From Brick and Mortar to Online: Transitioning Your Business to Ecommerce
Going from brick-and-mortar to online is something more and more businesses are looking into lately. Between the unstoppable rise of online shopping and in the face of global pandemics, it has never made more sense for even small businesses to get in on the world of ecommerce. That’s not to say all business should be moved online- for many businesses, a hybrid approach to retail, known as click-and-mortar, is growing in popularity as well. As a click-and-mortar business, you still maintain the storefront and small business feel, especially important if you deal in fashion or tactile goods, but you can weather periods of in-person-sales drought by selling and advertising online.
It’s not even just retail businesses that are going online. Other traditionally brick-and-mortar-only small businesses are looking at transitioning to online out of necessity. Businesses like gyms are finding ways to keep customers in shape remotely with online workout classes and face-timed personal training sessions. Of course, if you are in the world of retail, you’ll realize that things can get a little tricky when you start looking into things like ecommerce packaging, shipping, and even just choosing a shop platform.
TABLE OF CONTENTS
Tips for Transitioning Your Business from Brick and Mortar to Online
- Choose the Right Platform: Choose the right platform for your shop, based on your immediate and long-term goals, your comfort with website management, and your investment in your brand.
- Set Up Your Online Shop: Get the nuts an bolts in order (i.e. your merchant account, payment processor; shipping services, etc). Take great product photos and develop appealing descriptions. Have a strong and user-friendly organizational structure.
- Get the Word Out: Make sure the world knows they can now buy your goods online! Social media, newsletter marketing, paid advertising, SEO, influencer marketing, customer referrals -- there are a broad and diverse set of strategies to pursue.
- Work Out the Logistics: This includes shipping, packaging, inventory management, your fulfillment process, and more. These are the less sexy but insanely important operational decisions.
- Crush your Customer Service: Retail stores have in-person customer service and interactions. Online shops require multi-channel customer service - email, phone and chat. You need a clear and easy return policy and process.
- Figure out Financing: Building a successful online presence takes time and you m may need to finance this transition, whether it’s with your own cash, outside investors, or an elaborate bitcoin system.
Choosing a platform and setting up your online shop
Arguably the most important first step in going from brick and mortar to online is setting up a website. A digital storefront from which your products will be sold. If you don’t already have a website where you can accept sales, the first step is setting this up.
You have two main options: a third-party marketplace (like Etsy) or your own website, typically through an ecommerce platform (such as BigCommerce or Shopify). These types of platforms allow you to build your entire website through their service or you can connect their ecommerce functionality to an existing WordPress site, a great option for brands that already have an online presence
These are marketplaces where all you have to do to get started selling is set up an account, add your products and profile information, and watch the orders come in.
You don’t have to worry about buying and setting up your own domain, establishing a merchant account to accept payments, and designing your own site experience. Additionally, a shop has the benefit of drawing in business form Etsy’s existing traffic (though most successful Etsy shops invest in their own marketing).
The downside of Etsy and similar marketplaces are its pricing structure - there is a 5% transaction fee on the sale and shipping price. Merchants that use Etsy Payments (their merchant processing service) are also charged a 3% (plus $0.25) payment processing fee. Additionally on a big, third-party site like Etsy, there is minimal opportunity to build a brand and personality, beyond your “about us” section, and there isn’t a great way to organize your products.
Your own hosted ecommerce platform
So you’re ready to break out and build your own digital storefront. Ready to hand-craft a brand from the source code up. Well, you might want to look into a hosted ecommerce platform for now. These platforms, such as BigCommerce or Shopify, allow you to set up and run an online store on your own domain while they take care of the technical parts (templates, checkout experience, product listing, inventory management, etc).
The upside to a hosted ecommerce platform over a third-party marketplace is that you can design your own completely unique experience. Also, while you do pay a monthly fee, your total spend is often less than what you’d experience with Etsy. The downside is that you need to do the work of designing your own site through and through, which can be a lot of work. Another downside with an ecommerce platform is that you are 100% in charge of driving traffic to your site- you can’t piggyback off of Etsy’s marketing team anymore.
Whoops, I already have a website! If you already have a site for your business (but not an ecommerce component), you can keep your site and utilize BigCommerce or Shopify’s ecommerce functionality. Shopify and BigCommerce both have WordPress plugins that allow you to start selling through an existing WordPress site fairly quickly.
If you really want to go custom, but don’t want to be restricted to Bigcommerce or Shopify, another option is to create a site using a service like Wix or Squarespace, which have ecommerce functionality you can access. While these can be great options, many find that the ecommerce components of the sites are less effective than other options.
