Should I Sell Online?

by John and Jake Fell Feb 07, 2014

Q: Adding e-commerce to my shop’s website sounds like a lot of work. Do I really need to sell online?

Jake Fell
Jake Fell

Jake Fell: All brick and mortar retailers need to have a great website. However, not every independent retailer needs to sell online. As MR‘s Karen Alberg Grossman wrote in January, “16 percent of total apparel sales are online (about $40 billion out of $250 billion),” and the majority of the sales are of off-price items not likely in line with a specialty retailer’s business model.

There is still a vast opportunity for specialty retailers to sell online. Selling online can be demanding from a logistical and financial standpoint and some stores are stronger e-commerce candidates than others. To elaborate:

Strong candidates for online sales:

  • Stores that have the capacity to sell products for less money than major online retailers.
  • Stores that sell relatively unique items that people search for online.

Keep in mind: It’s rare that retailers sell unique items with little competition. Selling your inventory at a discount online may hinder your ability to achieve high margins in your brick and mortar store.

Moderate candidates for online sales:

  • Stores that provide excellent customer service to remote customers.
  • Stores with exceptional taste with the ability to achieve great online branding.
  • Stores located in vacation destinations with tourist customers who want to buy from you when they are back home.

Keep in mind: These scenarios may require significant investment in infrastructure, branding and marketing.

Poor candidates for online sales:

  • Stores that don’t have a competitive advantage in regards to price or unique items.
  • Stores with staff and owners who lack basic computer skills.
  • Stores with owners who think e-commerce will miraculously save their struggling brick and mortar business.

Consider starting slow. The good news is there are ways to sell online without a huge upfront logistical or monetary investment. New startups, like Shopify, make it easy and cheap for you to build a simple e-commerce site. You can also easily sell items on Amazon or eBay. These options are great for testing the waters and figuring out if there is demand for your online model before making a significant logistical or monetary investment in e-commerce.