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10 Web Hosting Best Practices for Ecommerce Security

Ecommerce websites can provide vast sums of revenue, but adequately securing them can be difficult. These sites are often ripe targets for cyberattacks aiming for financial or other data. If there’s anything that recent times have taught us, it’s that things can change overnight. 

Over the past year or so, ecommerce sales have gone through the roof. Q1 2021 saw retail ecommerce in the US leaping 7.7% over the previous quarter.

Always-available ecommerce websites help us rake in sales around the clock, but safeguarding our sites and customers is a formidable undertaking. There are so many potential points of security weakness, from plugins to web host vulnerabilities.

To overcome this, you need the right mindset, tools, and habits in your inventory to ensure ecommerce security.

Web Hosting Considerations for Ecommerce Security

1. Work With Reputable Security Service Providers

Cloudflare’s DDoS mitigation capabilities include edge detection systems (Image Source: Cloudflare)

Regardless of whether you’re running WooCommerce, Magento, or any other kind of ecommerce platform, you’ll likely be using various security plugins or services. There are many of these in the market, but where possible, choose a reputable service provider.

You don’t need to choose one and work with them alone; there are industry leaders with varying areas of expertise. Cloudflare, for instance, is known for its content distribution network (CDN), which is excellent at mitigating Distributed Denial of Service (DDoS) attacks.

On the other hand, Sucuri offers excellent all-around website protection services, including a formidable Web Application Firewall (WAF).

2. Ensure Data Encryption in Transit

Most website owners today will know about the importance of Secure Sockets Layer (SSL) certificates. They help visitors verify website identity and, more importantly, help encrypt data between them and your ecommerce website.

There are, however, various levels of SSL certificates. Non-commercial websites can get away with using free SSL like Let’s Encrypt, but ecommerce websites should avoid those. Remember that you’re handling more sensitive data, including customer information, payments, invoicing, and more.

Ecommerce websites should always consider more advanced SSL solutions such as the Organization Validation certificate. Many reputable brands offer this, including GeoTrust and DigiCert.

3. Always Secure Service Credentials

Many password managers utilize a zero-knowledge encryption system to secure credentials.

Working online, running several websites, and using hundreds of connected services has taught me a lot about passwords. Unless you’re repeating the same one or jotting them down, it’s impossible to remember complex passwords for each site.

Password managers are a relatively cheap tool that you can use to help with this. They store all your credentials securely so that you can create and use passwords like “xaACI91&2@@-duh” with no problems.

Using simple passwords repeatedly is simply asking for trouble. A single data breach can compromise all your accounts, including administrative access to your ecommerce platform. 

4. Conduct Periodical Vulnerability Testing

Website owners who have their digital properties set up and tested are often averse to touching anything once it’s all running. This aversion is a mistake since tools and technologies are constantly changing.

Developers and security companies are constantly discovering new vulnerabilities, and cybercriminals can quickly get their hands on more modern and advanced tools.

Because of this, you need to be prepared to periodically reassess ecommerce security on your site. One way of doing this is to have regular Vulnerability, Assessment, and Penetration Testing (VAPT) sessions to discover and work towards mitigating potential threats.

5. Get the Right Security Certifications

Aside from your web assets, digitally-oriented organizations like ecommerce firms should look towards comprehensive security certifications. Depending on your location, this could mean several things.

One example of this is the ISO/IEC 27001 certificate, which ensures that you follow proper information security standards. Aside from helping increase your organization-wide resilience, it can also act as a form of customer assurance to let them know you treat their business with due respect.

To get one of the various certifications available, you will need to work with a third-party provider in your country. They’ll carry out an audit of your systems to ensure they meet guidelines, and if so, will issue the appropriate certificate.

6. Have a Strong Focus on Payments Security

One of the most vital weaknesses in ecommerce websites is when customers make the purchase. The exact link where money flows is a highly-valued cybersecurity target. This point is also where you need to ensure compliance with the proper ecommerce security standards.

Standards will vary depending on the payment methods accepted. For example, if you allow customers to pay by card, that means PCI-DSS. The standard helps ensure that proper safeguards are in place to protect payment information.

Failing to meet payment security standards can mean heavy fines, penalties, or future restrictions for your operations. Most payment standards will have guidelines to be followed before you’re certified. PCI-DSS, for instance, requires the use of encryption, antivirus, firewalls, and more.

7. Ensure Web Assets Are Monitored 24/7

Monitoring as a service is available through many brands like Pingdom (Image Source: Pingdom)

The internet never sleeps, and your ecommerce website could come under threat at any time. Having entire IT security teams on a constant watch can be expensive and introduces additional elements of human error.

That’s where automation comes into play, and with the right tools, you can have apps and services constantly monitoring your web server. One example is the use of a web server monitoring tool to keep watch on resource usage. If things spike past a threshold level, it could be an early warning sign of some form of cyberattack.

8. Customer Education

Although customers aren’t part of your infrastructure, they are intrinsically a link to your platform. Attacks against them can lead to ecommerce security compromises on your site. There are some ways you can help them increase security, such as mandating strong passwords or requiring Multi-Factor Authentication (MFA).

However, there are some things they need to do themselves. Educating customers on security best practices is in your best interest. You can do this via outreach programs designed to warn customers about potential dangers such as phishing attacks.

9. Always Have Systems Fully Patched

Ecommerce platforms typically have many moving parts. Even the web hosting solution will need multiple applications working together to properly function; the web server, operating system, ecommerce application, and more.

Developers and security researchers are constantly finding new security issues with existing software. When that happens, developers often release patches. While some of these may be automatically applied, that’s not always the case.

Always have periodical update reviews to ensure your systems are running the latest secure versions of all applications. If you’re using a modular platform like WordPress/WooCommerce, that means ensuring each plugin and theme is also updated.

Where possible, don’t rely on automated patches as these aren’t always the best solution. Sometimes, hastily applied patches may introduce new bugs to operational platforms.

10. Always Ensure Adequate Backup Systems are in Place

Backups are often an overlooked part of any IT system. However, remember that it is a vital pillar of business continuity in a disaster, especially where eCommerce websites are concerned. Having suitable backup systems can mean the difference between an online store that recovers within moments or a total loss.

For most people, backups can be as simple as duplicating data on an alternative location on the server. As the OVH data center fire has taught us, that is far from sufficient. Backup best practices usually involve creating multiple copies of data across various locations. Remember that the data backups also need to be frequently refreshed.

More importantly, you need to verify the integrity of backup systems and data. Instances have arisen where blind faith in backup systems resulted in the restoration of corrupted data.

Final Thoughts: Always Ensure Transparency

Even as you work diligently to secure your digital assets, always remember that customers are a core part of your business. Working with them, you can increase your security profile while offering the transparency that today’s consumers desire.

Sharing updates on security concerns, understanding security challenges faced by customers, and helping them stay safe is in your best interest.

Meanwhile, the security highway is constantly evolving, so don’t be complacent once you have everything established. Be aware of new threats and vectors; that’s the best way to ensure ecommerce security.

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Retail Pricing Strategy for Ecommerce Stores

One of the keys to a successful business is selling at the right price. If your products are inexpensive, you may rake in more sales but have a hard time turning a profit. And if your products are too pricey, consumers will turn to other retailers, and you’ll lose your market share

But if you’re a small business owner, don’t fall prey to the misconception that price alone drives sales

When it comes to a retailer’s pricing strategy, there isn’t one surefire approach that fits all. You need to perform a product pricing balancing act that considers business and production costs, consumer trends, revenue goals, competitor pricing, and even a little psychology.

