Setting up online retail 101

Looking for ways to succeed in the online retail space? Here are four ways you can reach out to customers

Shweta Taneja
Updated16 Oct 2013
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According to a recent report by the Internet and Mobile Association of India, the e-commerce market in the country grew to $9.5 billion (around 57,950 crore) in 2012 and is expected to reach $12.6 billion by this year’s end—a 34% growth since 2009. The eBay India Census 2012 states it is selling one mobile accessory per minute and a mobile handset every 2 minutes.

If you are among those who feel that now maybe a good time to explore selling on the Internet, you should do your homework right first. You need to understand how to put up an e-store, what to expect and what kind of consumer base to go after. We looked at the various options available to help you take the first step:

Facebook Pages

For: Designers, people with quirky and unique products.

If you’re in the experimental stage and not looking for big numbers, this is the cheapest way to build an audience.

Set-up involved: You need a computer connected to the Internet and some time to enter the information on the page. Facebook Pages only display content, so you will need to ask people to send money using online account transfers. You will also need to tie up with a payment gateway; CCAvenue offers the most ways to pay, such as credit, debit, and bank transfer, and charges a 1,200 annual charge, and a 5.5% fee on each credit card transaction. You can also check PayZippy, which is cheaper but has fewer options.

Pros: Low initial costs let you experiment, and you can build a dedicated customer base connected to you through personal interaction.

Cons: You have to set up everything yourself and then build up the Facebook Page and garner likes. It is your personality that will push the page’s popularity, which is not something everyone can manage. It is also a time-consuming process, which isn’t very efficient if you’re getting more than 10 orders a day.

Niche online marketplaces

For: Boutique sellers who want to reach a wider audience.

If you have a unique brand that will not fit well with an Amazon or Flipkart, then look for sites like LimeRoad, which sell niche products like handicrafts, art, handmade clothes, and set up a store.

Set-up involved: Besides Internet access, you need photographs of your products. Specialized websites like, and handle all sales, including payment, and charge you a commission (15-20% for each order), but you need to ship the item to the customer.

Pros: These sites handle every transactional aspect; if you’re already handling deliveries and orders then this just adds revenue without taking your time and effort. The sites also market your products on social media like Facebook and Twitter.

Cons: You cannot expand into products beyond what they sell. You are also limited to a certain kind of customers so it’s best to combine this approach with other ways of selling online.

Broad online marketplaces

For: A retailer or manufacturer.

If you have a factory or workshop and are looking to add value to your offline sales chain, then you skip the middlemen and sell directly via eBay, Flipkart or Amazon.

Set-up involved: In India, there are a lot of online sellers, but for this category we are looking at the three biggest ones. Before you sign up with them, confirm their method of sale and how they proceed with paying you back. Look for charges that you might not have included in your product’s price.

Flipkart Marketplace ( lets you open a store in Flipkart and provide information for your products. They charge a category-specific commission, fixed amount for each closed deal and shipping fee, and pick up an order from your warehouse to deliver. Amazon ( charges 499 per month, a fixed fee of 10 on the units sold and a variable referral fee (5-15% per item). Amazon takes care of listing and payment while you deliver the items to a buyer. The retailer eBay ( charges 499 per month for opening an e-shop. There are also other charges, which vary for each category. The marketplaces have their own fulfilment systems if you don’t want to tie-up with a courier company, which is one less step you need to take.

Pros: The set-up is fixed and you get all the services of the website with a good customer support, a positive brand association, a good way to display your products and a ready consumer. It gets your stock moving without much effort, which means more revenue.

Cons: The big marketplaces are crowded with multiple vendors selling the same products, so you might not get much traction.

Stand-alone Web store

For: Brands that are known to people.

Your business already has been garnering online sales through shop-in-shops on e-commerce websites. Now you are looking for more online space where your dedicated customer can visit and buy products. You also want to go to the next level with loyal customers and integrate your marketing efforts towards your own Web space.

Set-up involved: Everything that you need to do to set up a retail shop in a city is what you will need to do here as well. You need to think of space (the URL), how big a showroom you want (hosting charges), and what you want to display (product information and photographs). Then you need to think of the ways you want shipment and payment to be handled. You can choose to do these either on your own or hire a technical team to handle the website. Or, you can buy a package, including experts who offer a complete online store with integrated payment and even logistics. There are many options in India to choose from. The basic package by ( 1,000 per month) includes display and payment gateway but no social network integration and website support. Those by ( 899 per month) and ( 818 per month) include 150-200 products, no logistics or website support. and (plans start from 1,000 per month) also charge on transaction, so we suggest you read between the lines of a package. In international options, there is whose basic package ( 2,650 per month) includes a website, store layout, 500-product listings, payment gateway and courier through Aramex at extra cost., which has recently launched its online store option for Indian customers, has a deluxe plan for 100 products ( 949 per month), which includes setting up a website, store design, payment as well as integration with The giant has a lot of templates to choose from to make your shop unique.

Pros: All of your store worries are taken care of. Other than the photographs of the products, every thing is handled by these experts. You can sit back and see how your online store is behaving, problem solve as well as read their analytics to understand which products are doing better than others and why. This way of opening an online store is especially useful if you are not comfortable handling technical things and do not want an inflated IT cost to hassle your small business.

Cons: It is an investment in terms of the monthly money that you are going to give to someone. So you need to be sure that you can drive traffic to your website. Social marketing like emailing, a Facebook or Twitter account to interact and send traffic to your website will help.

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