TAKING THE LEAP TO etail Six Tips for a Successful and Easy Transition to Online Sales

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1 TAKING THE LEAP TO etail Six Tips for a Successful and Easy Transition to Online Sales A Webgility White Paper

2 THE CASE FOR E-COMMERCE In the Democratization of e-commerce Report, Bigcommerce lays out the exponential growth of e-commerce over the last 10 years: It took from 1994 to 2012 for online retailers to sell a combined $1 trillion. But in 2105, those sales marks are expected to reach $2 trillion. Few other industries have ever seen this type of growth resulting in such core, fundamental changes in doing business. Today, even if a business doesn t have a website, it s online. When consumers need something, they search for it online in the same way customers used to search in local phone books, but with far more frequency. And these people (70% of millennials and 66% of the 50+ population) are actively reviewing the products and services they purchase letting others know how retailers match up with their competitors. Research shows that increasing brand visibility online actually drives more in-store traffic. According to Google, in addition to a digital presence driving more e-commerce sales, an online presence gets more customers physically into local stores. The results of Google s 2014 study on local search behavior showed that 50% of customers will visit a local shop within 24 hours of conducting an online search for something specific. The bridge between digital traffic and foot traffic has become a competitive necessity in retail, says Google. The retailers who embrace these new realities who connect with their customers seamlessly, no matter where those shoppers happen to be or how they want to buy will be the retailers who win. To set up your business to win in both the real and virtual worlds, make these small managerial and operational shifts before you thrust your inventories online. These tweaks can make a world of difference in the success of your business and new online sales and even help preserve your personal sanity. 1. Find the Sweet Spots Fortunately, there are now many resources for those turning to digital sales for the first time. Every business is different, so it s important to find tools that suit its specific needs which includes putting the owner at ease. For many, listing products on Amazon or ebay is user-friendly and provides crucial exposure to high web traffic; and companies like Magento and Bigcommerce help small business owners create beautiful, working online stores without the need to hire full-time developers and web designers. Similarly, QuickBooks POS also helps many store owners transition into online expansion and it makes selling across multiple sales channels simpler. By starting with a familiar platform and trusted accounting software, it s easier to create efficient management processes so there are fewer pitfalls during online expansion. White Paper Taking the Leap to etail 1

3 2. Mind Meld to Multi-Channel The biggest struggle most retail store owners face when going online is in making the changes required in management processes, says Allegra Mitchell, Webgility s Customer Success Manager. This is unfortunate, because the changes are fairly simple when addressed early on. The realization that setting up an online store especially in the first stages when you re getting everything going can be a full-time job is what can make or break a successful e-commerce launch, says Mitchell. Rather than treating the new e-commerce store as a side task, most successful business owners find it more effective to actually shift their mindset on how their company operates. Thinking of a retail business as a multi-channel sales outlet is far more efficient than the outdated model of a brick and mortar business with online shopping available on the side. This multi-channel shift in thinking allows a business owner to create a management system that s more holistic in its approach to point of sale (POS), inventory tracking, and shipping applications. Integrating all the moving parts involved in e-commerce management makes a night-and-day difference in overcoming technical set-up issues and dealing with third party integrations that are somewhat out of your control, advises Allegra. The biggest struggle most retail store owners face when going online is in making the changes required. 3. Play the Matching Game Accurately labelling products and their different attributes should not be underestimated. In fact, it should be one of the first things to address before going online. For example, a difference as simple as writing blck or black for a shirt attribute can have major implications your system would read them as two different items with two different attributes, and could lead to accidentally over-selling inventory. It is imperative that product names, SKUs, and attributes match each other perfectly in all sales channels. Once a brick and mortar store s inventory naming is consistent within its POS, it can be matched with its online channels and their naming conventions. Amazon and Bigcommerce each have their own specific rules for naming products, and so does almost every other online sales channel. It might seem like a headache to deal with, but creating a product naming system to match up and map out all of the naming conventions from your different sales channels within the POS system will keep inventory data up-to-date and eliminate risk. White Paper Taking the Leap to etail 2

4 4. Choose a Jumping Point Once inventory is organized for mapping across different channels, a business owner can take the plunge of making products in an online sales channel live with confidence the inventory won t over-sell. One of the quickest ways to get started is by listing some the company s top-selling products on a platform like ebay, Amazon, or Etsy. This does not require the back-end work of setting up a full-blown store, shopping cart, and payment processor (like you would with Bigcommerce or Magento), and a business owner can start learning and experimenting with advertising and other ways to make online sales channel a success. Also, these third-party selling platforms allow businesses to reach a large, ready-made audience full of customers who are ready to shop. A lot of first-timers in e-commerce like to migrate to Amazon first because it doesn t require a bunch of website design and development, says Mitchell. It s relatively easy to list products and it carries a more professional demeanor than some other third-party selling platforms. And if you have a basic website, you can put a menu link directly to your Amazon store so customers who come to your site wanting to shop for your products won t leave without a purchase. However, since third-party platforms don t offer a lot of room for company branding, creating an online store on the company s own domain using a setup like Magento or Bigcommerce is one of the most user-friendly ways to get products listed on the internet looking good and ready to buy. 5. Sync Your Sales Data Because QuickBooks POS is a database in and of itself, the way its integration is set up with third-party online sales channels is absolutely critical for the data to link up accurately especially with inventory. Syncing an online store s data with QuickBooks POS database will deduct each ordered item from your inventory totals, record the income generated from the sale, calculate and record taxes specifically for online versus in-store sales, and record shipping charges. In addition to updated bookkeeping, an up-to-date QuickBooks POS database means business owners can analyze which channels sell more of certain products and figure out how to improve their business through deductive reasoning. When it comes to syncing and importing sales data from an online store, there are two options: doing the work manually, or setting up a software to automatically download, process, and record orders. Of course manual data entry costs less, but it s extremely time-consuming and leaves a greater margin for error. One of the easiest ways to integrate sales data with accounting is by pairing QuickBooks POS with a backend software like ecc Desktop by Webgility. This user-friendly software will automatically download and update orders and inventory without the need to input data or manage it. White Paper Taking the Leap to etail 3

