Creating an online store - how does it work?

Creating an online store 101: The best way to plan the launch of your own online store

Some aspirants in e-commerce assume that creating an online store is basically the same as opening a "real" brick-and-mortar store: find suitable premises, furnish them smartly and present the goods in an appealing way. Then all you have to do is unlock the virtual door and the buyers come flooding in.

If it were that simple! Online stores and retail stores have one thing in common: the set-up is quite simple. Selling is not.

So before you get started, there are a few things to clarify. It makes sense to differentiate between the actual creation of the online store and all the other theoretical questions that need to be clarified when setting up an e-commerce business.

Before creating an online store: Lots of preliminary considerations

Creating your own store is now easier than ever. Nevertheless, it is anything but trivial.

The process starts with developing a business model that has been thought through as precisely as possible. This essentially determines the type of online store you should choose.

Which store system suits your business model?

Just like a physical store, an online store is the face of your e-commerce. The store that can be visited is what your customers see and what shapes your image accordingly. It is the place where interested parties get to know and hopefully love your products or services.

Creating an inviting and easy-to-use online store is undoubtedly one of the most important parts of building your entire e-commerce business.

How does your idea become digital reality? You basically have two options here: You can have your online store created or you can do it yourself.

If you want to try things out for yourself and realize your own ideas, you have the option of using so-called construction kits. These enable you to create a website without any programming knowledge and with a clear modular system.

The more sophisticated option, but one that offers far more possibilities, is to buy software licenses or use free open source solutions.

What should you choose?

To make a decision, you first need to find out which store system best suits your specific requirements. For example, ask yourself the following questions if you want to create your own store:

• Do I want to become a full-time retailer straight away or should the online store be a sideline, at least initially?
• Which products would I like to offer? Self-made individual items, customizable offers or mass-produced imported goods?
• How much can or do I want to invest in creating the online store?

Your answers to these questions determine further details such as the required functions, payment methods to be integrated or useful interfaces.

Which online store functions do you need?

Modern store systems offer far more than just product presentations and a shopping cart for purchases.

Depending on your requirements and needs, many providers offer you a choice of many additional features that can significantly increase the convenience and efficiency of your online store. These range from advertising and shipping management to preparatory accounting and much more.

The following functions are also useful for new users:

• An integrated blog is helpful to make your offer known online and to boost your store's search engine ranking
• Search engine optimization tools so that you can accurately control which keywords you should optimize your listing pages for
• Various marketing tools such as e-mail newsletters or connection to social media
• Automations such as invoice dispatch, order confirmations or VAT processing (particularly interesting if you sell internationally).

What payment methods will you offer?

On the one hand, you want to make it as easy as possible for your customers to pay for purchases in your store. On the other hand, you also need to be able to manage payments efficiently - and the costs for payment services must be kept within reasonable limits.

There are now quite a few attractive payment methods, for example:

• Invoice
• Direct debit
• Bank transfer
• Credit card
• PayPal
• Giro-, Google-, Amazon- or Apple Pay
• Cash on delivery

What you offer depends - among other things - on two essential factors:

• Which payment method your target group prefers
• the conditions you receive from the payment service providers (who provide the technical connection).

Which software interfaces are useful?

Of course, there is no alternative to connecting at least one payment option to your online store. But there are other possible software interfaces that you should be aware of. Here are a few examples:

• merchandise management system: From a certain sales volume, you need an inventory management system (ERP), i.e. software that allows you to control the entire flow of goods from purchasing to returns. It makes sense for the ERP system to communicate directly with your online store.
• Price search engines: A connection to websites such as idealo or cheaper is now an important additional sales channel for online retailers. They generate additional traffic, directing more interested parties to your online store and thus increasing the chance of more sales (conversions).
• E-commerce marketplaces: Sales via platforms such as eBay or Amazon also has a number of disadvantages (costs, lack of control), but it can make sense to connect your own webshop to marketplaces, especially at the beginning.
• Shipping service provider: Especially if you work with several shippers, it is advisable to use a store system plugin that connects your online store with them and largely automates many processes.
• Tracking and analysis: In e-commerce, data is the fuel for any optimization and further development. That's why you should always know the central store key performance indicators (KPIs). These include the number of visits and conversion rates. This requires an interface for analytics software.

