Meaghan Brophy

A POS—or point-of-sale—system is an invaluable business tool that has replaced the traditional cash register with constantly evolving, tech-driven solutions. These platforms do more than ring up sales. Many can track inventory across multiple sales channels, handle employee schedules and clock-ins, and collect data for business intelligence and personalized service. Below, we look at nine POS trends and how they impact small businesses everywhere. 1. Untethered POS Systems In the traditional retail environment, transactions happen at one location: the checkout counter. But with modern POS systems, you’re no longer tethered to the counter—or even your store. Associates armed with handheld devices can meander about the store, interact with customers, look up items, and complete sales on the spot. Mobile POS (mPOS) systems let you take orders at trade shows, curbside, or off-site locations and sync with your main store. mPOS transactions alone were forecasted to hit $2.88 trillion by the end of 2022. But it doesn’t stop there. With the advent of social distancing and isolation, mPOS and online sales allows customers to order for delivery, or order and pick up in-store—everything from restaurant meals to luxury items and even cars. Some 52% of retailers said additional customer delivery and pickup options were a top priority for 2021, and that trend is expected to continue in 2022 as customers grow accustomed to the convenience. There are expected to be 85.6 million mPOS users in the US by 2025. And, the average mobile transaction value is expected to increase from just over $7,000 in 2020 to $11,755 in 2025, signaling the continued—and increasing—prevalence of untethered shopping. 2. Seamless Omnichannel Experiences Omnichannel experiences mean merging in-person, mobile, ecommerce, and social sales, with a holistic view of the customer relationship on any channel at any time. It isn’t a new trend by any means, but POS technologies continue to empower retailers to create a more seamless customer experience across all touchpoints. Specifically, different types of POS systems can help retailers build: Non-linear paths to purchase: Today’s shoppers don’t use a linear path to purchase. For example, someone might initially learn about your products on Instagram, browse your storefront, and finally purchase through your website. The buying journey is increasingly complex, even for traditional brick-and-mortar businesses. Ecommerce as an extension of brick-and-mortar stores: Online holiday sales in 2021 hit nearly $205 billion, a rise of 8.6% from 2020, with 58% of consumers (87% of GenZ consumers) saying that social media will influence their buying decisions. Click-and-collect strategies: Customers can shop online and come to the store to finish the transaction, taking advantage of buy online, pick up in-store (BOPIS), or curbside pickup. BOPIS is also on the rise and has grown from just over $35 billion in US sales in 2019 to an estimated $83 billion in 2021; BOPIS sales are expected to further expand to $141 billion in 2024. In the wake of COVID-19, 46% of retail executives plan to invest more in omnichannel retailing as compared to their pre-pandemic sales strategy. Luckily, POS technology makes it possible for small businesses to accommodate these complex buying behaviors, letting them compete with the bigger budgets of larger companies. and , for example, allow shoppers to start a basket online and complete their order in-store—and vice versa. 3. Alternative Payment Methods We continue to move away from being a cash-based society with credit cards accounting for 38% of point-of-sale payments and debit cards making up 29%. In fact, cash now accounts for just 12% of POS transactions. While credit and debit cards remain popular, usage is expected to decrease gradually as consumers access ever-expanding payment options: Mobile/contactless payments: Digital/mobile wallets are becoming increasingly popular. While they accounted for only 6% of POS transactions in 2019, that number is expected to climb to 15.5% by 2023. These payment options include Google Wallet, Apple Pay, PayPal, Venmo, CashApp, and other apps and services. Amazon Pay: While launched in 2007, Amazon Pay has grown in popularity, with 5 million merchants and the Amazon Pay for Business app. In 2022, it intends to extend services to 1 million offline merchants through a local merchants program. Buy Now Pay Later (BNPL): Credit cards compete with BNPL services like Klarna, Clearpay, and Laybuy, which lets consumers purchase and pay in installments, often with no interest. As reported by Euronews, Juniper Research predicts that by 2026, BNPL services will quadruple to $995 billion. Installment payments: Even without BNPL services, you can use a POS with installment payment options. This is particularly ideal for consumers who don’t have traditional credit options, so offering these payment plans can improve conversions, average order size, and retention rate. Saved payments: For returning customers, you can use your POS to securely store their payment information for a more seamless checkout experience—encouraging repeat purchases and increasing customer satisfaction. Bill splitting: Especially handy in the restaurant environment, bill splitting gives customers the option to pay for a single ticket with multiple payment methods. Gift cards: Gift cards are expected to have a compound annual growth rate (CAGR) of 16.2% from 2020 to 2027. They’re not limited to physical cards, either. Shopify POS, for example, has an omnichannel gift card experience—cards purchased online can be used for in-store purchases and vice versa. Loyalty and rewards programs: Customer loyalty programs encourage repeat purchases and increase customer lifetime value by offering incentives for customer retention. Learn more in our section below on integrated customer loyalty programs. Cryptocurrency: Major financial organizations like PayPal, Visa, and Mastercard have started accepting cryptocurrency, which can be a viable form of payment if you’re willing to accept it. Related: Best Crypto Payment Gateways for Small Businesses When you accommodate additional payment methods with a flexible, tech-forward POS, you can accommodate more customers—and encourage more sales in turn. 4. Personalized In-store Shopping Experiences Nearly three-quarters of consumers expect brands to be able to understand their needs. Personalization was a top priority for only 41% of retailers in 2020 and 2021, taking a back seat to fulfillment solutions and mobility due to COVID-19, but as more customers have returned to stores, personalization is a higher priority again, and even more so in 2023. The POS industry is addressing these challenges head-on, as it makes personalization easier and more accessible to small businesses at scale. In fact, Reportlinker.com predicts the global personalization software market to grow from $620.57 million in 2020 to over $1.7 billion by the end of 2025. Having a POS that provides personalized shopping experiences is important because: Shoppers expect it: Consumers not only benefit from—but have come to expect—personalized experiences. They know the technology is out there, and they know their data is as well. Now shoppers are demanding they benefit from this information-sharing. Customers are willing to share data: To get the personalized recommendations they want, many customers are willing to share their data in exchange for a number of benefits. Of those surveyed, 39% find monetary compensation most valuable, and 20% would share their personal data for promotion incentives and discounts based on their interests. Perceived value is slightly lower for convenience and speed (16%), more responsive customer service and support (14%), and new services and products (11%). Overall, according to a Merkle study, only 23% of consumers resist sharing data. Buyer satisfaction depends on it: According to a McKinley report, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen. You can increase your prices: Better experiences mean you can charge higher prices, which ultimately increases profit margins. In fact, consumers are willing to pay more for an improved shopping experience. POS software captures valuable information with every transaction, so you can build customer profiles that help you learn more about your clientele. Over time, you can personalize automated campaigns through your POS, enabling your associates to access customer profiles at checkout or on an mPOS. 5. Rise of POS Data Analytics Most consumers are willing to save purchase history, preferences, and personal details if it means the checkout experience is easier and they get relevant offers. But POS data is valuable for more than just getting to know your customers and their communication preferences. The metrics from your POS can also reveal information about your business’ staff, products, store layout, foot traffic, and returns rate, as well as other metrics. POS systems track which inventory is selling and which items are less popular with your customers. Likewise, POS data provides insight into seasonal trends and makes it possible to increase margins based on pricing data. This makes it easier for businesses to optimize retail data analytics and drive sales. Many payment processors have add-ons or integrations that also provide data for making better business decisions: Payment processors: The best payment processing services include reports on your credit card sales, helping you track trends like declined transactions, returns, and more. Customer surveys: Many POS systems let you add a link to a receipt for customer feedback, sometimes with a reward of a free drink or a discount. (Need help designing a customer satisfaction survey? We have templates to get you started.) Time tracking and scheduling: This is especially useful for restaurants, but good for any shift-driven business. When your time-tracking software integrates with your POS system (or is included, like with ), you can see labor vs profits or sales volume to generate the most efficient schedules. Payroll software: Your payroll software can give you insight into your labor costs with insights like which employees make the most sales or generate the biggest tips, or do job costing to help you determine the best use of resources. , for example, offers payroll services that seamlessly integrate with its POS software. Foot counters: As people continue to return to the stores in 2022, integrating foot counters like into your POS can help you track how many customers you have or when your peak hours are, and give you a basis for understanding conversion rates. 6. Move to Cloud-based Software Many of the advantages of POS technologies, such as personalized shopping and omnichannel experiences, rely heavily on the different parts of the system sharing data. This is most commonly done through the cloud—servers run by the POS company and accessed through the internet. Most POS companies ensure the servers are secure, kept up to date, and have private sections apportioned to individual businesses. This makes it easier and more convenient for businesses, especially small businesses that cannot afford their own server. It also makes it easy to update POS software. It’s no surprise, then, that cloud-based systems are a continuing POS trend. Moving to the cloud is a priority for retailers, with 22% of current retail POS systems already in the cloud and 29% of retailers planning to move to cloud-based systems by 2024. In fact, the cloud POS market size is expected to grow to $6 billion by 2025. 7. Upgraded POS Hardware POS industry trends are also seeing developments in business-friendly hardware like tablets and smartphones, barcode scanners, receipt printers, and cash drawers. Retailers are moving away from the traditional cash register and toward more mobile, flexible, and advanced registers. In fact, hardware upgrades are the top POS priority for 30% of businesses. In addition to self-service kiosks and upgraded POS systems in general, other POS hardware trends you can anticipate are: Swipe transactions decline: With the normalization of chip readers and rise of touchless payments, swipe transactions are going away. In August 2021, Mastercard announced it is doing away with the magnetic stripe on its cards. Other credit cards are likely to follow. Bluetooth: Modern POS industry trends incorporate Bluetooth technology. This allows businesses to connect mobile card readers and other peripherals without hogging Wi-Fi bandwidth and increasing internet expenses. Still, the industry faces some challenges with respect to upgrading POS hardware. Newer, more powerful tools may increase network demand, be stolen, or require additional training for sales associates and other employees. Increasing self-checkouts: With the labor shortage and rising minimum wages, stores continue to add self-checkout stations. This trend is expected to continue in 2022 and beyond. Electronic shelf labels: Another labor-saving feature is electronic shelves, which are expected to have a CAGR of 21% between 2021 and 2026. Electronic shelf labels display the product price on the shelf and are automatically updated when the price is changed on a central server. Pickup lockers: With BOPIS mainstreaming, having secure lockers to store items where customers can pick them up themselves will add to customer satisfaction while cutting down on labor. 