Want to start an online business? Then, you're at the right place. This is the most actionable & detailed guide on how to start an online store in South Africa.
Starting a online business isn't easy. You got to set up a lot of things - address, payment, billing, shipment, etc. But, you aren't alone. Almost every wannabe eCommerce owner struggles with these.
What's the solution then? This step-by-step guide. Follow these steps & you'll see how easy it is to set up an online store. You can literally get everything done in an hour. Yes!
Are you ready to start an online business of your dream? Let's go!
Step #1. Prepare An Online Business Plan
An online business plan is all about how you'll position, strategize & market your online store.
Remember, running an online store is quite different from running an offline or physical store. Unlike in offline, an online store is not easily discoverable by your audience. So, even if you're already running a successful offline store, you still need an online business plan.
Picking a Niche
At the outset, you need to decide on what you want to sell through your online store. Pick a niche. Do not try to dump products from every vertical. Why? Because you can't compete with big eCommerce stores like Amazon. Can you? So, let's be realistic & pick a niche that you can serve well. That's the only way you've a chance of success against Amazon. In fact, all successful small eCommerce stores have one thing in common. That's their niche. Later in this post, I'll sharing some success stories of these small eCommerce stores who're earning six figures by niching down their business.
So, how do you pick a niche?
Example: Let's say you're into or are willing to get into clothing business. Now, how can you pick a niche in the clothing vertical? Can you pick women clothing? That's a niche. Let's niche it down further & deal only with women clothing for 40+? That's a sub-niche.
Example: Let's say you're into or are willing to get into footwear business. Now, how can you pick a niche in the footwear vertical? Can you pick men footwear? That's a niche. Let's niche it down further & deal only with men footwear for just one size - 5 feet? That's a sub-niche.
Example: Let's say you decide to sell pizzas online. Now, instead of dealing with pizzas of all varieties & competing against Domino's, why not only sell Veg Pizzas? Yes, there's any audience for all kind of niches. I'm sure, a vegetarian would love to order Pizza from your store than from Domino's.
The idea is simple. Niche down your vertical until unless you find a niche that you can dominate against biggies like Amazon. Makes sense?
Now, that you've picked a niche or sub-niche for your store, time to differentiate your offering. What do you want your online store to be known for? Zappos is known for its customer service. Amazon is known for its fast delivery. Domino's is known for its 30-minute delivery promise. How about yours?
This differentiation factor will help you build word-of-mouth buzz. So, long term success, you need a differentiating factor that will trigger a positive word-of-mouth campaign.
Example: If you're dealing with men grooming products, you can differentiate your store with guarantees like "no chemicals, all natural ingredients" or "no side effects".
Example: If you're dealing with grocery products, you can differentiate your store with promises like "delivered within 15 minutes" or "100% fresh" or "fresh & fast".
Remember, differentiation doesn't just mean coining a tag line. You need to justify it with your product & service.
Now is the time to decide on your target market or audience. You cannot target everybody, right? Therefore, you need a profile of audience you would be targeting. So, who's your target audience & what're their common characteristics?
Ideally, you should look at the following pointers to define your target audience:
A well defined target audience will help to position your products or offerings accordingly. And, not to forget, the importance of defining your target audience for online ads. The successful of an online campaign depends highly on how well you've defined your audience. If there's a perfect match between your product/service/message & your target audience, you'll most likely see higher sales or conversions.
Example: Let's say you deal with innovative beard trimmers. Your target audience profile may be:
- Age = 16 to 25
- Gender = Men
- Location: Metro cities of South Africa
- Preferences/Liking: Innovation
- Passion: Trying new grooming products
- Hobby: Reading men's fashion magazines
How're you planning to market your online store? Yes, marketing is an integral part of your online business plan. Nothing matters until & unless you make sales. And, you cannot make sales without marketing (initially at least).
In the later part of this post (Step #14), I'll discuss the various ways to market your online store in South Africa.
Inventory & Delivery Model
How do you plan to operate? Broadly speaking, there're two main factors in running an online store:
- Sourcing, storing & managing your inventory (products)
- Delivering & managing orders
So, how do you plan to source your products? From your nearest wholesale market? Or, using an online wholesale marketplace like Alibaba? Or, using an online supplier directory? Each option has its own merits & demerits. You need to study those & decide on what your sourcing model is going to be.
