Starting an e-commerce business

I read a Facebook post the other day, which read: “Be brave enough to suck at something new”. I replied to the post with: “Everyday, all the time! Currently sucking at dynamic shooting, Muay Thai, ReactJs and Airsoft!”. Self-development is a key element in my life, and in February 2020 I decided to delve into the world of e-commerce. Around that time, I had started to get interested in hand crafted soap. To make a fairly long story short (which I have already written about in an earlier post here), I chose to start an e-commerce store selling locally produced, hand crafted Swedish soap – Tvålbutiken (The Soap Store).

Picture from Pixabay.

My journey from idea to finished concept involved the following steps – some done in parallel:

Step 0 – Research

First thing I did when I decided on creating an e-commerce focusing on hand made soap was to attend a soap making class. I read all I could about soap making, the EU regulation no 1223/2009 regarding cosmetics (which soap is), talking to local soap producers and reading up on their needs.

When I felt I knew my way around the different laws governing e-commerce and the distribution of soap, and when I had a few soap makers that were interested to sell via my platform I started the process of launching Tvålbutiken.

Step 1 – Creating a legal entity

I had already started the process of creating a legal entity for my consultancy, as it was in my plan to do so by April 2020. The choice fell on a limited company due to several reasons. Which legal entity works best for you depends on your situation, priorities, and the country you plan to register the company in. I chose not to create a legal entity for the e-commerce website – I would rather wait until there is a valid business case in putting the extra capital and resources in having it as its own entity. This makes sense for me, as Tvålbutiken is a hobby rather then my sole business. Once the business tarts making more then 100 KSEK (roughly 10 KEUR), I will create a separate entity for it.

Step 2 – Choosing an e-commerce platform

I demo:ed and researched various e-commerce platforms, and also looked into coding something myself using Woocommerce.  I chose simplicity and budget over my won solution or more costly solutions as, again, Tvålbutiken was a hobby and learning experience rather then my sole income stream.

The choice fell on, which offered ease of use and a cheap starter plan. I had tested Shopify and was rather happy with it as well, but it is roughly 3 times more expensive then Quickbutik when it comes to the cheapest monthly subscription.

An issue with choosing ready made platforms is that you are stuck with them. Switching platform in the feature will punish you in Google’s and other search engines’ algorithms. Try searching for “change domain” and you will see what I mean. If I had created my own solution I would be more in control, but it would have taken more time then I wanted to invest in the project. I would have also had to look into the question of Payment Service Providers (PSOs) myself – your customers need to pay you somehow. Serious e-commerce platforms will offer a variety of options, and which PSO that works for you depends on your customer segment. I added Nets (incl. invoicing option and account payable risk transfer, and debit/credit card payment options) and Swish (direct bank transfer).

Step 3 – Creating a logo, finding a brand language

Although I have recently started dabbling with Photoshop, I am not a designer. Not even close. I outsourced the job of creating a logo to a designer on Freelancer who did a fantastic job, as you can see with the picture below. The image symbolized a water drop and soap, mixed with the letter T in “Tvål” (Swedish for soap).

I was clear from the get go that the focus would be on hand made, hard soap made locally by small scale producers in Sweden. The only exception I ever made was to include accessories, such as soap bags and holders. This was quite a decisive factor – I have had to say no to several producers who offered liquid soap, and soap makers based outside of Sweden. Tvålbutiken is true to its brand.

Step 4 – Developing relationship with suppliers and sourcing products 

This step was actually one I started with early. When the shop started taking form and was ready to be presented, I started taking more professional talks with the soap producers I was in dialogue with. I choose to keep a stock of my own rather then to have a drop-shipping solution (which in short means that the producer or a whole seller sends products to the customers) as I wanted my customers to get their products in a timely manner, and I also wanted to own the logistics and return process – this is key if a customer relationship is important to you and your business, and it sure is to me.

Step 5 – Social media and marketing

Once the store was ready to be released into the wild in April 2020, I created profiles in Instagram, Facebook, Twitter and Reddit. Twitter and Reddit proved to be less interesting platform for reaching my main customer segment, so my focus in terms of communication shifted to Instagram (with reposts to Facebook).

I started a blog which is housed in the e-commerce platform, and wrote a guide helping new soap makers navigate around the legal jungle of selling soap commercially.

Starting in February this year, I started investing in Google Ads which has proved to be a good investment. The caveat here is to not overspend, and choosing the right campaign type – for me, that was Shopping ads an setting a cost that was well calibrated based on the number of traffic per day, conversion rate and what it would cost to get a converted customer vs what it would entail in terms of revenue.

So, I hope this little recap was insightful –  if you have any: