Nonprofits need money in order to thrive. While grants and donations can go a long way, they don’t have to be your only form of revenue.
More and more, ecommerce has become a great fundraising method for nonprofits.
In this guide, we’ll provide you with an overview of ecommerce for nonprofits so you can better understand how an online store can help support your organization.
Let’s get started.
Why Nonprofits Should Consider Ecommerce
Let’s start our guide by outlining exactly what ecommerce is and all of the different ways it can benefit your nonprofit.
As the name implies, ecommerce (short of electronic commerce) is a term used to describe the buying and selling of products and services over the internet. Most often, this is done through an online store.
Nonprofits tend to raise money primarily through donations and through grants. And while those are both important sources of funds, they also have their limitations.
For example, many grants have restrictions on how their funds can be used. By contrast, revenue raised directly through an ecommerce store can be used in whatever way the nonprofit sees fit.
Another reason nonprofits should consider ecommerce relates to marketing. Depending on what you are selling, an online store can help your nonprofit establish its brand.
Selling branded merchandise with your nonprofit’s logo or slogan is one of the easiest ways to accomplish this.
Here is a list of possible branded merchandise products:
Stickers and enamel pins
Pens and other stationary
Consider making your merchandise relevant to your nonprofit. For example, an organization that works to help the environment might be interested in selling reusable water bottles or tote bags to reduce the use of plastic. We’ll be sharing some real world examples later on in this article so that you can see some of these strategies in action.
Finally, ecommerce can also serve as a way to gather potential donor data.
When users purchase something from your ecommerce store, they will need to provide an email address, which you can then use to send out information on new merchandise, new programs, and other initiatives. This is a great way to cultivate relationships with your buyers.
As you can see, there are a lot of direct and indirect ways that a nonprofit can benefit from an ecommerce store, from boosting revenue to raising brand awareness to fostering relationships with your audience.
Examples of Successful Ecommerce Strategies for Nonprofits
Below are a few examples of successful ecommerce strategies that you can draw inspiration from.
Not only are they incredibly cute, everything about them serves as a reminder of the WWF’s conservation efforts.
These plushies can also serve as marketing material. Someone may see a WWF plushie at the house of a friend or a family member and ask where they can purchase one for themselves or a loved one.
Furthermore, the huge variety of plushies is enticing for collectors or plushie lovers who would be interested in owning more than one. While they may not be able to purchase many right away, they can always come back to the store at different periods in time to expand their collection.
When setting up your online store, consider your mission. Is there something you could sell that people would not only want to buy, but that could also serve as a reminder of your cause? Would you be able to create multiple different versions of this item, incentivizing collecting?
These are some great ways to generate extra revenue for your nonprofit.
Similar to the example above, Ocean's store is filled with their famed bracelets and other products that provide their supporters with physical proof of how their money is being used to clean up plastic from the ocean.
But more than that, 4Ocean’s merchandise is directly connected to its efforts since the items themselves are made out of the plastic collected by their programs.
The store and the mission form a cycle, with their work feeding into their shop, and the money they make through ecommerce provides them with the funds they need to keep their operations going.
Is there a way you can tie the products or services from your online shop to your operations? For example, if you work to help local artists, then maybe you can try to sell prints of their artwork.
Charity: Water’s Partnership Program
While Charity: Water’s online store has plenty of branded merchandise, they have also partnered with other stores to increase their revenue. With a mission to bring safe, clean water to everyone around the world, Charity Water has forged partnerships with different brands in order to split the profit so that they can benefit from purchases made outside of their store.
From jewelry to planners to phone cases, Charity: Water links the stores of each of their partners on their website with information on how purchases made through those brands can help fund their clean water efforts. Similarly, most of these brands also have pages on their websites detailing their charity support programs.
Are there any companies your nonprofit could reach out to to form these kinds of partnerships?
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Best Practices for Setting Up Ecommerce for Nonprofits
Now that we’ve gone over why you should consider setting up ecommerce for your nonprofit, here are some best practices to keep in mind before getting started:
Consult an Accountant or Attorney
Before you begin your ecommerce journey, it is recommended to contact an accountant or attorney about the legal aspects of this revenue stream.
While nonprofits are allowed to sell products and services related to their mission, certain regulations and sales taxes will vary from state to state.
While this matter should not be overly complicated, it is still advisable to consult a specialist before opening a nonprofit online store.
Choosing the Right Ecommerce Platform
Finding the right ecommerce platform is crucial to the success of your online store. That being said, the criteria that makes one platform ideal for one nonprofit will not be the same for another.