8. Upgraded In-store Technology Overall The POS systems themselves aren’t the only areas getting tech upgrades. Retailers need to look at other infrastructure to ensure they can power and support the POS technology they plan to use. More than half of retailers plan to replace their POS software within three years (30% within one year). And that three-year number jumps to nearly 60% for POS hardware (22% within one year). When it comes to mPOS, half of merchants that already have mPOS plan to replace it within three years. As businesses look to keep their POS systems up-to-date, it’s even more important to ensure all other tech is upgraded accordingly. Although an offline mode is one of the top features retailers look for when choosing a new POS, it’s still important to consider internet and bandwidth. Retailers that don’t have strong internet already may need to invest in setting up WiFi networks for their stores so employees can use cloud-based and/or mobile POS technologies. Field Nation also predicts “there will … be a sustained increase in the installation of low voltage data and voice cables.” 9. Savings-oriented Subscription Offers Product subscription programs let customers enroll in recurring shipments—often at a savings. The pandemic led to an explosion of subscriptions, with 99% of consumers surveyed saying they subscribed to at least one service in 2020, and 52% saying they kept the subscription after the trial period. There are three types of subscriptions: Access: These are generally digital in nature: videos, e-books, audio books, images, and the like. Replenishment: Common subscription services include razors, meal kits, clothing, cleaning supplies, and other commonly used household products. These comprise 32% of all subscription box sales. Curation: These boxes have items picked by the seller. Examples include HelloFresh, DateBox Club, or KiwiCo. In this vertical, food and meal boxes were the highest in price, followed by clothing and fashion. Curation subscriptions have historically been the most popular, which harkens back to personalization, as these boxes are created based on consumer preference. Choosing a POS system that lets your customers subscribe to products or services makes it easy for them to keep their favorite products in stock or get new items while effortlessly maintaining brand loyalty. It also provides new market opportunities, as you can design customized boxes based on your products. 10. Putting Checkout in the Hands of Customers Self-service kiosks have made their way to restaurants and retailers of all sizes. As the labor shortage of 2021 continued into 2022, restaurants started self-service kiosks to compensate. And business demand for field services to help with self-checkout tech and tools grew 42% in 2021, with forecasts to grow even more beyond 2022. Self-checkout isn’t just for grocery stores anymore. Retailers of all kinds and sizes can implement the POS technology trend into their business. Some POS systems offer for mobile self-checkout, often with the use of QR codes and a companion mobile app. As an added bonus—self-service kiosks may result in people ordering more. Bottom Line Point-of-sale systems have come a long way since they were first introduced a few decades ago. Now, they’re more than just a way to take payments and make sales—modern POS trends have added features and capabilities that turn each system into a virtual command center for your entire business. With increased mobility, data analysis, and security, POS technologies are becoming an integral part of every retail business. If your business could benefit from the increased flexibility and insight current POS technology provides, read our guide on the best POS systems for small businesses to find a solution to match your business needs. 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The four primary Amazon seller fees are sale-related fees, seller account fees, shipping costs, and Amazon FBA fees. Sale-related fees range from 8% to 45% of each product’s selling price, with the average seller paying about 15%. Account fees range from $0.99 per item sold to $39.99 per month. You’ll also need to fulfill and ship your orders, which varies widely in cost, depending on your products and fulfillment method. We’ll walk you through each type of Amazon seller fee below and show you how to estimate the fees you’ll pay for each product you sell on the ecommerce platform. You can also download our Amazon Seller Fees ebook to use as reference later. Download Amazon Seller Fees ebook 1. Amazon Sale-Related Fees There are three types of Amazon seller fees that you may pay when you sell products on Amazon: referral fees, minimum referral fees, and closing fees. These fees vary based on your item category and selling price, so getting an accurate picture of your specific costs might take a little research—but we’ll show you the right resources to use. Here’s a snapshot of these fees, and we’ll examine each in detail below. Referral Fees All Amazon sellers (on Individual and Professional accounts alike) pay a referral fee for every item that sells on the marketplace. The two things that determine your referral fee are your: product category and selling price. Referral fees are calculated as a percentage of your product’s selling price. Most sellers pay a 8%–15% referral fee. But these fees can go all the way up to 45%, depending on which categories your products fall under. Minimum Referral Fees Amazon assigns a Minimum Referral Fee to some categories. If a category in which you sell has a minimum referral fee, you’ll pay the greater of the two fees (not both!) based on your product’s selling price. Closing Fees Amazon charges an additional fee for products sold under its media categories. This fee is the Closing Fee, and it’s a flat $1.80 charge, which is added to the Referral Fees for items in any media category, including: Books DVD Music Software and computer/video games Video Video game consoles 2. Amazon Seller Account Fees Amazon offers two types of Amazon seller accounts. The fees and features of each type are geared toward the specific selling needs of low-volume individuals and high-volume business sellers. Along with the differences in fees, each type of account offers features that accommodate small or large sellers’ particular needs. Which Account Is Best for You? If you’re an established ecommerce seller moving to Amazon, the Professional Seller account is your best pick; the Individual Seller account is very limited in comparison and requires more hands-on management. However, if you’re just starting to sell products on Amazon, you can get started on Amazon with no up-front costs at all using an Individual Seller account. It costs $0 to register an Individual Seller account and list products, and you’re only charged fees when your products sell. In fact, you’re not even “charged”—Amazon takes its cut from your payout, so you don’t pay a dime out of pocket. 3. Shipping Credits & Costs These charges are not seller fees, but they can cost you money if you’re not careful. If you ship Amazon orders yourself, Amazon pays you a shipping credit on every sale to cover your shipping costs—but there’s a catch. The credit Amazon pays sellers is generally low compared to the shipping rates you actually pay to ship orders. Depending on what you sell and the total size and weight of each package you ship, you may wind up spending far more to ship orders than you receive from Amazon’s shipping credit. To ensure you don’t lose all of your profits to shipping costs, you need to know how much you’ll get from Amazon for each item you sell. You can use the Amazon shipping credit chart below to estimate your credits for each product. To see if credits will cover your shipping costs, use the chart above to figure out what Amazon will offer you for shipping your products. Then, compare these amounts to your actual shipping costs. If you sell small, lightweight items, you might come out ahead. But if your products ship in large and/or heavy boxes, you might find you’ll lose on every sale. One thing that can lower your shipping costs dramatically and boost your Amazon profit is shipping software. With it, you can quickly compare costs and automate your shipping tools. Some shipping software, like , imports orders directly from your Amazon account, selects the best shipping rate based on price, offers discounted postage rates, and even emails tracking information to your customers. This helps you ship every order at the lowest possible rate while shipping more efficiently. Visit Stamps.com to start a four-week trial and get $5 in free postage, or read our in-depth Stamps.com review. Understanding your shipping credits vs. actual shipping costs is vital to determining whether you can price items profitably. You’ll likely find that Amazon is a feasible (or even ideal) marketplace for certain items but may not be right for everything you sell. In fact, shipping costs are a top reason that Amazon sellers, especially Professional Seller account holders, turn to Fulfillment by Amazon (FBA) to ship the goods they sell on Amazon. Want to get this article as a PDF? Click here to get it for free. 4. Fulfillment by Amazon (FBA) Fees Both Individual and Professional sellers can use FBA to stock, pack, and ship their Amazon products. Of course, Amazon charges fees for this, but many Amazon sellers find the FBA fees are quite reasonable for certain items. Plus, it takes time-consuming daily order packing and shipping tasks off your shoulders and even makes your items Prime-eligible. A majority of sellers use Amazon FBA while working from home. It’s definitely worthy of consideration. However, FBA fees vary based on product size and weight. Like every other facet of selling on Amazon, you need to understand the total fees you’ll pay to store and ship your products with FBA before jumping onboard. FBA Fees by Service Amazon’s FBA fees are pretty streamlined—the picking, packing, and shipping costs are compiled into one charge, and the other charge is for inventory storage. FBA fees include boxes and packaging and even cover returns handling if your buyers return items to Amazon. The two types of FBA fees you’ll see are: Pick, pack, and weight handling fees: This is your entire pack-through-shipment fee, including your shipping cost. Monthly storage fees: This is the cost of storing your products in Amazon’s warehouse. Product Size Determines FBA Fees FBA fees are based on the size of the product you’re storing and shipping. Size includes any packaging for your product, such as shoe boxes, blister packs, or retail packaging. Amazon divides FBA products into two size categories. Standard-sized products: Small standard-sized items, fully packaged, must weigh less than a pound and not exceed 15" x 12" x 0.75", while large standard packages can be up to 20 pounds and 18″x14″x8″. Oversized products: Any item over 20 pounds and/or exceeding 18″x14″x8″ is considered oversized. Click on the tabs below for a look at how current FBA fees stack up based on size and item type. FBA Inventory Storage Fees FBA also charges inventory storage fees that increase dramatically during the October to December holiday season. These storage rates are charged in addition to referral fees, account fees, and fulfillment fees. If you’re considering FBA, you need to be aware of other fees that can creep onto your bill. These include long-term storage fees and relabeling fees for improperly prepared products. If you don’t stay on top of these, they can quickly eat away at your profits. Amazon Fee Frequently Asked Questions (FAQs) Bottom Line Amazon generates nearly 40% of ecommerce sales and scores over 2 billion visitors a month—even in the low seasons. Its enormous popularity and customer-centric reputation make it a highly promising marketplace to use, but these advantages come at a significant cost with many complex parts. The difference between profit and loss can be slim on every item you sell on Amazon, so it’s vital that you understand the fees and costs that incur. With this knowledge in mind, you’ll be able to find profitable products and enjoy success in this huge, ever-growing marketplace. Ready to get started? Follow our step-by-step guide on How to Sell on Amazon. You May Also Like … How to Start a Retail Business How to Start an Online Store Online Shopping Statistics 