Our recommendation: Start with Etsy to get your online sales off the ground immediately. In the interim, build your independent ecommerce site using a platform like BigCommerce or Shopify. Get online fast but once you are up and running, quickly invest in content, photos and your user experience. Check out Etsy's guide to setting up a shop quickly and BigCommerce's store launch guide for detail on the process of setting up your shop.
Setting up your shop: Payment, design, pricing, and shipping
The above articles do a great job of detailing how exactly to set up your shop on each platform, so aren't focusing on these nuances here.
If you've gotten your store up in some capacity, congratulations! You’re halfway there! Now, you’ll want to think about some important details regarding your shiny new online storefront: payment, design, pricing, and shipping (which we’ll cover in more detail later on in the article).
First thing’s first- you want to make sure people can actually pay you for your products. It may seem obvious, but make sure you can accept all major forms of payment. A good payment processor and merchant account will help you do this with ease.
As with all things online shopping, you want to balance ease of use with the cost of the service. For example, using Authorize.net and Paymentech together will likely get you cheaper rates (depending on your specific business) but do take time to set up. Stripe, PayPal, and ecommerce platforms' built-in processors (like Shopify) are more expensive but often easier to set up.
Here we mean design in a broad sense - not just making your shop look nice. It’s also about organization. Figuring out what to sell and organizing them in drop downs and categories so it is easy easier for the customer to navigate and find,and buy the products they are shopping for. Think about the aisles in a grocery store; how annoying would it be if they were unlabeled and things were just placed on shelves at random?
- If you have a huge shop, narrow down your items for sale - too much can be too confusing to browse through on a website, and can also take longer to get your site up and running. Choose your best sellers and start there, then add more products as time goes on and trends begin to develop.
- Categorize in the most obvious way possible. Using the grocery store example, what makes sense to be near each other? Think canned goods and soups being in the same aisle- they’re similar products and we expect to find them together.
When designing these category and product pages for your site, make sure product images are clear and distinct, and product descriptions are written in an informative and compelling way. When listing product features use bullets to convey the most important information, and don’t be afraid to show your personality in a product summary section- think of these like Instagram captions. You don’t have the chance to sell these products in person, so this is your sales pitch!
There are a lot of factors that go into deciding pricing for online. If you’re going from brick and mortar to online, your product prices may or may not stay the same in your new click and mortar. That’s okay. Your big considerations in pricing are sales tax, shipping cost, and discounts.
Sales tax -- figure this out ahead of time. Most likely you only need to charge sales tax in your own state to start, but over time you’ll need to figure out taxes for other states and even countries (we’re dreaming big here). Taxes are complicated, but sites like Avalara can help.
The next online-specific pricing factor you’ll want to consider is shipping costs - should the price of your product increase to offer a flat rate or free shipping option? A common hybrid approach for new click and mortars that don’t have the scale to keep prices down and shipping costs down is to offer free shipping on orders over a certain amount. This has the added bonus of influencing the customer to add more to their cart to avoid paying for shipping as well. You always want to be selling more.
Finally, with an online shop, it’s easy to get creative with your discounts and coupons. Offer customers a coupon code for their next purchase on checkout, or discounts on orders of a similar product category. If applicable, offer a subscribe-and-save option to keep people buying for months. No more dealing with the hassle of printing out coupons, changing price stickers, or expensive “SALE!” posters. Offer an email-opt in on checkout for exclusive discounts, offers, and your killer content. SInce your site is brand new, maybe offer a grand opening discount.
Get the word out with promotion, marketing and SEO
Your beautiful new click-and-mortar business is up-and-running. The online storefront is organized, polished, and easy-to-use. Your product pages are informative, descriptive, and showcase your products perfectly (use this time to take awesome product photos). You have your pricing set, and your discounts locked-and-loaded.
Rather than just sitting behind your computer and waiting for the clicks to come in, you should be using this time to get the word out about your new online shop. Some of the key ways you can be doing this are with promotion, basic marketing, and search engine optimization. These mostly speak for themselves, but here are some ideas for how to get your digital marketing off to a quick start.
A note on businesses going through the online tradition as of the time this article is published: Throughout all of your messaging, it is important to remember that your message, and more importantly - your purpose - should emphasize the fact that you are staying open to serve your customers (rather than, "you are moving online to keep your business afloat during stay-at-home orders"). This approach is first and foremost a validation of your business, injecting you with purpose and strength versus a more defensive attitude. Additionally, it helps remind customers that you are important to them, and that they want to continue utilizing your products or services even when life has made retail difficult and even obsolete at times.
