Online commerce is no longer a luxury as it might have appeared a few years ago, and selling online has now become almost a categorical imperative for those offering products or services . After all, today, the products and services that cannot be purchased on the Web can be counted on the fingers of one hand.
You may not know this, but online sales in Italy in 2021 touched a record 40 billion. Also driven by the pandemic, the value of ecommerce grew compared to the previous year by as much as 21 percent, a figure not seen in a five-year period. The Milan Polytechnic’s snapshot only certifies what, today, is a certainty: online sales are a key component of a startup’s success (as well as that of a company in general).
Selling online, after all, has many advantages: it gives you access to a much larger market than you can access with a physical store and allows you to sell your products anytime, 24 hours a day, without the limitations (and costs) of the more traditional solution.
These are advantages that may seem obvious to your eyes; what really makes the difference, however, is knowing how to make the most of all the potential this option has to offer. This is much less obvious: you must, first of all, know how to identify all the potential opportunities in front of you, choose the ecommerce model best suited to your business and the best platform to intercept the needs and desires of your potential clientele, but also find the right suppliers. Not only that, it is also very important to know the regulations governing this specific field in Italy.
Does it sound much more complicated to sell online now? Remember the words of Frank Bettger:
“Selling is the easiest job in the world if you are enthusiastic about it, but it becomes the hardest if you take your time”.
The time has come, then, to break the buck and figure out how to open an online store while reaping all the benefits secured by ecommerce and neutralizing any of its possible risks.
Identifying opportunities
In order to be able to identify all the opportunities that selling online offers to those who decide to start a startup, you must, first of all, know what goods you can sell through this mode.
In this regard, it is useful to make a distinction between consumer goods and niche products (or services). The former are essential goods, which everyone needs and which, for this reason, are in high demand and popular; the latter, on the other hand, as will be clear to you from the name, are products or services that respond to more specific needs and desires, sometimes even unique and made to order.
If you’re thinking of focusing only on consumer goods with your startup maybe it’s time to rethink your choice: achieving success, challenging the ecommerce giants in their favorite battleground, is a very, very complicated undertaking (at least in the beginning). A good compromise is to decide to offer your customers both consumer and niche goods: in this way you can meet the needs of those (many) customers who like to buy different products (even both types) within a single online commerce platform.
What is needed, now, is even more specific thinking to help you figure out which products or services you can sell online to enjoy all the benefits this solution can provide. Although targeting emerging markets is a good path to success, going in search of a product or service that is necessarily “revolutionary” can sometimes lead you off course: more helpful is to focus on a concrete problem and how you and your startup can solve it in the best way possible. It doesn’t have to be a “new” product or service: you can, for example, improve the functionality of a good that is already on the market but has not proven to meet all customer needs.
The greatest needs and desires (and, therefore, also the greatest sales opportunities for you) are concentrated where customers are most passionate and emotionally involved. In this regard, it can be particularly effective to focus your attentions on people’s vices: consumers often spend more on their “guilty pleasures” and develop a closer loyalty bond with brands that prove able to understand their desires.
One last tip, just related to customer retention: create a recognizable and memorable brand that will prompt your customers to come back and “knock on the door” of your startup to make new purchases.
Choose the model
It is time, now, to think more specifically about the steps you need to take to open an online business. Fundamental is choosing the right business model. There is good news for you: nowadays it is easier than ever to find your way to success because there are several types of business models related to online commerce from which to choose. Each of them has its own specific advantages (and limitations) and, therefore, the choice you will have to make is related to your specific needs.
To help you in the initial phase, we have concentrated the experience we have gained over the years with our clients in the ecommerce world and have decided to share with you the fruit of our work, namely THE B-PLANNOW BOARD ECOMMERCE®: our shared visual language composed of 17 elements, which will really allow you to imagine, describe, share and innovate the business model of your startup in the ecommerce world, as well as to design in a detailed and scientific way its entire human, technological, logistical and legal ecosystem.
Download our free THE B-PLANNOW BOARD ECOMMERCE® here!
Own products/services
The first basic question you need to ask yourself is: to whom do you want to sell your products or services? You must first distinguish between B2C and B2B business models. The first model, also called Business-To-Consumer, is the one adopted by companies that sell their products or services directly to end users. In this model, the decision-making process leading to the purchase is shorter (especially in the case of goods with a non-high price) and, generally, less money is spent on marketing to get to the point of completing the sale, while still recording lower order volumes and fewer recurring orders than in B2B.
The B2B, or Business-To-Business, model is the one chosen by those who decide to sell their products or services to other companies. In some cases the sales process is completed with the individual purchase, but it may happen that the company that bought the product or service from another company then resells it to the consumer. The sales cycle in the B2B model is longer, the volume of orders is larger, and recurring orders occur more often.
Alongside these more traditional models, it will help you to know that it is also possible to identify the C2B (Consumer-To-Business) model in which it is consumers who sell goods or services to businesses (affiliate marketing services are considered C2B), and the C2C (Consumer-To-Consumer) model, in which consumers exchange goods and services with each other.
