How To Start an eCommerce Store for Your Nonprofits: A Simple (But Complete) Guide

By Kate Parsh August 23, 2021

How can a nonprofit organization fulfill its mission and stay afloat?

Collect donations, you say.

However, this method doesn’t guarantee a stable income.

The American Civil Liberties Union, Amnesty International, UNICEF… These and many other nonprofit organizations exist in a highly competitive world, like their for-profit counterparts.

Therefore, many NPOs began to look for other sources to make money. And one of them is to launch nonprofit online stores selling branded merchandise.

These are usually products with symbols of a brand, company, or community united by common ideas or values.

You can go even further and opt for a headless commerce solution to offer your products on various cutting-edge devices, such as IoT, wearables, and apps.

So, why is such merchandise popular? Because branded things show a person’s involvement in a group’s activities. And people like a sense of belonging.

But how can companies benefit from branded products? The advantages for organizations include:

  • generating additional income;
  • expanding the audience;
  • increasing loyalty.

This article will help you learn how to start an online merchandise store for nonprofits and why you need it.

Launching Nonprofit Online Stores: Step-by-Step Instructions

1. Figure out the Ways of Fundraising

What touchpoints do you use in your fundraising strategy? To reach as many potential donors as possible, consider various channels, such as:

  • crowdfunding;
  • running an online store;
  • online campaigns;
  • using social media;
  • YouTube and other similar channels;
  • holding exhibitions with auctions and sales.

As you see, an online store is one of the channels for donating. An eCommerce store can consistently generate income for you with little effort, unlike one-off donations or grants.

You can offer a specific product, the proceeds from which will go to your fund. Or take a percentage of the order amount to finance your work.

2. Define Your Purpose

Ask yourself the question:

Why do you need a nonprofit store?

For example, you can launch a sale of branded apparel or other merchandise to build the organization’s awareness.

Or you can publish online courses and tutorials to educate professionals in your field. In any case, these will be business-related products. They will reflect your goals.

Ecommerce is constantly growing, which was especially noticeable against the transition to a remote lifestyle.

According to statistics for December 2020, eCommerce sales will grow up to 6,388 billion dollars by 2024 from 4,891 billion USD in 2021.

The screenshot below shows how this economic sector has grown by more than 300% since 2014.

Also, online sales produce good results for less money than a brick-and-mortar store.

3. Consider Legal Issues

Are there any legal restrictions for nonprofits to sell merchandise? Nonprofits’ income is tax-free. But there are legal requirements that each organization must follow to maintain its nonprofit status.

A nonprofit must earn exactly as much from sales as it needs to cover costs. Otherwise, if you make too much money from the eCommerce store, you can face tax problems and legal issues.

So, don’t jeopardize your legal standing.

Yes, nonprofits can raise funds by selling items. However, income from gift shops and an online charity store is frequently liable to tax.

Consult a lawyer or financial advisor in your area before launching a website to see how it may affect your business.

After all, you need to fund the organization, right? Use an online merchandise store for nonprofits to direct profits from this business towards:

  • programs and projects;
  • services;
  • operating costs;
  • long-term investments.

I can illustrate it using an example of Friends of the Library, Inc. It’s a 501(c) (3) charity group, which means it’s tax-exempt.

It promotes literary appreciation and raises awareness of the library’s services within the community.

By raising funds, they improve and maintain local public libraries.

How do they earn?

The volunteers conduct lecture series featuring well-known speakers and sell donated books.

Such profit isn’t taxable unless they give it to anyone connected with Friends of the Library.

There are other cases to report earnings to the IRS (Internal Revenue Service). For example, when Friends of the Library starts making more money, they buy books from dealers and resell them at retail. In other words, it begins to resemble a typical commercial enterprise.

4. Decide on a Product Line

Many charities make a lot of money selling branded things through their internet stores, such as:

  • clothes;
  • mugs;
  • phone cases;
  • toys;
  • accessories;
  • stationery;
  • tote bags.

That is any goods that people often use in everyday life.

Remember to sell ​​products in line with your NGO’s objective. For example, if you are an animal welfare fund, distributing genuine leather and fur products isn’t a good fit.

Look at the example of the WWF online store in the screenshot below. They offer a branded line with images of animals, which is a terrific tie-in with their mission.

If we click on the “Elephant-themed gifts” button on the home page, we see the page with t-shirts, socks, and household goods with the image of an elephant. You can also adopt an animal and receive a special adoption kit with the following items:

  • a plush toy of your adopted animal;
  • adoption certificate and personalized acknowledgment letter;
  • photos and information about the species.

This adoption is symbolic, meaning you donate this money to support the wildlife.

5. Establish Pricing

The process of deciding on your pricing plan includes the following:

  • First, do some market research on other charitable organizations. Ask about their target profit margins.
  • Consider thecost of manufacturing and shipping when selling physical goods. While finding a vendor to print your logo on tote bags or t-shirts is easy, other goods you select to sell may be more challenging to make and deliver. Therefore, logistics should be simple to manage and affordable.
  • And, finally, come up with an acceptable profit margin for selling your products.

