From Zero to Ecommerce: Everything You Need to Know to Create Your Online Store

Estimated reading time: 12 min

Are you thinking of starting your own ecommerce? There are different aspects that you should consider. Business models, costs, commissions, logistics, platforms, customer satisfaction, are just some of them, our Co Founder and COO at Cubbo, Josu Gurtubay, has created a complete guide with the most important characteristics that you should consider, accompany us on this journey and take note.

7 most relevant aspects of the world of ecommerce

‍

1. Business models and costs

Currently, there are two online sales channels that support 80% of the demand in Latin America, the Marketplace and the DTC (Direct To Consumer), to understand them better, you can think about the differences between: being in a department store vs. be the owner of your own store, now we are going to explain them better:

Linear business – DTC: your own commerce, your own .com, in which you Having a direct relationship with the buyer; the customer gives you money and your online store provides them with a product or service; Being your own channel, you can start generating value from the first moment.

Marketplace: is a distribution channel where the customer and the supplier come together. Marketplaces such as Mercado Libre, Linio, Amazon, Costco, Coppel, among many others, charge a commission to serve as intermediaries to generate the sale. Sometimes they buy the inventory, other times they receive it on consignment and until they sell it they pay the ecommerce. 

When starting an online store, you do not yet have the recognition to generate high sales volumes. In addition to having your own .com, we recommend that you also sell your products on Marketplace, taking advantage of its recognition to make your brand known.

Which one to be in? depends on your market niche, you can start with several and see which one you get the best results in. You can start with your DTC and Marketplace simultaneously, a good strategy is for the client to know you on the Marketplace, but continue buying from you on your ecommerce.

Cost structure by sales channel

Find out how much it costs you to sell on your own DTC vs. the marketplace.

Let's start by describing how the operation can develop. When you Having an ecommerce and you do not outsource services, you are solely responsible for delivering; Logistics planning and fulfillment of deliveries depend on you. In the case of the marketplace, there are 2 operational options:

Fulfillment: In this modality, the marketplace is in charge of the entire process of storage, preparation and delivery of the product. This service is provided by some brands such as Amazon to those who acquire their Prime badge or Mercado Libre badge in their Mercado Shipments Full plan. 

Fulfilled by Vendor: in this case, the seller is the one who makes the delivery, not the Marketplace, even so, the latter supervises that it is carried out within the times contemplated in the delivery promise.

Now, let's go into detail, these are the costs that your ecommerce

• Fixed: Marketplace and DTC have similar fixed costs, for example, in Amazon and Mercado Libre a fixed fee of $600 pesos per month is charged for the use of the platform. In DTC we can talk about approximate fixed costs from $750 pesos per month for the use of platforms.ecommerce like Shopify.
  

• Sales commission: When you make a sale through the marketplace, you must pay a commission, this is usually between 15 and 20% of the value of the product; in your ecommerce You do not pay a sales commission, but you do pay the use of the platform, for example, in Shopify, depending on the plan, you can pay between 0.5 and 2% for the sale of each product, a value that is charged for the operational and technological support they provide you; There are platforms that do not charge you anything, but you will have other additional costs such as servers, configuration tools and, most likely, a person or technology team, among others.
  

• Payment gateway: is the banking terminal of your online store, in the marketplace the sales commission includes the payment gateway, in the DTC it is your ecommerce The person responsible for paying it generally charges you 3% or more of the value of the product sold.
  

• CAC: Customer Acquisition Cost is one of the most important amounts to consider; In the marketplace you can invest in advertising so that your product moves more, generally, will be between 5 or 10% of its cost, in some cases, up to 50% when you want to publicize a launch. In DTC the advertising can be especially important if your product is not well known, so you will have to invest in digital marketing and advertising campaigns to make it known. The value of the investment depends on your budget, the chosen channel, the reach and results you are looking for. 
  

• Storage: How much does it cost you to store your products? In the case of a fulfillment center, the value of the cubic meter is close to $500 pesos or more. If the product does not rotate, the marketplaces will “penalize” you and “push” the inventory out of the warehouse, raising the storage cost up to 10 times higher. In DTC this value can range between $200 and  $350 pesos per cubic meter.
  

• Operational: refers to the cost of management and preparation tasks (receiving, supplying, packing, etc.) that are carried out before shipping; the Marketplace with fulfillment It is included in the shipping value. In the case of DTC, the operating cost can be between $5 and $20 pesos per piece, depending on the type of product.
  