Jewelry is a $270 billion market with an endless amount of opportunity to carve out a specific niche or market. You can make jewelry for men, women, adults, children—or animals even. Though competitive, a jewelry business can also be lucrative. Historically, the average gross profit margin has been in the 43%–47% range. It’s estimated to cost anywhere between $600 and $29,000 to start a jewelry business, though you can certainly get started with less if needed. Whether you want to learn how to start a jewelry business online or through a physical store, we outline nine steps you can follow below: Step 1: Develop Your Skills Like many creative entrepreneurs, you can get your start making jewelry by jumping right in. Many jewelry designers did exactly that, honing their craft with training later on. With so much content available online, you can pretty much learn any type of jewelry-making skill with some Googling and YouTubing. But to refine your skills—and build confidence—you’ll likely want to invest in more formal training. That’s the route Despina Canelake of Jewelry by Thespi took. “​​I taught myself initially how to make basic jewelry, and then I took classes to learn how to metalsmith from another local jewelry maker,” she says. Sarah Rivera of Caracuri followed a similar path. “I learned to make jewelry while traveling in Central America with a Mexican artisan,” she says. “I learned different techniques with other artisans along the way.” She continues to learn and has plans to take fine jewelry classes someday. Danielle Gerber, owner and founder of Freedom Jewelry, was first introduced to the industry at a job she once had. “I used to work in a luxurious diamond jewelry boutique owned by two brilliant female diamond drillers, and I’ve learned all the basics about the industry from them,” she says. Later on, she enrolled in classes more relevant to the niche she wanted to pursue. “When I decided I wanted to learn how to craft in metal, I took private classes with amazing jewelers.” She also learns about gemstones from her suppliers and colleagues and the internet. Veronica Cabrera, owner and founder of Hunter Hue, took a somewhat more formal route, though the designer proclaims she is mostly self-taught. “I'm self-taught in my craft, but I have studies in art that have also helped a lot,” she says. Those studies have transferred nicely to her jewelry designs. If jewelry-making isn’t for you, that doesn’t mean you have to give up on your idea to start a jewelry business. You can work with suppliers who will make the jewelry for you. For example, you might buy and sell wholesale jewelry from designers, source and sell vintage pieces, or dropship from a third-party supplier. Step 2: Narrow Down Your Niche Choosing a niche is important when starting any kind of business, especially so when it comes to a crowded industry like jewelry. Your niche market is essentially a specific area in which you specialize. It helps you hone in on your messaging and marketing to appeal to a specific group of people. For example, Limnia sells customized jewelry. It describes its products as “renewable jewelry for the modern woman,” explaining that “we create design-forward, customizable fine jewelry that empowers modern women to buy for themselves, on their own terms.” This is a very specific market they’re appealing to: forward-thinking, independent women who have some money to spare. On the flip side, The Clear Cut sells diamond engagement rings—jewelry not meant to be purchased for oneself. The marketing and messaging for these two examples will be very different because they operate in two different niches. Other attributes to consider for your jewelry business niche include: Customized or personalized designs Handmade jewelry Children’s jewelry Fine jewelry Costume jewelry Designs with semi-precious stones Metal jewelry Unisex jewelry Smart/connected jewelry (things like wearable fitness bracelets) Step 3: Create a Blueprint for Your Business Once you settle on your niche, the next step is planning your business. This includes drafting a business plan, deciding on a legal structure for your business, and patenting your designs. Step 4: Build Your Brand Branding is important, especially in a crowded market like jewelry. Your brand identity makes the first impression and is also ultimately what customers will connect with. Sure, they’ll love your jewelry, but you want them to love your brand as well. And while visuals are important, a strong brand goes beyond a great business logo design. Your brand identity should come through in your voice and copy, and in every customer touchpoint—online and in person. Step 5: Organize Business Finances When you start a business, it’s a good idea to treat it as an entirely separate entity from your personal life. And this includes finances. Small business owners should keep business and personal finances separate as an extra layer of protection should something go wrong with the business. This includes getting dedicated business bank accounts, such as a business checking account, a business savings account, and possibly signing up for a business line of credit. These resources can help you navigate this further: How To Open a Business Bank Account in 6 Steps + Checklist ​​How To Open a Sole Proprietorship Bank Account How to Change Business Bank Accounts & When to Switch How To Choose a Bank for Your Small Business Additionally, you might also need to secure funding to either launch your business or reinvest once you’ve gotten it off the ground. External financing options often look for solid business credit history. Having good business credit will make more funding options available for small business loans and investors. You can also pursue crowdfunding regardless of credit history. Related: Best Crowdfunding Sites for Small Businesses Step 6: Create or Source Jewelry to Sell When it comes to the actual products you’re going to sell, the process may be slightly different depending on whether you’re creating jewelry from scratch or reselling it. Either way, you’ll want to secure a workspace and source suppliers before bringing your designs to life. Step 7: Determine Where to Sell Your Jewelry There are several options for where to sell your jewelry: in person, online, through social media, or at third-party marketplaces. You may also choose a combination of selling platforms to maximize sales. Step 8: Choose an Order Fulfillment Strategy Shipping and order fulfillment is critical but not the most fun part of your jewelry business. When it comes to getting orders to your customers, you can choose to handle this yourself, offload it to a third party, or use a hybrid of the two. If you have a physical store, you can make it do double-duty as a fulfillment center. Click and collect offers convenience for shoppers—without the cost of shipping for merchants. To help you navigate shipping and fulfillment for your jewelry business, check out these posts: Best Order Fulfillment Companies for Small Businesses International Fulfillment: Ultimate Guide to Finding the Best Method In-house Fulfillment vs Fulfillment Center: Ultimate Guide Ecommerce Shipping & Handling Guide [+ Free Checklists] How to Organize Inventory for Small Businesses Step 9: Promote Your Jewelry Business Once your jewelry business is set up, the last step is launching and promoting it. Physical stores can benefit from a grand opening event. Additionally, you can promote your business through social media, paid ads, email marketing, and participating in local events. How to Start a Jewelry Business Frequently Asked Questions (FAQs) How much do jewelry owners make? Jewelry designers make an average annual salary of $49,058. Jewelry makers make the most in Washington and Massachusetts, and the least in South Dakota and Mississippi. Is jewelry-making a profitable business? Yes, jewelry-making is a profitable business. Jewelry makers can earn a gross profit in the 40%-plus range. Bottom Line Starting a jewelry business can be a very rewarding entrepreneurial endeavor. It’s a great creative outlet, offers lots of flexibility, and has the potential to earn a substantial living.

To start a dropshipping store, you need an initial investment of $100–$500 for platform fees and marketing, a computer with internet access, and plenty of time for research and setup (along with five to 10 hours a week in ongoing management of your new operation). Unlike standard ecommerce ventures, you don’t need to buy expensive inventory, invest in warehousing, or spend time fulfilling orders. This makes dropshipping a low-cost, low-risk entry into online retail, with profit margins averaging 15%–20% of each item’s selling price. Most dropshippers report reaching profitability within six months. There are many variables involved in the trajectory of your store, but it’s reported that it takes roughly 12 months of dedicated effort to have an operation that can replace your full-time income. Here’s how to start a dropshipping business in ten simple steps: Step 1: Develop a Competitive Business Concept Most successful businesses are based on a concept around which you center your brand, content, and product collection. It can grow out of something you are passionate about or be based solely on sales trends that you uncover through product research and trial and error. As a dropshipping seller, you can brainstorm ideas, experiment with different concepts, and fine-tune your business as you go. You can proceed with a fuzzy notion of your business and brand. One of the biggest advantages of the dropshipping model is that you aren’t tied down by expensive inventory, so changes can be made at any stage. As you explore dropshipping business concepts and research products, keep in mind that focusing on niche products can make marketing more effective, help your website rank high in topic-specific search results, and strengthen eventual buying intent. Also, ask yourself how your business concept and related offerings will solve problems for your buyers. This approach can help you achieve an edge in the competitive ecommerce world by creating meaningful connections between your customer base and your offerings. Conduct Product Research Whether you’re niche-focused or casting a wide net, you’ll want to do some product research to get an idea of what’s selling. Seek out products and categories that are trending to gain your store traction. Not sure where to start? Here are the metrics you can use to assess the potential of a product, plus helpful tools and resources to get the data you need: Step 2: Analyze Your Competitors Successful competitors provide valuable insight into what works in your market, and that info can help you construct your own plans. Here are some effective methods to research your competitors: Check out search engine results pages (SERPs): Search for your own keywords on Google and assess which sites are ranking highly. Make sure to explore image search and shopping results as well as standard web results. From here you can identify who your top competitors will be. Take note of their site layout, product range, pricing, item descriptions, shipping strategy (including cost and delivery speed), and advertisements. Use social media: Instagram, Facebook, TikTok, and even Twitter are effective marketing platforms that often receive a lot of funding and attention from online stores. Find your competitor’s accounts and evaluate how they manage their socials—including response time, customer engagement, feed layout, post frequency, and affiliate influencers. Make sure to follow their accounts to stay up-to-date.Alternatively, you can search Facebook’s Ad Library for sellers promoting goods within your niche. This can be a helpful resource for planning your own marketing strategy. Sign up for mailing lists: By subscribing to your competitor’s regular emails, you’re getting crucial information sent right to your inbox. Keep an eye on the updates you receive to gauge things like frequency, copywriting tone, and promotion models (like sales and coupons). Step 3: Choose a Name and Branding For Your Dropshipping Business Once you have an idea of the types of products you’re going to sell and who you are marketing to, formalize your concept by choosing a name and brand for your dropshipping store. Especially because you are selling products online, marketing your business on popular social media channels like TikTok and Instagram as well as through search engine marketing will play a big role in your success. Take this into consideration when choosing your brand name. Select Your Business Name Your name should reflect the products you sell or the customers you are selling to. Ideally, your name will be memorable, brief, and easy to spell. If you’re not sure where to start, Shopify’s business name generator can help spark ideas. Check for Available Domains and Social Media Handles As if choosing a business name wasn’t hard enough, you also need to make sure there's a corresponding domain name and social media usernames available. Selecting a business name that is already