Does Selling Online Make Sense for Hyperlocal Businesses?

If you're a small local business and you're used to selling to people in your community, does it make sense to start selling your wares or services online?

In short, yes. Even if your business is niche and has traditionally targeted a certain type of customer in specific geographic locations, selling online could introduce your unique products to an entire new customer base.

Here are the benefits of selling online, even for the smallest businesses — and how you can get started.

Why customers love a hyperlocal business

The thing that sets hyperlocal businesses apart from others is their relationship with their customers. Because of the close proximity, the same local customers end up visiting the same shops. They get to know the owners and others associated with the business, and build a trust that doesn’t exist between customers and larger national chains.

Another reason hyperlocal businesses stand out is their local ecosystems. The entire supply chain of a hyperlocal business is generally in close physical proximity to the customer. This builds greater trust and enhances the overall customer experience because buyers can see all the steps involved in the making and delivery of the products, from sourcing to current location.

The entire supply chain of a hyperlocal business is generally in close physical proximity to the customer.

For instance, when you visit a local grocery store, stop for a chat with the owner. You might learn that the cheese featured is from a nearby farm and that the wine is from a local family-run winery that’s been around for decades.

These businesses can also deliver products and services much faster than their larger retailers. If you buy groceries from a large nationwide store, you might have to wait one or two days to get your delivery. But a small neighborhood market can get you your groceries the same day. The immediate delivery capabilities of hyperlocal businesses mean that they don’t have to deal with stocking items in multiple warehouses and long distance transportation.

So consider this: Selling online can, in effect, eliminate these two advantages for small local businesses. When you sell online, you potentially lose your emotional connection with your customers, and you’ll need to start competing with bigger companies on shipping costs — a difficult battle to win.

With that in mind, what are the benefits of selling online for hyper-local businesses?

Why it’s time to get online

The most obvious benefit to selling online is that you can sell your wares to whomever, wherever, whenever. As crazy as it sounds, your business is no longer limited by time and space. If someone across the country wants to buy something from you at midnight, they can do that — and you can send it to them.

This expanded market can boost revenue and keep you one step ahead of the competition. One poll found that 43% of business owners experience significant revenue growth from online sales. Nearly 70% said marketplaces like Amazon and eBay have helped increase sales, and 81% believe ecommerce is crucial to business success.

81% of business owners believe ecommerce is crucial to business success.

In addition, selling online doesn’t just make “selling” easier for small businesses. You’ll also enter a new and more robust world of digital marketing (including email marketing and social media marketing) that can help you build a stronger relationship with your customers — which is important, considering how much of your revenue comes from returning as opposed to new customers.  

Interestingly, selling online isn’t just a way to boost your out-of-community profits. In fact, your online presence can also boost foot traffic in your physical store. A study by Google found 50% of consumers visit a physical store a day after discovering the store on their smartphone.

Your online presence can also boost foot traffic in your physical store.

As a local business owner, you might enjoy the simple pleasures of inexpensive shipping fees and the face-to-face interactions you’ve had with customers. Still, even if your physical store has a following and people in the community know about your unique products and superb in-store interactions, you can’t ignore ecommerce.

Ecommerce options for hyperlocal businesses

As intimidating as it might sound, opening up the marketplace to distant parts of the country (and the world!) is easier than ever, thanks to a variety of ecommerce options.

Facebook Marketplace

Selling on Facebook is a good option to start with because it’s simple and free. The feature defaults to buyers in your local community and has the potential to reach thousands of new customers every day.

Putting your stuff on Facebook takes little time and effort, which is good. There is no protection for either the seller or the buyer, which is not so good. You are responsible for all shipping fees and any returns or service issues the customer might have.

If you find that the marketplace takes off, you might want to try a fulfillment service like dropshipping which does not require you to manage your own inventory. That means no need to fork over a big initial investment to buy goods and keep them in stock to have available whenever there’s a sale.

If you find that the marketplace takes off, you might want to try a fulfillment service like dropshipping which does not require you to manage your own inventory.

Instead, whenever a customer places an order from your online store, you purchase the product from a third-party supplier, who then ships the product to the customer. This method is popular for business owners who are new to the ecommerce world and want to keep online sales simple, manageable, and mostly out of their own hands.

A method like dropshipping might be a good idea for those who want to dip their toe in online sales, but if you’re all in, it might be time to look at ecommerce platforms that cater to small business owners.

Amazon

Amazon is one of the first sites that come to mind when people think about selling online — because who doesn’t shop on Amazon? For smaller business owners, there are two selling plans:

  1. The Professional plan comes with a $39.99 monthly subscription plus per-item selling fees. This option is best for power merchants who plan on selling more than 40 items per month and comes with many benefits, including access to inventory tools, seller reports, top placement on product detail pages, and customized shipping rates.
  2. The Individual plan does not come with a monthly subscription, but sellers will have to pay $0.99 for each item sold plus selling fees. It comes with many of the same perks as the Professional plan and is best if you sell less than 40 items per month on Amazon.

Aside from its easy-to-use platform and broad reach, Amazon is also a top choice for small businesses because of the ease of using its Fulfillment by Amazon option. The service picks up, packs, and ships your products, and takes care of all customer service issues. That means Amazon handles the customer service inquiry and return process. This option allows you to scale your business and reach a broader marketplace without having to spend all your time packing and shipping items sold.

[Fufillment by Amazon] allows you to scale your business and reach a broader marketplace without having to spend all your time packing and shipping items sold.

Keep in mind, selling on Amazon is a controversial tactic for small businesses, as there have been instances of copycats, or Amazon itself allegedly manipulating search results to feature its own products first. That being said, this platform is the premier marketplace on the web right now.

Build your own online store

With ecommerce platforms like Volusion that help you build your own shop, you can fine-tune marketing efforts so that you only target local or regional buyers, which makes it an excellent choice for hyperlocal businesses.

There are a variety of ecommerce platforms you can use to build your own store, and they’ll help you set up your payment processing, shipping, and logistics. The majority of your workload will be customizing your online store so that it matches your existing branding.

eBay

As one of the first ecommerce platforms, eBay is widely known and used across the globe. If you’ve ever taken a look around eBay, you will find all categories of items, so no matter what you sell, there are people on eBay who want it. The company bought the data startup Terapeak in 2017 to provide supply, demand and pricing insights to help “sellers know what to sell, when to sell it and at what price”.

If you choose to go with eBay, you are responsible for delivery and shipping of items sold. eBay charges an insertion fee when you post an item on its platform, and you are charged a final value fee when the item sells. The company also partnered with PayPal, which protects payment transactions for both the buyer and seller.

The bottom line on selling online

No matter how niche or hyperlocal your business is, selling online is an increasingly important revenue stream. Ecommerce provides you with tools and opportunities to reach new customers. Think of it much like the different marketing campaigns you use to target consumers. You might go low-tech to show a bit of your personality in posted signs around the neighborhood, and you might also capitalize on Instagram shopping features.

Integrating the old and the new is a smart way to stay ahead of the competition and find new revenue models. In much the same way, setting up an ecommerce store can only boost sales for your hyperlocal business.

Integrating the old and the new is a smart way to stay ahead of the competition and find new revenue models.

In fact, these days, we see that customer satisfaction comes from a combination of in-store interactions and online experiences. A customer might come across your business online, and decide that they want to visit your store. Once they've visited your physical location and enjoyed the interaction they had with you, customer satisfaction goes up. And now you have another loyal customer.