In this article, you’ll learn about:

  • What retail pricing is.
  • What kinds of retailer pricing strategies you can use.
  • How to choose the right retail pricing strategy.

What Is Retail Pricing?

The retail price is the final amount consumers pay to purchase an item. 

To make a profit, the retail price you set for a product must include the cost of goods for you, plus an additional markup to make a profit. 

As an online retailer, you can take numerous approaches to pricing products or services. The right strategy for you will depend on your short and long-term business goals.

Here’s the good news.

We’re about to explore 10 approaches, so you can pick the retail pricing strategy that will work best for you. 

Pricing Strategy Examples

  1. Manufacturer Suggested Retail Price (MSRP)
  2. Keystone Pricing
  3. Markup Pricing
  4. Discount Pricing
  5. Bundle Pricing
  6. Penetration Pricing
  7. Psychological Pricing
  8. Premium Pricing
  9. Competitive Pricing
  10. Dynamic Pricing

1. Manufacturer Suggested Retail Price (MSRP)

If you sell mass-produced items such as consumer electronics and household appliances, the Manufacturer Suggested Retail Price (MSRP) is a good pricing strategy to adopt.

MSRP is a standard price for an item, regardless of who is selling it. It takes the guesswork out of setting prices, but it can dull your competitive edge when your product sells at the same price as other retailers.

2. Keystone Pricing

Keystone pricing is a type of markup pricing. With this strategy, you double each product’s wholesale price to create a healthy profit margin. 

With a fixed percentage, your calculations will be simple. Maybe too simple — it’s easy to end up pricing products too low and too high.

Keystone pricing isn’t a good option if you offer highly unique products or custom items that take a long time to create because you won’t make enough profit. 

It’s just as poor a pricing strategy if you sell standardized, common products. Depending on the availability and demand for an item, it might be unreasonable for a retailer to mark up items at such a high rate.

3. Markup Pricing

Markup pricing (also called cost-plus pricing) is the most common and intuitive pricing strategy for retailers. You add a percentage of the base cost of individual items to create a profit — but you apply a different markup depending on the product. 

When selling a high volume of products or seasonal and perishable items that need to be sold quickly, it’s best to set the markup below 100%.

When selling custom products or privately labeled items like cosmetics, jewelry, alcohol, or electronics, you can set the markup above 100%.

It is straightforward in theory, but markup pricing requires you to spend extra time evaluating factors such as perceived customer value and competitor pricing.

4. Discount Pricing

When retailers mark down their products’ prices to encourage sales, it’s called discount pricing.

One form of discount pricing is the high-low pricing strategy: Products are introduced at a high price point and marked down when demand decreases. 

Electronics retailers use this strategy most often. Computers, game consoles, and smartphones are the most expensive when they’re first released. But when the next model comes out, the previous versions are sold at low prices.

Discount pricing is an effective strategy if you want to clear unsold inventory and increase sales. But if you become known for discounting your products, customers may perceive them as low quality or grow accustomed to waiting for the lower price. 

5. Penetration Pricing

Penetration pricing is another form of discount pricing. A business offers its new product or service at a lower price to attract customers. The idea is to get consumers hooked with a sale price, so they are willing to pay full price after the promotional period expires.

The penetration pricing strategy works best for subscription products, especially in a competitive market.

Businesses that use this pricing model include:

Similar to penetration pricing is the loss-leader pricing strategy, in which products are sold at a loss just to get customers in the door. 

6. Bundle Pricing

Bundle pricing is another discount pricing strategy. It’s useful if you sell related items you can package together. Bundling items lets you curate the customer experience and empowers you to increase sales volumes through up-sells or cross-sells

Common examples of bundle pricing are Christmas baskets or deli bundles that include preselected wines, cheeses, and meats.

Similar to bundle pricing, multiple pricing sets products at a lower price when more than one is purchased. For example, “buy one, get one free,” or “buy two, get 20% off.”

This strategy works best when you bundle less popular items with your high-demand products. Sales are hard to resist, especially if the customer is buying something they already want. You can simultaneously attract customers and get slow-moving items out the door. 

7. Psychological Pricing

Psychological pricing is a value-based pricing strategy. Also known as charm pricing, it depends on the customer’s perceived value of the item.  

According to researchers at Carnegie Mellon, people experience pain when they spend money.  It’s up to merchants to minimize that pain.

You see psychological pricing almost every day when retailers give products a price that ends in an odd number. 

For instance, instead of charging $6, retailers price a product at $5.99. The brain sees $5 and the consumer is tricked into perceiving a lower price.

Psychological pricing is best applied to non-essentials, as it encourages customers to spend impulsively.

8. Premium Pricing

Premium pricing (also known as prestige pricing or luxury pricing) is another value-based pricing strategy. High-end retailers sell their products at an additional markup that gives their customers the sensation of status.

Premium pricing works best when your product quality and customer service can match the expensive price tag. It also depends heavily on successfully marketing your brand as high-end. 

It’s how Gucci sells their $1,200 Lady Lock bags. Other companies that use premium pricing include:

As an online retailer, it may be difficult to replicate the luxurious feeling these companies have spent decades cultivating. However, you can validate your premium pricing with a chic design aesthetic, high-quality products, and a stellar customer experience — which includes a fast-loading website.

9. Competitive Pricing

Competitive pricing entails consciously setting lower prices to gain a competitive advantage. It works best if you’re in an industry with similar products, where your competitors’ prices are the only differentiator. 

The competitive pricing strategy is most effective if you’re a larger retailer and can negotiate a lower wholesale price from suppliers so you can still earn a decent profit. However, small retailers can be driven out of business in a price war. 

10. Dynamic Pricing

Dynamic pricing is a retailers pricing strategy where you adjust your prices according to changes in supply and demand. 

Ecommerce businesses are in the best position to use dynamic pricing because it can be done in real-time. When you sell online, you can leverage technology and data to sell the same product at different prices depending on the purchaser. 

The dynamic pricing strategy requires software, data, and manpower. WooCommerce plugins can help you price products optimally on your WordPress website.

Final Thoughts: Retail Pricing Strategy for Ecommerce Stores

When deciding on a retailer’s pricing strategy, online sellers have several factors to consider, including their company’s niche, competition, market behavior, and most importantly, financial targets.

Of all the strategies we’ve shared, no single pricing tactic will be enough. Small business owners should experiment and combine tactics to develop the right pricing strategy to ensure their company’s profitability.

Get your online store up and running fast with Hostdedi’s ecommerce web hosting plans. Experience the speed and scale of fully managed hosting for yourself. Start your free two-week trial today.

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Use an Entrepreneurial Mindset, Even When You’re Small

The 2020 pandemic has changed online shopping forever. The shift to ecommerce has been boosted by five years, and small businesses are scrambling to adapt.

While we hear about successful businesses that quickly pivoted to ecommerce, let’s not forget about those left in the dust. 

Studies show that 90% of ecommerce startups fail within the first 120 days. The main reason? Lack of an ecommerce strategy.

It’s not enough for aspiring entrepreneurs to be internet-savvy. After all, anyone can learn how to optimize their websites for speed. It takes an entrepreneurial mindset to run, grow, and build your ecommerce business to last.

In this guide, we’ll take a look at:

  • Successful ecommerce strategies.
  • The characteristics of a business mindset.
  • How to build an entrepreneurial mindset.

