BlogOrganizational Management The Ultimate Nonprofit Ecommerce Guide: Best Platforms & Beyond! Organizational Management The Ultimate Nonprofit Ecommerce Guide: Best Platforms & Beyond! Author: Marlena Moore December 12, 2023 Contents 🕑 9 min read Dreaming up the perfect merch for your nonprofit? Looking to bring in some extra funds? Then opening a nonprofit ecommerce store might be a great move for your organization! In this blog post, we’ll teach you how to build your own online store, complete with tips on: Brainstorming great nonprofit merchandise ideas The difference between sales and donations for nonprofits The finicky legal information Our top 4 recommendations for nonprofit ecommerce platforms Let’s dive in! Wait—Can a Nonprofit Sell Merchandise? Yes, nonprofits CAN sell merchandise! However, there are a few rules and restrictions you’ll need to keep in mind. Nonprofits that sell merchandise must: Charge tax on items sold in the store Not issue tax receipts for goods sold File Form 990-T if your merch makes more than $1000 (more on that below!) Earn a minimum of 33.333% of their income from charitable donations We have some tips below under “Legal Considerations” but please don’t take it as official legal advice! Before you open up a nonprofit ecommerce store, we highly recommend talking to an accountant. Donations vs. Sale of Goods The difference between sale of goods and donations for nonprofits is pretty simple: Donations are given without receiving anything in return Sale of goods refers to goods or services that are exchanged for money Confusing these two transactions could get you flagged for an audit—or worse, lose your charitable status! Make sure everyone involved with managing your online store understands how these items are different. Why Open a Nonprofit Ecommerce Store? Don’t let your nerves around the legal stuff spook you away from opening an online store! Opening a nonprofit ecommerce store: Diversifies your streams of revenue. Sometimes you find yourself with lapsed members, or don’t end up receiving that grant you applied for. Ecommerce for nonprofits offers one more income stream to keep the funds rolling year-round. Gets you unrestricted cash flow. Many sources of funding, like project-based grants, come with specific rules about how the money can be used. Nonprofit merchandise sales don’t have those restrictions, and can be applied wherever you feel needs it most. Gives visibility to your brand and mission. Social media ads and subway posters cost money—but it’s free when a stranger asks “hey, where did you get that?” Great merch can turn your supporters into walking billboards. Plus, with the help of the right influencers, you can make that social media magic happen organically! Opens the opportunity for powerful partnerships. Whether you team up with another nonprofit to uplift each others’ mission or connect with a great shop, partnerships are a fast way to expand your audience. For example, connecting with a local designer to make a product in your brand colors can spread your message in style! How to Make an Online Store for Nonprofits in 7 Steps Sold yet? Let’s break down the steps in making a nonprofit ecommerce store! Set your goals Let’s think beyond “I want to sell stuff!” Ecommerce for nonprofits can be more than just a financial boon—it’s also an opportunity to connect with your community and expand your audience. Hone in on a specific goal like: Building a consistent source of income Amplifying a specific fundraising campaign Prioritizing partnerships Providing member-targeted resources Developing and expanding on your brand Or anything else! With a clear focus, you’re more likely to see results. Brainstorm merch ideas Nonprofits that sell merchandise see the best results when the products are attractive, high-quality and relevant to the interests of their supporters! Just think about what your most successful nonprofit swag bags have contained, and innovate from there. You can sell physical goods like: Branded t-shirts (Bonfire works specifically with nonprofits!) Reusable water bottles Eye-catching stickers Custom calendars Donated items If you’re looking to save on shipping, you can always offer digital products like: Ebooks Subscription services Online workshop series Software licenses And like we mentioned—be sure to include the add-on to donate or become a member at the end of the sale! Research ecommerce platforms As you explore your options for nonprofit ecommerce platforms, ask yourself if: The interface is user-friendly The payment processing is secure It’s mobile responsive There’s the option to scale up your inventory It can integrate into (or build!) your nonprofit website It comes with great analytics features Psst—you can save some time digging around by checking out our recommendations below! Build your online store Depending on the type of platform you use, you’ll either find yourself building your website or integrating your store onto your current one. As you work on this project, keep branding top of mind, working with the colors and fonts in your current brand kit! Struggling to make your vision a reality? Start with a wireframe to guide each step of your design, and then make modifications based on the flexibility of your software. Review & train Once your website is feeling solid, bring it to your team! Your next steps include: Doing a bit of A/B testing Collecting feedback from your team and board Making any useful modifications Getting board approval Training everyone who will be working with the website While it’s good to have a few people get comfortable with the website, avoid over-distributing the keys to the kingdom! This will keep your site more secure, and prevent confusion about website management. Go live and PROMO! Now for the exciting part—get this online store up and running! We recommend starting with a week-long soft launch for your current members. This will give you time to receive feedback from your most dedicated supporters and make any final tweaks. When you’re ready for the site to hit the general public, have a whole marketing campaign ready! Not online will this drive people towards your shop, but it can also service as a great introduction to your nonprofit in general. Keep up with inventory and track data Running a nonprofit ecommerce website isn’t a one-and-done situation. Keep track of your user data (within reason!) and see what you can learn about consumer behavior. For example, if you notice you routinely lose sales once shipping is calculated, it might be time to adjust some prices of the base items. Finally, keep a close eye on your inventory. As any retail business can tell you, inventory mistakes can be a real nightmare—especially if an audit shows up. With the right systems in place and regular maintenance, your ecommerce website just might end up one of your favorite projects! 