Once you have clarified these and other requirements, the question arises: How do I actually create an online store? Below you can find out which DIY approaches you can follow to create your online store yourself.

Construction kit, software license or open source?

A key differentiating factor between the various store systems is the hosting. Every website needs a digital home, i.e. a server on which it is hosted.

The various modular solutions such as Shopify or Jimdo offer hosting at the same time, so you "only" have to worry about creating the store content. As the individual components are already programmed and you put them together according to your requirements, this is easier to manage than with licensed or open source software such as Magento or Gambio.

In contrast to modular systems, however, with these software solutions you need to be much more technically proficient (in terms of programming) in order to create your own online store that actually works smoothly and is attractively designed. You also need to take care of your own hosting solution, for example by renting server capacity.

Modular systems and professional software both have their advantages and disadvantages. The most important of these are summarized in the following table:

Store system	Advantages	Disadvantages
Construction kit	No programming knowledge required; hosting including software updates	Not freely customizable; not infinitely scalable, i.e. only suitable for stores up to medium size; transaction fees
Software	Freely configurable; Wide range of interfaces and plug-ins; Large range of functions	Only for experienced users; maintenance and care must be carried out by the user; more sophisticated solutions are expensive

By the way: If you would prefer to have your online store created, you can often find offers from freelancers in the popular modular systems.

What else is important if you want to start an online store?

In addition to the pure functionality of your online store, there are other aspects that need to be taken care of. This includes taking precautions for legal and IT security. And very importantly, you should devote a lot of time to marketing in order to attract your first customers.

The three topics at a glance:

Legal texts

In recent years, the legal requirements for online stores have become stricter. Consumer and data protection in particular has led to additional work that online store operators cannot ignore.

In addition to an imprint (provider: internal identification) with the legally required mandatory information, a revocation policy, payment and shipping conditions, a privacy policy that meets the requirements of the GDPR (General Data Protection Regulation), general terms and conditions (GTC) must also be created.

There are specialized service providers for all these legal texts, some of which offer the creation and updating of general terms and conditions and the like on a subscription model. Whether this expense is worthwhile for you must be assessed based on the size of your company and the individual effort required for secure legal texts.

IT security

The encryption of the Internet connection (recognizable by the "s" after the "http" as part of the URL) is now standard and is not a problem, especially for online stores created with construction kits.

However, as the operator of an online store, you still have to expect that hackers will steal sensitive data (including that of customers) or try to force you to pay a "ransom" with ransomware. It is important to protect yourself against this as best you can.

IT security is a complex topic. The basics such as suitable passwords, regular software updates and general caution (for example, using a VPN tunnel when processing orders on the train) should be practically part of your DNA.

You should also think about a watertight backup solution. Otherwise, for example, you may have to take your online store offline for days due to an IT problem. If you don't have the specialist knowledge yourself, you should seek specialized IT advice.

Online marketing

Whether offline or online, nothing works without marketing. You should realize that marketing is much more than just advertising. The 4 Ps of marketing are still the guiding principle for online retailers:

1. Product (product policy): What products do you want to sell? This point is the heart of your business model. How does your offer make your customers' lives better, more pleasant, more beautiful? And why do you fulfill their needs best (this is your USP: Unique Selling Proposition).
2. Price (pricing policy): How much should these products cost? In addition to the actual sales price, this also includes strategies for discount campaigns and partial payments.
3. Place (distribution policy): Which sales channels will you use? Only your own store or also the large marketplaces? Are you planning to use dropshipping or fulfillment service providers?
4. Promotion (communication policy): How can you publicize your offer? After all, you will only sell something if someone knows that you exist. This includes traditional advertising, for example in the form of online ads. But anything else that makes your brand better known, such as a blog or social media, is also part of communicating with customers.

Setting up an e-commerce business is complex. It consists of far more than just the initial spark. It's more like a long journey that requires patience and perseverance. This 101 on creating an online store will help you get started.

Once you have opened the virtual stores, you will realize that there is always something to do, something to improve, something to add. If you continue to keep the basics in mind and constantly analyze the data you collect, you will be in the best possible position to be successful with your e-commerce.

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