Ecommerce Strategy

  1. Be customer-centric.
  2. Optimize the shopping experience. 
  3. Leverage data to increase sales. 

Ecommerce Strategy #1: Be Customer-Centric

The most successful entrepreneurs often talk about bringing value to the customer

Instead of being revenue or product-focused, customer-centric companies consider their customers’ needs above all else. This is evident in their excellent customer service and cohesive consumer experience at every step of the buyer’s journey.

Millennial favorite Glossier found success by creating products that its customers wanted. The company built a loyal following and customer base purely through its ecommerce website and social media accounts.

Adopting a customer-centric strategy gives you a competitive advantage over other ecommerce businesses. It increases customer loyalty, eventually benefitting your downline.

Ecommerce Strategy #2: Optimize the Shopping Experience

If you want to sell more products, you have to make the shopping experience as seamless as possible. Some ways to improve the shopping experience:

  • Ensure your website is fast, accessible, and mobile-responsive.
  • Make the checkout process easy by not requiring buyers to create an account, saving shipping and payment information, and using form fields and auto-fill.
  • Offer various payment methods and expedited shipping.

Ecommerce Strategy #3: Leverage Data To Increase Sales

Today, data available to ecommerce platforms can be used to drive upsells and cross-sells through retargeting and personalized recommendations.

Ecommerce personalization and retargeting drive more conversions, sales, and revenue while enriching customer interactions with your online store.

Amazon is notorious for offering many recommendations. The company uses data to analyze customer behavior (for example, previous purchases and frequency of purchase) to segment similar customers and effectively recommend products.

Thinking Big: Characteristics of a Business Mindset

The ecommerce strategies detailed above won’t mean anything without an entrepreneurial mindset.

Having a business mindset empowers successful entrepreneurs to see the long-term big picture and adapt to the quickly-changing nature of ecommerce.

Every business owner’s journey is unique, but the best entrepreneurs often share a specific skill set that includes the following characteristics:

  • Innovative. Aspiring entrepreneurs with a business mindset think of the simplest ways to solve problems, resulting in process improvements or creating new products. Most people never thought we’d have self-driving cars or have the chance to be space tourists, but Elon Musk is making it happen with Tesla and SpaceX
  • Resilient. Mistakes are inevitable when launching startups, but the best entrepreneurs bounce back from failure and learn from their mistakes. Alibaba founder Jack Ma was rejected ten times from Harvard and rejected 30 times from jobs before he found success with Alibaba, China’s largest ecommerce website.
  • Lifelong learner. Many of today’s successful entrepreneurs have one thing in common: no college degree. Steve Jobs didn’t finish his degree but had taken calligraphy in college, which he later said was the inspiration for Apple’s typography. 

How To Develop an Entrepreneurial Mindset

It can be daunting or discouraging to develop an entrepreneurial mindset when you don’t have prior experience. 

The good news?

You can hone these entrepreneurial skill sets required to start your own business:

  • Provide value to others. Anyone can sell things online, but entrepreneurial success can be found when improving other people’s lives. When you focus on others, you see their needs more clearly.
  • Practice being decisive. Entrepreneurs constantly have to make quick decisions with the available data at the time. Practice critical thinking by looking through problems from different angles.
  • Remain curious. Continue seeking out new experiences and study what you don’t know. Take entrepreneurship courses and attend webinars. Learn from mentors and educators.

Final Thoughts: Using a Business Mindset for a Winning Ecommmerce Strategy

Anyone can create a startup, but without a clear ecommerce strategy, success isn’t guaranteed.

Business owners with an entrepreneurial mindset recognize opportunities and bounce back from failures. They differentiate themselves from their competitors by focusing on creating value and leveraging available technology.

If you’re an innovator looking to start a new venture,  let Hostdedi handle your business website. Set up a website in minutes with our ecommerce hosting plans, or try it for yourself with a free two-week trial of fully managed WooCommerce hosting by Hostdedi.

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How to Create a Business Plan: Ecommerce Business Plans

Proper planning is the key to success for any company and especially a new business. 

A 2019 study from Startup Genome found that 90% of ecommerce startups fail within their first 120 days of operation. Some of the reasons for failure include poor search engine visibility, a saturated market, and financial issues — all of which could have been addressed ahead of time with an ecommerce business plan.

It may seem like a daunting task. But learning how to create a business plan is the best step you can take to set yourself up for long-term success. 

In this guide, you’ll learn:

  • Why you need an ecommerce business plan.
  • What the elements of a business plan are.
  • How to create a business plan for ecommerce.

Why You Need an Ecommerce Business Plan 

An ecommerce business plan is just like the business plan you’d put together for any other business. It describes a company’s current status and eventual goals. 

If you’re figuring out how to create a business plan, you’ll need to consider all the details of building your business, including:

  • Products and services.
  • Financial models.
  • Operations.
  • Staffing.
  • Timeframe for achieving your goals.

Not every ecommerce brand launches with a formal business plan, but there is value in taking time to step back and study the market you’re looking to enter. That way, you can formulate a strategy to launch and grow a successful ecommerce site.

A solid business plan empowers you to:

  • Develop a strategy for growing your business.
  • Determine potential obstacles.
  • Identify the human, physical, or financial resources needed.
  • Evaluate the viability of your business idea.

Let’s go over the sections of a typical business plan. 

Elements of a Business Plan

  • Executive Summary
  • Company Overview
  • Market Analysis
  • Products and Service
  • Marketing Plan
  • Operations Plan
  • Financial Plan

Business Plan Template: How to Create a Business Plan for Ecommerce 

Writing a business plan is not as complicated as people assume it will be. Here’s how to create a business plan for your online business. 

Sum Up Your Plan With an Executive Summary

As the name suggests, the executive summary outlines the key points discussed in the rest of the ecommerce business plan. It is critical when you’re approaching potential investors with limited time. 

The executive summary is often the last section to be written, but it should be the first thing someone reading your plan sees. The executive summary’s goal is to encourage the reviewer to continue reading the rest of the business plan.

Keep it brief — an executive summary shouldn’t exceed one page.

Introduce Your Company With the Company Overview

The company overview introduces the business. By the time a reader finishes this section, they should know who you are and what you plan to do.

This section should provide an overview of your business in terms of:

  • Company and brand name
  • Brand mission, vision, and values
  • Business history: How did your company start?
  • Business structure: Are you a single proprietorship, partnership, corporation?
  • Business model: Do you purely sell products? Will you get into ads or affiliate marketing?
  • Value proposition: What makes your company unique?

Study Opportunities by Conducting a Market Analysis

In an industry as volatile as ecommerce, it’s no exaggeration to say that choosing the right market can make or break your business — you may continuously struggle to sell if you’re in the wrong market. As such, it’s important to do some market research.

This section of your business plan should discuss:

  • Market size: How big is your potential market?
  • Market share: What percent of the market have you captured?
  • Industry trends and growth: Explore other trends that may arise over time and other markets you can branch out to. A SWOT analysis can identify strengths, weaknesses, opportunities, and threats.
  • Competitive analysis: How do you fare compared to your competitors? What strategies are you going to adopt? Will you differentiate, segment, or offer competitive pricing?

For ecommerce startups, you should also include the following when doing a competitor analysis:

Get Into More Detail About Your Products and Services

You will mention your products and services in other parts of your ecommerce business plan, but you can dig into the particulars in this section. 

A products and services section is crucial if you sell niche products or provide a unique service.  If you sell a variety of items, you can include general descriptions of each here.

Convince Your Target Audience To Buy With a Marketing Plan

Once you establish that you have a winning product to sell to a promising market, it’s time to determine how you’ll convince customers to buy. This could involve working with bloggers and influencers, sharing branded quips with market leaders on LinkedIn, or by signing up as a retailer with Amazon. 

