Together with our long term supporter, payments company PayFast, Heavy Chef presents a three part series on online business in South Africa. Ecommerce is no longer a fledgling niche within the business sector on the African continent. It is the domain of big businesses and small startups alike.
Ecommerce in South Africa has reached the 1% mark of total retail spend in the country. That may seem small, but it’s actually a huge deal. Ecommerce and starting an online business is growing at a rapid rate in South Africa so naturally, everyone wants a piece of the ecommerce pie.
With that in mind, we’ve put together a three-part series on all you need to know to set up an online store. We’ve also spoken to some industry heavies to get their thoughts and advice on all things ecommerce. So let’s get started with a little research.
“Before launching my store, I researched so much. I looked at pricing for my products, shipping options and ecommerce platforms. I researched packaging, guarantees and returns. It’s important to know what your options are, and what they are going to cost before jumping in to your online store”. –Mario Toscano, Owner Unbreakable Man
It’s easy to get carried away at this stage and feel like a ‘deer in headlights’ the more you research. So we’ve broken it down to some crucial aspects of what you should consider before you start:
Know Your Product
This may seem like a no-brainer but knowing your product inside and out is essential. Are you manufacturing it yourself or are you using a supplier? Will your supplier be able to handle the demand? Will there be import duties? Once your product is bedded down and you know what you’re selling you’ll be in a better position to determine things like branding, pricing, shipping and marketing.
Marketing = ESSENTIAL
You can spend the rest of your life researching what shopping cart platform to use or how beautiful your store is going to look. But if no one is coming to your website noone’s going to see that perfect theme you chose. Now that you know your product, you’ll know who your target market is and where you can reach them. Phaedon Gourtsoyannis, founder of Cape Coffee Beans states that in the beginning phases "I was probably focusing too much attention on aesthetics when I should have been focusing on driving traffic and brand awareness”.
There are so many tools to help with marketing your business such as Google Analytics, Google Adwords, email marketing and don’t forget the power of Facebook advertising. See what options are going to work for your business and be ready to set those up when you get going. We’ll delve deeper into marketing in Part 3 of this series.
Look at what your competitors are doing and what their stores are like. What works? What doesn’t?
“Look at other online stores in South Africa and overseas selling similar products to yours. What looks nice? Which functionality is helpful? What product categories and subcategories do they have? Try and take the best from them and build it into your store.” Ian Muller, Prestashop Ambassador – South Africa
The people who are doing it already are the best people to learn from. And remember nothing is impossible until it’s done.
Pricing and Shipping
Don’t undersell yourself! Work out exactly how much your products cost to manufacture or import and factor these into your pricing. Look at what your competitors charge for similar products. This will give you an indication of what customers are prepared to pay for it.
Shipping can be a sticky issue, what works for one ecommerce store may not work for yours. Just remember that shipping is a big part of the customer experience so having a system that notifies customers every step of the way is a huge plus. Have you heard of uAfrica Shipping? They offer real time quotes from multiple couriers so you can save on shipping costs and you don’t need to have an account with the courier company you choose.
Here are some ways to charge for shipping:
- Increase product prices to cover costs for shipping – customer pays
- You pay the full price of shipping out of your margins – you pay
- Increase prices of products slightly to cover partial costs of shipping – you and your customer pays
Feeling clever yet? Great! Now, read the rest of the series (see links below) - and remember to subscribe to the Heavy Chef newsletter for updates.
This article appeared first on PayFast's blog. Check it out here.