Calculate the costs involved in selling online
Selling online in India or in any country for that matter involves various costs. Its important to first find out if you can make good profits after considering all those costs. Lets look at some of the important costs:
Shipping Cost – Visit your nearest courier or shipping company and find out how much it would cost to ship your product in various parts of India. Make a list of states and shipping fee. Normally this cost hovers between 5% to 15% of the product cost depending on the size and weight of the product.
Packaging Cost – Depending on the type of product you are planning to sell, you will need to consider the packaging cost. Check the different packing material and calculate how much you will need for one product. Calculate the total cost per product accordingly. Normally its between 0.5% to 2% of the product cost.
Payment Gateway Cost – If you planning to setup your own store, you will need a payment gateway. These sites normally charge between 1.5% to 5% of the total transaction. There could be one time setup fee and recurring annual maintenance fees. Last time when I checked, most payment gateway providers had waived off these fees. You can negotiate the transaction fee if you have higher volume.
Storage Cost – Depending on the product, you might need to rent warehouse or some storage space for your products. Find out this cost as well. Some online marketplaces like Amazon let you use their warehouses at a small fee.
Marketing Cost – Like any other business, you will have to tell the world that you have arrived. Surely, there are free ways to promote your business but at some point of time you will have invest in paid marketing channels. Google’s AdWords is a good platform to start with online ads and it also offers tools to calculate the costs.