How are planning to store your inventory? In your own warehouse? In your garage? Or, in a rented warehouse or 3rd party fulfilment centre?
How are planning to manage your inventory? Do you plan to use an eCommerce order management portal like SellBrite. Or, you're fine with processing your orders manually?
You can also try out an innovative model like drop shipping where you need not keep actual stock of goods. As & when you get orders, you've to simply direct those orders to suppliers & let them do the rest like packaging, labelling, dispatch, return, etc. In fact, bigger eCommerce players like Amazon do just that. Yes, of course, drop shipping comes with its own set of challenges & therefore isn't recommended for everyone.
Now, you also need to decide how you're planning to deliver your orders? Do you plan to hire delivery persons? Or, are you looking to outsource the delivery part to 3rd party local delivery companies like FedEx.
In your online business plan, you also need to decide on how you're looking to inject funds into your online store. Yes, you're right, the beauty of an online business is that it can be started with little money. You need not spend thousands of South African Rand.
Still, having some leverage in the form of money is great. You can get on to a flying start by spending money on ads. You could also get volume discount from suppliers if you buy in bulk.
Therefore, it's advisable to get started with some money. So, how do you plan to raise funds? From your family, friends or relatives? Or, from your savings? Or do you plan to raise bank loan? Whatever the source, you need some fund.
Any business, including online, will only be successful if the unit economics is positive. In case you're wondering, Unit Economics is nothing but net profit/loss at unit (product) level. It's calculated by deducting sales per unit by cost of goods sold per unit & other indirect costs per unit. For strong profitable growth, your unit economics should always be positive.
Example: If you're selling an online product at R 100 (South African Rand) & the cost of goods sold per unit of that product is R 70 (product purchase cost + shipping) per unit & the indirect cost (customer acquisition + operational/warehouse) is R 10 per unit then the unit economics turns out to be positive - R 20 per unit (R 100 - [R 70 + R 10])
To make things easier, here're some easy formulas to calculate unit economics:
- Cost of goods sold = Direct cost (purchase, shipping etc) incurred to bring goods to your location
- Gross profit = Sales - cost of goods sold
- Net profit (unit economics) = Gross profit per unit - indirect cost (marketing, salary, warehouse rent) per unit
The marketing cost deserves a special mention. I've found most eCommerce companies spending way too much on acquiring customers. The results? Their unit economics turns negative thereby eroding their cash & capital. A negative unit economics makes sense if your business is funded by angel investors or VCs. But, for vast majority of small businesses, a positive unit economics is a must.
So, in your online business plan, include your planned unit economics. What'll the gross profit margin you would generate? What is your target customer acquisition cost? Will you be recovering shipping cost from your customers? If yes, then how much? What'll be a healthy net profit margin?
If you want to make it big in eCommerce, you got to scale up fast. That means you need to grow profitably, acquire new customers frequently & increase your sales ticket size per customer.
So, note down your scaling up strategy is your online business plan. How're you planning to grow fast? How're you going to go viral? How'll you be hiring people to support your growth? What're the geographical locations you would be targeting for growth?
Enough of planning, now is the time for some real action.
Step #2. Get A Name & Logo
To start with, your online business needs a name. That's how your customers will know & remember your online store. Isn't it?
Ideally, a business name should be:
- Easy to remember
- Meaningful or relevant
Though not compulsory, it would be nice if you've a logo for your online store. A logo is nothing but a small visual representation of your brand or online store. You can get a logo using services like Looka .
Your logo should be simple yet powerful. It should represent what your online store stands for.
I would also advise you to check the official trademark site of South Africa (www.cipc.co.za) to confirm if your proposed business name isn't already been trademarked. Yes, its always preferable to stay on the right side of the law.
If your online business starts doing well, you should go forward & trademark your business name (optional though).
Step #3. Buy A Domain Name
A domain name is a virtual address where your online store will be located. Example: youronlinestore.com OR youronlinestore.co.za
Ideally, your domain name should be same as your business name. Example: If your business name is "Red Clothing", then your domain name should be redclothing.com or redclothing.co.za. Why? Because if your domain name would be different from your business name, your customers(& search engines like Google) will find it difficult to discover your online store.