Our analysis of business models doesn’t end there: get comfortable because you’re about to delve into new terms that could change your life, decreeing the success of your startup.
Franchising
Franchising is a business model in which a company grants the right to market its products or services using its brand name to another company in exchange for the payment of a fee. This is not exclusive to online business, but interesting opportunities can also be seized on the Web. To do so, however, it is necessary to pay attention to a few aspects in particular. A franchisor must, first and foremost, build a website that is professional and capable of ensuring a smooth user experience: the first thing a potential franchisee will do, in fact, is precisely visit the website.
Limiting oneself to the website, however, is not enough: it is very important to make the information contained in all the places where the company appears online outside the website (from Facebook to Instagram, from Youtube to Google My Business, etc.) consistent, complete and interesting.
Remember, too, that to capture a potential franchisee’s attention and connect emotionally with them, there is nothing better than a video (in which you explain your business and the benefits you can enjoy if you partner).
Affiliation
Another option available to you is to resort to an affiliate program: this model involves a business arrangement between an advertiser, that is, a company that wants to promote one of its products, and a publisher, that is, someone who makes their web space available for the promotion of that product. In return for the promotion, the publisher receives a commission each time it succeeds in achieving a certain result, such as selling the product.
For companies and, especially, startups, the great advantage of this solution is the fact that they only have to pay the publisher a fee for the service received based on the results obtained. Thus, in this way, unnecessary waste of money on ineffective campaigns can be avoided.
Dropshipping
If you feel that the solutions enunciated so far are not for you, know that you have another arrow to your bow: dropshipping. This term refers to a particular sales methodology typical of online commerce through which you can sell products without actually owning them, that is, without physically having them in a storage warehouse. In this sales system, basically, the dropshipper seller acts as a kind of intermediary between the buyer of the product and the supplier, who is also responsible for preparing and shipping the sold item.
You will understand well that what makes dropshipping particularly attractive are the very low initial costs, since, essentially, you only need to have a website. Another relevant aspect is that, in this way, warehouse management costs are totally cut down. There is an additional advantage: suppliers are paid only when the product is sold and, consequently, there is no need to pay for the goods in advance, thus avoiding the risk of having unsold goods.
There is, of course, also a downside: the initial costs are reduced but, hand in hand, so is the actual profit, especially in the beginning. From the price the buyer pays, in fact, the amount paid to the supplier and the costs associated with marketing must be deducted. To make a significant profit with your startup you will, therefore, have to wait until you have many customers and make particularly good deals with suppliers.
Finding Suppliers
As we have already pointed out, knowing how to find the right suppliers for your business (in case you do not decide to produce the products you want to sell directly) is crucial.
Again, there are many choices: buying from foreign suppliers ensures lower production costs but generally the quality of the products perceived by customers is lower. Not only that, shipping time is extended and there may be hiccups related to the language barrier, time zone or customs.
Virtually the opposite argument can be made for sourcing products from small and local suppliers: production costs are higher but the quality is also generally higher, the service you receive is more personalized, and there are fewer problems with shipping, language barrier, and time zone.
Are you planning or expecting to order large quantities on a regular basis? You will need more standardized procedures, and the best solution for you may, therefore, be to use national suppliers.
Pay attention, however, to the minimum order quantity: being able to secure the best prices is not the only factor you should consider when proceeding to choose a supplier for your business. Especially for a startup, in its infancy, it may prove to be a better choice to pay a higher price but at the same time secure the ability to be able to order limited quantities of products, so as to avoid waste in case of problems.
Choose the platform
Choosing the platform through which to sell online is another key step. The decision also depends primarily on the characteristics of your business, the products you plan to sell, and your specific goals.
You need to ask yourself, therefore, a series of questions. Here are some of them: how large is your product catalog? What kind of products do you sell (are they “simple” or do they involve many variations and/or customizations)? Do you plan to sell only domestically or also abroad? How quickly do you need to get online and operational in order to sell online? Will you handle the orders you receive manually yourself or do you need a highly automated system? How customizable does the platform need to be? What is your budget?
Answering these questions will help you figure out which platform is best suited for your startup. Obviously, considerations of launch and maintenance costs and usability performance must also weigh in your evaluation. Not only that, it is also critical to pay attention to the choices made by your direct competitors.
The two most popular models are ecommerce site and marketplace. To proceed to the final choice of online sales platform, you need to know more about its features and pros and cons.
Ecommerce
Let’s start with the basics: ecommerce is short for “electronic commerce”. An ecommerce platform is, in more concrete terms, a store for online sales, within which customers can browse through different product categories, explore the features of the items for sale, and proceed to purchase.
Opening an online shop assures you the highest level of customization in terms of appearance and functionality, but it is a choice that requires money and expertise for its management and maintenance, as well as a lot of time.