A marketing plan discusses your strategy to advertise your business and reach potential customers. Your plan will highly depend on the profile of your target market.

Your ideal customer is the foundation of your marketing plan. Visualize what kind of person you want to buy your products or services to create a buyer persona. 

Come up with a set of general demographic characteristics such as:

  • Age
  • Gender
  • Education level
  • Salary

You should also consider their specific behaviors — how do they spend their time and money? For instance, a stay-at-home mom has different interests and spending habits compared to a college student.

Additionally, most ecommerce marketing strategies include information on what Neil Borden calls the 4P’s:

  • Price: How much do your products and services cost? Why did you price it that way?
  • Product: What are the product’s salient features? Why should people buy it? What makes it different from competitors?
  • Promotion: How are you getting the word out? Are you going to do it through social media advertising? If so, what platform?
  • Place: What ecommerce platform will you use to sell your products?

How to Do SEO for Ecommerce Websites: Techniques, Tools, & Best Practices >>

Share Your Ecommerce Startup’s Day-to-Day With an Operations Plan

The operations plan details how you’ll run your online business. This section should demonstrate to potential investors that there are contingency plans in place if difficult situations arise. It should also define the specific nature of your ecommerce store, such as whether it involves dropshipping or print on demand.

Your operations plan should cover every aspect of the supply chain:

  • Suppliers and service providers: Where are your products sourced or produced? What about any raw materials that make them up?
  • Production: Are products made, bought, or will they be dropshipped? Are they physical products or digital products?
  • Facilities and equipment: Do you plan to have an office, physical retail space, or warehouse?
  • Sales channels: Aside from your chosen ecommerce platform, will you also be selling on social media?
  • Inventory: How much product will you have on hand? Where will it be stored?
  • Delivery fulfillment: What is your delivery lead time? Will you offer both local and international shipping?

How Do I Find the Right Dropshipping Suppliers? >>

Demonstrate Profitability With a Solid Financial Plan

The time or effort you invest won’t matter much to potential investors. Their top consideration is a business’s financial feasibility. 

Your financial plan is one of the most critical sections in your ecommerce business plan. With 82% of companies failing due to cash flow problems, potential investors want to know if a business will be worth their while. Digging into the financials will also help to determine how to fund initial startup costs.

Most financial plans include:

  • Income statement: This includes revenue sources and income statements which show whether the business was profitable or not.
  • Balance sheet: This provides a snapshot of your business’s equity, which is the difference between the assets and liabilities.
  • Cash-flow statement: This is similar to the income statement but provides a real-time report of your revenue and expense flow. More income than expenses indicates a positive cash flow, while the opposite indicates a negative cash flow. Aim for the former to keep your business solvent.

Final Thoughts: How to Create a Business Plan for Ecommerce 

An ecommerce business plan facilitates your business’s success by providing direction for where it should go. Writing an effective plan for your online store does not have to be complicated. 

If you spend time gathering information on your company, competitors, and future plans, then your business plan can be a roadmap to achieving your business goals. 

You handle the business plan, and we’ll handle your website. Jumpstart your ecommerce company with Hostdedi’s managed WooCommerce hosting packages and our online StoreBuilder today. 

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How to Find a Profitable Niche for Your Ecommerce Shop

One of the biggest reasons why small businesses fail is a lack of product strategy.

Too many online shops resemble marketplaces that sell everything. They figure this means they’ll be able to capture a larger market and more customers. However, when you try to sell to everyone, you end up selling to no one.

If you want to brand your online business or be an authority, you have to choose a product niche. Choosing the right niche establishes your credibility over competitors, ensures a more focused business, and opens you up to other income opportunities down the line, such as affiliate marketing.

What’s the result? Profitability.

In this guide, you’ll learn:

  • What a niche is.
  • How to find a profitable niche.
  • How to find a niche product.

What Is a Niche?

A niche is a profitable market segment with a focused audience. It is a subset of a large market defined by its own unique identity.

For example, the furniture market can be segmented according to use (i.e. office furniture, home furniture, or antique furniture), material (plastic, wood, or upholstered), or price.

The specific niche you choose can influence many aspects of your business, including:

  • What products you sell.
  • How much you sell.
  • Which suppliers you work with.
  • What kind of marketing strategies you should use.

Choosing the perfect niche is more complicated than it seems — you need to find a niche with products that are high in demand but low in competition.

Only when you find the right niche can you determine how to find a niche product. 

Below you’ll learn how to find a profitable niche.

How to Find a Profitable Niche

  • Brainstorm niches you’re passionate about.
  • Identify the problem of your niche market.
  • Look for profitable niche markets.

How to Find a Profitable Niche Idea #1: Brainstorm Niches You’re Passionate About

To start your search for a profitable niche, make a list of your interests and what you’re good at. This is just the brainstorming stage, so don’t worry about financial viability at this point.

The ideal niche is at the intersection of profitability and your interests. Business is hard work. If you’re in it for the long run, it’s best to create a business you know you’re going to enjoy.

Additionally, if you choose a niche you’re passionate about, you already have an idea of the basics, including: 

  • Who to sell to.
  • How to sell it.
  • What needs to be improved.
  • Where to get suppliers.

Who knows — you may even get to develop new products. 

How to Find a Profitable Niche Idea #2: Identify the Problem of Your Niche Market

Good marketers know the key to success and longevity in business is to identify an unmet or underserved need and create a solution.

Analyze your target audience and identify gaps in the marketplace. Your products or services should address a pain point that your audience is currently experiencing.

Here are some websites you can use to seek out that information:

How to Find a Profitable Niche Idea #3: Look for Profitable Niche Markets

Validate your business idea by checking on its value in the niche market. Otherwise, you’ll waste time and effort trying to sell something unprofitable. 

Remember: Not all markets are created equal. Some are more profitable than others. Choose a sector that has anticipated growth.

To start, read articles on ecommerce trends, and look through a list of profitable niches.

How to Find a Niche Product

Now that you’ve learned how to find a profitable niche, it’s time to look for products to sell. 

A suitable niche product should:

  • Have a relatively low amount of competitive products.
  • Be in demand.
  • Have the potential for long-term popularity.

Here’s how to find a niche product:

  • Check past and present trends.
  • Perform keyword research.
  • Study the competition.

To choose the best niche products, analyze past and current trends. Input keywords from the niche you’re eyeing in Google Trends to check their performance over time. 

For instance, the search term “weight loss pills” enjoys relatively stable activity because people will always be interested in an easy way to shed pounds.

Meanwhile, seasonal terms such as “candy cane” only see a surge in searches around Christmastime.

Avoid fads. “Bread baking” may have experienced a surge in search volume during the height of the pandemic. But its popularity has already dropped back to pre-pandemic levels, which indicates bread baking niche products will not be viable long-term.

How to Find a Niche Product #2: Perform Keyword Research

To find saleable niche products, do keyword research on popular ecommerce platforms such as eBay or Amazon

Amazon’s bestseller page is a goldmine for keywords you can break down into niches and sub-niches.

Let’s say you want to move into the beauty industry. On the bestseller page of Amazon’s Beauty and Personal Care category, you’ll find subcategories such as bath accessories, fragrances, hair care, and makeup. Explore these categories for new products to sell.

Look at the highest-rated items and their prices to validate what people are willing to pay for them.

How to Find a Niche Product #3: Study the Competition

Although you may want to break into a new niche, competition signifies a healthy business opportunity. 