A good domain name also has the following characteristics:
- Available (isn't already bought by someone else)
- Short & easy-to-remember
- Avoids special characters like - , $ # ! etc
- Having a .com extension (easier to remember)
- SEO friendly
You can buy a domain name from a domain registrar like NameCheap (I've been using them to buy my domain names since 2016. They're awesome). Don't panic. Buying a domain name is as easy as buying products on Amazon. Let me show you how:
1) Search for your preferred domain name
2) Add the domain name to your cart & proceed to checkout
Congrats! You just bought a domain name.
Step #4. Create A Shopify Account
Now that you've your domain name ready, time to build an online store on the top of it. Don't fret. Building an online store is not as difficult as it seems.
Shopify is a revolutionary drag-and-drop tool that helps you build a full-fledged online store within a matter of minutes. All without coding or programming.
Used by more than a million merchants worldwide, Shopify has indeed changed the way online stores are built. No more the need to spend hundreds of thousands of South African Rand to build your store. Nor do you need to hire a programmer or developer.
Following are the key benefits of using Shopify:
- Unlimited visitors
- Unlimited products
- Drag-and-drop builder
- Connect your own domain name (youronlinestore.com)
- Customize the theme (look & feel of your store)
- Enterprise-grade security & uptime
- Free SSL certificate (https)
- Fully responsive (Store looks good on both desktop & mobile)
- Integrated with payment gateways like PayPal
- Integrated with couriers like FedEx
- Custom shipping & ordering rules
- Multiple selling channels like Facebook & Amazon supported
- Mobile app to manage your orders
- 24 * 7 live chat & phone support
- Thousands of 3rd party apps to add extra features to your store
So, get started by creating a Shopify account. Yes, Shopify does come with a 14-days FREE trial. You can use this trial period to set up your store & see if Shopify meets your needs.
Step #5. Connect Your Domain Name
When you create your Shopify account, you'll automatically be awarded with a FREE Shopify domain like youronlinestorename.myshopify.com. You can continue with this domain name or connect your own domain name you bought at Step #3.
For branding reasons, it's always recommended to use your own domain name.
After connecting your domain name to your Shopify account, your online store will be live on the same (if someone visits youronlinestore.com, she'll be greeted with your online store).
Here's how you can connect your domain name with your Shopify account:
Thereafter, you'll be guided by Shopify on how to point your domain name to your Shopify account.
To make things easy, here the exact instructions to connect your NameCheap domain name with Shopify.
In case of an issue, you can always chat with the Shopify support team. They're available 24*7. Yes, even on weekends.
Update: Now, you can also buy a domain name directly on Shopify. If you decide to do so, you can safely skip this step (because Shopify will auto-connect your domain name with its server).
Step #6. Install & Customize A Theme
How will your online store look? That depends on your theme. On Shopify, a theme gives the design, look & feel to a store. Think of it like a skin of your online store.
Shopify already comes with a default FREE theme. But, for branding purpose, it's highly recommended that you buy & install a premium theme. You can also customize your premium theme to change the colours, fonts, menus or other designs of your store.
To install a premium theme, head over to the Shopify dashboard & click on "Customize theme".
Now, upload the downloaded theme to Online Store > Themes section.
That's it! You now have an online store with a premium look.
You can customize the theme by going to Online Store > Themes section
Step #7. Source Products (Optional)
If you already have a physical store & are willing to sell the same products on your online store as well, you can safely skip this step.
Before sourcing, you need to find a reliable supplier. A supplier is reliable if she has the capacity to supply adequate quantity of products within a short time frame & gives utmost importance to product quality.
The crux is: If you deal with the right quantity & quality of products, your customers will be delighted. And, that's what matters for your online store's long term success. Isn't it?
So, how do you find a reliable supplier for your online store? Simply use one of the following methods:
You can find South African suppliers or factories using a suppliers' directory like WorldWideBrands. It's 20-years old directory that lists vetted & trustworthy suppliers from all major parts of the World. Yes, all suppliers listed on WorldWideBrands are audited & therefore are reliable.
So, all you need to do is create a WorldWideBrand account, search using your product keyword, shortlist suppliers & send them messages. Yes, you can chat with the suppliers right from WorldWideBrand's dashboard. I would recommend filtering suppliers based on location (South Africa).
Nearest Wholesale Markets
Want any easier & faster way to find suppliers? Then, visit wholesale markets in South Africa.
