eCommerce

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eCommerce

eCommerce websites

POS SOFTWARE

One point about the current lockdown is that eCommerce is continuing unaffected, I am sure that it is going up. People are not afraid to shop via apps and websites. Many now have nothing to do but research and buy online products that they need.

What I have noticed is that in our clients' websites, the product mix is changing rapidly as one great advantage with online shops is that the range of products can be quickly changed as you do not have to have the product to sell it. 

 

 

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eCommerce site breakeven point

POS SOFTWARE

We all want to get the most out of our business.  

So a proposal was given to me by one of my clients about they making an eCommerce website and that they wanted to do it on the cheap, what they wanted are they looking at to make it work. It is a really hard question to answer as you do not know where to start so I decided to look at a commonly used one Shopify.

To make it work you need to go past the Breakeven point which is the spot where the total revenue equals total costs and expenses. Here there is no profit or loss, you "break-even". It is the most commonly used measure to give a feel of just how much is required to make the project viable. 

I then went looking at the relevant plans for a Small to medium-size business (SMB) for Shopify. No reason I picked this one, other then it is commonly used although in truth I am not that keen on it at all. I think there are better solutions for money, for a small site eCommerce site look at WooCommerce.

They have three basic plans for SMB and the one you pick would depend on just how much you hope to move online. The problem here as well is that these plans are very limited and if you require anything more then just these plans there are many additional costs but as the proposal is here, they want nothing more then to do it on the cheap so no additional extras. Note this I do not recommend as some of these so-called additional extras, I think are required. 

Now I am going to assume that all the templates and setups, they will do themselves and select the free ones. A professional with a lot of experience usually charge about $4,000 for Shopify and gives you a professional site.  In my experience, the person who does it himself on his first attempt has something that looks like a first attempt but as in this proposal, we will say these costs are zero.

Now the next problem is I need the margins, so I decided to make a range of margins to give you an idea and you can select where you fit on the scale. I used

10% mainly as I have clients that sell products at these prices.

30% which is often fairly standard 

50% which would be a gift item 

100% often people in professional services eg accountants, car mechanic etc consider this all profit

Now I went through the plans taking these items and looked at it 

Now there is GST to consider here on the account charges, Shopify is a bit confusing here on this but for this analysis, I will just add it in

I included only local Australian credit card rates, as its only a first-level approximation.

I picked the smallest plan, it cost about USD 29.  They also have a payment fee of 1.75% + 30 cents (as Shopify costs are listed in US dollars it is 30 cents USD) per transaction.

Today 1 United States Dollar equals 1.44 Australian Dollar. I will assume here no conversion costs and bank fees etc which is not true.

So a 30% item say with a $40 price which I think is a fair typical price for many of my clients, you would need to sell at least 4.8 items as that gives you revenue of about $190.13 then if you take off 

GST $17.28

Cost of goods $120.99

Payment fee of $3.66

Transaction fee $2.26

Shopify fees $45.94

You have zero the breakeven point. So you need to sell at least one item a week. This is not a big ask and we have clients that are doing much more than that. 

Now if we do the same analysis for a range of products margins assuming a unit sale of $40, and I have written a quick spreadsheet to automatically calculate these figures on a range of products, so you can see where you are on the scale. This is the result

 

If you want a copy of the spreadsheet let me know.

These are absolute minimums as it assumes no returns, no extra costs, none of your or your staffs time, no hidden costs that always appear, it also does not include their optional extras like your domain name, themes, joining their marketing campaigns that you would like to leverage to get customers, apps, Email Marketing software and training courses.

These figures are simply designed for you as a first-level approximation. 

If you want to know more, please let us know.

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eCommerce state of play

POS SOFTWARE

In our marketplace, probably the most important source of information on technological views is our yearly survey which we have been doing for over 30 years. This year we decided to add a question on eCommerce websites.

Although it is early days yet into the survey, it makes interesting reading.

Here are the results.

  

Of those that have an eCommerce site, one has or is in the process of removing it because he feels for the amount of work, it did not produce enough income. The rest seem very happy with their site. I know that many of our clients are generating significant amounts of trade through their websites. 

Although I cannot measure it, I do feel that it is a big increase in what was last year. I am also sure that the number that have a website doing ecommerce will soon be 100%. 

 

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Amazon prime day sale

POS SOFTWARE

 

It is Amazon Prime Day today in Australia, which is an annual shopping event on Amazon exclusive to Amazon members. It is their big push for sales today, so its a good time to review their Australian operations. Now if you want to see if Amazon affects you today is the day.

