How to sell things online
The beginner’s guide to selling products online.
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Why sell online? It’s simple: selling products to consumers online greatly increases your reach. Rather than being restricted to customers who can visit your store in person, you can now sell to people in another city or state and even internationally. More customers mean more sales and an increase in profits.
However, if you’re new to the world of ecommerce, selling your products online can seem like a confusing and daunting venture. Let’s take a look at everything you need to know to sell items online and how you can get started.
What's in this guide?
- Watch: How to become a successful online seller
- How do I sell products online?
- Compare e-commerce platforms
- How to start selling through an e-commerce website
- How to start selling on a marketplace like Ebay
- Do I need an ABN to sell online?
- Do I need a refund policy and other disclaimers?
- If you are dealing with tangible products returns and refunds, will be a fact of life. To ensure you're protected it is good practice to have the right documents in place.
- How much does it cost to sell products online?
- Dealing with foreign exchange rates
- Use an online seller account to save on foreign exchange costs
- How do I price my products?
- Where can I sell products online?
Watch: How to become a successful online seller
How do I sell products online?
There are two basic options to consider when you want to sell things online:
- Setting up your own ecommerce website. Selling from your own online store gives you complete control over how you list and sell your products, but it can be time- consuming getting started and difficult to generate sufficient traffic to your website.
- Selling through an ecommerce marketplace. An alternative and much easier option is to list and sell products on an already-established online marketplace like eBay or Amazon. This allows you to tap into the marketplace’s reputation, infrastructure and existing customer reach to target a much broader customer base.
Compare e-commerce platforms
When it comes to setting up an e-commerce website, you have two main options:
1. Use an e-commerce platform
Creating an online storefront of your own doesn't need to be complicated or costly. You can create an online storefront almost instantly via easy-to-use platforms such as Shopify, Wix and Squarespace. These platforms allow you to pick a domain, a website theme and upload your products with photos to the site. From here, customers can click and purchase your products. The payment is processed automatically via a payment gateway and transferred to your account. They also offer various marketing opportunities to promote your website.
- Easy to set-up. Using a pre-made template from a platform like one of these is easy to set up and inexpensive to host. Most of these platforms also offer free trial periods. So, it's worth keeping an eye out to see what's currently available.
- Marketing efforts. While creating your own online storefront gives you greater control and more scope for creating good brand awareness, there are also drawbacks. Having your own storefront requires you to be more active with marketing, as your customer reach may not be that of giant marketplaces like Amazon.
What can you expect to pay?
- Fee per month. Most e-commerce platforms will charge a monthly fee. This will vary depending on the package that you opt for. For example, a basic plan will be cheaper but will have fewer features than a more expensive plan.
- Fee per sale. Ecommerce platforms will usually charge a small percentage of each sale you make, plus a transaction fee (usually around 30 cents). Percentage charges per sale are generally less than the amounts charged by marketplaces.
- Fees for marketing. There might be additional charges for some of the marketing tools available via these platforms. However, these might be included in your monthly subscription, depending on the package that you opt for.
The intermediate option for those who are more tech savvy or have resources to help them is to have a custom site built with a CMS (Content Management System). Building your own site using a CMS allows you complete control over your online business and how your product is presented online. The most popular CMS for those in this category is WordPress, although there are other platforms that offer similar features. This option would still require the use of a payment gateway plugin – WooCommerce being the most popular – for managing the payment process.
- Customisation. You can also add plugins and features as your business grows, allowing you more options in terms of marketing, design, payment processing and customer engagement.
- Less support. While there are a number of benefits to having your ecommerce site set up in this way, you won't have the same support available to you as with platforms like Shopify. This means that if something goes wrong with the site, it's on you. So, unless you know what you're doing or are investing money to have a professional web developer manage the website build for you, this path might be inadvisable.
What can you expect to pay?
- Set-up costs. The cost for hiring a professional for the website build will depend on factors like their level of expertise and the type of website you want, and the cost will vary dramatically. However, if you're able to do the work yourself, the cost is incredibly cheap. WordPress and most plugins are free to download and website themes can cost from $10 - $150 to install.
- Fee per sale. A bonus of having a custom site is that there are no seller fees. However, payment gateways will still charge you a small fee per transaction. This is usually around 30 cents.
Starting out as an online seller is easier than you might think. While the signup process and information required varies slightly depending on the marketplace you choose, you will usually need to follow a few simple steps:
- Sign up for an account. This is quick and easy to do online. Depending on the service you select, it may or may not be free. You’ll need to provide your name, contact details, business name and bank account information.
- List your items. Next, decide on price points for your products and list them for sale on the marketplace. You’ll need to provide a product description and images, as well as shipping information and costs.
- Start selling. As sales start coming in, you’ll need to ship products to customers. If you have trouble getting sales, you could consider adjusting your prices or checking what special features are available to make your products more visible.
- Bring your money home. If you receive payments in a foreign currency, you’ll need to transfer those funds back into Australian dollars.
- Plenty of options and easy to start. You can opt to sell your products on third-party sites such as eBay, Amazon or Etsy. Listing your products on these established stores is probably the easiest way to start selling online. There are also other benefits to listing through these sites, such as tapping into the marketplace's reputation, infrastructure and existing customer base and reach.
- Marketplaces can be oversaturated. Among so many competitors, you might find it difficult to be seen and to make as many sales. It may also not be conducive to how you wish to portray your brand. Most people don't remember the seller they purchased a product from when using these platforms; they just remember the marketplace. So, if you're going for brand awareness, a marketplace might not be the right place for you to sell.