taken could put you at legal risk. Sharing a name with other businesses is also confusing for customers and makes it harder to market your store. When you have some possible name ideas, search available domains through a domain provider like Google, GoDaddy, or BlueHost. For social media handles, you can search within the platforms you think you’ll want an account with. Learn more about domain names:  What is a Business Domain Name? How to Choose a Domain Name? Domain Name Ideas  Register Your Business While this step isn't technically required, we highly recommend it. If you don’t register your business in your state, it’s by default recognized as a sole proprietorship. This is a common choice for dropshipping store owners and definitely the simplest route to take. In a sole proprietorship, your business earnings are reported on your personal taxes, with no additional state or federal filing requirements. Plus, you don’t need an employer identification number (EIN) to operate, although it’s still a wise idea to get one for licensing and banking purposes. The biggest drawback of a sole proprietorship structure is that you have no personal liability protection. This means that if a customer were to ever sue your business, your personal assets would be at risk. If a judge ruled your business at fault, they could order the liquidation of personal assets or garnish wages to pay damages. For this reason, many store owners opt for an LLC, but it’s up to your assessment of your own risk of being sued. Selling certain offerings—such as skin care products or baby goods—may increase that risk. Create a Brand Concept Now that you have your name, fully flesh out your concept with the following: A logo: The Best Sites for Logo Design (Free & Paid Options) Color scheme: How to Pick a Website Color Scheme Typography: How to Pick a Font for Your Brand If you’re artistically inclined or have an interest in marketing, this step can be a lot of fun. If this doesn’t sound like your cup of tea, you can enlist help from professionals on sites like UpWork. Alternatively, many ecommerce platforms have free resources and themes that can help guide you through this process. Step 4: Source Products from Reliable Suppliers Sourcing products is one of the more time-consuming steps in starting a dropshipping business. To be sure that your efforts pay off in profits, you’ll want to consider each item and partner-vendor for its total viability. Consider these factors as you review potential products and suppliers: Item Popularity: An item’s previous sales volume is an easy metric to find on most dropshipping marketplaces. Although you may be able to market less popular products effectively, hot-sellers are usually safer investments of your time. Profitability: Your credit card processing fees and shipping costs will take a consistent bite out of your profits, so evaluate each item’s wholesale cost and suggested pricing for potential profitability. Keep in mind that you can increase an item’s markup to make your sales more profitable or decrease it to better attract buyers. Item Quality: One of the biggest drawbacks of dropshipping is that it’s hard to gauge the quality of your goods. You can order a sample for yourself to get hands-on experience, but this can become overly time-consuming to do for an entire store’s worth of offerings. Most dropshipping sellers rely on marketplace supplier ratings and sales numbers when judging the quality of an item. Location: A supplier’s location will have an impact on shipping cost and delivery speed—important factors in the customer’s buying decision. Many dropshipping vendors are based in China, so try to work with vendors who provide ePacket shipping for fast, trackable deliveries. Supplier Reliability: Until you’ve worked with a supplier, it’s difficult to assess how reliable they will be. However, most dropship marketplaces are strict with their vendors and won’t keep a vendor with ongoing service and quality complaints. Additionally, supplier reviews are usually accurate and helpful resources. Return Policy: Most dropshipping marketplaces aim to avoid returns and handle most problems via no-return refunds. However, each marketplace operates differently, so you’ll want to check out the return policy and process for each platform (or direct vendor) you use. The two main ways to source dropshipped goods are through dropshipping marketplaces or direct-source suppliers. Here’s an in-depth look at each option: Source Products from a Marketplace When First Starting For new sellers, using marketplaces is the easiest path to launching a dropshipping business. These platforms automate the process and make it easy for entrepreneurs to both build and operate a business. They do this by directly integrating with ecommerce platforms, which allows you to: Easily search for and source goods to sell Add listings to your store with a single click Display stock availability to avoid backorders and customer service issues Automatically forward orders to be shipped to the correct suppliers Automate shipping confirmations to update customers Pay the wholesale cost upon shipment (after the buyer has paid you for it) The most impactful of these benefits is the ability to find products with ease. Platforms like DSers host thousands of suppliers—ranging from independent manufacturers to individual wholesalers to and aggregate vendors such as AliExpress. In total, DSers connects store owners with millions of products to choose from. You can search the entire catalog by item, category, vendor, location, or by useful metrics like sales volume. Dropshipping marketplace profit margins run about 15%–20% of the selling price, which is a healthy profit for a low-cost, low-risk selling method. The downside of using these marketplaces is that your competitors can access the same products. Some marketplaces charge monthly or per-transaction fees to access their platform, but most offer a free starter plan to help you start a dropshipping business without any upfront costs. Top-rated Dropshipping Marketplaces After the startup phase, many dropshipping ventures use more than one marketplace to source their products. You can list and sell goods from multiple marketplaces using plug-and-play integrations on platforms like and , which helps diversify your offerings. Seasoned dropshippers and industry experts agree that dropshipping marketplaces are ideal for startups or side-gig and part-time sellers. However, to develop a more profitable, long-term venture, sellers need to look at more direct sourcing options, which we’ll look into next. Once you’re familiar with your sourcing options, it’s time to get your website up and running. Step 5: Choose a Dropshipping Website Strategy To put your dropshipping business into action you need an accessible, user-friendly, and traffic-driving ecommerce website. For this step, you’ll need to plan a model for your site. Choose Between a Product-focused and Content-focused Site Is your business concept more product-focused or content-focused? This differentiation is important because some ecommerce platforms are better for content-rich sites, while others cater to product-focused businesses. Plus, this model will play into your advertising strategy, which we’ll discuss later on. Here’s an overview of these two models: With a general plan for your site in mind, the next step is to obtain the right tool to build it. Step 6: Choose Your Ecommerce Platform To easily build a site with shopping cart and payment processing features, you need an ecommerce platform. We recommend as the best overall ecommerce platform for small businesses. The best ecommerce platform for your dropshipping venture will depend on your store’s model and your plan for sourcing suppliers. Here are some of the top platform options for dropshippers: Once you’ve made an account with your chosen ecommerce platform, the process of building a usable site is simple. We’ll cover the details in the next section. Step 7: Build Your Dropshipping Site Building an ecommerce website starts with laying the groundwork, like setting up payment processing, connecting a domain, and designing a layout. If you’ve chosen Shopify as your ecommerce platform, check out our guide to setting up a Shopify store for detailed instructions. If you’re using another ecommerce platform, refer to the provider’s website for tutorials, FAQs, and helpful articles. Most platforms offer helpful customer support or even free setup assistance sessions to make this step as easy as possible. These resources can help you sort out all of the aspects of your store—from integrating your shipping strategy to listing your products. No matter where you’re setting up shop, building your site will start with: Choosing a template or theme Customizing your pages (use the color scheme and typography you chose earlier) Connecting your domain name Once you have the theme and main pages of your site set up, there are some critical details that may apply differently in a dropshipping operation. Here are some areas of your site to focus on: After you’ve created an online store, it’s time to work on the operational side of your ecommerce business. Step 8: Separate Your Business Finances To launch a legitimate venture, you’ll need to take care of these legal and financial aspects of your business: Step 9: Drive Sales Through Marketing Once your site is up and running, you need to market it in order to attract shoppers. Each of the following marketing tactics is startup-friendly and can be very effective at getting sales flowing: Step 10: Run Your Dropshipping Store Running your dropshipping store mainly comes down to overseeing your orders, serving your customers, and basic accounting. Then, as your business develops, another task is to use analytics to refine your offerings and find ways to drive growth (and make more money). Here’s what the duties of a dropshipping store owner look like: Keeping up with these day-to-day duties as well as site maintenance and marketing efforts is the way to run a successful—and profitable—dropshipping business. How to Start a Dropshipping Business Frequently Asked Questions (FAQs) What is dropshipping? How does it work? Dropshipping is an ecommerce business model where customers place an order on a regular online store, but the products ship directly from wholesale suppliers or manufacturers to the customer. The dropshipper or online store doesn’t keep the products in stock and instead acts as a facilitator between the customer and supplier. In many cases, the customers do not know they are receiving a drop shipped product. Learn more in our guide to dropshipping. Is dropshipping profitable? It can be. Overhead costs are much lower for dropshipping compared to traditional ecommerce because there is no upfront investment in products. However, the profit margin on each individual sale is typically much lower - around 15% - 20% compared to 40% - 50%. Learn more in our guide comparing dropshipping to traditional order fulfillment. How much does it cost to start a dropshipping business? You can start a dropshipping business with less than $100 if you just want a simple setup. At minimum, you’ll need a domain name, an online store, and a reliable internet connection. However, you will also likely want to invest in product samples, which can cost up to several hundred dollars depending on the type and quantity of products you’re interested in. Once you’re up and running, you’ll pay an ongoing ecommerce software fee ($30 - $300 per month). To generate sales, you’ll also likely want to invest in social media and/or search engine marketing as well as content creation. Do I need an LLC to start dropshipping? Technically no. Many new and small dropshippers operate as a sole proprietorship. However, registering for an LLC reduces some elements of personal liability. If you're serious about starting any business, it's a good idea to register an LLC. Learn more about the pros and cons of an LLC. What are the best items to dropship? The easiest items to dropship are typically trending or popular items, lightweight products (for low shipping costs), items that aren’t typically purchased brand name, or items that have a marketable niche. For inspiration, consider the following: Best Items to Buy and Sell for Profit Most Profitable Items to Import from China Bottom Line The dropshipping business model is a highly accessible solution for sellers seeking low-cost and low-risk entry into ecommerce. It’s flexible enough to work for part-time entrepreneurs and has the potential to earn a steady stream of real income. However, it often takes a few months for dropshipping stores to gain traction and be sufficiently profitable. The initial investment of time can be hefty, but your store’s success relies on proper research, site building, marketing, and management. Starting a dropshipping store is best done through and , which integrate to make the process simple from start to finish.

