing I didn't sell a single thing.
I'm not even sure if you can do that nowadays.

Sounds good.

Some of my lower cost items are 20p to 40p per unit and usually priced around the 2.50 to 3.00 mark - like you say with a pound postal costs included.
Using PayPal so 5p plus 5 percent (hey that's eBay limitations) so for some stuff say 20 to 25p.
Add in ebay fees of 10 percent and advertising fees.

The minimum I prefer to go is a pound net profit - can go lower if there are other reasons to sell something.

Not everything needs to be cheap though. Higher profit per unit items may sell less often but can still sell.

Plenty of people appear to go for free websites these days with say 20 to 35 a month hosting. Cannot say they are better or worse than the sites people spend a grand or two setting up with again monthly hosting.

 

[momon121]

The above example is better suited with items that allow you to sell it for 200% profit and onwards. Then it’s easily more doable to build the shipping cost into pricing the item.

We specialise in short date confectionery so if we pick an item for 70p it’s impossible to double up, it’s a numbers gave for us and we have to work very keen to sell the items fast.

Now you are probably thinking is it worth going online. Simple answer yes, as we are niche and I’ve seen used Facebook as online store getting orders customers were happy to pay shipping because the deals we have you cannot get them in ordinary pound stores. With more and more people shopping online, and online grocery is on the increase I think we have a chance

 

[MOIC]

The above example is better suited with items that allow you to sell it for 200% profit and onwards. Then it’s easily more doable to build the shipping cost into pricing the item.

We specialise in short date confectionery so if we pick an item for 70p it’s impossible to double up, it’s a numbers gave for us and we have to work very keen to sell the items fast.

Now you are probably thinking is it worth going online. Simple answer yes, as we are niche and I’ve seen used Facebook as online store getting orders customers were happy to pay shipping because the deals we have you cannot get them in ordinary pound stores. With more and more people shopping online, and online grocery is on the increase I think we have a chance

Hi Mo

Hope you're doing well.

For your model (and more importantly your profit margins), I would do the following:

1. Charge a delivery fee per order. (It doesn't have to be what you are paying - during the current situation, people are more than happy to pay for food to be delivered to their door. It's all about convenience).

2. All orders over (say £50 - can be more . . .) offer free delivery.

Calculate the profit margin for the 'larger amounts' and set the figure which covers the delivery charge.

I would also throw in a 'freebie' (something you have extra stock of that you want to get rid of quickly - example: a product nearing the 'use by date') to each order. Consumers will appreciate this 'touch' and will remember your company for providing 'that extra present'.

You are progressing well and taking your business to the next level, stage by stage.

Keep up the good work!

Ron

 

[Mr D]

The above example is better suited with items that allow you to sell it for 200% profit and onwards. Then it’s easily more doable to build the shipping cost into pricing the item.

We specialise in short date confectionery so if we pick an item for 70p it’s impossible to double up, it’s a numbers gave for us and we have to work very keen to sell the items fast.

Now you are probably thinking is it worth going online. Simple answer yes, as we are niche and I’ve seen used Facebook as online store getting orders customers were happy to pay shipping because the deals we have you cannot get them in ordinary pound stores. With more and more people shopping online, and online grocery is on the increase I think we have a chance

So what is stopping you building shipping into price?

 

[Financial-Modeller]

@momon121 you have had some great suggestions from experienced owners of online businesses.

An additional observation from a consumer is that eBay sometimes shows the same vendor, selling the same product as two distinct items, one for £1 plus £3.99 p&p, and one for £4.99 with free p&p. Perhaps do both and let the buyer decide!

 

[momon121]

Hi Mo

Hope you're doing well.

For your model (and more importantly your profit margins), I would do the following:

1. Charge a delivery fee per order. (It doesn't have to be what you are paying - during the current situation, people are more than happy to pay for food to be delivered to their door. It's all about convenience).

2. All orders over (say £50 - can be more . . .) offer free delivery.

Calculate the profit margin for the 'larger amounts' and set the figure which covers the delivery charge.

I would also throw in a 'freebie' (something you have extra stock of that you want to get rid of quickly - example: a product nearing the 'use by date') to each order. Consumers will appreciate this 'touch' and will remember your company for providing 'that extra present'.

You are progressing well and taking your business to the next level, stage by stage.

Keep up the good work!

Ron

Hi Ron

Hope you are good. Thank you so much. I’ve decided to the following what you’ve suggested. Because all our competitors also charge the shipping separate per orders.

I will look out ways to see which orders types can be offered to make free delivery.

How is life in China

 

[momon121]

@momon121 you have had some great suggestions from experienced owners of online businesses.

An additional observation from a consumer is that eBay sometimes shows the same vendor, selling the same product as two distinct items, one for £1 plus £3.99 p&p, and one for £4.99 with free p&p. Perhaps do both and let the buyer decide!

Yes some fantastic suggestion, thanks to everyone including Mr D I’ll be tweaking some of the prices on some items I sell to help with the shipping. Didn’t expect so many positive suggestions. Definitely looking at it from different angles I can do this feel more confident

 

[MOIC]

How is life in China

Wearing masks

Working hard

I'm used to living in China . . . . . .say no more.

 

[momon121]

Wearing masks

Working hard

I'm used to living in China . . . . . .say no more.

Be safe, seems like many of the predictions you suggested about UK sadly has come to pass and yet still no adequate PPE nor proper regulations for COVID. People still wondering the streets. You’d never think it’s lockdown here, more of a Sunday everyday

 

[MOIC]

People still wondering the streets. You’d never think it’s lockdown here, more of a Sunday everyday

Only one plausible explanation.

They are following Herd Immunity, just not saying so anymore.

They haven't got a clue, which is sad . . . . .but predictable from the start.

 

[Mr D]

Wearing masks

Working hard

I'm used to living in China . . . . . .say no more.

You ever go out for an English? Or order takeaway English food?

 

[Bethen]

You already had everything prepared before making a deal? A website, niche and business plan?

 

[Mister B]

The other way of squeezing a little more out of the process, is to offer a second postage option. As well as free second class post, offer a first class option but charge an additional £1.00 for this service. (Or whichever figure suits, as long as you make money on the extra postage charge. )

 

[Mr D]

The other way of squeezing a little more out of the process, is to offer a second postage option. As well as free second class post, offer a first class option but charge an additional £1.00 for this service. (Or whichever figure suits, as long as you make money on the extra postage charge. )

Be careful overcharging for 1st class.
People who don't send parcels much may not notice you charging extra, the people who do send parcels may have a very good idea you are trying to gouge.

 

[momon121]

Ours will be parcel so it’ll be difficult to either extra bunce on the delivery

 

[MarkOnline]

How are you planning on selling, market place or own website?
70p to return a £1 wont work online, even on your own website, especially if you are equating volume to 100 units per week. You will run out of money fulfilling orders from the comments you have previously made.

If it were me ( and its not so its easy for me to spend your money) I would try to bundle and take £20 £30 or whatever the number is so that you can absorb some or all your distribution costs and still make a margin.

Good luck, be careful.