Be wary of a niche that doesn’t have any competitors. They’re evidence of an existing market. Competition indicates people are looking for the kinds of products you want to sell.

When you study the competition, you can also identify gaps in their current offerings and the markets they’re targeting. Use tools like Ahrefs and SEMrush to research your competitors’ top content, traffic sources, social media, and sales pages.

Final Thoughts: How to Find a Profitable Niche for Your Ecommerce Shop

Contrary to popular belief, it’s relatively easy to make money online, but many small businesses fail due to a lack of a product strategy.

Learning how to find a profitable niche and how to find niche products is vital to building an online business. Use the information to stand out from the competition, establish your credibility, and create a focused business.

Have you found your niche? Get your online store up and running fast — check out Hostdedi’s ecommerce hosting plans today.

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Agency Matters: Preparing Your Ecommerce Clients for Black Friday

Holiday sales events are right around the corner and if 2020 has taught us anything, it’s that we need to be ready for anything. This year ecommerce sales have blown projections out of the water, and even in an unstable economic climate, the holiday shopping season is anyone’s guess.

Our advice?

Prepare your clients’ sites now, be ready for that wave of traffic, and if it never comes, at least you won’t be explaining why they missed out on the biggest quarter of the year because their site couldn’t handle the traffic. 🤷‍♀️

Here’s a list to start running through.

Ask Them If They Have Any Sales or High-Traffic Events Planned

The main concern for developers outside of user experience and site functionality during the holidays is site performance. In order to set up the site for success though, you need to know what your clients are planning.

Get a detailed list of their promotions, including which products they’re targeting, which pages they’re sending traffic, dates, discount offers and codes – absolutely everything.

But above all else, communicate to them that preparing ahead of time will allow you to allocate the hosting resources they need to avoid server crashes and a slow site. Their conversions are on the line, after all.

Check Host Bandwidth Limitations and Prepare Your Clients

Holiday traffic spikes can be unpredictable to say the least, and sometimes a service restriction buried in your host’s SLA can be what throws an unexpected wrench in your client’s plans.

Remember – there’s no such thing as unlimited bandwidth. Read the fine print in your hosting agreement and press support until you get a real answer, so you can determine exactly what happens when a big wave of traffic hits your clients’ sites.

Run Performance Tests NOW

Weeks before those sales events kick off, start running performance tests across the site to determine how it holds up under dramatic increases in traffic. Are there issues with slow checkouts? Are you getting 502 errors?

Read this article to learn more about how to run performance tests on your WooCommerce store.

Get Enterprise Clients Set Up With Performance Solutions

If you’re running ecommerce sites for ecommerce clients who have high traffic volumes on a regular basis, you’ll need extra robust solutions to get them through the holidays without a hitch. Most enterprise hosting solutions require long-term contracts, but Hostdedi offers a new feature, Advanced Auto Scaling, that allows you to toggle on more resources incrementally, with no long term agreements.

Learn More About Advanced Auto Scaling

Get EVERY Magento 1 Store On Safe Harbor

Magento 1 reached end of life over the summer, which means that any client still running their store on this platform is at massive risk of compromising their customers’ data and being out of PCI compliance.

If they’re holding off on a migration because the timing isn’t right or funds are tight, send them our way to get them set up on Safe Harbor by Hostdedi. It’s a solution that will keep Magento 1 stores PCI compliant and secure until they figure something out.

Learn More About Safe Harbor

Implement Optimization Plugins for WordPress Sites

If you don’t already have speed optimization plugins running on your clients’ WordPress sites, it’s time to implement them and start testing now. Start with image compression, CDNs, and lazy loading, and eliminate redundant plugins wherever you can.

WordPress plugins are famous for not getting along and breaking sites when you have the wrong ones turned on at the same time. That’s why the Hostdedi WooCommerce and WordPress experts created Value Added Bundles – to save you money, and tons of time trying to optimize the right combination of plugins.

Learn More About WooCommerce Plugin Bundles

Set Up Coupons

Get a full list of coupons from your clients and start getting them imported into your client’s ecommerce application. Be mindful of any conflicts too – if a coupon can’t be combined with another offer, be sure to create a rule for that.

Optimize for Mobile Buyers

This. Is. EVERYTHING.

You’re probably a really good web developer, which means you probably already know that the majority of traffic these days is coming from someone on their phone. Tiny mobile devices are the new rulers of ecommerce user experience, and your sites HAVE to play nice with them.

Make sure your clients’ sites are extremely mobile friendly, and consider deploying a PWA (if nothing else, going into the new year) to keep the user experience fluid across browsers and devices.

Enable Save/Favorite Features

Giving shoppers a way to favorite items or add them to a wishlist is a great way to help your clients capture more revenue. 

Walk Through Checkouts 

Improving your clients’ checkouts can have a dramatic impact on their revenue, so be sure to walk through it as a user and take any notes on areas that may need improvement.

Cart optimization is a big topic on its own, but here are some tips on what to look into:

  • Use a persistent cart that tracks items, even if the user leaves the site and comes back later
  • Add credit card scanner to make entering payment details easier
  • Offer a few ways to pay
  • Keep it simple – try to limit it to a single page checkout
  • Reduce form fields wherever possible
  • Ask for payment details last
  • Make shipping costs clear and simple early in the process
  • Enable guest checkouts

Enable In-Cart Upselling

Smart product recommendations and upsells are a massive driver of revenue for ecommerce brands – give your clients the technology they need to capitalize on this area, too.

Ask About Abandoned Cart Emails

Abandoned cart recovery can make up for a lot of lost revenue. Talk to your clients to make sure they have retargeting set up for those carts, whether it’s ads or emails, and make sure their sites are set up to implement it ahead of Black Friday.

Audit Their Search Functionality

A good search function on an ecommerce sites can help place customers with products they’re trying to find – a bad one can send them somewhere else. Audit your clients’ search plugins, and if they don’t have one, be sure to get one setup ASAP.

Elasticsearch 

Make Sure Brick and Mortar Clients Are Using a Cloud POS

If your clients are running physical stores and online stores, be sure to have them use a cloud POS that will integrate the data across both the website and in-store purchases. 

Hostdedi has just partnered with Oliver POS for our WooCommerce clients, and it’s a fantastic solution that not only integrates this data, but does it for free on an open source platform that you can create custom apps for.

Learn More About Oliver POS

Clarify Terms For Free Shipping With Your Clients and Set It Up

Studies show time and time again that free shipping, even with an elevated product cost, triggers more customers to buy. Be sure to clarify the threshold for free shipping, program it into the checkout, and communicate it clearly across the site.

You’ll also want to clarify the time it takes to deliver items clearly throughout the site and checkout.

Have a User-Friendly Return System Ready

Simple, free returns keep customers coming back. Have a returns policy and process clearly outlined on your site, and make it easily accessible to customers.

Have a Plan for the Unexpected

Site performance is going to be your biggest concern as a developer during the holiday shopping season. The weakest link is ALWAYS going to be the potential for a site to crash and keep you on the phone all night with hosting support working on a fix.

If you’re not working with a managed platform like Hostdedi, you’re going to need to more closely monitor site performance and bandwidth.

But with Hostdedi, you can clock out at five.

Thanks to our auto scaling, your client’s sites will automatically get the resources they need when traffic spikes, with the first 24 hours of auto scaling completely free of additional charges.

Learn more about Hostdedi Managed WooCommerce and Magento hosting, and we’ll handle the migration for you.