What to do right away:
- Send a newsletters to your existing customers, and then start a regular newsletter with product and company updates, and resources for your community.
- Announce online buying opportunities via social media, with special discounts for your followers. Consider showcasing a new product every day.
- Offering discounts for first time online buyers, including product discounts and/or free shipping.
- Consider localized paid advertising options, including Facebook, Instagram and Google Adwords.
- Look for local PR outlets, especially right now, as many journalists will be eager to cover the positive, strong, hopeful actions people and businesses are taking in the face of so much economic uncertainty.
- Put a sign up on your brick and mortar location, with links to your site and online buying options.
Steps to consider longer-term:
- Mobilize a virtual community. If you sell clothes, build a community in which customers can share their fashion advice, dos and donts, and help others improve their fashion game. If you sell cosmetics, build a community that let's customers share their favorite products, rituals and routines. If you are a fitness studio, build a community where customers can share and celebrate in their wins. Start small and focused, and see if a community like this grows for your business.
- Email marketing strategy. Steady newsletters to subscribers should come from a professional email address (no more gmail addresses)! Use programs like MailChimp to help you build professional newsletters. Create a thoughtful calendar of information and news ahead of time to help you establish a rhythm to your messages.
- Content marketing. Write what you know and what you love, through website articles and blog posts. Get fancy with SEO but writing about topics that support your rankings in the keyword terms you are most focused on.
- Marketing and giving. Consider establishing an authentic give-back strategy (1% for the Planet, donating a portion of proceeds, a buy one give one, etc). First and foremost, this strategy gives you purpose and connection as you build your business. From a marketing standpoint, it provides you with something to write about and rally around.
As you’re working on all of the above steps in the process of setting up an online store, don’t neglect the importance of search engines in the online shopping experience. Where’s the first place you’d go if you were shopping for something online? Chances are you’ll open up your internet browser and search for what you’re looking for, comparing results and ultimately selecting the one that best fits your needs. That’s where search engine optimization (SEO) comes in.
You want to make sure that your products show up when people are comparing them before buying. In a way, Google is like a shopping mall- everyone’s stores are contained within it, all of them trying to attract customer attention. No one shops at that one store furthest from the parking lot with the lights broken in front of it.
Get your site to the front and center of the digital shopping mall- research shows that most potential customers don’t even scroll past the first page of Google results. Also make sure your search snippet is compelling- this is as close as you can get to offering a free sample. Your title and your 160 character sales pitch. Google also prioritizes sites that are mobile-optimized, so make sure your shop platform is mobile-friendly. We could write an entire article on how to improve your Google ranking quickly, but we’ll save that for another time. Just don’t neglect SEO, trust us.
Packaging, shipping and fulfillment
Now comes the nitty gritty part of operating an online business- getting products to customers. It’s not as simple as them walking into your store and picking it up. You need to package products in a way that’s both protective and ideally visually appealing, choose the best shipping company, and store products before they’re shipped.
Supplies you need to buy:
- A computer (to keep track of orders and fulfillment)
- A printer for shipping labels and packing slips (could the same printer or different ones- direct thermal printers don’t print packing slips well)
- Packaging - to start, why not reuse packaging you already have around? Chances are high you’ve got quite a few boxes lying around already- just make sure to take off the old shipping information!
- As you grow, you’ll want to invest in consistent, and eventually branded packaging
Ecommerce packaging considerations
Let’s talk packaging for a minute. First of all, can you believe that as a packaging company, we’re just now talking about packaging? Talk about self-restraint. Anyway, with packaging we believe there are three considerations to keep in mind- protection, aesthetics, and environmental impact. Our definitive guide to ecommerce packaging covers the basic nuts and bolts of packaging across a variety of industries. This is where you’ll learn about how to package and protect your products for shipping.
As you grow, you’ll want to consider the aesthetic impact of your packaging. When your customer picks up your package from their stoop, that might be their first physical impression of the brand. Make it count. Make sure it’s custom-branded, that your unboxing experience is on point, and that your ink is both sustainable and the right color.
Finally, with packaging we firmly believe that it should also be as good for the environment as possible. Our name is EcoEnclose, so we incorporate the environment into every aspect of our business. You probably should too- sustainability is good for business, and it’s better for the environment. Win-win.
Fulfillment and shipping
Starting out, use a shipping platform like Shippo or ShippingEasy, and take advantage of the discounted rates they usually have - with USPS, and sometimes with other carriers. These shipping platforms connect with most ecommerce platforms + sites, and then allow you to see your orders and fulfill them through packing slips or pick lists. Decide if you’re going to ship with USPS, UPS, FedEx, or another carrier- shop their rates, discounts and more to find the one that’s right for you.
