With a national trend towards shopping online, it’s natural that Rhode Island entrepreneurs (that’s you!) are opening up ecommerce stores left and right. But is this a smart step for you and your business? How do you evaluate if investing in ecommerce is a growth opportunity–or a huge distraction? What should you first consider before taking the plunge into the world of ecommerce?

In this article, we answer five common questions to help you move forward with confidence, no matter which direction you pursue. Our colleague Amanda Basse at the Rhode Island Small Business Administration shared her experience for this article.

1. Should I open an ecommerce store–or focus on brick and mortar?

Opening an ecommerce business allows you to reach markets outside of your local area. The potential to scale is enormous–and just like growing your customer base at a traditional storefront, it takes time, money, and facing competition with bigger pockets.

One important question to ask yourself is if you have capacity and desire to manage an online business, especially if this comes in addition to the day-to-day requirements to run your brick and mortar business. How much time can you dedicate to launching and maintaining it? What can you reliably delegate to other team members? Do you enjoy interacting with customers solely through digital means?

We recommend you create a business plan for an ecommerce business (even if you envision it as a natural extension of your current business) and evaluate if you have the time and financial resources to invest in an additional business. That’s right– your ecommerce business is truly an additional business, with new types of customers, a new way of selling, and new operations requirements.

2. How much does it cost to launch an ecommerce site?

The financial investment to open an ecommerce site is significantly less than a brick and mortar storefront. Your biggest financial investments will be in purchasing inventory and building and maintaining your online sales platform. Additionally, we recommend you budget for several upfront, non-recurring costs, such as website design and professional photography of your product.

Depending on how extensive your product catalog is and how complex your ordering process is, as well as how much existing professional photography you have of current products, launching an ecommerce store may cost you as little as a few thousand dollars. However, it can cost significantly more depending on the functionality and features you desire, as well as your professional photography budget.

Evaluate several bids from experienced ecommerce website developers and speak to other entrepreneurs about their ecommerce experience for the best outcome.

3. What is the best website platform for ecommerce?

We recommend Shopify and WooCommerce. Look for ready-to-go templates from either provider, and plenty of add-on functionality. Note, while the base cost may be attractive, keep in mind that both platforms will tack on upcharges for any additional functionality you opt into.

On the flip side, Shopify is a multi-channel marketing platform that is user friendly and very popular, which means there are a lot of help articles and videos to navigate common issues, as well as web developers who specialize in building Shopify ecommerce websites. You’ll find a similar trove of resources and specialists if you choose WooCommerce.

4. Once I’ve launched, how do I increase my online sales?

As with any business, you must invest in marketing to build your customer pool and retain existing customers. Building your email list, cultivating an engaged social media community, and leveraging text marketing is essential to grow your online business.

As part of your business plan and financial planning, craft a marketing strategy and budget that will allow you to build your customer base over the first year in business. While digital advertising is the fastest and most direct way to communicate directly with potential customers, it is costly and you will likely be competing against brands with significantly bigger budgets. Investing in digital partnerships, influencer marketing, and SEO have potential to increase your website’s traffic. Additionally, consider having a presence on online shopping destinations like Amazon, eBay, Etsy, and others while you build your website’s visibility in search engines.

Related:

Eight benefits of getting started with Facebook ads

Four reasons why your business needs video marketing

5. How do I measure the success of my ecommerce site?

Sales is the most important success metric, and you’ll want to rely on other metrics while you launch and build your online brand. Set a deadline for launching your website. Then, measure traffic to your website, how many other websites have linked back to your site (called linkbacks), how long users spend on your website, how many users add a product to their cart, and how many users complete the checkout process and make a purchase (aka conversions.) Over time, your success metrics will change. As you grow and scale, increasing your conversion rate, growing your average order size, and your customer retention rate will be priorities.

Are you ready to launch your ecommerce business? Still weighing your options? Or have you decided to refocus on brick and mortar operations? Either way, we are here to help you achieve your business dreams. Reach out today.

The Rhode Island Small Business Development Center at the University of Rhode Island employs a dedicated, experienced, and knowledgeable staff of business counselors and administrators who can assist you in growing your business. Register now for free, confidential business advice from our advisors here—call (401) 874-7232 to schedule a counseling appointment or attend our free webinars.