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What Is PCI Compliance? – Hostdedi Blog

When it comes to processing payments online these days, most people don’t even bat an eye. Shoppers are paying with credit cards, over email, and through Facebook, but for ecommerce sites, payment security risk aversion is integral to how they do business.

Here’s how to make sure that your clients’ sites are staying compliant, and what to do when you’re dealing with an out of date application that’s reached end-of-life.

What does it mean?

First of all, let’s get our heads around what PCI compliance even means.

Originally set by the major credit card companies, the PCI Security Standards Council formed these parameters for payment processing compliance to protect their cardholders from security threats and fraud.

Using a set of qualifications to determine the safety of a point of sale terminal or ecommerce website, these standards are now mandatory best practices between businesses who process card payments and their customers.

The standards for PCI compliance are as follows:

  • Install and maintain a firewall configuration to protect cardholder data
  • Do not use vendor-supplied defaults for system passwords and other security parameters
  • Protect stored cardholder data
  • Encrypt transmission of cardholder data across open, public networks 
  • Use and regularly update anti-virus software or programs
  • Develop and maintain secure systems and applications
  • Restrict access to cardholder data by business need to know
  • Assign a unique ID to each person with computer access
  • Restrict physical access to cardholder data
  • Track and monitor all access to network resources and cardholder data
  • Regularly test security systems and processes
  • Maintain a policy that addresses information security for all personnel

For developers, a separate set of standards has been set by the PCI SSC to ensure websites are processing electronic payments securely:

  1. Do not retain full magnetic stripe, card verification code or value (CAV2, CID, CVC2, CVV2), or PIN block data
  2. Protect stored cardholder data 
  3. Provide secure authentication features 
  4. Log payment application activity
  5. Develop secure payment applications
  6. Protect wireless transmissions
  7. Test payment applications to address vulnerabilities
  8. Facilitate secure network implementation
  9. Cardholder data must never be stored on a server connected to the Internet
  10. Facilitate secure remote access to payment application
  11. Encrypt sensitive traffic over public networks
  12. Encrypt all non-console administrative access
  13. Maintain instructional documentation and training programs for customers, resellers, and integrators
  14. Maintain instructional documentation and training prog

Penalty fines for non compliance can range between $5,000 and $100,000 a month, and inevitably wind up being the merchant’s responsibility. Additionally, merchants can face steeper transaction processing fees, or even the inability to process electronic payments for their customers in the future for non-compliance.

What Developers Need to Know About PCI Compliance

Thankfully, payment applications and payment gateways have taken care of much of the technical side of ensuring that payments are processed securely. As a developer or site builder, your primary responsibility where PCI compliance is concerned is to ensure that your applications meet the PCI SSC’s standards and stay up to date.

PCI compliance standards are determined by the volume of transactions which a merchant processes. The merchant is assigned a compliance level requirement based on the volume of business that he or she does, and the security of their sites may be tested by an approved scanning vendor, or ASV.

Source

Ecommerce sites fall under PCI SAQ 3.1 and have the following standards:

Whether your client requires an ASV really depends on which payment processors and ecommerce applications you’re running their site on. These charts depict the flow of data, so that you can determine whether your client’s site will need an ASV or not.

The burden of site security is ultimately on the site administrator, which may be you. If that’s the case, the strongest prevention for noncompliance is pretty straightforward:

  • Make sure plugins stay up to date
  • Ensure that software updates and security patches get installed
  • Maintain stringent server security standards
  • Make sure ecommerce applications are up to date

What End of Life Means for PCI Compliance

Recently, Magento 1 reached end-of-life, putting thousands of ecommerce sites into a compliance grey area when Adobe stopped issuing official security updates.

While the ecommerce application itself represents only a small part of what PCI compliance truly entails, for merchants still running their ecommerce sites on Magento 1, the important thing to note is there will no longer be security patches and updates issued for the platform. They’re on their own unless they’ve invested in a solution like Hostdedi Safe Harbor

This primarily applies to number seven in the list of PCI compliance measures for developers:

Test payment applications to address vulnerabilities.

With Magento no longer looking after security updates for Magento 1 users, it begs the question: can an ecommerce site be PCI compliant on an ecommerce application that’s reached end of life?

Yes. Hostdedi has done it with Safe Harbor. 

What to Do When a Platform Reaches End of Life

Magento was built on Hostdedi servers. When Magento 1 started approaching end of life, our engineering team jumped to work developing a solution that would allow merchants to decide for themselves when to migrate.

For many Magento 1 store owners, making the move to Magento 2 in the wake of COVID-19 wasn’t financially realistic. Site migrations are expensive and complex, and with so much upheaval and uncertainty, many were understandably scared to make the leap.

So the engineering team at Hostdedi came up with a compromise. Hostdedi Safe Harbor was built to address Magento 1 end-of-life, keeping ecommerce sites and stores owners PCI compliant until at LEAST the end of 2021, so they can migrate on their own time.

With regular security patches made by the team who literally started with Magento, Hostdedi is able to keep Magento 1 sites and stores PCI compliant until they’re ready to make the switch.

End of life doesn’t have to mean the end of PCI compliance.

Get more time, and keep customer data safe with Hostdedi Safe Harbor.

Click here to learn more about Hostdedi Safe Harbor, or open the chat window at the bottom right of your screen to speak to sales.

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Why DTC Ecommerce Matters More Than Ever Today

In 2020, DTC ecommerce has proven to be another sensible way to reach your customers, and many brands are looking at starting from B2B and transitioning to direct to consumer.

Those of us working in ecommerce have been seeing the shift for a while now. As more and more stores transitioned their inventory online, the ecommerce boom wasn’t just happening – it was inevitable.

Fast forward to spring of 2020 though, and NOBODY could have predicted what happened next. 

Massive store closures triggered the single largest exodus from brick and mortar the world has ever seen, with more than 100,000 small businesses in the US alone closing for good as a result of the COVID-19 shutdowns.

But small businesses weren’t the only ones to take a hit. Larger retailers like Neiman Marcus have filed for bankruptcy in the last few months, and that list continues to grow.

All things considered though, the pandemic has thrown into sharper relief the need for a stronger ecommerce presence for many of these retailers. Record-breaking numbers are rolling in for ecommerce for 2020, including a growth spurt that put the industry four to six years ahead of schedule.

The Problem With Wholesaling During COVID-19

Even in spite of many shoppers setting their sights online, manufacturers saw major hits to their B2B sales as brick and mortar stores shut down. Those relying on wholesale relationships to float their revenue took devastating hits in the midst of the shutdowns.

As consumers turned to ecommerce sites like Amazon though, the fallout continued. In mid-March, Amazon restricted their B2B purchasing of nonessential goods in the wake of unprecedented demand for household staples.

As Amazon made room in their warehouses for hand sanitizer and toilet paper, purchase orders for nonessential goods rolled to a trickle or stopped completely, and manufacturers saw B2B sales plummet.

In the scramble to recover these revenue losses and brace for a potential second wave of retail shutdowns, many manufacturers are turning to DTC ecommerce models.

What Is DTC and a DNVB?

DTC stands for direct-to-consumer. It’s an ecommerce model wherein the brand sells directly to consumers, rather than through retailers, essentially cutting out the middleman. Some DTC evangelists will tell you the goal is to handle production, sales, distribution, and marketing under one roof and never go wholesale, but in 2020, it’s proven to just be another sensible way to reach your customers, and many brands are looking at starting from B2B and transitioning to DTC.