To know what would work best for your nonprofit, consider answering these questions:
What do you plan on selling?
What do you absolutely need?
What can you compromise on?
What is your budget?
Where is your website currently hosted?
When looking into the different ecommerce platforms out there, make sure to note:
Their price point
Whether they are compatible with your website
What other services they provide
Platforms such as Shopify offer nonprofit discounts for their services, while web hosting companies like SquareSpace have ecommerce as an option for their clients.
Make It Easy to Navigate
Most people do not have the time or patience to spend hours browsing through complicated websites.
For this reason, make sure your online store is easy to navigate. Have the information clearly presented with good photos that clearly display the products. Make sure the shopping cart is easy to find, that any information regarding the purchase is easy to see, and that your website is accessible to all.
Don’t forget to ensure that your page is also easy to navigate on mobile devices. Test out how well each picture and text reads when presented in a significantly smaller screen, how long it takes for them to load, and adjust your content accordingly.
In almost all cases, if you are going to sell items on an online merchandise store, you’ll need someone to help you with the designs.
While putting your logo on a product may seem easy to do, if you want to make your items more visually appealing, you should go to an expert for help.
There are many places where you can find freelancers with experience in this area, though also consider checking with your team or other nonprofits in your network to see if anyone has any recommendations. If the relationship works well, you might even consider going to this designer again for other projects, not all of which need to be necessarily connected to your online store.
Have an FAQs Page
A Frequently Asked Questions page can be very useful for any website, but especially so if you have a store.
Not only can this ease the burden on your staff who would otherwise have to respond to the same questions numerous times, it also provides your customers and donors with useful information, both on your nonprofit and the logistics of their purchase.
Some of the information you could include in your FAQ include, but are not limited to:
How long it takes for orders to process
Estimated amount of time for shipping
How the customer can contact you if something goes wrong with their purchase
Information on how the money raised through your online store is being used
This level of transparency will also make the online process faster and easier, increasing the chances of them returning to your store in the future.
Challenges of Ecommerce for Nonprofits and How to Overcome Them
Finally, we will conclude this guide by discussing some of the challenges you are likely to face if you decide to set up an ecommerce store for your nonprofit and how to overcome them.
Lack of Resources
When you are already doing everything you can to optimally divide your current resources amongst your different programs, it may seem impossible to begin a brand new initiative.
Try taking things slowly. While it is good to have ambition for a larger, grander ecommerce store, begin with what is manageable and slowly work your way up.
Start by creating a business plan for your store. Consider answering these questions:
How much time can you spend promoting your store?
How long can you keep it running without generating a profit?
How much shipping and handling can you do on your own?
What do you already have at your disposal?
What do you still need to acquire?
How much can you afford to outsource?
Once you’ve answered these questions, you’ll have a better idea of everything you have at hand and what next steps you need to take.
Besides the lack of resources, another challenge nonprofits may face is technical difficulties. Running an online storefront can take a lot out of your servers, your website, or even physical space.
Consider partnering with a technology provider. As mentioned above, platforms such as Shopify are more than ready to accommodate nonprofits. Talk to your web hosting provider and see what they’ll recommend given your current plan. Perhaps there are other tech companies that would be willing to provide you with an in-kind donation that could help you make up for any such shortcomings.
Limited Staff Expertise
It takes a lot to run a proper online shop. Not only do you need to ensure your website is functioning properly, you must keep on top of your inventory, your shipping process, returns or other difficulties on the consumer end, etc. Unless one already has experience with online retail, most people would not be equipped to handle these many responsibilities immediately.
Training your staff would be the first ideal option. There are plenty of courses online as well as other resources going into the on-hands practical steps of opening an online shop. From video tutorials to blog posts, you can quickly gather all the information you need.
However, if providing staff training is not an option for you (either due to time or money), then consider whether this is something you can outsource. There are many ecommerce operations out there that will handle not only the hosting of your online store, but also the managing of inventory, shipping, restocking, and all other details that you perhaps do not have the time or expertise to handle yourself.
While this will certainly cut into your final revenue, depending on your situation, it might be a worthy trade-off.
Wrapping Up: The Next Steps
Ecommerce can be a great revenue stream for nonprofits. But in order to do it successfully, you have to do it right.
Hopefully, this guide has prepared you to open your own online store by giving you successful examples, best practice tips, and useful information on possible challenges and how to overcome them. Now you should be well equipped to embark on this new initiative and raise more money for your nonprofit.
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