Opening an online store: how to tell if your organization is ready to sell online

Before choosing a platform, it's worth answering a question that has nothing to do with the website: who packs the boxes on Thursday afternoon, and who responds to the person who writes "it arrived broken." An online store isn't just another channel to switch on: it's a second way of working, with its own timing and costs, resting on the same people who already do other things. This guide helps you understand whether your organization can handle it, and under what conditions, before you invest.

What you sell online, and to whom

The answer is almost never "the whole catalog." Some items work well online; others bring more work than they're worth.

• Products that explain themselves versus products that require a measurement, a site visit, or guided selection. The latter aren't excluded, but they sell an appointment, not a cart.
• Products that travel poorly: fragile, bulky, heavy, perishable. Shipping can eat up the entire margin, and shipping damage remains your responsibility.
• Products with many variants. Every size, color, or measurement is a line you have to keep updated forever.
• Products you already sell through resellers. If your store competes with them on price, the problem isn't technical.
• Who's buying: a private individual and a business customer with a VAT number want different things — price lists, terms, documents, payment methods. They're two different stores, even when the platform is the same.

The profit and loss of a single order

The fastest way to tell if the store holds up is to work out the numbers for a typical order. Not annual revenue: one order. The figures below are made up to show the calculation; they aren't prices or industry averages, and must be replaced with your own. The sale price is set at one hundred so that each line reads as a share of the same figure.

The number alone doesn't say much: you need to move it around, because it's in the worst cases that you find out whether the channel holds up.

• Returns. The product comes back, outbound and return shipping is often on you, the goods need to be checked before going back into inventory, and someone has to handle it. How many full-margin orders does it take to cover one return?
• Free shipping above a threshold. Someone who orders just above the threshold costs you as much as someone who orders twice as much: that cart has the lowest margin of all, and it's also the most common one.
• The cart that's lower than expected. If the typical order is worth half what you assumed, the fixed costs — packaging, shipping, preparation — don't get cut in half too.
• Advertising. If it's needed to bring in orders, it belongs in the calculation. A margin that only holds up as long as customers arrive on their own describes a situation that won't last.

The line items almost everyone forgets

The cost of the platform is visible and can be quoted in advance. What follows isn't, and it weighs on you every week.

• Photos and product pages, for every new item that enters the catalog. This is recurring work, not a one-time job.
• Pre-purchase questions: measurements, compatibility, delivery times. They come in the evening and on weekends.
• Orders left pending because payment didn't go through: someone has to look at them and close them out.
• After-sale support, warranties, and replacements.
• Keeping stock levels aligned when the same warehouse also serves the physical store or sales reps.

Who updates the catalog and who responds

Every question below needs an answer that's a person's name and a time of day. Not a department, not "we'll see."

• Who uploads a new product, and how soon after it arrives in the warehouse.
• Who decides the online price, and what happens when it differs from the price list or the physical store.
• Who responds to customer requests, during which hours, and with what maximum stated response time.
• Who checks pending orders every day.
• Who handles a return, and who decides whether the goods go back into inventory.

If every answer is the same person, and that person already has a full-time job, you've found the bottleneck before spending anything. That's a good outcome.

A limited launch

Launching with the entire catalog and every feature makes it impossible to tell what didn't work. A limited launch costs less and teaches you more.

1. Choose part of the catalog: the items that sell the most, that travel well, and that you almost always have in stock.
2. Set the duration upfront, long enough to cover a normal cycle of your seasonality.
3. Assign tasks with names and times, and tell everyone that's how it works for that period.
4. Decide in advance which data to collect and who looks at it.
5. Set the decision date and the three allowed outcomes: expand, adjust, or close.

The useful data points are few and can be tracked by hand: how many orders, what they're made up of, how much the average order is worth and how much it varies, how many minutes it actually takes to prepare a package, how many requests come in before or after purchase, how many returns and for what reason, how many payments fail. A sheet filled in every evening for the duration of the launch is worth more than a report written at the end.

What this guide doesn't cover

Here you decide whether to open the channel, and under what conditions. Choosing the platform, which starts from these same requirements, is a later step. And the numbers to look at once a store has been running for months are different, because by then the question is no longer "can we handle it?" but "where are we losing?"