• Consumables: These materials used for packaging products, such as boxes, envelopes, bubble wrap, etc., are usually given away by the Marketplace. When the operation is on your own, can cost you from $5 pesos per piece.
  

• Shipment: Generally, Marketplaces are quite economical for shipping nationwide. When is a single piece, shipping can cost approximately $70 pesos. When you do them from your ecommerce, shipping may be a little more expensive, around $75 pesos, however, you can include more pieces due to the weight covered by the guide, and reduce the value per piece.
  

• Buyback: out of every 100 orders per month, how many are recurring customers? This indicator is super valuable, since you will not be paying the CAC to attract new users. In the Marketplace you always pay the same commission for the sale, in the DTC your margin increases on the repurchase.

‍

2. Types of premises

In the world of sales we can find different scenarios, in traditional retail a physical point is the kiosks, the shopping center, the stores, etc., but in the ecommerce, the arrival point is the platform known as shopping cart, where you can do custom development or hire SAAS services, a software that already has everything implemented to set up your online store.

Internal or custom development, which requires a complete team of programmers, resources and investment, was common a few years ago, when shopping carts did not exist. With the current alternatives, our recommendation is to choose a SAAS like Shopify, where you can manage your store, without the need to have other areas or specialists, as occurs with internal developments (unless you are an expert on the subject). In the world of ecommerce Everything is agile and fast, the more dependence you have on the technology area, the slower the process will be.

Another SAAS platform option is WooCommerce, a free tool that requires other additional investments for the configuration of the store, such as the server, the support of a technology area, the plugins, etc., you will also find providers such as Prestashop, Magento, Vtex, among many more, which offer different advantages and services, depending on the type of ecommerce.

From Cubbo, we are preparing a super article, where we will tell you the pros and cons of the 5 platforms ofecommerce most common in Latin America, you will soon find it on our blog.

‍

3. UI, UX interior design

By this we refer to the experience generated by the ecommerce on the user, based on aspects such as photography, the catalog and the usability of the store. At a physical point, you enter, you see the place, you feel, you have smells, you touch the product; In digital, this does not happen, therefore, you must find a way to provide a good shopping experience, having a visual and modern appeal, facilitating the buyer's navigation, having clear and concise information, among other characteristics.

80% of people seek to Having a prior interaction, before making a purchase in the ecommerce. It is important that you can resolve the customer's concerns, only with the content, you must have enough information to answer everything that the buyer wants to know, if you have free shipping, if you offer exchanges and returns, the characteristics of the product, etc., the page must be as complete as possible, and also have communication channels such as chat or WhatsApp, since there is no in-person advisor to resolve doubts, as occurs at the physical point.

Your ecommerce It must be APP, that is, Problem Proof, it cannot happen that the customer does not know how to make the purchase or find a product, that he observes inconsistencies in the information, or faces rejections of his card due to the lack of compatibility with the payment method, which generates multiple purchase attempts that end in the withdrawal of the same.

Analyze your Conversion Rate

Of every 100 people who enter your ecommerce How many do they buy from you? Measure your conversion rate and identify all those changes you can make to improve your percentage; A single point increase generates significant impacts on sales. Depending on the industry, the average conversion rate is between 1 and 3%. That is, of every 100 online visitors, between 1 and 3 will buy from you.

There are tools that allow you to improve your conversion rate, below we share two of them:

A/B Testing. If you place a red button and a green button, which one do you sell more, which one do your buyers click on more? A/B testing allows you to compare two versions of something, which is the most effective in achieving your goal.

Hotjar: this tool allows you to know how the user behaves within the ecommerce, which are the buttons with the best interaction, the most viewed pages, where on the page the customer looks, among other data, is a tool that you can use for free in its basic plan and will be very useful for you.

‍‍

4. Increased flow

If you want to sell more, you must increase the number of visitors to your ecommerce and improve your conversion rate. It is of no use to you to have the best store, the best product, if no one knows you, if no one enters your store and buys from you. 

How do you achieve it? With SEO optimizations, which allow you to position yourself in the Google search engine, creating content for the client that has the potential to go viral, executing advertising campaigns to generate traffic to your ecommerce, structuring a strategic content plan for social media and identifying which of these channels is most effective for your objective, building communities in these environments, and finally, with content marketing, producing valuable content for the audience you want to reach such as articles, podcasts, videos, etc. 

