Creating an Online Store | Part 2: Costs, getting started, software selection and integrations

by Nicole Stanbridge / Cindy Jones Assoc / May 15, 2021

This is the second of our four-part series on setting up and launching and online store for your gift shop. In Part 1 of the series we looked at online consumer behavior, current demand, pre-launch planning, as well as the pros and cons of an online store. Here, in Part 2, we we’ll discuss startup and operating costs, technical requirements, selecting an ecommerce platform, and system integrations. Part 3 will look at setting up the website, navigation (menus), product images, and online shop policies. Part 4 will explore options for shops that don’t have the time, resources or staff to launch an online shop.

Exemplary online stores
We interviewed four shops with successful online stores for this article. We encourage you to visit them! 

^{A sincere thank you to all the managers we interviewed!}

Other notable online shops:

White Rose Gift Shop, Mackenzie Richmond Hill Hospital (powered by Shopify)
Cedars-Sinai Helping Hand Gift Shop (powered by Shopify)
Strong Memorial Hospital Gift Shop (powered by NitroSell)
Wild Rose Gift Shop, Univ of Iowa Hospitals (powered by Magento)
Scarlet Ribbon Gift Shop, Ohio State Univ Hospitals
Methodist Hospital Gift Shop  (powered by Shopify)
Mercy Gift Shop, Ascension Via Christi Hospital (powered by Wix)

Startup and operating costs

Startup and ongoing operating costs for an online store can vary depending on existing infrastructure and the extent of services offered. Typical costs include ecommerce software fees, domain fees, webhosting fees, templates (optional), and web developer fees (optional). Costs for photo supplies can include lightbox, backdrop, lighting, steamer, and edit/design tool (e.g., Canva). If you decide to offer shipping, allow for expenses like postage, postage software, printed inserts, equipment, labels, packing materials, and shipping boxes.

“The startup costs for the Sprout Gift Shop website were fairly limited. Outside of having the website designed by a third party, the only additional costs associated were staff time, WooCommerce, and Shopventory. These depend very much on the size of the gift shop and the options that the organization wants. The website design fee was integrated into other regular maintenance fees with our website developer, Island Collective,” said Shauna Morgan, Shop Manager at Jim Pattison Children’s Hospital in Saskatoon, Canada.

The largest ongoing expense is typically ecommerce software fees (or shipping expenses, if offered). Among the shops interviewed, ecommerce monthly fees ranged from $60 to $300, not including credit card processing fees (2% – 3% per transaction). Most software providers offer a discount for annual vs monthly payment. Beware, some have steep setup fees.

Mercy Hospital Gift Shop, Manhattan, KS

Hire a web designer to setup your site if you have the budget. The average cost is around $3,000-$8,000. Ask your marketing or IT department to set it up. Or, you might be able to do it yourself thanks to today’s user-friendly platforms. Only one of the shops we interviewed hired a designer. The rest were all self taught! 

Below are some of the typical startup and operating expenses for an online store. You might not incur all of these, depending on your store. For example, you bundle the domain and hosting fee with one ecommerce provider or decide to not offer shipping. Thank you to Stanford Health Care Gift Shop for contributing content to help construct this budget! 

Getting Started
What do you need to create an online store? There are three components required to launch:

1. Ecommerce software for creating the store’s website.
2. Web host provider who will ‘host’ the website files (on a physical server somewhere).
3. Domain name (i.e., URL, weblink) for the online store. This can be a subdomain of the hospital or a separate custom domain. Stanford’s online shop uses a custom domain: shcgiftshop.com. In contrast, Strong Memorial uses www.stronggiftshop.urmc.edu, a subdomain of urmc.edu.

These services can be obtained from three separate providers, a single provider, or a hybrid configuration utilizing your organization’s existing providers, when available. We recommend sourcing as many services as possible from a single provider. It will be easier to manage, consolidates billing, and requires the least technical know-how. Shopify offers bundled software, hosting, and domain for $29/mo (Basic plan).

• Top ecommerce platform providers include: Shopify, Magento, BigCommerce, WooCommerce.
• Common domain registrars (providers) include: Google, Domain.com, GoDaddy, Bluehost, HostGator, Namecheap.
• Some of the best webhost providers include: Bluehost, HostGator, DreamHost, A2Hosting.

