Increasingly, small producers selling directly to consumers are turning to selling directly via the internet, a practice known as e-commerce.
Selling online via your website is one way to overcome issues with consumer access to your products when, for example, your retail customers do not stock your full range or do not stock it in every store, or if you want to offer products to consumers who cannot easily get to someone who stocks your products. Some distributors also offer online sales.
If you choose to sell online as well as through more traditional retail outlets such as supermarkets, you will need to formulate your pricing in line with the on-shelf price for your product so that you don’t undercut your other customers.
Setting up an online store and just sitting back to wait for orders won’t work. You will need to develop a tailored plan to promote your new service. Special offers, discounts and vouchers are all good ways to drive sales to your website. Your marketing plan for online sales has to work alongside, and not damage, your other sales via other outlets.
If your products are robustly packaged and are not affected by periods of times in ambient temperatures, this may work for you. Products requiring cold chain integrity (that is, products that must be kept at a specific temperature from the point of manufacture to point of sale, such as dairy products, fresh food etc) will need sophisticated packaging and specialised transport and this will add to costs. Very delicate foods may not travel well and you will need to test them under normal postage conditions to make sure consumers will receive your products in good condition.
You will also need to be able to respond quickly to orders, ideally within one to two days.
Packaging and postage
It is a good idea to assess your options for what you expect to be the most common ordering quantity so that you can get a realistic idea of the cost of postage and set your ordering system up to include this cost as part of the ordering process . You can bulk order approved packing boxes and envelopes from Australia Post.
Many businesses also offer either a standard post or express delivery option, costed accordingly. Others offer free delivery under certain criteria but remember the internet is global so you will need to be specific about this in all sales materials and on your website itself. ‘Free delivery anywhere’ could potentially find you faced with a significant postage cost to an overseas customer that will wipe out any profit on the sale. Certain foods may not be sent overseas without certifications.
Payment options and security
Online sales require a payment gateway which is has the capability for sales and payment with encryption security. You will need to decide what forms of payment you will accept. The most common is by credit card so you must be able to assure customers of the security of your system if they are to provide this sensitive information. Some businesses will accept cheques on the condition that goods will not be despatched until the cheque is cleared.
There are costs associated with establishing a merchant account for online sales. It is a good idea to talk to your bank about options, systems and costs associated with setup and maintenance. You must also make sure the rest of your system security is up to date and stays that way. A website designer with experience of e-commerce will be able to assist you.