All these strategies will allow you to direct the buyer to your page; For the execution of each of them you must determine a budget, the total amount invested divided by the number of clients, will give you an estimated acquisition value per client. You must also stipulate measurement indicators (KPIs), evaluate them and determine which strategy works best for you, to focus on it.

‍

5. Point of sale terminal, different payment methods

In a physical store, payment for a purchase is generally made in cash, a method that in the ecommerce is not so easy to implement, since the traditional way of purchasing is through an electronic transaction with a debit, credit or PayPal card; This is where an essential aspect becomes relevant: the banking of the population, where in the case of Mexico, only 37% of its inhabitants are banked, which means that if you only have digital payment alternatives, of 100 people who try to buy from you, only 37 will do so, due to the lack of a payment method according to their possibilities. Provide some alternatives for unbanked users such as SPEI transfers, payments in OXXO (although only 20% of them are finalized), COD or payment on delivery, this way you can finalize the sale with a greater number of visitors. 

In addition to the above, there is the issue of fraud, a common behavior in Latin America. In the Mexican case, for example, we find that 25% of online transactions carried out Having a risk of fraud; a quite negative figure. Can you imagine that 25% of the sales you make through your store were fraud? It would be a serious blow to your profitability! To avoid this type of situation, gateways such as PayPal or Mercado Pago have developed some strategies, where by an increase in the commission, they give you certain guarantees against the occurrence of this type of events.

‍‍

6. Staff in store (ecommerce operating team)

The fulfillment and customer satisfaction, are usually the main headache in the ecommerce After selling, you must go through certain stages before delivering, processes that can affect your reputation and damage the sale, if the operational team does not develop them efficiently. You must ensure that everything works perfectly so that your buyer is a happy customer with the service you offer.

Among the five main reasons why people buy online, the logistical issue is involved: being able to receive their purchases at home, saving time and accessing products that cannot be found in the physical store, the other two criteria correspond to comparing prices before buying and accessibility to products that are not sold in Mexico. If your logistics operation is the best, you will already have won 3 of the 5 preference factors. 

Another point to consider is the issue of changes and returns, where the logistics issue also intervenes and the way in which your operational team develops it; In this case, we found that there is a fear among online consumers of buying due to the possibility of making a mistake when choosing the product, especially if they are not sure that they can return or exchange it if they do not like it. Implementing and making this policy visible will provide greater guarantee to your customer.

If we talk about exchanges and returns, Mexico registers quite low indicators, since this practice is not regulated in the country, depends on the ecommerce whether or not you wish to offer this benefit; contrary to what happens in other territories such as Europe, where by law it is mandatory to provide this service; Thanks to which, 30% of requests for exchanges and returns of the total purchases made are presented in this territory, even reaching 40% in countries like Germany, that is, of every 10 products purchased online, 4 are requested for an exchange or return.

The fulfillment must guarantee customers an excellent delivery experience. As? Delivering the product in perfect conditions, meeting delivery times, providing traceability and tracking of the order, protecting it with an exchange and returns policy, among other aspects, if you ecommerce With these differentials, you will be doing things well.

‍

‍

Why is logistics operation essential to survive in ecommerce?

75% of the success of your online store depends on you knowing how to execute your logistics operation. The other 25% will occur when your product is accepted by the market.

Did you know that between 75 and 90% of SMEs fail before the 2nd year of operation, and that 75% of the causes for this to occur are related to problems in the execution of the operation. If you do not deliver on time, you lose customers, if you do not have customers, you do not sell, therefore, you do not receive income. 

To prevent this from happening, is essential to Having a scalable operation to support a 100x increase, from one day to the next, the ecommerce It's that explosive. In traditional retail you can Having a 1 or 2x increase in demand and satisfy it with the available inventory, while, in the ecommerce, you can have demand peaks of 10, 20 or 100x in a day and that is where the logistical issue becomes complicated. If you do not have the capacity to respond to demand, the joy of increasing your sales will be overshadowed by the concern of making your customers look bad.

the operation of any ecommerce that sells products begins with the receipt of the product, its storage, the generation of the order, the assortment, shipping and delivery, a process that can become a headache and complete chaos, when you do not have the resources or the experience to carry it out. 

How to develop your operation?

