Why you should start selling online in India in 2020?
E-commerce in India is booming rapidly and the growth doesn’t seem to slow down at all shortly. According to a report by BCG and study by Google India, India has an internet users base of about 475 million as of July 2019, about 60% of the population. This number is expected to cross 800 million by the end of 2022. Internet and explosive growth of mobile phones are fuelling this growth further.
Over a million people have already moved their businesses online are started selling.
If you have a product to sell, this is perhaps the best time to start selling it online. Here is an ultimate guide to teaching you how to sell online in India.
Before You Start Selling Online:
1) Calculate the costs involved in selling online
Selling online in India or any country for that matter involves various costs. It is important to first find out if you can make good profits after considering all those costs.
Let’s look at some of the important costs:
Business Registration Cost – Before you start selling online, you need to incorporate your company in India and register for GST. This is a huge investment and the overall process can cost easily around anywhere between INR 25,000 to INR 60,000, depending upon your state and other requirements.
Shipping Cost – Visit your nearest courier or shipping company and find out how much it would cost to ship your product in various parts of India. Make a list of states and shipping fee. Normally this cost hovers between 5% to 15% of the product cost depending on the size and weight of the product.
Packaging Cost – Depending on the type of product you are planning to sell, you will need to consider the packaging cost. Check the different packing material and calculate how much you will need for one product. Calculate the total cost per product accordingly. Normally it is between 0.5% to 2% of the product cost.
Payment Gateway Cost – If you planning to set up your store, you will need a payment gateway. These sites normally charge between 1.5% to 5% of the total transaction. There could be a one-time setup fee and recurring annual maintenance fees. Last time when I checked, most payment gateway providers had waived off these fees. You can negotiate the transaction fee if you have a higher volume.
Storage Cost – Depending on the product, you might need to rent a warehouse or some storage space for your products. Find out this cost as well. Some online marketplaces like Amazon let you use their warehouses at a small fee.
Marketing Cost – Like any other business, you will have to tell the world that you have arrived. Surely, there are free ways to promote your business but at some point in time, you will have invest in paid marketing channels. Google’s AdWords is a good platform to start with online ads and it also offers tools to calculate the costs.
2) Find out if it is viable to sell online
Now that you have a fair idea of different costs involved in selling online, you can do quick math to find out the profitability of your venture. Here is a simple formula :
Profit Margin= Selling price – (Sourcing Cost + Packing & Shipping + Transaction Fees + Marketing Cost + Variable Costs)
If your profit margin is positive, you are good to go ahead and start selling online. If it is very low or negative, you should think about minimising the costs.
3) Create a digital catalogue of your products
Assuming you have passed the profit margin test, its time to take the next step. You will need to create a list of products in a spreadsheet. Later you will be able to import that list to eCommerce marketplaces or self-hosted shopping cart. This list should contain Product Code (or SKU), Product Name, Description, Category, Selling Price, Discount (If any), Brand, Colour and other applicable attributes.
Once this is done, take 3-4 good quality photographs of the product from different angles, preferably in white background. Product images play a vital role in online selling, so its recommended to take help from a professional. In some case, you can get these photos from the manufacturer as well.
4) Setup End to End Process
It is better to get organised from day one. Do you know how event management companies manage huge events without any goof up? Well, they play the entire event in their minds before they start working on it. You can do the same and layout a process describing steps from getting an order to shipping the goods.
It could be a simple checklist for doing quality checks, packaging, invoicing, etc. This will help also help your staff when you are not around.
5) Use A Good Inventory Management Software
As you will be dealing with inventory every day, it might become painful to manage inward and outward stock movement manually. Start using a good inventory management software to track your inventory. Some of the software even provide inventory sync option with your shopping cart or marketplace account.
6) Be discoverable online
Your customers are more likely to search for your business before they make any purchase. If they can’t find product reviews or any other information about your business, they might drop off. So, it is important to have an online presence in the form of a company website, social media account or any other channel.