4 Steps for Small Business Owners in the Caribbean to Utilize Online Shopping
Thinking about opening an online store? Here’s some useful tips to get you started!
Although online stores are not yet mainstream in the Caribbean – the demand for online shopping is on the rise. More and more people in the Caribbean are using credit cards and shopping online – Amazon is one of the top 5 websites visited in the Caribbean.
And the impact of COVID-19 has only served to boost the effects of e-commerce. Experts predict that it won’t just be a short-term boost, but one that’s here to stay, even after COVID-19. This is because people will get comfortable with the comfort and convenience it offers and the benefits of contactless payments, both of which are likely to cause a permanent behavioural shift towards digital purchases.
Additionally, local banks are looking into rolling out new debit cards that can facilitate online payments – meaning the customer base of people who can shop online in the Caribbean is about to get bigger.
Will your business be ready to supply them?
AC Marketing sat down virtually with some of the experts on Caribbean e-commerce - the Managing Director of web development company Sightfactory and the CEO of payment gateway company FAC.
Currently, small business online retail in the Caribbean consists mainly of the “click and collect” model – where customers order online and pay in person when they pick up the product. By facilitating online payments, you attract customers to use your website for its convenience.
And that’s not all – online retailers like Amazon use online payments as a business strategy. This is because a quick and easy online payment incentivizes impulse buying among consumers. And various studies have shown that people spend more – up to 83% more – when they use their credit cards than when they have to use cash.
This is due to many reasons, one of which is the rewards programs credit cards have that encourages making purchases. There is also the psychology aspect whereby people think less of the money they spend on an item if they do not see physical cash leave their hands in exchange for it. So if your website allows people to make easy purchases 24/7 online – expect an increase in revenue.
In that regard, treat e-commerce as an investment to boost your business.
Your business doesn’t have to be retail giant in order to capitalize on e-commerce.
Here’s what you need to do:
Formulate a Strategy and Plan for your Online Business Model
Your plan has to be more than just “I want to sell stuff online”.
This involves really thinking through the process:
Transportation and Delivery: Once someone purchases your product, how will you deliver it to them?
Hybrid Model or Fully Online: You can have both an online store and your brick and mortar store, but be sure to allocate products accordingly to each segment of your market. Consider the costs and benefits of going online – what does it cost for you to sell products in your store vs. online? Which is more viable for you?
You can save money in running your small business if you go straight to online.
Pricing: How will you set your prices so that they are both competitive, but also deliver enough sales revenue to cover your overhead costs?
Marketing: How will you market your website to ensure you reach a broad customer base? After all, success depends on people knowing that your business is online and can accept online payments, so advertising is essential (and it’s also an expense to consider).
Speaking of expenses…
Be Aware of E-commerce Transaction Fees: Taking your business online allows you to reach a wider target base and increase your revenues – but this is business, after all, and everything comes with a price.
Depending on your bank, you may have monthly fees and per-transaction fees which can eat up a small percentage of your earnings. You have to account for this when setting your prices and establishing what volume of transactions you will need for your online business to be economically viable.
Apply for an E-commerce Merchant Account with your Local Bank
An e-commerce account is different from a regular business account, so even if you have a business account and point of sales machines that accept credit card payments for your business, you still need to open an e-commerce account to do business online.
It’s essential that you apply for an e-commerce account so that your bank can provide you with a Merchant ID. Your unique Merchant ID is used to link the online transactions on your website to your bank account. You will need a gateway company to facilitate this link for you on your website. (More on that later).
Your bank’s website would have what requirements they need for opening an e-commerce account - such as a viable business plan, financials, and maybe even a beta website (an example of what your site would look like).
Have a Website Developer Set Up a Website for Your Online Store
When you apply for your Merchant ID, your bank should have a shortlist of developers they can recommend to you, like Sightfactory Ltd.
Sightfactory is a leading website and web application development studio based in Trinidad and Tobago. In terms of e-commerce, Sighfactory can create a website for your business so you can sell your products online.
Have a Payment Gateway Company Connect Your Website to Your Merchant Account to Facilitate Online Payments
First Atlantic Commerce or FAC provides online payment solutions and international credit card processing for merchants, banks, and partners all over the world. They are a payment gateway that enables merchants to accept and process credit and debit card payments online.
FAC also offers a checklist for their clients to ensure best practices on their websites like Terms & Conditions, Refund Policies, Logos and more, so they help to hold your hand through the process.
For this reason, Christopher Burns, CEO of FAC, recommends that you apply for your Merchant ID in conjunction with meeting website developers and FAC.
Do everything in parallel, but don’t leave the banking part for last as it takes a while to get approval for your e-commerce account, so you need to set a realistic timeline.
Together, Sightfactory can set up your website, and FAC can facilitate the online payments. And voila! You’re now utilizing e-commerce.
Hopefully, this article gives you a better understanding of the nuts and bolts of setting up an e-commerce business and all the best to any small and medium-sized business owners who are about to start the online journey!
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