You can do it internally (In House) or outsource it. In the first case, if you are not an expert in logistics, the time will take you to learn and bring your In House operation to an optimal state will cost you errors and money. However, if you outsource, from day one you will have the best practices, which will allow you to save time and assets. 

When you develop the operation internally, you pay many fixed expenses and your unit cost is more expensive. However, when you outsource, you know what your cost will be over time. Outsourcing is a global trend; in the US, for example, 85% of transportation services and 78% of storage are contracted to specialists (The Logistics World), thus ecommerce You can focus on other areas such as sales or marketing, to continue attracting customers. If you delegate the operational part to an expert, you will do it right from the beginning.

What is the best way to operate?

Focus on growing by outsourcing your operation, there are two ways to do it: outsourcing the entire process or in a hybrid way, if the ecommerce It is small, you can take care of the storage with the internal space you have, and outsource the last mile or parcel delivery service, when you cannot supply, that is, when you have between 50 and 100 monthly orders, the best thing you can do is outsource the entire operation. When doing so you should pay attention to the following:

Look for a strategic partner with whom you can establish a long-term relationship. is essential that you have common objectives, that he wins when you win. In addition, you must be very careful with hidden costs, those “fine prints of the relationship” so that there are no surprises later, for example, “at Cubbo we are very transparent, from day 1 we inform the client in the contract about all the situations that may arise and how they will be addressed.” 

Second, look for a specialist, if you are going to outsource your logistics.ecommerce, you can't go with a company that doesn't know about ecommerce, you are going to experiment with your company, improvise, make mistakes and that is going to cost you very expensive. The logistics operator that serves traditional retail is different vs. a ecommerce, with the latter, that is, with a fulfillment, you have competitive differentials such as unlimited operating capacity, better and more professional practices from day 1,  efficiency, quality of service and lower cost, aspects that will undoubtedly take your operation to another level.

Finally, be clear about its scope, for example, when you operate and outsource with parcels, you know that the scope of your supplier will be the last mile process, when you operate with a fulfillment center like Cubbo, you know that from the moment you deliver the product, they will be responsible for the entire process, until its delivery to the final customer.

‍

Customer satisfaction‍

One of the biggest differentials of ecommerce is the closeness you have with the end customer, in traditional retail, the consumer buys in the store and does not see it again, you hardly know if the product met their expectations or not, however, in the ecommerce, you have their contact information, which allows you to have feedback on your product, know what they liked and what they didn't in order to improve it, this information is worth gold, make an effort to know their opinion and take corrective actions.

“For our most successful clients at Cubbo, as well as for us, the priority is the client and their complete satisfaction.” This is an aspect that can determine the success or failure of an ecommerce, “get obsessed” with your customer, make them a priority in your online store.

‍

What does the online buyer expect today in Mexico?

The Mexican digital consumer has evolved rapidly. You no longer just compare prices, you also evaluate the entire shopping experience.

Among the most valued factors are:

• Clear and competitive delivery times.
• Real-time tracking information.
• Packaging in good condition and complete orders.
• Simple exchange and return processes.

If any of these points fail, the impact is not just a return: it's a negative review, a lost purchase, and one less customer in the future. Therefore, logistics cannot be seen as an isolated cost, but as a direct part of the ecommerce value proposition.

‍

The top selling trigger at ecommerce

We already talked about logistics and its scope at the consumer level, what is behind the process, now, we will talk about a certain characteristic that the client looks for when buying from you. 

As the most important sales trigger, we find free shipping, the buyer does not want to pay for shipping, they want all their money to go towards the product. is a conceptual issue, when they tell you that X is worth $95 pesos plus $5 shipping, you immediately reject the purchase, you do not want to pay more. On the other hand, if they tell you that X is worth $100 pesos and that shipping is free, you immediately perceive a benefit and finalize the transaction. You can include the shipping value in the product or offer it from a certain sales amount, find a way to offer free shipping, without affecting your profitability.

We hope all this information and tips that we have shared are of great help for the creation of your ecommerce, make the best decisions and start developing your store now. We Having a video that illustrates all this content quite well, visit our channel:https://www.youtube.com/watch?v=ROVgQAotcRI

‍
Are you looking for an ally to help you improve your delivery process, enhance your compliance and the satisfaction of your customers? Do not hesitate to contact us, we are the best fulfillmentcenter for ecommerce in Mexico and Colombia, you just have to click here.