Inventory management is also something you’ll want to consider here- most sites do this, but be sure to set it up properly so you only sell what you have! Trying to keep track of everything manually won’t be feasible if you grow as an online presence. Also make sure to be clear to customers on your site about how long it will take for products to ship- few things lead to customer disappointment than expecting something and not getting it.
As you start to fulfill more orders, you might find that your garage or retail storefront is starting to get pretty full. One thing to consider as your online shop takes off is hiring your retail workers to fulfillment or customer service. Just make sure you take the proper precautions for their health and safety. As you grow, however, you’ll likely need to start thinking about fulfilment at a larger scale.
When you’re starting to expand online, it’s wise to consider fulfillment from Amazon or Earth Hero. These companies take your stock, then market it, accept orders for it, and ship products for you. Your garage can only hold so much, after all.
Be known for great customer service
When it’s so easy to click the back button and go to the next competitor in the search results, you have to nail your customer service interactions to keep your customers coming back. Be prepared for conversion rate questions, international shipping questions, etc. - have you sold internationally online before? Do you plan to? These aren’t decisions you have to make right away, but they’re important to keep in mind if you plan on expanding online.
It is absolutely critical that you come up with a SOLID shipping, returns and refund policy! Be transparent about all of these policies on your page, and make it easy to find them. When Karen orders something for her nephew's birthday in two days and it doesn’t arrive in time, you’ll thank us.
When it comes to traditional customer service issues, the most common types of interactions we have with our own customers can be broken down into two categories- pre-sale and post-sale:
- Pre-sale: pricing, product questions, sizing and sustainability questions.
- Post-sale: Returns, defects, and damages
It is incredibly easy to leave a negative review online. As a fledgling click-and-mortar, that’s the last thing you want. Be clear with expectations up front, and be genuine, apologetic on issues, and be transparent on everything. Customer service isn’t just dealing with complaints either, help your customers make the right product decision and get the most out of their purchase with pre- and post- sale support. Make it easy to contact you with product questions, and send an email when the product arrives with instructions, contact info, a discount code (we mentioned that earlier, remember?), and encourage them to leave a review. Clear shipping and returns policies, kickass product pages, and helpful follow-up emails are all it takes. Easy, right?
Patience, time and financing
Okay, so you’ve got all the technicalities worked out. Your shop is up, you’ve spread the word about it, your store-room is stocked, your shipping and returns policies are crystal clear, and your packaging is ready to go. Now comes the hardest part- waiting for sales to come in. Short-term, going online can capture some sales when a physical shop is down, but to truly build an online presence takes time and often money.
In the short term, online sales can help keep a business afloat. Over time, it can become even stronger and more successful than the original retail business it is replacing! That’s the beauty of the click-and-mortar over the standalone brick-and-mortar.
This journey takes time and requires some funds (especially if you are aiming to keep employees and rent paid as you transition from a retail to an online storefront). Take advantage of funding opportunities if at all possible. If applicable, consider our guide for COVID-related funding opportunities.
We can’t speak on all available opportunities for funding, as they change daily, but rest-assured that there are opportunities available, and that there will be more-and-more as time goes on. So while the initial transition from brick and mortar to online shop can seem like a daunting task, undertaken simply to stay afloat, it may wind up actually being better for your business in the long-run. It’s a wonderful opportunity to get creative, strengthen your brand and your commitment to your customers, and reach new markets you never even imagined. Embrace it.
Know Your Numbers
After you've been in the online business a few weeks, it is important that you understand a few critical metrics: Average order size, unit economics (or in laymen's terms - how much gross profit you make, on average, with each order you ship), return rate, reorder rate (this may take a little while), monthly "burn" rate (or your fixed expenses each month on things like software, staffing, rent and utilities).
Knowing these numbers can help make basic analysis much simpler! For example, let's say your average order size is $100, and after paying for the raw materials, labor, packaging, and shipping associated with fulfilling an order, you make $30 in gross profit on that order. If your monthly expenses are $6000, you know you need to get 200 orders to cover your costs and stay afloat. If you know you have a return rate of 20%, then you actually need to get 250 orders each month (knowing that 20% of them will be returned).
Know these numbers cold, even as you need to be comfortable with the fact that these are fluid average figures. You'll be shocked at how much easier it is for you to get a handle on your business, growth, trajectory and need to raise outside funding if you have your head wrapped around key metrics.