But first, find out if your organization has already established these services with a chosen provider. Also ask about any requirements or regulations. The hospital may already be using a web host, or require a HIPAA-compliant provider, or prohibit custom domains. Noelle Boardman, Shop Manager at UnityPoint St. Luke’s Hospital in Cedar Rapids, learned that her hospital already had an ecommerce platform and local web developer available for the gift shop’s use. Also check with the maternity department. Most of them sell products online for mothers and newborns. You may be able to use the same ecommerce platform.

Otherwise, try to select a provider that bundle software, hosting and domain together. Ask the IT, communications and marketing departments for recommendations, along with friends, family, colleagues. Don’t go it alone. Use the resources and expertise available to you when selecting the required services.

Selecting an ecommerce platform

Selecting an ecommerce software to run your online store is one of the most important decisions in the entire process. As with any business decision, you need to do your research first. There are a lot of options, some better than others. The first step is to outline your requirements. Sit down and shop the example stores interviewed for this article. Write down the features and components you want. Don’t worry if you miss some. Right now, it’s about becoming familiar and discovery.

Consider creating a free 14-day trial with Shopify to become familiar with the setup process, identify requirements, and determine if you want to go at it alone or get help. Use the free trail as a learning tool. Then keep the account or close it, no credit card required.

It’s a good idea to ask yourself a few questions at this stage, such as: 

1. What shopping cart and check out functions do you need?
2. Does it have to integrate with your POS? If so, will it require a fee?
3. Will you hire a designer or use the templates provided to build your store’s website?
4. Do you need a domain bundled with the ecommerce software?
5. How big is your customer base? Some platforms charge by sales volume.
6. Do you need shipping functionality?
7. What payment methods do you want (credit card, Apple Pay, Paypal, payroll deduction, etc.)?

A good ecommerce platform has an intuitive interface, requires minimal technical knowledge, and includes robust online support documents and forum. A good platform will walk you through the entire setup, in plain speak, step-by-step fashion. Most come with templates for designing your webpages, including layout, components, and navigation. You’ll also find template language for check-out pages, refund, return, and other shop policies. (More about policies in Part 3.)

Sprout Gift Co, Jim Pattison Children’s Hospital

Start thinking now about how, or if, the ecommerce software will integrate with your POS. Most of the managers we interviewed touched on this. Managers Shellee Laubersheimer and Mamta Kaur at Stanford Hospital Gift Shop said their ecommerce “options were limited because it needed to integrate with Vend POS. That was the priority and BigCommerce had best integration.” They also did a trial account with BigCommerce first, which helped. We’ll discuss system integrations, at length, next.

We use Shopify for the online store at Cindy Jones Associates. It is reasonably priced, user-friendly setup, designed for the non-techy, well supported, includes domain and hosting. Other popular ecommerce platforms include Square Online by Square (also known as SquareUp), Shopify, Weebly, Wix eCommerce, NitroSell, Magento Commerce, Squarespace, BigCommerce, and WooCommerce (requires WordPress). Explore the software used by the online shops in this article in Part 1. Additionally, there are good comparisons here in the 8 Best Ecommerce Platforms and Ecommerce Platform Comparison – Which Will Be Best for You?

POS and other integrations

System integrations can save considerable time, prevent errors, enhance services, and increase customer satisfaction, while inherently optimizing operations. How the shop’s software and systems integrate, or talk to one another, can have a significant impact on shop efficiency. Here’s an example. Both in-store sales and online store sales will now pull from the same inventory. Your POS and online store should, optimally, sync these transactions. This was one of the most common challenges among the managers we interviewed for this article.

Stanford Health Care Gift Shop

Stanford Health Care Gift Shop’s ecommerce platform, BigCommerce, integrates with their POS (Vend) and “serves as the source of truth for all things inventory related,” said manager Shellee Laubersheimer. In contrast, St Luke’s Cedar Rapids Hospital manually records online orders in their POS (Counterpoint). Shop manager Noelle Boardman said their lack of integration is the hardest part. “Availability is indicated online for shoppers, but items can sometimes sell out in the store. When this happens, staff notifies the manager who marks it ‘out of stock’ in the webstore. But staff don’t always notify the manager so the website doesn’t get updated.”