Shipping companies and carriers deliver products to merchants and customers alike. When comparing the top shipping companies—FedEx vs UPS vs USPS (United States Postal Service), you should consider cost, speed, and service. Each carrier is reliable, offers affordable options if your package doesn’t need to arrive quickly, and allows you to pay more for faster delivery. Most small packages ship for less than $20 with each carrier. FedEx vs UPS vs USPS at a Glance When To Use FedEx vs UPS vs USPS FedEx vs UPS vs USPS: Pricing & Speed Comparison Each carrier has different options for shipping speed, customer support, and service options. Price and shipping speed are the most significant differentiating factors as each carrier is relatively equal in other areas. USPS averages the best overall rates for shipping everything from flat mailers to packages up to 70 pounds. However, shipping rates depend on many factors, including size, distance traveled, and service speed. The type of delivery location—home or business—also factors in since both UPS and FedEx charge more for home deliveries. All three options can be viable choices for ecommerce shipping, depending on your circumstances. Shipping prices can vary if you purchase postage in person, and rates will be higher during the peak holiday season. Discounted rates are available from many fulfillment companies and shipping solutions such as . To give you a better idea of pricing among UPS vs FedEx vs USPS, look at the table below for a cost and speed comparison on flat rate, overnight, ground, priority, small, and heavy packages. FedEx vs UPS vs USPS Pricing Comparison (Updated for 2023) *Priority Mail Express, which guarantees 1-2 day delivery FedEx Pricing & Speed Certain FedEx Ground routes are cheaper than USPS and will get the package to your destination up to two days faster. This is especially true for larger, heavier shipments. Should you need a package to arrive as soon as possible, you can get it to your destination as early as 10 a.m. the following day with FedEx First Overnight. You’ll find many drop box locations and retail partners if you don’t have a corporate location near you. See the FedEx rate sheet at the time of publication. UPS Pricing & Speed UPS pricing is competitive for heavier packages and any time you need to ship internationally. Should you need a package overnight, UPS Next Day Air is a suitable option, albeit a pricey one. You’ll pay a small fee if you choose for UPS to pick up your package, but the convenience can be worth it if you’ve already got your shipping label and box packed. UPS also offers attractive commercial discounts compared to USPS. See the UPS rate sheet at the time of publication. USPS Pricing & Speed USPS is one of the best options for sending packages under 20 pounds. It’s also a great option for shipping anything heavy and small, thanks to flat-rate shipping rates. USPS is part of the executive branch of the US federal government, so the hours are more limited than those of FedEx and UPS. However, you can find a workaround by using one of USPS’s many retail partners—often grocery stores. USPS’s low prices and reliable delivery make it the best shipping option for many small businesses. See the USPS pricing sheet at the time of publication. FedEx vs UPS vs USPS: Shipping Features Once you have reviewed the price comparisons between UPS vs FedEx vs USPS, the next element to compare is their shipping features. Service Options Pickup & Drop-off Locations Free Tracking FedEx: FedEx customers can track up to 30 order numbers at a time. Small businesses may sign up for the free FedEx Delivery Manager service, which includes more tracking capabilities, pickup management, and delivery notifications. UPS: UPS offers free tracking for up to 25 tracking numbers via its website. Small business owners can sign up for the free UPS My Choice for Business program. With this, you can monitor inbound and outbound packages, manage returns, and track claims online dashboard. You can also create a branded tracking page for your customers to track their orders. USPS: USPS offers free tracking for up to 35 tracking numbers via its website. You can sign up for free business shipping services to track more orders. Insurance Label Printing Options FedEx: You can print a label on a regular or thermal printer. All FedEx Office locations will also print labels. UPS: After creating a shipment, you can either print shipping or return labels yourself or at a UPS Store. UPS also offers easy step-by-step instructions via its website if you want to install your thermal printer for labels. USPS: You can print labels at a USPS location or use the Click-N-Ship feature to print shipping labels yourself. To access Click-N-Ship, you’ll need to sign up for a free USPS account. The Label Broker ID program also gives customers the ability to print their own prepaid and return shipping labels via the USPS website or at most post office locations. The feature, part of the Click-N-Ship application, provides customers with a unique ID number or a quick response (QR) code scanned at USPS locations when shipping an item. Commercial Discounts Customer Support FedEx: You can contact FedEx via email, phone, or at one of its locations. Phone support hours are 7 a.m. to 9 p.m. Central time, Monday through Friday; 9 a.m. to 3 p.m. on Saturdays; and unavailable on Sundays. Users also have the option to chat with a FedEx representative or access an FAQs section and tutorials from the website. UPS: You can contact UPS via email or phone or by visiting one of their retail locations. You can also hop on to the UPS website to live chat with a virtual assistant or browse the FAQs section and tutorials. Preferred Customer account holders receive a dedicated support team and priority routing when contacting technical support. USPS: USPS customer support is reachable through phone, email, or in person at any location. USPS hours vary but are generally 9 a.m. to 4 p.m. local time—some branches close for lunch. There’s no chat feature on the USPS website, but you can check the FAQs section to find answers to common questions. FedEx vs UPS vs USPS: Ease of Use Each shipping carrier has many locations where you can drop off packages. However, these usually require you to have already paid for postage and packed your box. Retail partners with extended hours for USPS, while FedEx and UPS tend to be open later. Each shipping calculator worked well, except we had minor issues with FedEx—if you’re shipping to a residential address, it uses the FedEx Home option rather than Ground. Using a dimensional calculator before you ship can help approximate cost. FedEx Ease of Use When calculating shipping rates, we had difficulty finding FedEx Ground options using the company’s calculator online. You may need to try multiple browsers to get the rates to show up. However, the rest of the rates were straightforward to calculate. The FedEx Home Delivery option may show up if you’re shipping to a residential location rather than FedEx Ground. This service is faster and offers weekend deliveries to more residential areas. While there are many FedEx locations, some smaller communities may only have one. FedEx hours are usually 9 a.m. to 7 p.m. Monday through Friday and 10 a.m. to 5 p.m. Saturday and Sunday. UPS Ease of Use The shipping calculator on the UPS website is easy to use and provides a simple table with all the rates based on your input. There aren’t many UPS locations, although there are many drop boxes and retail partners like Staples and PostalAnnex. Hours are daily from 8 a.m. to 6 p.m. or later, depending on location. USPS Ease of Use Calculating shipping is easy using USPS because you just need to enter the weight and the ZIP code you’re shipping from and to in the shipping calculator. While nearly every city and town has a USPS location, it may close for lunch in smaller cities and have limited weekend hours. Retail USPS hours vary, so if you’re shipping or picking something up from the post office, you’ll likely have to take off work early. You may find extended hours at retail locations, such as those found in Walmart or Hy-Vee. Typical hours are 6 a.m. to 10 p.m. FedEx vs UPS vs USPS: Customer Reviews In a battle of UPS vs FedEx vs USPS for fast shipping times, it was a tie for most customers. When shipping internationally, customers favor UPS because shipments often arrive much sooner than expected. While pricing is higher for most shipment options through UPS and FedEx vs USPS, customers say they prefer UPS and FedEx because of customer service issues with USPS. Here’s a breakdown of each shipping company’s customer reviews: FedEx: FedEx customers talk about fast shipping and how easy it is to track shipments at all stages. Complaints include frustrations with FedEx customer service and delivery times not being met. Many users have pointed out the convenience of delivery seven days per week, a service available to most of the US. UPS: UPS customers mention one of the perks is that UPS delivers international packages faster than promised. Customers complain about lost packages, damaged goods, and damage to property from delivery trucks. However, customers praise how UPS goes out of its way to deliver packages—even making phone calls to the customer for help locating an address. USPS: USPS customers favor its pricing compared to other shipping carriers. However, concerns about poor retail location hours, lost packages, and lack of customer service are prevalent. Customers also talk about how kind their personal USPS carriers are. FedEx vs UPS vs USPS: FAQ Bottom Line When starting your retail business, you might not think about shipping and fulfillment. But as the lines between retail and ecommerce blur, many retailers also need to consider their shipping options. This is where shipping companies come into play. When comparing FedEx vs UPS vs USPS, consider the price and shipping speed that your small business needs. While USPS has some of the best pricing, FedEx and UPS offer faster shipping times for a higher cost. When reviewing features of UPS vs FedEx, UPS tends to deliver international packages faster than promised. USPS is typically the best comprehensive shipping solution for most low-volume businesses. There are no monthly requirements, the service is reliable, and the regular retail rates are very competitive. However, even lower rates and discounts are available through services like , making it easy to print shipping labels from home.

The best ecommerce platforms offer a powerful website builder on the frontend with detailed order management tools, sales and product features, and marketing solutions on the backend. For small businesses, the ecommerce website builder also needs to be easy to set up and maintain at an affordable price. Based on our extensive research, the best ecommerce platforms for small businesses are: Best overall: Best for growing businesses: Best for adding to an existing site: Best for storefronts wanting to add a website: Best for SEO and drag-and-drop design: Best templates: Best Ecommerce Platforms Compared Get a Personalized Recommendation Do you need help finding the perfect fit for your business? Take our quiz below for a personalized recommendation. You won’t need to enter personal information or be directed to another page. Shopify: Best Overall Ecommerce Platform for Small Businesses is sometimes called the only true competitor to Amazon—and for a good reason. We have tested a lot of ecommerce website builders, and Shopify is one of the easiest systems to use when it comes to creating an ecommerce website and managing orders. Usually, when we test products that are very easy to use, it's often easy to use because the functionality is more basic. And when a product has a ton of functionality, the user interface will typically be more complex or clunky to navigate. Shopify is unmatched when it comes to packing in functionality in a way that is intuitive to navigate for new sellers yet is robust enough to scale up and accommodate enterprise businesses. In fact, in our evaluation, Shopify was the only system to earn a perfect score for sales and product features, as well as ease of use. It’s the best all-around ecommerce platform for most online sellers. BigCommerce: Best for Growing Businesses When it comes to choosing the right ecommerce software for your business, it will most likely come down to BigCommerce vs Shopify. We consider a close runner-up to Shopify in being the best overall ecommerce platform. BigCommerce, as its name implies, is best for growing businesses that need a scalable sales platform. Its open SaaS structure also makes BigCommerce an attractive platform for companies that want to personalize their stores as much as possible. In our evaluation, BigCommerce came right behind Shopify. Its built-in sales features, advanced level of customization, SEO capabilities, and zero transaction fees earned high marks. However, its ease of use and sales volume limits on pricing plans prevented it from getting a perfect score. Ecwid by Lightspeed: Best for Adding to an Existing Site If you already have a Tumblr, Blogger, Wix, Squarespace, or WordPress website and want to start selling products, then is an excellent free option. While Wix and Squarespace have ecommerce plans, they can get expensive. If you just need a simple shopping cart of a few products, Ecwid is a great free option. Ecwid can work on any website where you can inject code. It can also be used as a free standalone website, with its instant site builder. Though this is less common, it’s a good option if you need a quick and simple site with just a few products. It also comes with a mobile-responsive shopping cart and the Apple Pay one-tap checkout feature. In our evaluation, Ecwid lost points for having limited customization features and customer support, which are crucial for ecommerce solutions. However, it is still the best value and user-friendly choice if you want free ecommerce software for your existing website. Square Online: Best for Storefronts is best for brick-and-mortar stores wanting to add online ordering, such as cafes, retail outlets, and professional service shops. A free plan lets you create a professional online store and sell unlimited products with built-in credit card processing. Paid subscriptions are available for more advanced features, such as using a custom domain instead of the yoursite.square.site domain that’s provided for free. Like Shopify, Square includes a POS for businesses that sell in-store and online. Unlike Shopify, however, its POS is free to use, with optional paid upgrades. Square Online is our leading free ecommerce platform. Meanwhile, Square is one of our best POS systems for small businesses. If you need an online ordering solution with BOPIS, curbside pickup, or local delivery to supplement your storefront, Square Online is a great option. Wix: Best for SEO & Drag-and-Drop Design is a popular platform for all kinds of small businesses. In fact, it’s now our top-recommended website builder thanks to its design flexibility and recently improved (and impressive) SEO tools. And, it now makes our list of the best ecommerce platforms. Its new SEO tools along with more payment processing tools, upgraded marketing solutions, and ecommerce-focused reporting tools have earned it a spot on our list. In our evaluation, Wix performed well for site builder tools as well as ease of use. Like Squarespace, Wix is a site builder first, so it excels with its design features, SEO tools, and site analytics; however, it falls short of Shopify and BigCommerce when it comes to inventory, product, and order management, which is reflected in its score. Squarespace: Best Templates is simple but doesn’t sacrifice quality, making it ideal for solopreneurs who don’t want a more powerful system like Shopify but want to showcase their products with top-notch quality. Its sites are always designed to look modern and trendy, no matter how much of a novice you are at web design. In fact, it’s one of our top picks for the best website builder for small businesses for that very reason. In our evaluation, Squarespace earned a perfect score on its design functionality and available templates, as Squarespace is known for top-rated templates. However, as Squarespace is a website builder first and ecommerce platform second, its online selling tools aren’t as advanced as what you would find with Shopify or BigCommerce. How We Evaluated Ecommerce Platforms for Small Businesses Ecommerce Platform Frequently Asked Questions (FAQs) What is the best ecommerce site for beginners? Shopify is the best ecommerce website builder for most beginners. It is easy to use and can grow with you as your business evolves. Learn more in our Shopify review. How do I choose the best ecommerce platform? The best ecommerce platform for you depends on what kind of business you have and what your goals are. Consider everywhere you want to sell (your own website, social media, in-person, Etsy, etc.). It's most important that you choose a platform that can accommodate all of your sales channels in one place. Also consider your inventory tracking needs. If you just have a few products and plan to manage all orders yourself, a website builder with ecommerce tools (like Squarespace or Wix) might be enough for you. However, if you have a larger inventory assortment or one with variants, you’ll want to choose something designed with this in mind, like Shopify or BigCommerce. Learn more about honing your business concept in our guide to starting an online store Which platform is the cheapest? Square Online tops our list of the best free ecommerce platforms. It allows for unlimited products and sales with few limitations. You can create a professional-looking site, connect other sales channels, and market your business for free. Bottom Line If you want your online store to scale with your business, you need to consider the features your customers will expect as you grow. For example, are you prepared to support multiple languages and currencies or provide customer support through an automated chatbot? Can you set up customer user accounts, email marketing, and a loyalty program? These features become more important as your store expands and play a key role in helping your store grow. Ecommerce platforms must offer the essential features at a lower starting price point and have options for advanced functions and extensive integrations. Shopify has advanced functionalities and plans that scale with your business in a user-friendly package and at an affordable price point. We recommend it as the best ecommerce platform for small businesses. Visit Shopify to try it for free for 14 days.

