So you want to sell your widgets online. What do you do?

We receive many inquiries about the best way to go about selling products online. Most of these inquiries are premised on the belief that selling products directly on your own website is undoubtedly the way to go. But is it? Honestly, we’ve talked a few people out of, at least initially, building their own e-commerce website.

Actually, there are quite a few options, and what might be right for Joe might not be right for Josephine. Let’s review potential ways to sell online.

First we must ask: Where are your potential customers? Makes sense, right? We need to find customers because without customers we don’t get too many sales.

So where do your potential customers shop online today? If you are not yet selling online yet, they are not shopping on your website or storefront, that’s for sure. But chances are they already shop at an existing online store. This would be either a mainstream mega-store, like Amazon or Ebay, a specialized store open to many sellers (like Etsy, which focuses on crafty products, or CafePress for t-shirts and similar swag), or on a highly individualized website – perhaps an acclaimed artist with high name recognition who offers their goods only or primarily on their own website.

Where your potential customers are shopping today, in other words, depends on your product. Is your product fairly generic? Is it handmade or handcrafted? Is it highly and exclusively identifiable to you? Is it also sold by Wal-mart? Is it, or could it be, sold by your neighbor?

Let’s say you sell widgets that are consumer items sold by many others. Many people buy those widgets online already, at the online mega-stores. If that is the case, is it reasonable to think that people will come to your own website to buy widgets, no matter how good your widgets are? You would be, in a sense, competing with the mega-stores for sales. Can you effectively compete against them? Is it even worth trying?

If you can’t compete against Amazon, does that mean you should give up on your idea to sell those widgets? No! One option falls under the “if you can’t beat ‘em, join ‘em” category. You can create your own storefront at Amazon or Ebay. Or if your product is hand-crafted birdhouses, perhaps Etsy is the appropriate home for your storefront. Or perhaps it makes sense to have storefronts on all these places.

One important upside of selling at such established online stores (in addition to being where shoppers already go) is that you don’t have to recreate the wheel. You have no need to pay the upfront costs of creating an online store from scratch (whether rudimentary, costing a few hundred dollars, or more sophisticated costing a few thousand). The mega-store sites will handle for you issues like online inventory management, the look and feel of the store and, importantly, calculating taxes and shipping costs.

An important downside to consider, however, is that the mega-stores typically charge a transaction fee on every sale (possibly in addition to monthly fees). That transaction fee will be assessed to you as long as you sell there. In contrast, if you build your own e-commerce website, ultimately with enough sales you should be able to pay off the cost to build and maintain it.

Another potential downside is that you will have less flexibility in designing a storefront at one of these mega-stores than you would in designing your own e-commerce website. You need to decide how much it matters to you (and your customers) how unique your storefront is.

What about doing both? That is, can you have your own online store as well as a storefront at one or more mega-stores? Of course! A nice way to have both a website and a mega-store presence is to place a link on your website to your mega-store storefront. You can be as unique as you like on your website, but guide people to your storefront for the actual sale. In some instances you may be able to embed your storefront, or a part of it, right on your website.

We tend to recommend that people looking to get their toes wet on selling online try a mega-store online storefront first. They are fairly easy to set up and the cost is minimal.

While we are only scratching the surface, here are some resources you might want to review before starting to sell those excellent widgets you make:

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