A good rule of thumb is to always integrate new systems upfront, on launch, whenever possible. Aim to select an ecommerce platform that is the most compatible with your POS and other systems. It will be easier and less expensive now versus retrofitting incompatible systems down the road. Sprout Gift Shop in Jim Pattison Children’s Hospital has their POS connected to both the online store with WooCommerce and Shopventory. “If an item is sold in-store or on the website, inventory is adjusted accordingly,” said Shauna Morgan, shop manager.

When researching an ecommerce software ask 1) does it integrate out-of-the-box with my system(s); and 2) how easily? BigCommerce integrates natively with Square POS, Vend (now Lightspeed), Springboard, Shopkeep, Hike and Clover. But, to our knowledge, Square and Shopify do not offer native integrations because they sell their own POS. If they don’t integrate, get a quote for the work. Negotiate fees or explore other platforms.

Note, you might hear the term API when researching integrations. This is simply the intermediary software that allows two applications to talk to each other. Enlist your IT department to help with integrations.

Don’t forget to also ask your POS provider what ecommerce software they recommend for ease of integration. For example, Vend offers native integration with BigCommerce, Shopify and WooCommerce.

Finally, many POS companies come with their own native ecommerce component so there is no need to integrate. For example, Square Online can be easily added on to Square POS. It includes software, hosting and domain for $12/mo (Professional plan). Lightspeed offers Lightspeed eCom bundled with their POS. Be sure to check hardware compatibility first.  UPDATE: “ARBA POS releases fully integrated online store” (Jan 2022)

POS With eCommerce Built-In

Lightspeed 
Square
ARBA 
Shopify 

Finally, if were already planning to upgrade your POS, consider providers like Square and Shopify that offer single-source bundled POS, online store, social media services, inventory platform, and more. There are always pros and cons, but bundled services are typically advantageous if time, resources, or technical know-how are limited.

Research, plan, and then execute

In closing, take the time now to evaluate costs, explore technical requirements, determine your store’s ‘must haves’, research ecommerce software, and make a plan. This stage is about learning, prepping, and planning.

When asked for the most important piece of advice to give others, Noelle Boardman at St Luke’s Hospital at Cedar Rapids said, “When you first start, you need to be all in and on board. Allocate the time required up front. Be willing to learn, dig in, and put in the time upfront.”

At Stanford Health Care Gift Shop, getting started “was an ongoing plan, partnering with IT and the shop, over 18 months. IT researched ecommerce options and guided us on technical and security requirements. They also lead communications with their ecommerce provider (BigCommerce) when problems arise,” said manager Shellee Laubersheimer.

Next, in Part 3 of this series, we will dive into setup, branding, site design, layout, product images, delivery, shipping and policy requirements for an online store. Following this, Part 4 will address common challenges or obstacles, and explore outsourced alternatives when an online shop is impractical due to staffing, time constraints or resources.

Do you have a question about the online store topics discussed here this month? Let us know!

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Do you have questions about the online store topics discussed here this month? Let us know in the comments and we’ll do our best to answer them!

Thank you!

Shops reopening

Mayo Clinic, Mankato, MN

At this time last year, we like so many others closed our doors until September. We are almost back to an 9am to 4pm schedule, Monday thru Friday, which is very gratifying! It was so good to know that what was going on here was the norm across the country and that we would make it through this. Thank you, Cindy, for being there for us.

Our shop is 1000 square feet and we use every inch of it. Clothing is our best selling category. Customers do appreciate the same amount of a style so they do not see multiples when at work or at an event.  We have a clothing display outside the door which is changed daily. That is golden! Other points of interest about our shop:

Our helium balloons sell for $3.99.
Our buyer attends 5 gift markets a year.
We produce monthly sales reports.
We follow ADA aisles requirements.
We give a 10% discount to our gift shop volunteers.
Shipping costs are factored into our prices.