A shopper profile is a description of a customer or set of customers. It usually describes a business’ target or ideal customer and can include demographic and geographic information as well as interests and purchasing patterns. Essentially, everyone shops differently and thus has different shopper profiles. Maybe your customers enjoy browsing slowly or perhaps they stick to a list and are in and out. Shopper profiles identify different buying behaviors and what ultimately drives a customer’s decision to make purchases. Understanding your customers’ profiles—how they shop and what drives them to buy—will help you cater your store’s shopping experience to your unique shoppers’ needs and increase sales. Here we will go over eight types of shopper profiles, including their general characteristics and needs. 1. The Bargain Hunter Most retailers regularly encounter bargain hunters in their shops. Also called discount shoppers, bargain hunters are usually armed with coupons or discount codes, know when all of the best sales are, and rarely buy without some sort of deal in hand. Whereas some shoppers are looking for something sentimental, the bargain hunter’s purchase will be primarily determined by price and a sense that they are saving money. Although bargain hunters were a shrinking segment, economic challenges from COVID-19 and talks of a looming recession have inspired a resurgence of cost-conscious consumers. More than half of consumers are actively seeking discounts and coupons, and nearly half are even switching brands to save money. The Bargain Hunter’s Needs As you might have guessed, what bargain hunters need is sales and deals. If you have a large bargain shopping demographic at your store, you’ll need to create a pricing strategy or rewards system to regularly provide offerings that will satisfy your shoppers’ quests for deals. How to Market to the Bargain Hunter Unlike other shoppers, bargain hunters are not after a particular item, nor are they loyal to a specific brand. Price is their most important purchasing factor, and they will shop around, wait, and compare prices to find the best deal. While the simple solution to this would be to run constant sales, this will cut into your margins and may leave you at a revenue loss. When deciding how you want to appeal to your bargain hunters, have a budget in mind which can maintain your profit margin while still presenting discounts. To appeal to bargain hunters, retailers can: Host sales on a predictable schedule: Many retailers have clearance sales on certain days of the week or month. Others take a more seasonal or holiday-focused approach. Use promotional pricing strategies: Promotional pricing is a marketing strategy that uses bundles, gift-with-purchase, or discount pricing to drive more sales while also providing shoppers with a good value. Try anchor pricing: This is another pricing strategy where you display the original price and your own to demonstrate that your price is better without necessarily having to run a sale. Clear out end-of-season merchandise: Most retailers have some leftover inventory at the end of the season; appeal to bargain shoppers by hosting a heavily advertised end-of-season sale to help move old products and make room for new ones. Organize flash sales: Choose a typically slow or quiet time of day or day of the week to host a limited-time sale where shoppers can get a discount on their total purchase. This will draw your bargain shoppers in when you traditionally have low sales. Offer points and rewards: In addition to traditional sales, you can also create a loyalty or rewards program where customers automatically get rewarded for shopping and can use their points to get money off their purchases. 2. The Browser If you have a brick-and-mortar store, especially one with a lot of foot traffic, you’re probably very familiar with shoppers who are “just looking.” Browsing customers, or wandering customers, aren’t looking for a particular item or to purchase from a specific location. They happened to come across your store and are curious as to what you have to offer. For example, my boutique was in a popular walking neighborhood with lots of shops and restaurants. We would constantly get individuals and groups of people that were just exploring and not necessarily looking to buy. The Browser’s Needs Typically, the browsing customer is motivated to make a purchase based on an experience or a connection. For example, a browser might come across a candle with a smell that reminds them of their childhood. Or, they might talk with a sales associate for an hour about a fancy cheese and then buy it because they know its history and have formed an attachment. Ultimately, these emotional connections are what drives the browser to make purchases—and emotions are powerful influences on purchasing behavior. Browsing shoppers are especially common in gift and souvenir shops, boutiques and apparel stores, bookshops, and any kind of hobby shop. They also might just be killing time. Consider how you can foster an emotional or special experience in your store without interrupting your browsing shoppers. How to Market to the Browser The best thing retailers can do with browsing customers is to make them feel welcome. Keep yourself available if anything arises, but ultimately leave them alone. To appeal to the browser, market your goods so they have a story or foster connection without you having to intervene and make it obvious. When working with browsing customers, retailers should: Provide a warm welcome: Browsing customers don’t respond well to pushy sales tactics, but that doesn’t mean you should ignore them. Even if a customer is “just looking,” say hello, offer assistance, and inform them of any sales or promotions. Have a comfortable environment: Retailers should pay close attention to the lighting, music, cleanliness, and overall presentation of their store. Wandering shoppers are more likely to spend time (and possibly make a purchase) in a store that’s neat and inviting, rather than harsh and unorganized. Design an effective store layout: Since browsing customers are not directly interacting with store associates, your store layout and signage serve as the primary guide; make sure popular, profitable, and bestselling items are prominently displayed. Offer small trinkets and easy-to-transport items: Even if shoppers are just browsing, small gifts or trendy items can still catch their attention. Curate an assortment of items that are eye-catching and easy to carry, as well as clear signage that illustrates product benefits. Browsers are often out and about, so small things they can take with them will be an easier sell for this shopper. Create product stories: Market your products so they have a story and people see them as more than just goods. Use signage and create displays to show how your products can fulfill a need or want and fit into your customers’ lives. Allow for self-sufficient shopping: Allow browsers the space they need to explore. Make sure they can find all the answers to their questions without working with an associate, so you don’t have to interrupt their shopping experience. Write instructions and answers to frequently asked questions on flyers and signs, label everything, and ensure your store is navigable. 3. The Showrooming Customer One of the biggest perks of in-store shopping is testing out products in person for quality, color, fit, etc. However, sometimes shoppers test in person only to then buy online. This practice is known as “showrooming.” This type of shopping is particularly popular among people in the market for furniture, appliances, or other large, expensive products that are supposed to last. While large companies like Ikea have molded their entire business model on the showrooming customer, showrooming can be problematic for small businesses because often, shoppers will view your product only to purchase it from another retailer at a lower price. The Showrooming Customer’s Needs The showrooming customer uses their in-store experience to get a feel for the product, scout out its price, and ensure that they are making the right decision. They then choose to purchase online to get an easier shipping and handling process and the best price. If you can give the showrooming customers peace of mind and simplify their shopping process, you will meet their needs and convert them into an in-store sale. How to Market to the Showrooming Customer In addition to meeting the needs of their showrooming, retailers need to offer these customers incentives to shop in-store or with their specific brand. To appeal to showrooming customers, retailers should: Sell specialized or unique products: The easiest way to ensure that customers don’t purchase online from a competitor is by selling products they can only get from your store. Merchandise such as private label products, custom-made items, or pieces from local suppliers are great options for creating exclusivity around your products. Start a loyalty program: A points-based rewards or loyalty program will incentivize shoppers to purchase from your business instead of a different online store because they can eventually earn discounts or free products. Offer product customization: Offer free in-store monograms or engravings on certain products or with a minimum purchase to incentivize shoppers to purchase in-store. Have a user-friendly website: Not every customer will buy in-store; make sure your online store and social media profiles are up-to-date and user-friendly so shoppers can still buy from you online. Offer warranties and price matching: Showroomers are often searching for the best deal and assurance that they are getting a good product. Show them that you can provide solutions to those apprehensions with product warranties and price matching. Streamline a hassle-free shipping and handling process: Make yourself competitive with online retailers by offering shipping and local delivery services so that customers don’t have to worry about transporting items themselves. Offer assembly services: Set yourself above the online big-box stores by offering assembly services for relevant products. Remember, showrooming shoppers are looking for ease, so cater to that need. 4. The Impulse Buyer Impulse shoppers make unplanned purchases based on items that appeal to them at the moment. I’m sure you’ve been in line at the grocery store or convenience shop and have grabbed a pack of chips at checkout. That’s an impulse buy. According to research, impulse buys make up anywhere from 40%–80% of total purchases. Typically, impulse shopping is often buying small items that catch people’s attention. It can also, however, be retail therapy or emotional shopping. This type of impulse buying generally involves large purchases with little forethought. The Impulse Buyer’s Needs Whereas other shoppers have clearly defined needs, the impulse buyer operates not on necessity but rather on impulse. This makes impulse buyers’ needs hard to predict, but we can capitalize on their general buying habits. As previously mentioned, impulse buyers gravitate toward small, typically inexpensive things that they can tack on at the end of a purchase without much thought. If not small and inexpensive, then the other kind of impulse buyer tends to make spur-of-the-moment larger purchases. Creating an attentive staff, good product displays, and an easy-to-shop space will help cater your in-store experience to the impulse shopper’s needs. Another important thing for the impulse buyer is their in-store experience. If your merchandising and branding don’t spark their interest, the impulse buyer won’t bite. Create a fun experience and help foster emotional attachments to your products to ensure the impulse buyer is happy and engaged. How to Market to the Impulse Buyer Retailers can appeal to impulse shoppers by having friendly and helpful store associates, forging product connections, simplifying the buying experience, and using smart merchandising. Retailers looking to cater to impulse buyers can: Tell the story behind the product: Small businesses have the advantage when it comes to selling products with a story. Highlight local makers and other small businesses or products that have a specific tie to the local community so that shoppers experience an emotional connection with the products in your store. Make it easy to buy: Since impulse shoppers are buying on a whim, they want to make their purchases quickly and easily. Lines