Doing business online
- The benefits of doing business online are clear.
- Cost effective – may cut out the need for a shopfront or similar.
- Access to a global customer base.
- Efficiency – faster delivery of products and services.
- Environmentally friendly – less paper waste.
- Allows your business to be managed from anywhere in the world.
- Selling online
If you are committed to creating an online business, you can find out more about selling your products online here.
According to the NAB Retail Sales Index, Australian consumers spend billions of dollars each year ($12.3 billion in 2012) online.
How do I sell online?
If you have a website and you have products and services to sell, you should be selling them online.
There are four main things that make up an online store:
- A catalogue listing your products or services
This is the basic content of your website, the way in which you market your brand and what it is you are offering your customers.
For example, an online clothing store would have several catalogues of clothing divided into men’s and women’s clothing and possibly styles, seasons and sizes.
- A “shopping cart” where people can order your products or services and review their order.
- A catalogue listing your products or services
Many businesses doing a large volume of selling online have a merchant company that collects and collates their customers’ purchases.
PayPal is a basic merchant account that many small businesses use, but a larger volume of online selling will require a more sophisticated merchant company.
- A Secure Socket Layer (SSL)
SSL is a code on your web server that keeps online interactions private, even though they travel across the public internet.
When a web browser contacts your secured website, the SSL certificate enables an encrypted connection.
It has been compared to the process of sealing an envelope before sending it through the mail.
The processes of buying and selling online require SSL protocol to ensure the business and banking details of the buyer and seller are kept secure.
The web hosting company you choose to host your website will normally offer SSL services as part of its hosting package.
- A Payment Process or “Checkout”
The merchant company you choose to set up your shopping cart will have what is known as a “payment gateway” which allows credit card and payment processing so your customers can pay for the products and services they order.
Credit card processing services usually attract a monthly fee; sometimes a start-up fee, and the processing itself will have fees that are a small percentage of each sale.
Prices and shipping
Be upfront on your website about the full cost of the products and services you are selling and how much shipping or postage could be added.
- You take into account the entire cost of online distribution before setting your price, including; payment gateway fees, credit card transaction costs, taxes and insurances).
- Prices are easy to find on the website.
- Shipping and postage charges are visible and applicable to the location of your customer.
- Estimated delivery dates are available.
- Successful online transactions are confirmed with the customer via email.
- Contact details are clearly visible in case your customers have any queries.
Creating and managing a website to support foreign trade is more complex than an Australian-based e-commerce platform. Further information about online exporting can be found through Austrade
When preparing to sell your products online to international markets, first consider:
- Language: English may not be the first language of your target market. Do you need to invest in translated web content to market to this audience?
- Exchange rates and currency: If you list your prices in Australian dollars you will need to have a currency converter on your website. You will also need to ensure your payment gateway can accept and trade in foreign currency.
- Metric system: You may also need to have a metric converter for your products if they include sizings to ensure your foreign customers can convert them into a system of measurement they understand best.
- Time zones: Although your website can be “open for business” 24 hours a day, 7 days a week, if you are offering customer service or contact options you will need to consider the time zones of your overseas foreign customers. You could add a world clock to your website to make it easier for your customers to know the best times to get in touch with you.
Taxation and Customs
Tax rules for e-commerce are constantly changing and evolving.
It is recommended you take advice from a Certified Practising Accountant for all global and national buying and selling undertaken by your business.
Remember to monitor taxation developments so you can plan ahead and make the necessary changes to your systems and be aware of the tax implications of the countries in which you are trading.
There will also be customs duties to contend with, and these are usually collected by the purchaser, so they will need to be factored into your costs.
For more information on the types of documentation required to adhere to taxation and customs laws when you are trading internationally online, visit the Australian Institute of Export.
Legals and regulations
Legislation surrounding e-commerce transactions is evolving and it is recommended that you take advice from a qualified legal professional to assist you with meeting the complex regulations of cross-border transactions.
As a start, you can take some simple steps to ensure you are complying with domestic and international consumer protection laws.
- Ensure your website is compliant with the best practice model of electronic commerce outlined by the Australian Treasury Department.
- Inform yourself about global e-commerce laws.
- Educate yourself on e-commerce developments in the country of your target market e.g. Europe.