In South Africa, following are some of the popular wholesale markets:
- Multiflora flower market, Johannesburg
- China city wholesale center, Johannesburg
- Joburg market, Johannesburg
- Market big save wholesalers, Pretoria West
- Karas wholesale suppliers, Cape Town
- Fresh produce market, Durban
The biggest advantage of visiting wholesale markets is that you can directly talk to suppliers face-to-face. You can also check the product samples & quality yourself.
Make sure you finalize the following terms with the supplier:
- Payment terms
- Mode of delivery
- Shipping charges
- Pre-delivery quality check
- Return & refund
- Minimum order quantity
- Volume discount
- Dispatch turn around time
I would also advice you to sign a contract with the supplier. A written contract will save you & the supplier from future disputes.
Online B2B Marketplaces
If you're looking to import products from China, then you can use online B2B portals like Alibaba. It's easy to use Alibaba. All you've to do is search for products, contact with relevant suppliers & discuss terms.
On Alibaba, you need to take care of the following best practices:
- Only deal with gold & verified suppliers (these're the suppliers vetted by Alibaba)
- Order & pay via Alibaba portal only
- Request for product sample before committing on a big order
- Make sure you've necessary import permit or licence (www.gov.za)
If you aren't careful on platforms like Alibaba, you can get scammed.
If you're looking to dropship & not keep actual stock of goods yourself, you can find dropship suppliers on platforms like SaleHoo. It's a dropship directory that claims to have listed 8,000+ pre-vetted suppliers from across the globe.
So, get started by creating a SaleHoo account, search for suppliers using your product keyword, shortlist & chat with suppliers & close the deal.
Step #8. Feed Product Images & Description
Time now to feed product images & description to your Shopify store. Your product images & descriptions are going to the biggest factors affecting your store's conversion rates. If they aren't enticing enough, your customers simply won't buy your products no matter how good they are. So, take your time & make sure your product images & descriptions stand out.
Following are the characteristics of good product images:
- White background
- High resolution
- Captured from different angles
- Minimum editing
Following are the characteristics of good product descriptions:
- Enticing & persuasive
- Preference to benefits over features
- Revealing all technical details
- Funny or non-boring
- Structured or formatted properly with headings & sub-headings
Here's how you can add product images & descriptions on Shopify:
Step #9. Set Up Billing, Tax & Payment Gateway
Before collecting payments from customers, you need to set up your billing, tax & payment gateway details in Shopify.
To set up billing information on Shopify, follow these instructions:
To set up tax information on Shopify, follow these instructions:
Note: In South Africa, you don't need to register for VAT or collect VAT from customers until unless your sales cross R 1 million a year.
You also need to set up a payment gateway in Shopify. A payment gateway is nothing but an account with a 3rd party payment processor like PayPal. Using your PayPal account you can collect online payments from your customers. On Shopify, you can connect your PayPal account easily.
To set up PayPal on Shopify, follow these instructions:
If you don't already have a PayPal account, you can click here to create one. It only takes a few minutes.
Under payment settings, you can also set up a manual payment method like "Cash on delivery".
Step #10. Tie Up With An eCommerce Courier Company
To deliver your products across South Africa, you need to tie up with an eCommerce courier company like FedEx. To create a FedEx account, click here.
After creating a FedEx account, you can link it to your Shopify account. Thereafter, whenever you need to create a pickup request, the same can be done directly from the Shopify itself.
To set up FedEx on Shopify, follow these instructions:
That's it! You can now initiate FedEx pickup requests straight from Shopify.
Step #11. Create Your Shipping & Ordering Rules
Next up, you need to configure shipping & ordering rules in your Shopify account. Meaning you need to decide on what & how'll you charge your customers for shipping OR other ordering limitations like minimum order quanity.
Here's how to set up shipping rules in Shopify:
You can also set various tiers of Shipping with different rates like "Standard", "Premium" etc.
Step #12. Create Pages Like About Us, Contact Us, Refund Policy, etc.
Your online store is not just about your products. You also need to create certain important pages like About Us, Contact Us, Return & Refund Policy, etc.
These pages are required for building trust & confidence in the minds of your customers. Before ordering, your customers would like to know more about you, where you're based out, how about your product quality, refund process etc.
Pro tip: Be transparent & reveal the following information in these pages:
- Legal name of your business
- Details about the founder(s) or team
- The founding story
- Physical address
- Phone number
- Email address
- The complete return & refund process
- Link to your social profiles (Facebook, Twitter, Instagram, etc)
To create these pages on Shopify, follow these instructions:
Step #13. Install Custom Apps (Optional)
Do you want your online store to have some specific features that aren't provided by Shopify (by default)? That's possible by installing custom Shopify apps.
