Shopify is the digital world's best-known and fast-growing crowd favorite when it comes to e-commerce platforms. You can use over 70 payment gateways with checkouts in over 50 languages, making it easy for anyone to sell products anywhere in the world.
Its intuitive interface, easy-to-use store, and content management tools make setting up the store and customizing it a breeze even for someone who has never explored e-commerce before. It also has a full marketing suite, such as abandoned cart recovery and search engine optimization.
It’s no secret that building a successful business in online retail will require your commitment and long-term perspective. A realistic and practical mind is needed when setting expectations, goals, and plans with regards to investment and profitability. When it comes to online retail, your major investments are time and money.
- Investing time
Time is something that's going to be spent a lot in setting up your online retail site. However, think of every moment you spend setting up your Shopify store as a learning curve of understanding how online retail works, the ins, and outs of the business. Investing time needs dedication, and you need to learn the business' ropes even if you already have a brick-and-mortar shop. Online retail is different, and in fact, much harder since a lot more consumers prefer online shopping than they do going to a store. Spending time on your understanding of your Shopify store will help you get to know your target customers and your market, which will help you make informed decisions as your business grows. Investing your time in developing your store also enables you to develop new skills to help you as your business grows.
- Don’t quit your job just yet, or do away with your physical store.
As tempting as it may be, realistically, it won’t make sense unless you have a pretty good financial backing or if you already have a physical store that's doing well. Investing time and money on your Shopify store must be done on the sidelines until and unless your store can provide you with the financial means to quit your job. You need savings to help you stay afloat for at least a minimum of six months.
Also, thinking of migrating from a physical store to a fully digital one requires adequate planning. The best way to know if a digital store works better than a physical one is to see which platform acquires higher, faster sales and more importantly, if your team can manage the inventory, sales, and shipment coming in from your digital store. Because more and more people are digitally connected, shopping online just requires a few clicks on the computer. Also, the purchasing decision via online shopping is much faster than physical ones. Can you manage your inventory of both your physical and digital stores? If not, you can also invest in inventory management, such as https://lilypadforfishbowl.com/fishbowl-integration. With the CoViD-19 scenario, it makes more sense now to have a digital store fully operational, functioning, and up-to-date with inventory than ever before.
As your digital store increases in profitability and cash flow, you'll eventually have a better idea of which platform is more viable for your product or service. When your online business gets up and running, the hard part comes in maintaining your site, but this may take less time than earning that amount of money from a 9 to 5 job. Your biggest investment would pay off in terms of scalability and efficiency that the e-commerce model offers.
Whether a side hustle or an extension of your physical store, you're creating more than just one income stream with your e-commerce platform. You're also building yourself an asset that could be sold off in the future. You also want to consider the equity value of the business you're accruing, as well as the cash flow that's generated when looking at your true returns.
- Investing money
Investing time enables you to invest money profitably. It's crucial for you to understand how your business works at each level to be able to invest money in apps, extensions, software, and programs that enable you to run your physical and digital store seamlessly. If you have the budget you can consider hiring a Shopify plus agency to help you with the design process.
- Deciding on a business structure
Setting up a legitimate business entity is part and parcel of taking your business seriously, and ensuring a smooth integration between a physical and digital store. Here are some of the most common business structures that you can look into for e-commerce:
- Sole Proprietorship- Extremely simple and straightforward, this structure of a business is something most people do on both physical and digital stores. The only downside, if you will, is that sole proprietorship means you don't have protection from personal liability. If your business is sued by someone, the personal assets you have become part of the business equation. But then, on the good side, this business structure means less tax filing, and it also means you can do a report or filing on your personal taxes, as well as the earnings from your business.
- Limited Liability Company (LLC)- Through an LLC, you establish your business as a separate legal entity, which means your personal assets are protected. This is the second most-used structure as it offers wider protection compared to a sole proprietorship. That said, it's not entirely foolproof. In this kind of business structure, you'll need to adhere to certain filing requirements and pay certain fees.
- C Corporation- Set up properly, a C Corporation gives the most liability protection. Because of this, plenty of businesses nowadays choose to go with C Corporation. However, C Corporation tends to be a little more expensive to set up and is also subject to double taxation, as the income doesn't pass directly to the shareholders.
Which of these structures would you choose? Most business owners will go for LLC or sole proprietorship. For an online business, it's recommended to go with an LLC because it offers a better trade-off regarding autonomy from personal finances and costs and liability protection.
- Making sure your finances are in order
Never ever blend your business finances with your personal finances. Mixing up your personal and professional income and expenditure isn't only confusing on a personal level, but it can be an auditing hell. More often than not, it can also get you into trouble, especially if you don’t pay the right tax at the right time or ensure you have the right licenses. Whatever kind of business you're in, this is the golden rule for running an online business or brick-and-mortar. Opening a bank account under your business' registered name is a great way to start.
Here are the bank accounts you need to open:
- Business Checking Account
When setting up your finances, make sure to open a checking account registered with your company name. Make it mandatory for all business-related revenue to be deposited into this checking account, and for all business-related expenses to be withdrawn from this same account. This way, you have a clear idea of how much money is flowing in and out. This makes things a lot clearer and easier for you (the business owner), your finance team, accountant, and also for tax filing.
- PayPal Account
PayPal accounts are great to have in your e-commerce site, especially if you plan to accept payments via PayPal. For this, you'll also want a business account tied to your e-commerce website.
- Credit Card
This is the most common and preferred payment method for suppliers and customers, too, whether a digital or physical store. In this same train of thought, having a business credit card only for business-related expenses makes it easy to purchase inventory for your business. Having a business credit card is also a gateway to perks and rewards. Look around for cards specifically for the business traveler in mind because you could get some serious deals from earn rates, travel rewards, as well as bonus points from selected merchants.
- Collecting Sales Tax
Like it or not, taxes are part of life and part of the business. Depending on where you operate, different states have different taxes. You'll also need to collect sales taxes if:
- The state your business is operating from collects sales tax.
- An order is made by a person living in your state.
The taxes concerning online stores or online merchants are extremely beneficial, especially if you're a startup or your business is still small and growing.
- Local Business Licenses
Depending on where you're doing business, you need to ensure that your online site and your physical store has the right and correct license to do business. These licenses need to be renewed yearly (at the minimum), and for online businesses, it also includes renewing website licenses, trademarks, domain, and site memberships. It’s important to look into what your local laws and regulations require, if anything.
Building a business nowadays requires an online site, and having a Shopify store is one of the best ways to start. Make sure you get your inventory, finances, taxes, and understanding related laws in order before you make any concrete decisions. Having an online site is an extension of your business and a new means of reaching a wider, digitally connected clientele.