will turn the impulse buyer away, so ensure you have adequate registers or equip your staff with mobile checkout devices so that no impulse sale is lost due to traffic flow. Use labels, signs, and instructions: You can simplify the impulse buyer’s shopping experience through clear product labels and instructions. Make your store easy to navigate and engage with—the impulse buyer isn’t going to be asking for help to make their purchase, so make sure they don’t have to. Train an attentive staff: An attentive staff will make all the difference for the big-ticket impulse buyer. By making product suggestions, helping with sizing, and overall accelerating and simplifying your customer’s experience, your staff will be able to better capitalize on the impulse shopper. Place small, inexpensive items by the register: The cash register is one of the top places the impulse buyers make their move. Line your register with small, inexpensive items that people can add to their carts on a whim. 5. The Mission-driven Shopper Mission-driven buyers are on the hunt for particular products or are shopping from a list. They are even sometimes called “list shoppers” because they so often come with a physical litany of things they want to buy. Others have termed them “need-based” and “reluctant” shoppers because, for them, buying is driven strictly by need and not because they necessarily enjoy shopping. The Mission-driven Shopper’s Needs Overall, mission-driven shoppers want their shopping experience to be easy, fast, and to fulfill their needs. Remember, shopping is not something the mission-driven customer enjoys, so anything you can do to make their experience pain-free will boost their loyalty to your brand and make them more likely to return. How to Market to the Mission-driven Shopper The need your marketing should be addressing for the mission-driven shopper is ease. Offering services that will streamline your shoppers’ experience and merchandising so that things are easy to find will ensure that your business is ready to facilitate easy, pain-free shopping. To appeal to mission-driven buyers, retailers should do the following: Offer buy-online, pickup in-store (BOPIS): Time-crunched shoppers often choose to purchase from stores that let them place orders online and pick up the same day. Offering pickup services will also completely cut out all of the actual shopping for a mission-driven buyer. Have gift guides ready: Make shoppers’ lives easier by offering gift guides and other inspirational materials to take the thinking out of shopping and make your customers’ missions easier to accomplish. Utilize cross-merchandising: Shoppers in a hurry will appreciate items conveniently placed, such as bread by the deli counter or limes next to the beer display. Consider what items are typically purchased together and merchandise them near each other for convenient shopping. Have a clear store layout: Having an easy-to-navigate shop primarily comes down to the store layout that you choose. Be sure that you create good traffic flow and clear lines of sight so your store is easy to shop. 6. The Indecisive Patron Indecisive shoppers are looking to make a purchase but are reluctant or hesitant to do so because of price, information overload, or insufficient information. I know I ran into this type of shopper all the time at my store. They would try things on, but struggle to make a decision and constantly make excuses as to why they shouldn’t buy the piece. Ultimately, I learned that the best way to appeal to the indecisive shopper was to be hyper-attentive so that I could calm any hesitations and answer any questions before they got into their own heads. The Indecisive Patron’s Needs What the indecisive shopper needs is someone or something to boost their confidence. Anything that you can do to make the indecisive shopper feel more assured of their selection and give them a slight push to make a purchase will help calm their hesitation. You want to be sure to not push the indecisive shopper too hard, as you could end up making them uncomfortable. Remember, this shopper wants to purchase something, so you should offer helpful nudges without creating an irritating experience. Meet hesitation with assurance, but if you’re getting firm negative responses, move on and try suggesting another product. How to Market to the Indecisive Patron When working with indecisive shoppers, retailers need to serve as quasi-personal shoppers or shopping guides for these customers. Indecisive shoppers have high purchase intent; they just do not know the right product yet. Having top-notch customer service associates is crucial for appealing to indecisive shoppers and securing a sale. When working with indecisive shoppers, retailers should: Ask questions: Determine the shopper’s buying needs by asking open-ended questions about who and what they are shopping for so that you can give precise recommendations. This will allow you to provide better solutions to their problems and calm any hesitations. Give honest advice: Shoppers who have a hard time making a final purchasing decision will appreciate honest advice, including personal experience or feedback from other customers. Telling someone that a piece is unflattering or giving them a piece of honest advice will build trust and result in more sales. Use visuals and/or data: Signage and marketing tools that display features and benefits of the products will help shoppers weigh their options and better understand your products. Feedback on bestsellers, product comparisons, pricing information, and expert reviews will all help make the indecisive shopper more assured and ready to purchase. Have a flexible return policy: Having a return policy or warranty can help assuage any fears of the product not living up to expectations. Offer product suggestions: Product suggestions will help your customer feel like they’re getting the best products put in front of them, allowing them to feel secure in the purchase decision. 7. The Educated Consumer With increasing access to product information, many of today’s shoppers fall into the educated or well-informed shopper profile. In fact, more than half of modern shoppers do research before they make a purchase. The educated shopper researches products or a store’s inventory online, reads customer reviews, and scans general pricing information before visiting the store. They also typically have an idea of what they want to buy by the time they make it in. The Educated Consumer’s Needs While the educated shopper can be tricky to help they do have a few needs that you can use your marketing to address. The educated buyer wants to see the online products that you have in-store. Additionally, even though they have done research, the educated buyer will still want to ask questions to be sure that they really understand your products before making a purchase. For example, at my boutique, we would often get customers who had clearly viewed our website or social media pages before coming in. In this case, they always had questions and wanted to see the exact pieces they’d been eyeing. By furthering their product knowledge and giving them a chance to see the items in person, we were able to elevate their in-store experience and satisfy their need for understanding. How to Market to the Educated Consumer The biggest thing you need to provide the educated buyer is a cross-channel shopping experience that adds value to what they already know. This includes continuously updated websites and merchandising displays, in-store only products or services, and very knowledgeable sales staff. When working with the educated customer, you should: Keep your website and store up to date: Most educated shoppers will check out your store online before coming in so they can see what’s in stock. To avoid disappointment, make sure the things you offer online are also available in-store, and that your website is up-to-date with all your new offerings. An integrated inventory management tool will help. Offer a great value: Since educated shoppers typically already know about pricing and features, these factors won’t wow them. Offer something extra like product customization, exclusive features, a special member price, or at least information that they wouldn’t have been able to find elsewhere. Provide a positive shopping experience: Many shoppers return to retailers not because of their product selection or even price point, but rather because of the overall experience they had shopping with you. More than half would be less loyal to a brand after a bad in-store experience. Your customer service, loyalty program, and merchandising will make or break your shopper’s time in your store, so enhance those elements to create something memorable and positive for your shoppers. Equip your staff with product knowledge: Empower associates to become experts on your products so they can answer any questions and provide a level of expertise not found through online research. At my store, for example, we had a binder with product information that included sizing, typical life cycle, styling suggestions, and compositions. Associates could reference and study the binder in their spare time so that they were ready to answer any customer concerns. 8. The Loyal Customer Loyal customers, or regular customers, are every retailer’s favorite. The loyal customer is someone who visits your shop often and makes regular purchases. You might even know them by name and have a rapport with them. The loyal customer is a particularly important shopper profile subset due to their potential for profitability. However, brand loyalty is diminishing as consumers get younger—so your brand loyalists are more likely to be Baby Boomers or Gen X. The Loyal Customer’s Needs To keep loyal customers happy, retailers should recognize their loyalty and treat them like VIP customers every time they come in. This will create an incentive to continue to be loyal and maintain an affiliation with your brand. At my store, for example, we had several women who came in almost every week to see what new merchandise we had gotten. I always made sure to address them by name and pull styles that I thought would flatter them. This helped to continue to foster their loyalty and rewarded them for choosing our brand. How to Market to the Loyal Customer Marketing to the loyal customer is all about making them feel special for their loyalty. They already like your brand and the experience you have to offer, so it is up to you to elevate their experience with special treatment and rewards. Reward your regular customers: Host events or promotions and offer exclusive rewards for your loyal customers to let them know they are appreciated. Start a referral program: Regular shoppers are likely already referring friends and family to your store. Start an official referral program to track your top-referring customers and reward them for boosting your business. Ask for their input on new products: Send out a survey or hold a focus group with your loyal customers to get their feedback on new or potential products. They’ll love being involved in the process, and you can purchase those new products with confidence knowing customers will buy them. Make an effort to get to know your loyal customers: It’s not hard to identify who your loyal customers are. Don’t be afraid to collect data—as many as 80% of consumers are willing to share some personal information if it means they’ll have a better shopping experience. Create a list with their names, customer personas and profiles, general needs, and shopping styles for all your associates to access. If you can demonstrate you value your loyal customer as much as they value your business, you’re sure to impress them and continue to strengthen their loyalty. Create a loyalty program: Rewards shoppers for what they are already doing and continue to build their loyalty with a loyalty rewards program. Nearly a third of consumers enjoy the benefits that come with loyalty program membership. Bottom Line As a retailer, you will run into all kinds of shoppers, all with their own unique needs and behaviors. Learning which types of customers most often visit your store takes time, but identifying your shoppers’ profiles will be the first step to creating an in-store experience that will serve them and, by extension, your business. Use this guide to help you identify what kinds of shoppers frequent your business and watch as you meet their needs and get the sales rolling.