If you need to quickly attack a niche market or lack the resources and knowledge to be able to operate on your own, you can opt for one of the many ready-to-use platforms that the Web makes available to those who want to sell their products online.
It is obvious that this choice is more convenient in terms of practicality: in fact, these are CMSs that are easy and quick to set up because they provide predefined templates in which to insert content, do not require advanced skills and do not need constant maintenance. Not only that, these sites also ensure secure payment systems and guarantee the protection of the data that customers enter into them to make a purchase, relieving you of any liability in case of a breach.
There are, of course, disadvantages as well: customization options are limited, the platform structure itself may not fit your business perfectly, and in the case of scalability, future migration to more complex systems is very limited if not sometimes impossible. There is also a registration fee, a monthly fee or a commission on sales. Generally speaking, in purely economic terms, platforms of this type prove to be more convenient for small/medium business startups and, more generally, for those with little marketing budget, while they become particularly expensive in their more advanced versions (which are necessary for larger businesses).
The most famous example of an ecommerce platform of the SAAS (Software As A Service) type, which can provide all the technical infrastructure of the ecommerce and keep it updated and operational 24/7 (in exchange for a monthly fee and a percentage of sales, which varies according to the plan selected), is to date Shopify. Surely it’s a name you’ve heard before: another advantage of these platforms is, after all, that they already have a recognizable brand and are therefore easier for customers to find. The visibility of your online sales site, however, depends on you and your marketing efforts, especially in the area of search engine optimization.
Then there are Open Source platforms, where the programming code is provided “open,” i.e., without a license fee; therefore, these CMSs have a very low if any initial cost, while what costs is customization, integration with integrated enterprise systems, and maintenance. The most widely used is WooCommerce, a WordPress plugin that allows you to create an e-commerce site using the world’s most popular CMS.
Then there are PAAS (Platform As A Service), ultra-high-performance platforms dedicated to corporations and multinationals; they are “tailor-made” CMSs with extremely advanced features that can be customized; as with SAAS they charge a monthly fee and/or fee on transacted business.
Finally, there are proprietary CMSs, which are platforms developed ad hoc by specialized agencies or internally within the company; while they offer total customization and high performance, they also involve high development time and costs.
Below you will find the most important CMSs divided by category:
Marketplace
The alternative option is the marketplace: you can think of these platforms as online shopping malls, within which customers can find and purchase many different kinds of products.
To use such a platform, you just need to create your account, choose your sales plan, and enter your items. Basically, selling via marketplace works like this: the retailer adds products on the marketplace as a third-party seller, the customer buys the product on the marketplace from the third-party seller, the third-party seller directly ships the purchased product to the buyer, the marketplace deposits the payment into the seller’s account retaining a commission.
By resorting to a marketplace, therefore, you do not need to create a site and can market your products more easily: customers prefer to buy on marketplace platforms because there they can easily and intuitively compare prices and choose the most convenient option. In fact, users also use marketplace platforms simply as search engines to find the solution that best meets their specific needs.
Again, of course, you must also look at the downside: hosting thousands of vendors makes it very difficult to stand out and capture the attention of potential customers. Business terms and conditions are fixed and may not marry best with your business. In addition, the commissions charged on product sales can also be very high, especially for small- to medium-sized startups.
Finally, selling generalist products under someone else’s brand exposes you to cannibalization risks, whereas if you work in private label or proprietary brand they become a great opportunity.
Usually these are very large sites (do the names Amazon, eBay, and Facebook Marketplace ring a bell?), multilingual, and also accept different currencies-meaning you can sell your products all over the world, but not only.
Yocabé, a company that supports brands in improving online sales has created a world map of marketplaces, identifying the big players that produce the most traffic and channel the most purchases.
The analysis shows how, alongside the best-known and most established names, niche players or local brands (especially Northern Europe or Non-EU) are also gaining a foothold in the market today, where local online platforms are being developed that can compete with the industry’s biggies.
How to open an online store in Italy
You are almost ready to sell your products online. You know how to identify the most suitable model for your business needs and choose the online commerce platform that can ensure you the best sales opportunities, but one last aspect remains to be clarified in order to avoid missteps that risk determining serious repercussions on your entrepreneurial adventure: you need to know the bureaucratic steps required to open an online store in Italy. The bureaucratic process to sell online, specifically, involves the following steps:
- choosing the most suitable legal form for the business to be started;
- opening the VAT number and determining the ATECO Code;
- registration with the Chamber of Commerce;
- notification of the start of the business to the municipality via SCIA;
- acquisition of a Certified Electronic Mail (CEM) address;
- opening of INPS/INAIL position in case of hiring staff;
- regularization to the required disclosure obligations (from the Consumer Code to the Privacy Code and GDPR).
Now you have all the theoretical and practical tools to sell online: all you have to do is find your niche market and identify the needs and wants of customers to be satisfied with your products. No fear: now you know how to do it.
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