Today’s nonprofit organizations operate in a competitive world. Executing their mission while keeping the company afloat often takes more than regular donations. Many nonprofit organizations have begun developing different revenue streams to supplement grants and donations, and this includes opening nonprofit online stores.
Read on to discover how your organization can benefit from operating a nonprofit online store and how to successfully implement its strategy.
Can nonprofit organizations sell merchandise?
Because nonprofits are exempt from federal income tax, there are legal rules that each organization needs to follow to keep its status as a nonprofit. Nonprofit organizations can sell merchandise to fund operations, but income from gift shops and a nonprofit online store is often considered taxable. Before setting up your website, talk to your lawyer or financial advisor to determine how the site could impact your organization.
Why should you consider a nonprofit store?
A nonprofit online store offers a source of consistent revenue that can help you fund your organization. It is a store in which you sell merchandise related to your business. This could be anything from branded clothing and other goods to online webinars or e-books that help educate professionals in your field.
Ecommerce is a steadily growing part of the economy. The U.S. Census reported that in the third quarter of 2020, ecommerce sales were 37.1% higher than in the third quarter of 2019. Operating an online shopping site is also more cost-effective than running a physical retail location.
Nonprofit online stores: How would one fit into your overall fundraising?
Your fundraising strategy should be holistic, incorporating a variety of touchpoints. If you are not fundraising online through crowdsourcing, ecommerce, online campaigns, and other internet-based strategies, you could be missing a large portion of potential donors.
Setting up a charity shopping website for your nonprofit fits into your overall strategy by providing another avenue by which people can donate. If you have a consistent product to offer, this can also become a steady revenue stream, unlike a grant or a single donation. As a bonus, when people check out in your online store, you can keep their email address on hand for future touchpoints and other marketing campaigns.
Which platforms can you use?
Your nonprofit can use a variety of sites to sell products, including Amazon and Etsy.
SERRV is a fair-trade organization that has been in operation since 1949. It offers an excellent example of a nonprofit online store using its website to sell fair-trade merchandise directly from the artisans who benefit from the organization.
What should your nonprofit sell?
Ideally, your merchandise should tie in with your company’s mission. If your company is dedicated to cleaning up the environment, selling branded plastic water bottles probably isn’t a good fit. Ask your employees and current donors what they would be likely to buy from you.
Some choices include branded merchandise like clothing, coffee mugs, pens, and other items that people use often. But this is also a chance to get creative. If you have a popular class or event, see if you can turn it into a webinar that people will pay for.
When selling physical merchandise, factor in the cost it takes to make it and to ship it. It’s easy to find a vendor to print your logo onto tote bags or t-shirts, but other items you decide to sell may not be easy to make. Logistics should be easy to facilitate and cost-effective.
The Best Friends Animal Society has an online store with a wide variety of merchandise for people and their pets. Since the organization helps animals, offering a branded pet line is a great tie-in for the mission.
The Getty Museum Store has typical gift shop items and merchandise that ties into various exhibits throughout the museum. It brings the gift shop to people at home so that they can shop long after their visit. The store includes buttons with information about upcoming exhibits throughout the online store, which is a good way to integrate your store with your website.
How should you price your products?
Unlike for-profit businesses, your goal with your online sales should be to cover expenses associated with running the organization. Making excessive revenue from your online store could open you up to tax liabilities and potential legal issues that could impact your status.
Before setting your pricing strategy, do some market research with other nonprofit organizations. Calculate your manufacturing and shipping costs and then determine a reasonable profit level that you can achieve by selling your merchandise. When researching the market, ask other nonprofits about their target profit margins.
How do you set up your store?
Once you have chosen your desired online retail platform, determined what items to sell, and developed a pricing strategy, it’s time to set up your store. You will need to include:
- The category of your store
- The store’s name
- Payment information
- The store’s theme
- Your products
- Integration information (i.e. PayPal)
There should be information on your website about your charity. Communicate to people where the proceeds of their purchases from your nonprofit online store are going. If a percentage goes to fund your organization’s mission, state that.
How should you promote your store?
Building awareness of your online store can help you increase sales and enhance your fundraising. Use your organization’s social media pages to drive people to your shop or to promote sales. The Sea Shepherd Conservation Society is an organization dedicated to helping marine wildlife. It uses its Facebook page to post-sales and promo-codes, driving traffic to the online store.
You can also send out email campaigns announcing your store or promoting sales. Tell customers how their purchase benefits your organization and tie in the promotion with your mission in your copy.
Setting up an online charity store can be a valuable part of a multi-faceted fundraising strategy. This tool lets donors fund your organization while getting something in return. It also helps lessen your dependence on traditional funding resources. By devising a strategy that aligns with your mission and offering quality nonprofit merchandise, you can set up a successful ecommerce site.
Create a visually appealing website that is easy to navigate to drive sales and then promote the store to current and new donors. With hard work and vision, you can successfully tap into the ecommerce market to supplement your fundraising.
With these tips in mind, you can get started on your nonprofit online store. For even more marketing strategies and support for your nonprofit, check out The Download, a free guide from Constant Contact.