A DNVB is a digitally native vertical brand that starts this way. Best typified by brands like Avocado Green Mattress and Allbirds, DNVBs typically start with a simple product line (typically one or two options), clear, crisp branding, and a strong mission-driven component.

With brick and mortar sales remaining unstable and manufacturers now dealing with the fallout from their Amazon backlogs, DTC ecommerce is looking more attractive all the time – and consumers are taking notice, too.

Mission-Driven Shoppers Are Fueling the Fire

Interestingly, DTC brands are creating evangelical customers and devoted fan bases centered around two things:

  1. Amazing products
  2. A unifying brand mission

Consumer data shows that millennials now make up the majority of buying power in the US, and are 63% more likely to purchase from a brand because of their mission and values. 

This data, coupled with the boom the DTC sector has seen from innovative consumer goods startups has created a replicable business model that’s looking all the more attractive to manufacturers who entered the industry through wholesaling.

Four Components of a Successful DTC Ecommerce Site

Over and over again, we see brands killing the game in DTC ecommerce, and the best of them have a few things in common:

  1. Clean branding. Visually-driven shoppers respond to powerful messaging and clean logos. Brands like Tushy and Anese are leading the pack with memorable branding that leaves a mark in a saturated market.
  1. Smooth UX. At Hostdedi, we know that an ecommerce site’s performance is directly linked to its ability to generate revenue. The best DTC ecommerce sites have an intuitive layout, load fast, and have a smooth interaction with their shoppers.
  1. Simple product lines. They say simplicity sells, and that’s certainly the name of the game in DTC ecommerce. Strong DTC brands typically have one or two flagship products they make their mark with and expand on.
  1. Strong missions. The data supports that today’s consumers are more conscious of their purchasing decisions than ever. Making your mission clear and building your brand around it (instead of as an afterthought) will literally win you more sales, and good karma.

Is It Time for You to Go DTC?

If COVID-19 has taught us anything in ecommerce, it’s that you can’t have enough backup plans. Diversifying how and where you sell your products makes all the sense in the world. Those high-volume retail POs may seem nice for a while – until they vanish, and your revenue vanishes with it.

Build resiliency, connect with your customer base, and get in on the thrill that is DTC ecommerce. Talk to one of our experts today about what it would take to get your brand online and selling DTC.

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Hostdedi Magento Cloud vs. Magento Commerce Cloud

One of the misconceptions about the Enterprise version of Magento 2 is that you have to use Magento Commerce Cloud for hosting. Or that Magento Commerce and the AWS-based Cloud solution are one and the same thing. Magento Commerce Cloud hosting for your Magento store is built by Adobe and includes powerful features (modules) like page building progressive web applications (PWAs). Hostdedi Magento Cloud is hosting for your Enterprise Magento Commerce store, or your Magento Open Source Store with features for professionals like high scalability, development/staging environments, and PCI compliance.

In this post we’re going to clear up the misconceptions between these two very different platforms.

Magento Commerce Cloud was created about two years ago after Magento was sold to Adobe. It’s their official solution for hosting Magento and it has a lot of good things going for it:

  • Magento Commerce Cloud includes common functionality for your Magento store
  • They allow progressive web apps (PWA)
  • They have a cloud based infrastructure for scalability

But it’s important to remember that Adobe, even though they own Magento, is the new kid on the block. They’re still learning how to build & optimize the infrastructure needed to power a Magento site.

Building a Solid Infrastructure

Magento Commerce Cloud is great at including product features. But they’re still building their entire stack on someone else’s infrastructure. What does that mean?

It means, if you have a problem with your website, you first have to bring it to Magento Commerce Cloud team. And they have their standard Service Level Agreement (SLA) to respond to you. If in that time, they discover a problem with the underlying infrastructure, they’ll submit a ticket to Platform.sh – the company that maintains their infrastructure.

So your SLA is built on top of the SLA from another company. That means solving any potential problems could take twice as long. Not great if you have a problem that negatively impacts your store and you lose money every minute it’s not fixed.

Hostdedi Magento Cloud is built on our own infrastructure. Hostdedi has one SLA, and because we own the infrastructure, we can solve all of the problems ourselves and we don’t need to rely on any other companies. This means less finger pointing, more informed support, and faster resolution.

Experience

The other big difference between Hostdedi Magento Cloud and Magento Commerce Cloud is that we aren’t brand new to this space. Magento was literally built on our servers back in 2007 – before Magento v1 was even released (Magento v1 was officially released March 2008). 

We saw the opportunity of Magento back in 2008 when brick & mortar stores first started moving online to avoid the worst of the Great Recession. We helped brand new stores get started with Magento and we learned a lot about it in the process, like exactly how many PHP workers were needed, what caching systems were most effective, and which Magento settings are worth enabling. We distilled everything we knew to create the very first Magento specific hosting solution. 

We also wrote the book on Magento Best Practices and shaped the Magento community by siege testing Nginx vs Apache and settling that debate. We’ve improved and continued optimizing and put out a new book for Optimizing Magento 2.

Contributing Open Source Libraries

Besides optimizing hosting for lightning fast websites, Hostdedi also created Turpentine which was the first varnish cache for Magento. You can take advantage of this on any hosting that uses varnish. 

We also created security extensions and continue to contribute to Magento core.

Plan for Exploding Growth 

Most hosts, including Magento Commerce Cloud, give you a certain number of resources that you must remain within. If you go over a bandwidth threshold you might have to pay more – or if you have too many people on your site at a time, it slows down to a crawl. 

Hostdedi created our first Magento plan during a time when everyone was getting online and then immediately started outgrowing their small plans. We’ve also been around for over a dozen Black Fridays so we’re used to seeing retailers needing extra resources on demand. That’s why we built auto scaling into all of our plans.

If you have a post that goes viral or your Black Friday sales really take off, we have you covered with additional PHP workers which keep your website snappy and your visitors happy.

Conclusion

Adobe Magento Commerce includes a lot of nice product features and it can be easily managed in the cloud. Hostdedi Magento Cloud is both more established and leads the way with the most efficient & affordable infrastructure you can find.

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The eCommerce Guide to International Shipping Costs

If a product in your ecommerce store has global appeal, start thinking about a plan for shipping internationally. Shipping overseas isn’t the same as shipping within the country. 

Here’s a primer on the customs issues, international shipping costs, and other logistics you’ll manage as you begin shipping around the globe. Keep in mind that there’s rarely universal truth in international shipping. Get individualized quotes for your own products so you know how much it’ll really cost. 

What is international freight and what is the cheapest international shipping? 

Since shipping overseas is usually more complicated than domestic shipping, international freight logistics can present some unique challenges for eCommerce businesses. Some companies specialize in international freight and handle the logistical challenges for you. 

For small orders sent to your customers, you probably won’t have to think too much about customs issues. Even if you do outsource this process entirely, however, it’s worthwhile to learn more about how international shipping works for your products. You’ll be more adept at troubleshooting and improving your shipping processes. 

Shipping domestically can be very straightforward. You pay a single amount and your package gets delivered. But costs associated with international shipping may include the following: 

  • Customs charges 
  • Customs brokerage costs
  • Ground transportation
  • Maritime transportation
  • Air transportation 

When you ship, you’ll need to choose a carrier to transport your package for you. There are three different types of carriers, and they all work a bit differently. They also frequently work together. Even if you choose one of these, it’s possible that your carrier will contract out part or all of the shipping to another one on this list. 

International Carrier 

If you choose an international shipping carrier such as FedEx or DHL for the entire route, some or all of your shipping costs may be rolled into your postage. International carriers are responsible end-to-end for shipments and generally permit more visibility across the entire process than a national carrier working with a shipping partner would. 

