In April, Etsy raised its transaction fee from 5% to 6.5%. Enough sellers were dissatisfied to call for a strike. For anyone building a business on the platform, the change served as a reminder of a point that is easily overlooked during the excitement of launching an online store: another company sets the rules and can change them at any time.
This issue is central to our work, because one version of the business launch program we teach is designed specifically for online businesses: e-shops, Amazon sellers, Etsy makers, and people selling a service remotely, from design to bookkeeping to tutoring. The program is the ASP Lancement d'une entreprise, offered with Osmose Formations. It includes the same 330 hours, the same 12 weeks and the same combination of virtual classes and coaching as the other versions. Only the nature of the projects differs.
Below are the elements these projects require that a local café does not, as well as those they require to the same degree.
Does an online business need market research?
Yes, as much as any other business. People who plan to sell online often skip market research, because the internet appears limitless: with billions of users, it seems likely that a few thousand will want the product.
That assumption is a hope, not a market.
An online business requires the same groundwork as any other. Who, specifically, buys this product? Where do these customers already shop? What do they currently pay? How will they find this business among the forty other sellers offering a nearly identical product?
Online research is inexpensive and fast when the right sources are used:
- Search the marketplace you plan to sell on and read your competitors' reviews, particularly the three-star ones, where customers describe what is missing.
- Use Google Trends to determine whether interest is growing, declining or peaking only in December.
- Check keyword volume with Google's Keyword Planner. The figures are approximate, but more reliable than estimates.
- Identify where your customers gather, whether in Facebook groups, on Reddit or in a hobby forum, and read the discussions before posting.
Then, as with any business, speak with actual potential customers. Online sellers are the most likely to skip this step and the ones who need it most, since they would otherwise never meet their customers in person.
How do platform fees affect the business model?
Fundamentally. On Etsy or Amazon, the platform is not a sales channel added at the end. It functions more like a landlord and a business partner combined, and it takes its share before the seller receives any revenue.
On Etsy, sellers pay a listing fee, the transaction fee (now 6.5%), payment processing fees and offsite advertising fees when a sale comes through those ads. On Amazon, the referral fee depends on the category, and sellers using Fulfillment by Amazon pay additional fulfillment and storage fees. Shopify charges a monthly subscription plus payment fees. None of these costs is hidden; they are all listed on the platforms' pricing pages. They are simply not added up.
One of the first exercises we assign to students launching online businesses is therefore a per-order margin calculation. It follows a single sale from the customer's click to the deposit in the seller's account: the price, minus the product cost, packaging, every platform fee, any shipping not charged to the customer and payment processing. What remains?
Sometimes the result is a healthy amount. Sometimes it is two dollars. Occasionally it is negative without anyone having noticed. It is far preferable to discover this in a spreadsheet than after three hundred orders.
Should a business sell on a marketplace or on its own site?
Our recommendation is to use the marketplace for its main strength, which is traffic, while maintaining a site of your own. A simple online store, or even a one-page site with a newsletter sign-up, ensures that if the platform changes its fees or closes the account, the business can still reach its past customers. The marketplace owns the customer list; the seller does not.
Why must shipping, returns and customer service be included in the plan?
Because they consume significant money and time. These aspects rarely seem central during the planning stage, yet they quickly take up evenings once the business is operating.
Shipping in Canada is expensive and represents a real line in the budget. Weigh the packaged product, measure the box and obtain actual quotes from Canada Post and several couriers. For shipments to the United States, customs forms and duties must also be considered, and customers will not distinguish between parties when an unexpected fee appears.
A returns policy must be in place before the first sale. How many days are allowed? Who pays for return shipping? What happens to a returned item: can it be resold, or is it a loss? Clothing sellers are particularly affected.
Customer service requires time, and time is the resource new business owners most often fail to account for: messages at 11 p.m. asking about a package, a damaged parcel, a review the owner considers unfair. Someone must respond courteously and quickly, and in a one-person business, that is the owner. These hours must be included in the plan.
What tax and registration obligations apply to online sellers in Quebec?
The same as for other businesses. Selling online does not exempt a business from administrative requirements. Registration with the Registraire des entreprises is still required when operating under a name other than one's own. Once taxable sales exceed the $30,000 small supplier threshold, the business must register for GST and QST. Marketplaces now handle part of the tax collection on their end, which helps, but sellers still have records to maintain.
Our recommendation is straightforward: open a separate bank account from the first day, keep every receipt, and record how each sale was taxed. This discipline greatly simplifies future obligations.
Are remote service businesses also online businesses?
Yes. Not every participant in this version of the program sells products. Some plan to offer their skills from any location: design, translation, virtual assistance, coaching or bookkeeping. Remote services involve no inventory and no shipping, which is a clear advantage.
They do, however, present their own challenge: the inventory consists of the provider's hours. Prices set too low lead to a full schedule without sufficient income. Most people underprice at the outset because they compare themselves with freelancers on international platforms. That competition is difficult to win, and in our view it is not the right strategy. We recommend selecting a clear niche, pricing according to the value delivered to a specific client, and making the business easy to find and to trust.
This last point determines the success of online businesses of every kind: good photos, clear descriptions, accurate delivery times and a real person answering messages. None of this is complex. It is the same trust a Main Street store builds at the counter, established through words and images instead.
The work involved exceeds what "passive income" videos suggest. It is nonetheless a genuinely effective way to start a business with very limited capital, provided the figures are calculated first.