Credit and Finance, Management
Trading online for SMEs
Posted on by Cindy Yip
Estimated read time: 5 mins
Online sales in the UK have increased by 16.2 per cent* since 2014, making it one of the top markets in Europe. The internet offers SMEs the largest customer base they could’ve ever imagined with unlimited markets and opportunities. Product sales are only part of the picture with service providers quick to seize a proportion of the market share. There are lots to consider when deciding to sell and trade online, such as the platforms to use, how to present your product/service and the type of payment you will offer.
Considerations when choosing a platform
You could choose to set up your own website or if you already have an existing one, decide to set up a shop within this. This way you can have customers dedicated to just looking at your products and services and be able to control what your customers see to a certain extent. However, this is provided that prospective customers have stumbled across your site or actively searched to be able to land.
Otherwise, there are many established online marketplaces which all specialise in selling different items catered to different audiences. Some specialise in unique handmade items, luxurious items, freelance work or general large market places which sell everything. Whichever it is, make sure you consider the following:
- Commission fees and type of contract
- Design and layout of website
- Target market and audience reach
- Opportunity to increase prominence
- Availability of supportive and community forums
Clear title – make sure the title clearly states what the product is and can easily be picked up when customers search for it.
Detailed product description – explain the product/service since they aren’t there in person to experience or see it.
Good quality pictures – the saying pictures speak a thousand words really is true, whether it be a demonstration of your service or picture of your product appearance.
Look at similar sellers – see what competitors or similar sellers are offering and how they’re pricing and displaying their products
State shipping and return policies and prices – Will you charge extra for shipping or is it included in the price? How long is your exchange or refund policy?
Type of payment
- Choosing payment gateway
When taking card payments directly through your own website, you need a payment gateway and an internet merchant account. Payment gateways act as an intermediary protecting credit card details by encrypting sensitive information ensuring information is exchanged securely.
- Look around for the best rates
An internet merchant account is a special account which receives your online debit and credit card payments. They’ll charge you a percentage rate on each transaction made but as with anything don’t be afraid to try and negotiate these rates or look at different options first. Your payment gateway may even offer you their merchant account when you sign with them but bear in mind this may not be the best deal.
- Offer different payment methods
The more payment options you give customers, the bigger of a market you’re opening yourself to. Customers will have less of a reason to not buy with you if you offer them as many options as possible to complete their transaction. Especially if you’re offering your services/products worldwide, not everyone will have credit or debit cards or feel safe using these payment methods.
- Payment bureau
Some companies which may have problems with their trading history or credit rating might have difficulty setting up an internet merchant account. The next best option would then be to use a payment bureau which collects and processes card details on behalf of the merchant without using an internet merchant account. This may be a better method for start-ups as it’s quicker and easier to set up. However, they may also hold onto your money for longer with service and transaction fees being typically higher.
- Adapt to evolving technologies
Technology is constantly improving with payment methods getting more and more advanced. With the introductions of contactless payments, payments with mobile phones and other portable devices, payment options available will only increase. Depending on the nature of your company, it might be beneficial to keep up with the latest technology but make sure to weigh up the pros and cons before you do.