This option may be more expensive than the other two and doesn’t necessarily allow you as much flexibility, but it’s likely a simpler and less time-consuming choice. 

National Carrier

A national carrier handles your packages within a specific country. They may not provide service outside that nation’s borders, or they may contract with local carriers to transport packages through other countries. You can work directly with a national carrier, but you’ll need to ensure that someone is still transporting the packages once they leave national borders. 

One example of a national carrier is the United States Postal Service (USPS). USPS has international reach by working with local partners to transport your packages. When a partner is delivering a package, USPS may not allow as much visibility into the shipping process which means you may not have access to much information when you ship internationally. 

For a small package that only weighs a few pounds, choosing a national carrier might be cheaper than your other options. Larger or heavier packages may be better off with an international carrier or freight forwarder. 

International Freight Forwarder

A third party can organize the handoff between USPS and the final carrier while also handling any customs issues. This is what an international freight forwarder does. They have permission from you to take on freight and have their own agents handle the customs and shipping logistics along the way. 

You could use multiple carriers and arrange the logistics yourself but in practice, this may be too complicated and time-consuming. That’s where outsourcing can make sense. For example, you may decide to ship a package from within the U.S. to the Canadian border through USPS, then have another carrier take it from there. 

Cheapest Way to Ship Internationally

Shipping to other countries is not just one process. There’s so much that depends on the country. To send your products overseas, consider the end country destination and plan accordingly. 

Consider these country-specific sections for more information. This is just a starting point, so be sure to do your own research just to be safe. 

Cheapest Way to Ship to Canada

Shipping to Canadian consumers can be complex. Although you generally shouldn’t have a problem shipping to most Canadians, Canada is a diverse country with a variety of different shipping arrangements and options. Some Canadians live in very isolated, rural areas that may make shipping a more expensive process while others are in urban areas with an abundance of affordable shipping options. 

Retailers must be prepared to work hard in order to win Canadian customers. Having convenient shipping is a good start. Whatever you can do to make purchasing from you easier is probably worthwhile. 

Online purchases made by Canadians do incur customs duties and other taxes, and paying these is the responsibility of the buyer. Although these costs are not coming out of your own pocket, you should know that these expenses do directly impact how much your shoppers can spend with your business. By keeping costs for your customers low, you could even offset some of these expenses and make it more likely that you’ll win their business. 

Besides import costs, Canadians also pay sales taxes for their province and a Goods and Services Tax (GST) to their federal government. GST represents 5%  of the total. Local sales taxes bring this amount higher. 

If your products are relatively cheap, you probably won’t lose business because of import duties. Recent updates to customs processes and costs mean that Canadian customers ordering from American businesses are exempt from paying customs costs on purchases up to $150 CAD, with some exceptions. This is up from the previous $20 CAD limit set in 1985. The old $20 rules still apply with items shipped through Canada Post, so keep in mind the larger limit only applies to private carriers such as FedEx. 

When you ship to Canadians, you have a lot of options. 

Shipping Options for Sending Items to Canadian Buyers

Canada Post, the national postal service, is one great option for retailers. You can also use FedEx, UPS, DHL or Purolator. Here’s where you may also want to consider Canadian geography when you’re shipping. Some of your customers may live in isolated communities and you may need to account for longer shipping times. As a result, some carriers such as FedEx, have different policies within Canada. FedEx Ground ships in four days or less within the US, but in Canada, takes up to seven days for shipments. 

You can use an individual carrier or use a multi-carrier shipping option that hands off packages to a new carrier at the border. Although the usual U.S. carriers you’re probably familiar with are available, the additional choices you gain within the Canadian border may be worth it. Purolator, for example, is known for reliable next-day shipping by 9 a.m. and 10:30 a.m. to Canadian addresses. When shipping packages, having this option available to customers may be a helpful selling point. 

Cheapest Way to Ship to the U.K.

In the U.K., eCommerce businesses have several options for shipping within the country such as the Royal Mail and DHL. You also have UPS international, FedEx, and even USPS international shipping. Shipping to the U.K. can be an expensive venture with a USPS Small Priority Mail Flat Rate box costing $36 and a Large Flat Rate box costing $94. Your costs will certainly be higher than shipping domestically, but that doesn’t mean shipping to the U.K. is completely cost-prohibitive for retailers. 

Imported goods need to follow the U.K. guidelines. Some of this may involve more work and recordkeeping on your part unless you outsource part or all of this process. 

You should find out if you’ll owe Value Added Tax (VAT) and have to collect it for your customers. Many eCommerce sellers are required to create their own VAT registration and request information from customers to help with location verification and tax reporting — even if you’re not based in the U.K. 

These rules may change. At time of writing, the U.K. was planning to leave the European Union which could result in different policies. 

Cheapest Way to Ship to Australia

When you’re shipping to Australia, you have several options. You can use an international carrier such as UPS, FedEx, or DHL. You could also use USPS. With Flat Rate International options available, you can reduce your costs for shipping a package to Australia. 

Customs costs may not be as much of an issue for you if your products are valued at less than $700 — which is about the minimum taxable amount for Australians who are buying products online and having their purchases shipped. GST imposed by the Australian government applies for more expensive purchases. 

If you use a freight forwarder or shipper, they’ll provide a Self-Assessed Clearance (SAC) Declaration for the Australian government when your package arrives at the border. Otherwise, you’ll be responsible for providing the SAC. 

Cheapest Options for International Shipping

You can streamline your international shipping and save money by creating a process. If you want a game plan for how you’ll ship internationally when orders arrive, take the time to decide in advance which countries you’ll be selling to, and create a system for taking care of shipping. As your business operations grow, you may need a more formal internal process for packaging and shipping including designated job descriptions for team members you have in charge of the process. For automated or outsourced shipping, plan how you’ll transport packages to the carrier, or sign up for a pick-up service. 

Your cheapest overall option may be outsourcing your shipping to a service such as Parcel Monkey or Easyship. These services can take advantage of volume discounts on international shipping and pass the savings along to you. In some instances, this can cut half of your shipping costs. 

Before you make any shipping decisions, carefully consider your options and find out what every shipping service has to offer for your business and your customers. 

Choosing the Best International Shipping Service

Business owners should shop around and consider several important factors when looking for the right shipping service. Start with an example order and calculate the cost and options offered by several different carriers. 

Before you make a list of carriers to compare, you may want to consider what you’ll need in a package shipping service. Specifically: 

  • Product categories you ship
  • Countries you ship to 
  • Countries you plan to ship to later as your business grows 
  • How much of the regulations and customs process you need to outsource 

See how every option stacks up against the others and note any questions or concerns you have for further research. Of course, you’ll also want to compare: 

  • Price
  • Arrival time 
  • Convenience for your customers
  • Shipping experience for you 

Every time you ship internationally, you have the option of using one single carrier or using a multi-carrier shipping option. 

Automating Your Shipping with the WooCommerce Shipping Plugin 

If you’re using WooCommerce, a shipping plugin can help you ship more efficiently. Balance multiple carriers along with a busy array of incoming orders and have costs calculated for you. A variety of different plugins are available with various features designed to make shipping calculations easier and enable quick comparisons among carriers. 

With a plugin, your site can calculate shipping rates accurately and provide customers with multiple choices. This feature allows you to provide different price points and shipping times so buyers can make their own decisions. 

Once you’ve automated your shipping, your online store can run with less guesswork and greater simplicity for both you and your customers. 

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