Worldwide, Amazon is a vast global online retailer with close to 232 billion U.S. dollars in 2018 net sales. So big that when Amazon decided to physically come to Australia, as Amazon already had a firm hold on the Australian market and with a physical presence in Australia, many Australian retailers were terrified. So many of them spent fortunes on developing a competitive online product. 

Well, Amazon came here, and the results seem to be mixed.

They have achieved a lot of growth in Australia. Current figures were at 1500% in 2018 but it is only about A$300 million which although is a lot of money is only a small fraction of the Australian online shopping which last year was estimated then at A$28.6 billion and brick and mortar stores do about ten times more than that so as a result few currently pay much attention to Amazon here. 

Many here, including myself want Amazon Australia to close down as it restricts us from buying much directly from Amazon US. However, I doubt that it will not close down even though Amazon now report that it is losing money in Australia soon as large companies like that are quite prepared to run at a loss for an extended time to make a viable product. So we are all going to have to learn to live with it.

Australian retailers must see that in the online space the competition is up, and the two immediate issues are they need to look at their e-commerce and their delivery options. This is where Amazon is powerful.

Where we are unique in our market space is that our point of sale software is a unified commerce solution which brings together both of these issues into one platform in your POS system. Pieced together systems, that our competitors offer cost more money and lead to problems as different systems both in use, training and the need to talk to each other. Plus there is no long-term as who knows what the individual and separate parts are going.

Our unified system gives you long-term as well as a day-to-day business solution. Click here for more details

PS If you want using our system you can sell through Amazon too.

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Shopify

POS SOFTWARE

Today in modern retail, a shop can make many extra sales by extending itself into the online space. This is because many modern customers want to choose when they want to buy?

This is where modern retail is heading!

To do that a shop needs a consistent customer experience between your online and brick-and-mortar shop. Customers have to interact with the shop in both places. They need to view online as part of your brick-and-mortar shop one company.

What is very popular today and what you need is Click and Collect

Where they buy online but pick it up in store? 

One popular solution is to combine the power of the point of sale software with Shopify this we can help.

What to know more click here.

 

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Thinking of a website, what is the name?

POS SOFTWARE

Selecting a website name

With our POS Software, you can have an integrated website. That is a big plus.  Then what you will have is a shop that can take orders all the time. 

Now what you need to consider is a name for your online shop. Here are some points I recommend for an Australia shop.

1) Do not try and save a few dollars by selecting .NET, .BZ, .COM, .ORG, etc extension. Australians want to see your website with a .COM.AU extension. 

2) The shorter and easier it is to remember the name, the better. If it complex, it will be harder to find. 

3) Make it relevant to online. Say for example your name was Simon White and you owned a stationery shop in the suburb of Moorabbin.  If your business name was "White Stationery shop", how is that going to help your business? On the other hand, a name like "Moorabbin Stationery shop", would alert Google and Bings search engines that you sell stationery in the Moorabbin area. It would come up in people's searches. 

4) Keep it as short and simple as possible. I suggest that you pick a name that is easy to spell and simple to pronounce. 

5) Do not be too clever in your name eg haveagr8tday is not good nor is komputer.

6) Check your proposed name that you do not get in trouble eg if your name is McDonald and you open up a hamburger shop, there may be problems.

Bonus tip

For most SMB, I suggest looking at your location and what you do to make your name.  See point (3).

There are my tips, 

 

 

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Margin on eCommerce

POS SOFTWARE

I attended yesterday, the New Retail ’19 which is Australia’s largest retail gathering. It brought together over 2500 retail leaders and learners for a three immersive day to explore omnichannel retail, fulfilment strategy and partnerships. Some of the stuff was an eye-opener, and it is going to take me a while to digest much of it. 

New Retail 19

The first point I wish to discuss is the margins required for e-commerce with some real data supplied at the show. I will explain it point by point to give you a professional appreciation of how these people think plus give you a feel of how it works and what sort of product you require.

What happened was a company decided to advertise a product using keywords in Google advertising. These are the advertisements that you see on the top, left and bottom of the screen when you look up something up in google. So they put in an advertisement into Google. This is the result

 

  Raw figures Calculated figures
Metric     
Impressions 2,165,947  
Clicks 161,756  
Click through rate (CTR)      7.47%
Cost per click (CPC) $0.35  
Marketing costs   $56,752.24 
Orders 4,303  
Revenue $295,322.70  
Effective revenue share (ERS)     19.17%

 

The raw figures are the ones that they put in, and the calculated values are the ones that they derived.

