Should Your Consider Selling Your Products Online?
The Indian ecommerce industry is growing at an astounding rate and is expected to account for 2.5% of the country’s GDP by 2030. The Asia-Pacific region is currently the largest e-commerce market in the world with China in the lead and the Indian E-Commerce industry catching up fast. According to a joint study recently conducted by Assocham and Deloitte, the industry is expected cross $50 billion mark in 2018.
With the boom in the industry, the number of online shoppers in India is expected to cross 329 million by 2020. The growing penetration of internet, the Jio’s entry into the telecom industry and increase in use of mobile phones act as catalysts in this boom. Indian e-companies like Flipkart have already crossed billion dollar valuation. This is the best time to enter this market and begin selling your business’s products online. Here is how to sell your products online in India.
A Step-By-Step Guide To Selling Your Products Online
1) Estimate the cost to sell online
It is important to consider the various costs involved in selling online in India such as:
Shipping Cost – Reach out to your nearest courier or shipping company to find out the shipping costs for your products to different locations in India. Maintain a list of the locations and the amount required to ship to them. On an average, this would cost you anywhere between 5% to 15% of the product cost depending on the size and weight of the product.
Packaging Cost – If your product is one that requires packaging, make sure to consider the packaging cost too. Look up the ideal packing material your product would need, calculate how much you will need for each shipping and the total cost per product. This would be between 0.5% to 2% of the product cost.
Payment Gateway Cost – If you intend on setting up your own online store, you will need a payment gateway. They usually charge between 1.5% to 5% of the total transaction but you always negotiate the transaction fee if you have higher volume. Apart from transactional costs, some payment gateways charge a one-time setup fee and a nominal annual maintenance fee.
Warehouse Cost – Figure out the cost to rent a storage space or warehouse for your products. Be sure to check out online marketplaces like Amazon that lets you use their warehouses at a nominal fee.
Marketing Cost – Marketing your product is essential to let the world know what you have to offer. Though they are free ways to promote your business but as you grow, you will have to consider ads and paid marketing channels. Calculate these potential costs to get an estimate of the amount you would require. There are several online tools that can help you calculate these costs.
Once you have taken an account of all these expenses, ascertain whether you can make profit and a good profit margin after these costs.
2) Ascertain The Viability Of Selling Online
Now that we have an idea of the different costs you would incur while selling online, you can find out the profitability by deducting the costs mentioned above from your selling price using this simple formula :
Profit Margin = Selling price – (Sourcing Cost + Packing + Shipping + Transaction Fees + Marketing Cost + Variable Costs)
Make sure you have a positive profit margin before you start selling online. In case it is negative or not what you had in mind, go back to step 1 and figure out what costs can be minimised and rework this calculation.
3) Create A Digital Product Catalogue
Once you have ascertained that you will earn a decent profit margin, the next step is to create a list of products in a spreadsheet containing important details such as Product Code (or SKU), Product Name, Description, Category, Selling Price, Brand, etc. Take 3-4 good quality photographs of the product from different angles using a light background preferably with the help of a professional since good product images go a long way in online sales.
4) Chalk Out The Process End-To-End
Plan the entire selling process in advance to avoid any errors that could cost you at a later stage. Lay out a process with descriptions for every step right from receiving an order to shipping the goods and subsequent customer satisfaction. It can also be beneficial to create a simple checklist to perform quality checks, packaging, invoicing, etc. Having a written account can always come handy when you may need to delegate this work to your employees or in case any issue crops up in the future.
5) Make Use Of An Inventory Management Software
Rather than managing and tracking inward and outward stock movements manually, it is always better to begin using a good inventory management software early on. Some of the softwares have additional beneficial features such as syncing your inventory with your shopping cart or marketplace account.
6) Have An Online Presence
The world has gone digital. Your customers are likely to rely on what they find on the internet about your business before purchasing something from you. Not only does it add credibility, but it can also be a great way of letting them know all about you and your products. The chances of them dropping off are high if they cannot find relevant information about the business online. Whether it be a company website, social media account or any other means, having an online presence can boost your sales and success rate.