Following are the list of some of the most popular Shopify apps:
- Free Shipping Bar - Installs a FREE shipping announcement bar at the top of your online store
- Loox Photo Reviews - Allows your customers to add photo reviews to your products
- Privy Pop Ups - Triggers pop ups when the customer is about to leave your store without buying
- Shopify Email - Send marketing emails to your customers directly from Shopify dashboard
- Shopify Chat - Helps you live chat with your customers
- Oberlo - Helps you dropship AliExpress products
- AfterShip - Sends tracking & order notifications to your customers
To install a Shopify app, follow these instructions:
That's it! Your online store just got more powerful.
Shopify apps are one of the reasons of Shopify's growing popularity. No other eCommerce builder comes with such strong community of 3rd party apps. Shopify is way ahead of its competitors when it comes to community support & engagement.
Step #14. Test, Launch & Market Your Store
Before launching your online store, you need to test the following:
- End to end ordering process
- Payment process
- Front end design & navigation
- Packaging & labelling
No matter how great your products & online store are, people won't discover them until unless you market. Nothing works until unless you start making real sales. Isn't it? Sales is what makes or breaks a business. Be it offline or online.
Following are some of the ways you can market your online store:
Flyers are like advertisements on paper. Using Flyers, you can communicate to people about your new online store. The best part? Printing Flyers is affordable. And, so is distributing flyers.
So, get started by designing a flyer with a tool like Canva. Print those flyers & start distributing them in your locality. It would even be better if you can add some kind of "launch discount" to entice people to visit your online store & buy.
Facebook ad is a great way to reach out to thousands of people at a low cost. Yes, you can advertise on Facebook with as low as R 100 a day!
To get started all what you need to do is create a Facebook page & a Facebook business account. Thereafter, you should add your credit card & create a new ad by adding product images & description. Your ad should go live within an hour or two.
Google AdWords is ads on the most popular search engine - Google. While ads on Facebook are interest-based, ads on Google are keywords-based. That means your ad will show when someone searches for using your targeted keyword.
Example: If someone searches "online grocery store in Durban", your online store will show up at the top of the search results. Makes sense?
How about installing ad banners across important junctions like hospitals, parks, restaurants, bus stops, etc. Yes, they're very effective. The downside? They'll cost you a lot of money.
To get started, you should contact a local advertising agency & inquire about the available ad spots. Simple!
Shoppers love discounts & therefore brands across the world use discounts to bait customers. Discounting is an evergreen strategy that always works.
The idea is simple. Print discount coupons & distribute the same to shoppers coming out & going in to a shopping mall. If your budget permits, you can also install temporary canopy inside of the mall.
Affiliate marketing is a 100% ROI-positive marketing strategy where affiliate marketers refer customers to you & in return get a small cut or commission on the sales. Yes, its a WIN-WIN relationship.
Brands across the world use affiliate marketing to grow their customer base. The best part? They don't have anything to lose. As a brand, you pay affiliate marketers only & when a sale is made.
To get started, create a brand account on popular affiliate marketing platforms like:
- Rakuten Marketing
- Share A Sale
- Commission Junction
These affiliate marketing platforms connect brands with affiliate marketers.
Forums like Quora & Reddit are great platforms to market your new online store. All you need to do is participate & answer shopping related queries. In your answers, you can strategically link back to your website. If your answers become viral or are upvoted a lot, you can expect huge traffic on your online store.
But be careful. Do not spam forums. They're communities & therefore your first objective should be to help people with your valuable answers. The better your answer, the more people would visit your store.
YouTube is immensely popular nowadays. So why not hop over it & promote your store.
To get started, prepare product unboxing videos. Do that for all of your products. Make sure you include your website link in the description box. If your videos become viral, they'll send you thousands of qualified visitors to your store. Imagine what impact will that have to your sales!
I know. Starting an online business sounds overwhelming. But, with the aforesaid 14 steps, you can get everything done flawlessly. Alternatively, you can hire an eCommerce consultant to help you get things up & running.
Get started with the first step & you'll see how easy it is to follow through the next steps. You're just 14 steps away from building an eCommerce store you always dreamed of.
Start. Hustle. Succeed.