A stock keeping unit (SKU) is an alphanumeric code that identifies a product and helps you track inventory for your retail business. You can create SKU numbers manually or use inventory management or point-of-sale (POS) software. SKU numbers print on your product label along with the product’s UPC or universal product code (we’ll explain the difference between the two numbers below) and other information. Depending on the type of inventory, retailers can include identifying information for everything from department to style, gender, size, and color. For example, at my store, we used an SKU system in which the first two letters of each SKU code corresponded to the type of product it was attached to, e.g., all of our shirts had SKUs starting with an SH, all of our pants had PA, jewelry JE, and so forth. The remaining digits corresponded to store location, size, and other relevant product information. With this custom identification system, it was easy to keep track of our products and label our goods. SKU Numbers vs UPCs If you are buying manufactured goods, each good will come with its own unique universal product code (UPC). If you are manufacturing your own goods, you will need to obtain UPCs for your products. All products should have a UPC present on their label. While you can use a UPC as your only product code, most retailers will also add a unique SKU code. SKU codes can be customized to make sense with your business and products, so they are a preferable system for internal tracking. Here are the main differences between an SKU number and a UPC. Why SKU Numbers Are Important for Store Owners Whether you are starting a business or already have one up and running, SKU numbers can help you track products in an inventory management system, streamline checkout, boost profits by eliminating human inventory errors, and even provide the data necessary to make informed merchandise purchases. A well-thought-out SKU number system helps you better plan and manage several primary areas of your business. Store Appearance & Shopping Experience SKU numbers help you map and organize your store, so shoppers and staff can easily find products. They also let you track products by item type, department, collection, or vendor, allowing you to organize and find products easily on your sales floor and in storage areas. SKUs also improve store merchandising and present an inviting, ordered experience to shoppers, which leads to more sales. Without SKU numbers, you can lose track of where products are in your space and end up with confused staff, frustrated shoppers and, worst of all, lost sales. Customer Checkout & Service A streamlined SKU system makes customer service and checkout smooth and error-free. Tracking products using SKU numbers in a POS system, like , ensures that your inventory and pricing are always spot on. When customers check out, purchases ring up with the correct pricing, and your on-hand quantity is automatically reduced to reflect sold items. Plus, when a customer can’t find an item, an SKU search in your POS can easily reveal stock status and help staff quickly locate it and close the sale. Inventory Management & Profits Shrinkage, or inventory lost to theft and inventory management errors, is costing retailers more and more each year. While retailers also have to mitigate theft, many of these losses are caused by administrative and data entry errors that, over time, can add up and seriously impact your bottom line. Tracking inventory with an SKU number system prevents many of these lost profit situations. For example, SKU numbers enable you to: Organize your storeroom and keep track of overstock for future orders Check in and manage inventory shipments to avoid shorted shipments Use your supplier code to pull inventory counts for just one supplier for an inventory spot-check Pull a sales report based on one item type code, such as Flare-leg, to see all sales for Flare-leg products over a period of time Pull a restock order report for one department within one store How to Set Up SKU Numbers in 5 Steps Now that you understand why SKU numbers are important, let’s look at a basic five-step framework for creating them. Whether you’re using a manual system or a POS option to track your inventory, the framework is the same. You can mix numbers and letters in your SKU numbers system using whatever logic works for your organization. Follow these steps to create a system that meets the unique needs of your business: Step 1: Start SKU Numbers With a Top-level Identifier The first two or three digits/characters of each SKU should represent a top-level identifier. This can be a department, store category, or even a supplier. With this, a glance at an SKU number identifies the top-level merchandising group and location of any product in your store. You can also use this section to identify store locations if you run more than one store. Step 2: Use the Middle Numbers to Assign Unique Identifiers It’s helpful to use the middle section of SKU numbers to assign unique features such as size, color, item type, or subcategory, to your product―whatever makes sense when organizing the products you sell. Step 3: Finish SKU With a Sequential Number Using sequential numbering―like 001, 002, 003―for the final series of an SKU number makes setup easy and also helps you identify older versus newer items in a product line. In some cases, tying the final series of an SKU number to a supplier product number can be helpful too. Again, use whatever makes logical sense for the products you sell. Step 4: Add SKUs to Your POS or Inventory Management System You can create your SKUs and track inventory by hand in notebooks or by using spreadsheets, but it is far easier and more efficient to use a retail POS with inventory tracking. In general, a POS like Square lets you enter as much—or as little—product data as you want to track. That said, most small stores generally need to enter just the following to get started: Item name Item category Product description Type of item Pricing SKU number Any applicable variations like different sizes or colors With this data in place, you can manage your sales and track inventory easily in one streamlined system. Plus, every transaction automatically updates your inventory so that you always know what you have on hand for every SKU number in your system. One of our recommended POS for small and growing businesses is . The basic POS is free to use, and the Retail POS is $60 per month and includes advanced inventory management features and comprehensive reports. You can add more features as you grow too. Step 5: Create SKU Barcodes Labels Once you have added your SKU codes into your inventory system, you will want to create scannable versions of your SKUs, or barcodes, to include on your product labels for easy checkout and inventory counting. Above, you can use our barcode generator to create the scannable codes that you can then download and print. Alternatively, if you are using an automated inventory management software or POS system, barcodes should automatically have been created for each of your entered products. All that is left to do is print and attach your barcodes to your products. SKU Number Examples Now that you know how to create SKU numbers, let’s look at some additional examples of this SKU number framework strategy in action. Other SKU Number Identifiers to Consider In the examples above, we explored how common top-level identifiers such as category and supplier can pair with item type codes to create versatile SKU number systems. However, those are just a few of the many identifiers you can use. Here are some other identifiers that may be useful for your operation. Store or Location Identifier If you run more than one store or sell some items solely online or via fairs or markets, you can also use a Store Identifier to group items by sales outlet. This helps track sales by location or outlet and makes it easier to track inventory quantities per store. Even if you don’t sell in multiple locations yet, if you think that’s in your future, leave a placeholder for this identifier in your SKU framework so that you won’t have to reinvent your system later. Sales Channel Identifier Likewise, if you sell both in person and online, you might consider adding an identifier to differentiate each channel. This helps you understand and compare your ecommerce and brick-and-mortar efforts. For example, if you sell on Amazon and your own branded store on Shopify, you might use AMZ or SHO as identifiers. You can take this approach even if you sell on just one digital channel—the option for expansion will always be available. Department Identifier Departments are broad top-level identifiers that help you track merchandising and location within your store. You can use a Department Identifier to quickly tell where an item will be located or displayed on the sales floor. If you use a department identifier in your SKU number, you can also segment sales reports by department to spot troubled areas of your store. If you have a department with overall lackluster sales, you might need to move that section, adjust your store’s traffic flow, or boost your featured displays in that area. Variation Identifier If you sell products that come in different colors or sizes, a Variation Identifier can be a great help to both your customers and staff on the sales floor. Plus, it lets you easily track which colors and/or sizes are most popular. Here’s a look at how easy it is to add a variation identifier to our sample SKUs: 01120001M = Jeans (01), Flare-leg (12), Medium (M) 09120001L = Dress Pants (09), Flare-leg (12), Large (L) Subcategory Identifier For small retailers, this level can be a bit fussy, But if you wish to track inventory and sales at a very granular level, you can add a Subcategory Identifier to your SKU. For example, if you have a Candy category, you can assign a numerical code for subcategories such as Candy Bars, Lollipops, and Boxed Chocolates. Tips for Creating an SKU Number System Keep it simple. SKU numbers are so easy to customize for your business that it can be tempting to include too much information. Avoid incredibly long SKUs by choosing two to three traits you want to reflect in your SKU number system. If you want more than three traits, keep the individual codes brief. Start with the most important trait. Once you identify these high-priority traits, decide which is most important to you and put it at the beginning of each SKU number. Some retailers prefer to use the most general trait as the first identifier and then work down from there—for example, start with the identifier for jeans before getting into style and size. Don’t start SKU numbers with a zero. Oftentimes, computer software interprets a zero at the beginning of a number as just that—nothing. This means that the SKU 01120001M could actually be read as 1120001M. To avoid confusion caused by this type of error, don’t start any of your SKU numbers with a zero. Many businesses get around this by adding a brand or supplier identifier at the beginning of the SKU number, such as in the example above. Avoid letters that may be confused for numbers. Because SKU numbers are alphanumeric, it can be tempting to take advantage of all of the letters of the alphabet. That said, you should avoid using letters that look like numbers to avoid confusion. For example, the letter “O” may be easily confused with a zero and a capital “I” looks a lot like a one. Don’t just reuse the manufacturer numbers. Developing an SKU number system can seem intimidating, and it may seem easier to just use the manufacturer’s number or include it in the SKU. However, this eliminates the benefits of having a custom SKU formula built to meet the unique needs of your company. FAQs About SKU Numbers What is an SKU number? SKU stands for stock keeping unit, which is an alphanumeric code that serves as a unique product identifier. Retailers create their own SKUs to help them track inventory. Learn more about retail inventory best practices. What is an SKU number used for? Inventory tracking Sales analysis Customer checkout Product identification Are SKU numbers universal? No, SKU numbers are not universal. Retailers create their own SKU numbers for products according to their own naming systems and conventions. UPC codes, on the other hand, are universal. Learn more about SKUs vs UPCs. How can I get an SKU code for my product? You can create a SKU code system for your inventory by following the steps in this post. If you just need to quickly print a SKU code, use our barcode generator and a barcode label printer. Bottom Line SKU numbers help you organize, track, find, and identify inventory using a system that’s meaningful to you and your staff. Because SKU numbers can include both letters and numbers, there’s a tremendous amount of flexibility, making it easy to create a system that’s totally tailored to your business needs. Done right, your SKU numbers help you merchandise your sales floor, better serve customers, and maximize sales. Essentially, having a thoughtful and well-maintained inventory management system can make your business more efficient and more profitable. Pairing a meaningful SKU number system with a POS like Square gives you every tool you need to maintain your inventory and sales floor efficiently. Square provides streamlined, user-friendly inventory management and reporting tools so retailers can put SKU numbers and their data to work. Visit Square to create a free account.