Impressions: This is the number of times that the advertisement was shown.  In this case, it was shown over 2 million times.

Clicks: Is the number of times that someone went to the advertisement. 

Click through rate (CTR): Is the percentage of how many times the advertisement is clicked compare to how many times it is shown. This is very important as if this is low then Google shows your advertisement less so even if you are prepared to pay Google will not show it. What Google says is that your advertisement is less relevant to their users' requests so they will give their users more relevant information. 

Cost per click (CPC): Is how much this person paid every time someone clicked the advertisement.  

Marketing costs: Is the amount that was paid for the advertisement.

Orders: This is the number of orders the company got 

Revenue: This is how much the orders added up to, I am not sure if this includes shipping costs and other products that were sold by them.

Effective revenue share (ERS): This is the line I wanted to get too. What this is, is the cost of the advertising to revenue. In this case, it was 19.17%. 

The point here is that this particular item, putting aside all other costs requires 19.17% of the revenue to pay for the Google advertisement, that does not include many other costs, e.g. website, storage, etc. You need to pick your product.

 

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click-and-collect

POS SOFTWARE

Click and collect

When a retailer opens an eCommerce site to supplement their store it is as if they are opening a new shop. This one is online and like starting any new shop it is challenging. Each shop has their own set of demands and requirements.  

What works well is to make your eCommerce site work together with your physical shop. So that your eCommerce site gets an initial start from your shop base and your eCommerce shop raises the shop sales too. So what you need to do is let your customers shop across the physical and online shop seamlessly.

The best approach is click-and-collect here is where the customer buys in your online shop and then later picks it up in your shop at a time that suits them. This eliminates the cost of delivery and the risk of missed deliveries. This often helps make your offer cheaper price than many of the other online shops as they have unlike you to charge for delivery. 

This both helps drive sales in your physical shop and keep delivery fees down and has the added advantage that a high percentage of shoppers coming to the shop for click and collect often ended up buying additional items which are why many shops are willing to act as click and collect points for other businesses too.

 As a rule, I suggest that you do the following for click and click.

  • Have the goods available and ready within 2 hours of their being purchased. 
  • Make a rule that the person picking the goods up has to have the receipt and valid ID
  • That you give the people a receipt through our point of sale system and have them sign your copy.

If you are interested in learning more please contact us here as we are doing a webinar on it.

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AMAZON back flips, it is reopening its American site to Aussie

POS SOFTWARE

 

Amazon Australia as I expected has not done well, the problem is not that our retailers are inefficient or not tech-savvy but our overpriced, undependable and slow delivery services which are holding us back in e-commerce plus our small comparative market. 

So now Amazon has done a backflip and will sell Aussies Amazon stocked and sold products from the US. I expect soon that the 3rd party sellers on Amazon will be released soon.

What happens with the costs of delivery to the Australian consumer from Amazon overseas sites will be interesting. Will they keep the Prime subs which allowed free postage over $49 from the US store?

For Australian retailers, the opening of the Amazon sites overseas is going to increase competition, and the two immediate issues are they need to look at their e-commerce and their delivery options.

Where we are unique in our market space is that our point of sale software is a unified commerce solution which brings together both of these issues into one platform in your POS system. Pieced together systems, that our competitors offer cost more money and lead to problems as different systems both in use, training and the need to talk to each other. Plus there is no long-term as who knows what the individual and separate parts are going.

Only our unified system gives you long-term as well as a day-to-day business solution. Click here for more details

 

 

 

 

 

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Why Integrate Your eCommerce Website and your Point of Sale Software?

POS SOFTWARE

eCommerce website


The major reason is it is more practical, quicker and easier to use, as you do not need to learn and operate two separate systems. 

It is almost certainly a cheaper solution too as you are only buying one system, not two.

With two separate systems, someone will need to move information from one system to another.

A typical cycle might be something like this. 

  • Stock information has to be taken from your POS software and put into your eCommerce website.
  • Orders from your eCommerce website have to be put into your POS software
  • Stock levels need to be checked on both systems.
  • Then the shipping information and tracking reports have to be put into the eCommerce website from the POS software.

During all of this mistakes happen.

What I have seen is

  • Shipping addresses entered wrong.
  • Stock levels are wrong so there is the problem of no stock due to overselling.
  • There is a lot of stock information required to be put in, so many items are not put on the eCommerce site as it is too much work.  

All these problems are avoided by integration.

If you do not integrate your eCommerce and POS software, it will cost you. 

Check our solution out.

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