6. Choose a Platform for the Store

How will you establish brand equity for your organization? The easiest way is to start selling your products on existing sites like Amazon, Etsy, or eBay.

This way, you can understand what sells and what doesn’t. You upload photos, create descriptions, and advertise your offers.

Did you know about the AmazonSmile Foundation?

Subscription to this program allows your shoppers to donate some of their money to your organization while they buy products at the same low prices they usually do.

How do they contribute? They purchase at smile.amazon.com, and Amazon gives 0.5% of the sum.

The other alternative is to set up your eCommerce store. Thus, you won’t have to rely on marketplaces. Depending on the requirements, you can choose the platform for creating the store.

  • Are you looking for a fast and straightforward solution? Do you want it to take care of your hosting? Then, create a website on Shopify.
  • If you want to transform your existing website into a shopping platform, you can add a simple shopping cart solution, Snipcart.
  • Another option is TrueCommerce Nexternal. It streamlines the online selling process and helps you manage your donor base and customers.

Such platforms allow you to update online inventory, track orders, or make price and other information changes. You can also maintain your brand consistently.

If you choose a platform like Amazon or Etsy, you’ll have to maintain both sites individually and keep track of your online store on a separate platform.

7. Set up Your Store

So, you’ve decided on what to sell, at what cost, and which online retail platform you’ll choose.

And now you set up your online merchandise store for nonprofitsand fill it up with content. When setting up a store, consider the following:

  • the name of the store;
  • categories;
  • information on payments;
  • the theme;
  • products.

Remember to include information about your charity. People should know why they should buy from your nonprofit’s online store and where the proceeds go.

Declare if you use this money to support your organization’s work.

Add detailed product descriptions, different colors and sizes, a call to action, and reviews on the product page. In short, encourage people to buy in the same way as for-profit online stores do.

To illustrate my point, I provide a screenshot of the Best Friends Animal Society store. The goals of this noble organization include:

  • ending killing at American animal shelters;
  • adoption;
  • spay and neuter education;
  • other no-kill initiatives.

Their online store sells various products, including:

  • clothing;
  • accessories;
  • pet goods;
  • etc.

If we open the Crewneck Sweatshirt page, we see 83 reviews. It is worth noting that Best Friends representatives pay attention to the response to each of them. We also see:

  • two color options;
  • sizing;
  • a description with washing conditions and fabric materials;
  • a noticeable orange CTA;
  • product photos.

8. Develop Your Promotion Strategy

The existing site must sell and attract buyers. How will you advertise your store so that as many people as possible know about it? Increase customer touchpoints through the following channels:

1. Share your products and promotions on social media. Make sure your content is share-worthy and valuable.

You can use the 80/20 rule. That is, 80% of posts per month give people valuable information, and 20% promote sales.

I took the screenshot below on the Human Rights Campaign Instagram account.

This organization protects the rights of the LGBTQ+ and creates comfortable living conditions for them without fear and inequality. What do they post on their page?

They talk about their successes in the field of legislation and fighting for the rights of LGBTQ+ members.

They repost famous people’s quotes about this issue and discuss films and their impact on the trans community, for example.

But they also don’t forget to share photos of their merchandise and a link to the online store, like this.

2. Use email marketing. Invite people to subscribe to your newsletter using a pop-up window or at checkout.

Your letters can be an additional way to interact with your customers post-sale. Also, a good practice is to provide promo codes limited in time to drive more traffic to the nonprofit online store.

3. Share a story. People are more eager to link back to a nonprofit organization than to a commercial business. So, take advantage of your favorable position.

Cooperate with local press, national magazines, and local websites. Visit TV and radio shows, and build solid relationships with journalists and media outlets.

Share practical, insightful, or inspirational information and mention your store there. It’ll help you make some high-quality references and links that will increase your trust rating and domain authority.

Major Takeaways

NPO fundraising isn’t limited to just collecting donations. It has many channels and ways to support your goal.

And the online store can be an essential component in this complex formula for attracting donors and money while also giving something in return.

Do you want to become less reliant on traditional funding sources?

Create a successful eCommerce site. Develop a strategy that connects with your mission and delivers high-quality charitable items.

Build an easy-to-navigate and appealing website and then promote the store to current and potential donors.

Hard work plus imagination will help you come into the market with new fundraising opportunities.

The following two tabs change content below.

Kate Parsh

Kate Parish is the chief marketing officer at Onilab with over 8 years of experience in Digital Marketing in the sphere of eCommerce web development. Kate always aspires to broaden her competency in line with cutting-edge global trends. Her primary areas of professional interest include SEO, branding, PPC, SMM, Magento PWA development, and online retail in general.

Speak Your Mind

*