How to sell products online in 6 simple steps

Let's look at major considerations for small businesses exploring how to sell products online.

Step 1: Know your competitors in business

Understanding your competitive marketplace is the foundation for any business strategy. When you sell online, you're likely going up against thousands of other sellers, from mega-retailers like Amazon to companies with their own ecommerce websites to individual sellers on platforms like eBay and Etsy. So, how can you set yourself apart?

• Research your competitors. Knowing how to conduct a competitive analysis is essential for carving out your niche in the market. Start by identifying other businesses that sell products like your own. By looking at their products, price points, and marketing content, you can determine which audience they are targeting, their marketing strategy, and their broader business strategy.

• Create a business plan. Using this information, identify gaps that you can use to inform your own business plan so you can stand out in the market. For example, you may be able to identify an underserved audience, see an opportunity to offer a luxury version of a product at a premium price point, or capture an opening to offer a lower-cost version by leveraging third-party partners or running the business out of your home. Your plan should include your mission statement, marketing strategy, brand identity, and overall plan for operations. Learn more about how to write a business plan.

Step 2: Understand your target audience

A target audience of senior citizens in middle America has very different needs and expectations than a target audience of digital-native Gen Z Europeans. This means you'll want to understand your customers to better position your product and services to their unique needs and wants.

One way to do this is to create a buyer persona that gives you a fictional representation of your ideal customer. Using your data and research, define who this person is, what they like, where they work, their pain points, and what they want to accomplish with your product. Try also to define their process for finding products like yours when shopping online.

Next, take the time to learn how to segment customers. Segmentation is vital for crafting targeted marketing strategies and personalized online selling experiences that feel relevant to their needs every step of the way.

Step 3: Determine your product pricing

With online shoppers able to easily compare prices with a Google search, choosing a pricing strategy that positions your product competitively and safeguards your profit margins is essential.

Begin by using your competitors’ prices as your benchmark to ensure your product is in the ballpark of what customers expect when they look at search results. Depending on your brand and strategy, your goal may be to become the bargain option, the premium version, or something in between.

Keep in mind that prices online change constantly, which means you'll need to keep a close eye on what competitors are asking to ensure you keep pace with the market. Your cost of goods and supplies may also go up, so make sure you adjust your prices when needed to ensure you keep making a profit.

Step 4: Create an online store

Once you've determined your strategy, you're ready to start building your online store.

• Choose an ecommerce platform. First, you need to choose an ecommerce platform such as Shopify, WooCommerce, or Squarespace to power the store and manage inventory. Many ecommerce platforms are PayPal partners that may offer discounts when you enroll using a PayPal Business account. When choosing the right ecommerce platform, compare features and pricing to find one that is not only right for your business at launch but will continue to meet your needs as you grow.
• Design your store. Use the platform's tools and templates coupled with your customer understanding to design the store in a way that meets the needs of your audience. This process includes creating a layout that is easy to navigate, choosing colors that reflect your brand, and picking typefaces that are easy to read on both computer screens and smartphones.
• Add your products. Once your store is up and running, it's time to add products to your store. Write out all the product content shoppers will want to read when researching your product, including sales copy, dimensions, features, and supporting links.

Step 5: Select a payment processor

The most important part of any business is getting paid, making your choice for payment processing critical to success. If you're new to online sales, here is how a payment processor works: At checkout, the customer chooses their payment method, and the payment processor then provides all the technology required to move money from the customer's account through the payment network to your account.

To select your payment processor, your ecommerce platform will have a section titled “payment types,” “payment options,” or “payment methods.” You can then choose what types of payment types you want to accept. Remember: some customers have strong preferences about how they want to pay, so look at your buyer persona to see if your target audience has a specific payment method they may want to use.

In addition to common payment methods like credit and debit cards, consider payment methods like a digital wallet, buy now, pay later, and subscriptions:

• What is a digital wallet? These apps make it easy for customers to store and pay using multiple payment methods. Some digital wallets to accept include PayPal, Apple Pay, Google Pay, Samsung Pay, Alipay, and WeChat Pay.

• How does buy now, pay later work? By letting customers pay for their purchases over time, buyers may be more likely to make larger purchases or add more items to their cart, helping you to grow your sales and average transaction value.

• What is a subscription? By offering recurring subscription plans, customers can get your product on a regular basis without having to place an order each time, keeping customers happy while improving your customer lifetime value.

Step 6: Promote your business

Once your website is ready to accept payments, it's time to hang out your virtual sign and start attracting customers. The best ways to advertise your business and bring awareness to your store will depend on how much you want to spend and how much time you have to allow to specific marketing channels.

For example, an inexpensive but time-consuming way to promote your brand is to set up profiles on Facebook, Twitter, Instagram, TikTok, and other social media platforms where you can share content, photos, and videos of your products and marketing content. For more tips on growing your follower count and reaching your biggest fans, check out this guide to social media marketing.

On the other end of the spectrum are paid channels like email marketing or paid search ads. With these channels, you can often reach highly targeted audiences when they are ready to buy, improving your odds of making a sale quickly. However, you'll need to factor in your customer acquisition costs when using these channels to ensure you're still making a profit.

To choose the right channels and leverage them effectively to sell products online, it’s essential to craft a marketing strategy. This will ensure you choose the channels and marketing methods most likely to resonate with your target audience.

Check out these resources for inspiration on how to shape your business and how-to advice on marketing for small businesses.

A few tips before starting to sell online

As you prepare to launch your online business, keep these best practices in mind:

• Take advantage of seller protection. Many payment processors, such as PayPal, offer seller protection programs designed to help you in the event of transaction disputes, fraud, or chargebacks.

• Use high-quality product images. Clear, well-lit photos from multiple angles give customers a better view of your products, making them more likely to purchase. Check out these best practices for ecommerce photography to make sure photos stand out.

• Believe in your product. Your confidence in your product's value should be evident in every aspect of your business, from product descriptions to customer service. This can inspire trust in your customers, making them more likely to buy from you and recommend your store to others.

Getting started selling online with PayPal

Ready to start selling online? PayPal makes it easy to get paid quickly and securely online with the payment methods your customers love. By accepting payments online with PayPal, you're not just simplifying the checkout process, you're meeting shoppers’ expectations for convenience and security when shopping online.

With fraud protection, seller protection, and a wide acceptance among consumers worldwide, PayPal’s comprehensive suite of tools and services makes managing online payments straightforward. Accept payments online with PayPal today.