What can you expect to pay?
- Fee per month. You may need to pay an ongoing monthly subscription fee. Some sites offer an entry-level free account but provide additional features for sellers for an additional monthly fee.
- Fee per sale. Usually, marketplaces will charge a small fee for each sale you make. This could be a percentage of the sale amount, a flat fee per sale or a combination of the two.
- Fee per listing. A number of marketplaces charge a fee for each product you list for sale. Some marketplaces may offer you a limited number of free listings and charge for subsequent listings that exceed that amount.
- Fees for marketing. Marketplaces usually offer the option for you to promote your products on their site for an additional fee. This may be in the form of a PPC (pay per click), a flat fee or a varying charge for how many potential customers you'd like to reach.
Do I need an ABN to sell online?
Whether or not you need an ABN depends on if you’re selling items online as a hobby or as a business. If selling online is a pastime and something you’re just doing for a bit of fun, no ABN is required. If the main reason you’re selling online is to make a profit, you must have an ABN.
It’s also important to be aware of the impact of GST. If your turnover exceeds $75,000 a year, you must register for GST. To do that you’ll need an ABN, so an ABN is therefore essential if your turnover exceeds $75,000 each year.
Do I need a refund policy and other disclaimers?
If you are dealing with tangible products returns and refunds, will be a fact of life. To ensure you're protected it is good practice to have the right documents in place.
How much does it cost to sell products online?
While there are some online marketplaces that let you list and sell products for free, most will require you to pay for the privilege. There are a few separate fees you need to be aware of, and depending on the marketplace one or more might apply:
- Fee per month. You may need to pay an ongoing subscription fee each month, regardless of whether or not you make any sales. Some sites offer an entry-level free account, but provide additional features and tools for sellers for an additional monthly fee.
- Fee per sale. It’s quite common for marketplaces to charge a small fee on each sale you make. This could be a percentage of the sale amount, a flat fee per sale, or a combination of a flat fee plus percentage.
- Fee per listing. Other marketplaces charge a fee for each product you list for sale, regardless of whether the product actually sells or not.
For example, every eBay seller is entitled to 40 free listings per month. Additional listings attract an insertion fee of $1.65 if priced under $100, or $3.85 if over $100. Next, you’ll need to pay a final value fee of 10.9% of the total price the buyer pays for each item sold (including postage and handling) up to a maximum of $440 in most categories.
Read the fine print to ensure you’re aware of the costs for selling products online.
Dealing with foreign exchange rates
If you sell to overseas customers, another obstacle you’ll need to overcome is finding a cost-effective way to bring your profits home. Foreign exchange rates can have a huge impact on your bottom line. For example, while you might get the price you want in US dollars, if the USD/AUD exchange rate is at a low point then your profits could take a hit when you try to bring the money back to Australia.
While it’s possible to repatriate funds to Australia through some ecommerce sites, those sites typically don’t offer the best exchange rates on their transactions. Instead, you will usually find much better value if you transfer your profits back to Australia using a specialist online transfer company.
These providers offer higher exchange rates than you’ll get from your bank, and many also offer accounts specifically designed for online sellers. These accounts allow you to access local bank accounts in international markets, which means you can hold funds in multiple currencies and then bring your money back to Australia when the exchange rate peaks.
There are a few other issues to be aware of when sending international money transfers:
- Timing your transfer. Exchange rates fluctuate substantially daily, weekly, and monthly so you might be able to find much better value for money simply by waiting a month or two to send your transfer. If you understand the many factors that affect foreign exchange rates, you can time your transaction to take advantage of a high rate.
- Transfer fees. Before sending money overseas, review the transaction details to make sure you’re aware of any applicable transaction fees. These fees can make a big difference to the total cost of a transfer so it’s worth shopping around for the best deal.
Check out our guide to international payments for online sellers to find out how you can send cost-effective overseas transfers.
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Use an online seller account to save on foreign exchange costs
An international online seller account might be a way you can keep more of your profits when you need to transfer them back to Australian dollars.
How do I price my products?
Working out the right prices for the products you sell is often a difficult task. If you’re new to the world of online selling, remember to consider a few factors:
- Profit margins. How much does it cost you to make the products you sell? How do you need to price your products to ensure that you can still make an acceptable profit?
- Fees and costs. Selling things online comes with fees and charges attached. As well as the fees imposed by whichever marketplace you choose, you’ll also need to consider the cost of returns and the impact of foreign exchange rates when selling to overseas buyers.
- Competition. Examining what your competitors are doing is crucial. Take a look at how similar products are priced on the same marketplace to make your prices competitive.
- Incentives. Once you’ve worked out a competitive price point for your product, think about the incentives you can offer to help your products stand out from the crowd. For example, you could offer limited-time discounts or free shipping for orders over a specific minimum amount.
Where can I sell products online?
You’re spoiled for choice when it comes to online marketplaces where you can sell products. Amazon and eBay are the two biggest sites and others like Etsy and Zazzle also have loyal followings.
Which marketplaces should you choose to help you sell your products? That depends on a number of factors. Amazon and eBay are the most recognised and have the widest reach, but others target specific niches. For example, Etsy specialises in selling unique, handmade items, while a site like Zazzle helps emerging designers find new customers for their products.
For help choosing the best online marketplace for your business, check out our guide to where to sell things online.
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