- I don’t know how to write a guide.
- There is nothing official about it, just click-bait.
- Though most things below apply globally but I am talking about India market primarily.
As Global & Indian e-commerce industries evolve, scope of terms like “online shopping” and “e-commerce website” has also evolved (in terms of business models). We will not cover “digital goods”, everything we talk about involves physical goods, even if its cow dung.
We start by answering some questions like Why, What, When, Where.
Why sell online?
Firstly, biggest factor is market size, you can choose to ship stuff to entire city, state, country or even the entire world.
Secondly, general consensus is that costs tend to lean towards lower side, for example warehousing is cheaper than retail spacing, but I strongly disagree with this consensus. I think it all depends on product category, product value & on scale of operations.
Lets examine major cost heads:
- Shop/Office/Warehouse: Retail space at a primary location or even a non primary one costs way more than a warehouse within which a small back-office can be setup. Difference in rental and electricity, maintenance, interiors and lot of other things.
- Employees: Generally physical retail needs more manpower than online retail, like sales people who have to be presentable and well-spoken are not required for online retail. Operations managers, hr, finance etc. requirements would be roughly the same again depending on scale. To start, one person can easily do it all. Its hard work but doable.
- Technology & Equipment: Tech and Equipment costs rise considerably. Physical retail is not as tech intensive, mainly you just need a POS (point of sale and maybe a back office computer for stock-keeping and accounts), for online retail you may have to rent some platforms, automation systems, pay some fees to some sites and service providers, and have multiple computer systems and operators and you grow along with packaging people who don’t need to be highly skilled but educated to a level nonetheless.
So while some costs go down, some expenses increase as well, its all about product category, value/segment and again scale of operations.
Thirdly, everybody else is doing it so it kind of becomes necessary to evolve with the market and keep up the competitive spirit for everyone. If everybody is buying diapers online (which makes a lot of sense, but selling them doesn’t make a lot of sense) then a brand which is prohibiting online sales (for some weird reason which I can’t even think) or retailer who does not start selling online because they do not have the know-how, they will just get left behind eventually or not live upto the full potential of their sales.
What can you sell online: I am not Siri but Home & Kitchen is a high growth category in India right now for example but it can be ANYTHING except weapons and drugs and you know illegal stuff in general.
What do you need to start selling online:
- Stuff to sell
- A small room where you can operate from and store the stuff too.
- A computer & A mobile (so that you can call support helplines)
- Decent internet connection
- Basic knowledge of accounting but mostly common sense.
- Stuff like tape, courier bags, bubble wrap etc. to pack stuff after orders start rolling in.
- TIN/VAT/CST/Sales Tax number (yes its a single number and all of them are the same thing), you can start without it as there are certain exemptions in place by various VAT departments for some categories and turnover in general but better you start with it if you are not just “trying” to sell online but setting up a proper business.
When should you start selling online: Yesterday.
Where should you start selling online: Anywhere, but I strongly recommend eBay to start with, will explain why later.