– Mary Robinson, Gift Shop Coordinator, Mayo Clinic Health System, Mankato, MN 

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St. Michael-Atlanta welcomes back volunteers

CHRISTUS St. Michael Hospital-Atlanta volunteers have returned to duty after a “hiatus” because of the COVID-19 pandemic. Volunteers reopened the hospital’s gift shop and returned to other roles Monday, following a luncheon on Thursday “to thank them for their dedication and to welcome the volunteers back to service,” the hospital announced. Read more…

💮 CALENDAR 💮

GIFT MARKETS

STATE AUXILIARY CONFERENCES

Jun 10-11, 2021 Wisconsin Assoc of Directors of Volunteer Services (WADVS) Annual Conference & Market Pewaukee, WI

Jun 16, 2021 Oregon Society of Directors of Volunteer Services (OSDVS) VIRTUAL

May 6, 2021 Midwest Assoc for Healthcare Volunteer Resource Professionals (MAHVRP) Annual Meeting VIRTUAL

Oct 4-6, 2021 Council of Volunteer Services of Georgia Hospital Association (COVS-Georgia) Annual Meeting Macon, GA

Cancelled Texas Association, Directors of Volunteer Services (TADVS)

Q. Scrub hat vendor?

Q. I am trying to find a vendor that sells scrub hats. Can you please ask the other gift shop managers in your next newsletter. Thank you! – Debbie Collins, Beaumont Hospital, Royal Oak, MI 4/19/21

APRIL 2021 NEWSLETTER: ISSUE #616
Check out last month’s articles, surveys, and discussions.

DISCUSSION

OLD INVENTORY & SPACE

Q. What do you do with old inventory that is taking up space?

We host an annual clearance sale as well. Our store room is in the basement of the hospital so we have a $1-5 cart we put outside the door to move items as well. – Ginger Taylor, Cox Medical Center, Springfield, MO.  2/20/21

I manage a small hospital gift shop, and like everyone else, have “odds & ends” left over after each season. I create a “potluck” or themed basket, make it attractive and colorful. I use pretty paper and ribbons, so it’s seen as a “prize”, and raffle it off for $1 a ticket. Everyone sees it as a chance to get items to use later for gifts, or get things they just didn’t pick up for themselves. I take a picture, email it to all the departments, and watch those $1 tickets fly out the door! More times than not I not only recoup the costs of the items, but make a profit! The winner gets their picture taken with their prize, and is in the next email. It’s productive and great fun! – Susan Ingram, Gift Shop Coordinator, Jack Hughston Memorial Hospital, Phenix City, AL. 2/17/21

Thank you for this idea! – Holly Verbos, Penn State Health Milton S. Hershey Medical Center, Hershey. 546 beds

A clearance sale or special of some sort. Maybe themed by a coming holiday or special day like a 25% off sale on the 25th day of the month. – Peter Waugh 2/17/21

If you have room to store it such as winter items, bring it back out in November and have a big sale. But only keep items from previous season. If you don’t have room to do this sell it drastically reduced for 6 weeks and donate what didn’t sell. We use Facebook and advertise our sales with pictures. – Debbie 2/16/21

I mark inventory that’s not moving down a couple of times and then leftovers are put in my annual “sidewalk” sale. I set up a conference room every September and mark these items to move. Employees look forward to this sale every year. I rarely have anything left. – Diane Honsberger 2/16/21

Very good solution, Diane! – Cindy

First, I get down to a 20, 30, 40, 50 dollar rack and if it still does not go, I donate it! – CC Cree. 2/16/21

On 50% off, do buy one get one. Makes 2 leave instead of 1. – Tricia Rochman, Pink Geranium Gift Shop, Carbondale. 65 beds. 2/16/21

Tricia, I agree with you 100%! – Cindy

We have a small clearance sale area in the back corner of our gift shop. Items are priced 30-70% off. The longer they sit, the deeper the discount. We usually donate the non selling items, but this year we held a $1.00 Sale. We put all items that we were planning donating on cart and sold each for $1.00. It was a great success and no one had to haul any boxes out to be donated! – B. Putnam, Coldwater, MI 2/16/21

Love the idea of a $1 sale! We always dread clearance items that still don’t sell and having to haul them to a donation station! It’s a win-win! – Staci, Methodist Texsan Hospital, San Antonio, TX. 200 beds 2/16/21

Read Cindy’s extended response in last month’s newsletter.

PROMOTIONS