5 Without this integration, someone who has a store on Amazon either has to check Amazon Seller Central for new orders or wait to receive an when something is sold. Once they have the data of the sale, they have to manually print out packing slips, fulfill the order, prep it for shipping, and then record the sale in QuickBooks for a record of it and an updated inventory. That s a lot of work! With ecc Desktop by Webgility, the only work required is to prep the order for shipping in fact, the shipping labels and packing slips even print automatically. Orders are set to regularly download from online channels into ecc Desktop, where the data from the sales receipt on sales income, inventory item deductions, shipping fees, and addresses get immediately distributed into the appropriate places within QuickBooks POS and integrated shipping apps (like UPS, FedEx, or Stamps.com). 6. Make Friends with QuickBooks Beyond inventory preparations and basic order syncing, there s a handful of things to do within QuickBooks POS to make business operations and financial reporting seamless. Embrace Accrual-Based Accounting: Typically, small retail businesses who do around $250,000 per year or more in sales prefer to move from a cash-based accounting system (money in versus money out) to an accrual-based accounting system. Cash-based accounting can be done without specialized software, but accrual-based accounting can get messy if you don t have a system keeping track of it for you. It lets business owners record the money from bulk purchase into an inventory asset account, and only records it as money leaving the business when it can be matched with a sale. This can be particularly helpful when inventory is ordered in bulk to keep up with booming online orders. Any version of QuickBooks Financial (Pro, Premier, Enterprise) can do this, says Chris Robinson, QuickBooks ProAdvisor for Webgility. Users can sync their data from QuickBooks POS to their QuickBooks Financial account to get instant data access to the big financial picture of their business. Ultimately this allows business owners to optimize top sellers and special offers to further grow in-store and online sales. Use the Group Item for Bundles: A popular way to boost sales online is by offering bundle sales the most common of which is a two pack. But too often listing this online and getting the inventory to reflect the numbers properly can be confusing for first-time e-commerce sellers. To combat this, ensure bundles are listed as a group item within QuickBooks POS and the inventory numbers will be taken care of properly. White Paper Taking the Leap to etail 4

6 CONCLUDING CASE IN POINT Webgility small business client (and surf shop) Rider Shack did some research before taking their sales online and decided to use Magento to create an online store to sell more than 13,000 products. They liked the user-friendliness of it, but found themselves spending way more time on order processing than they wanted there was no time to surf! and they frequently over-sold their inventory. We had to manually enter all online sales into QuickBooks and then manually sync the inventory between the online and retail store, said store owner Jeff Glass. This was extremely time consuming and slow! A couple times a week, we had to cancel an order because the item was out of stock. Customers were not happy to hear that. To solve their problem by saving time and protecting their inventory, Jeff and his wife configured ecc Desktop by Webgility to sync inventories between their online store, retail store, and QuickBooks POS. This reduced their inventory management by 15 hours each week, reduced their shipping process time by 25%, and saved them $1,400 per month. In a perfect world, transitioning to online sales would be a quick and easy step for every brick and mortar store, but that is not yet the case. The wisest small businesses learn from the mistakes of those which have gone before, and these six tips were borne out of such experience. Certainly there will be many other challenges along the path to retail world domination, but integrating these lessons learned into the transition to online sales will likely pave the way for some actual enjoyment as your business grows and thrives. To build a profitable online business, retailers must integrate it seamlessly with their brick-andmortar operations, said The Economist. Many keep them separate, increasing the risk that they fail to communicate or work together properly. White Paper Taking the Leap to etail 5

7 ABOUT WEBGILITY & ECC DESKTOP As a leading provider of e-commerce accounting automation software, we created the ecc product suite to serve small- and medium-sized businesses who care about effectively managing their store s online presence. Each ecc product automatically integrates financial data from different cloud applications, saving smart business owners time and money. We re certified partners of Intuit and Xero, and our software has the flexibility to integrate with 40+ e-commerce platforms and SaaS providers, including Magento, Bigcommerce, ebay, Amazon, UPS and FedEx. Since 2007, we ve served more than 5,000 businesses like yours to provide better data tracking and visibility into the financial health of your operations. We d love to show you how we can do the same for you. Get in touch for a free trial or demo. 301 Howard St., Ste 950 San Francisco, CA (877) USA 1 (415) International sales@webgility.com The Webgility logo is a trademark of Webgility, Inc. in the United States. All other trademarks mentioned in this document are the property of their respective owners Webgility Incorporated. All rights reserved. Webgility White Paper Taking the Leap to etail 6

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