7 Tips for Diving Into Ecommerce for Nonprofits If you want to make the best online merchandise store for nonprofits, here are a few things to keep in mind: Keep an eye on those processing fees. Make sure your platform doesn’t charge a processing fee for both the shopping cart AND the payment processor. With your own card’s fees and monthly hosting fees, you could easily end up losing money if you’re not careful. Set up shipping accounts for FedEx, USPS and UPS. Each of these services comes with special features like discounts for small businesses and streamlined tracking. Have people on hand for customer care. Nothing loses a sale faster than a confused or frustrated customer. An easy-to-find chat box or email address will be helpful for the detailed questions the FAQ might not cover. Make your store consistent with your nonprofit website branding. Consumers are more wary than ever of falling victim to scams and financial fraud. Consistent colors, fonts and logos make your nonprofit ecommerce store look more legitimate. Your platform should be able to grow with you. Maybe right now you only have a couple products for sale, but that might change over time! Look for platforms that don’t restrict the number of items you can sell, or add exorbitant fees past a certain point. Offer member discounts. Discounts are a top perk in your members benefit package, and an easy way to show appreciation for your members’ dedication to your cause. Include donation & membership add-ons. Want to add a further CTA when you make a sale? Including a one-time donation button or the option to sign up for an annual membership can turn consumers into members at the moment of purchase! 4 Best Platforms to Host Your Online Store A quick google will throw a whole lot of recommendations for nonprofit ecommerce platforms. After a bunch of research, we’ve simplified them into a list of our top 4 favorites! WildApricot Looking for a nonprofit ecommerce solution that can truly do it all? WildApricot’s award-winning membership management software might be the perfect platform for you! Our ecommerce solutions include: An unlimited product catalog Secure payment processing Automatic tax receipts for donation add-ons Seamless integration with your nonprofit’s current website or… A special gadget for your expertly-branded WildApricot website Beyond ecommerce capabilities, we can also help you build a robust member database, streamline your member communications and more! Pricing: 60-day free trial, and then plans starting at $100/month. Shopify With millions of clients in over 170 different countries, Shopify is one of the world’s most popular commerce platforms. It can manage sales for online stores and retail locations alike, and represents 10% of total US ecommerce. While it isn’t designed specifically for nonprofits, you can consider it ol’ reliable when it comes to ecommerce! Price: Shopify for nonprofits has plans starting at $29/month, with transaction fees depending on your provider. WooCommerce WooCommerce is a WordPress plugin that serves as the world’s most popular open-source ecommerce platform. Because it’s open source, your nonprofit will have full ownership of its own content and data—and the flexibility to set up your nonprofit online store however you’d like. Price: Free! Psst—want all the benefits of an open-source ecommerce platform, but with a touch of extra help? We recommend checking out Woo Express! This is a simple, all-in-one package withfully managed hosting from WordPress.com, popular extensions and world-class customer support for a monthly fee. Price: 14-day free trial, 3 months at $1/month. Packages then start as low as $25/month. Ecwid Ecwid is the best ecommerce platform for businesses that are looking to advertise their goods across as many channels as possible! You can market across your website, varying social channels, marketplaces and in-person—all from one elegant dashboard. If your nonprofit has a strong social media strategy or is looking to partner with influencers, this is a great pick. Price: Starts at $19/month. Legal & Safety Considerations Nothing shuts down a store quite like being on the wrong side of the law! Here are a few key legal and safety considerations to keep in mind. Unrelated Business Income Tax (UBIT) Depending on the types of goods you’re selling, and if you make over $1,000 from your nonprofit merchandise, your tax-exempt nonprofit might need to file Form 990-T for Unrelated Business Income Tax (UBIT). There are a few exceptions, including: Volunteer labor Business for the convenience of members (like a school cafeteria) Sales of donated merchandise Bingo IRS Guide 598 breaks down UBIT exceptions even further, but we highly recommend getting help from a tax attorney or financial advisor if you’re even a little confused! Individual State Sales Tax Laws Nonprofit sales tax laws will vary depending on which state you’re operating in. Find out your state’s laws for sales, income and other taxes to make sure you’re in compliance. PCI-DSS Compliance Payment Card Industry Data Security Standards (PCI-DSS compliance) are what keep online transactions safe for both sellers and consumers. These standards prevent data theft and security breaches, and are a MUST HAVE for every online store. Luckily, it’s pretty simple to keep things safe! When you choose your payment processor and gateway, be sure it’s listed as being PCI-DSS compliant. We also highly recommend: Getting your website an SSL certificate Scanning your website for viruses and malware Only updating your website from one secure computer Checking out PCI’s list of ecommerce best practices Mastering Nonprofit Ecommerce With knowledge of the rules under your belt, all that’s left is the fun part: getting started on your nonprofit merchandise! Soon your members will be showing off your brand with style—and inspiring new supporters to join your organization. Want to get your nonprofit ecommerce store and membership website set up in one fell swoop? Sign up for your 60-day free trial of WildApricot’s award-winning membership management software today! Related Organizational Management Articles Organizational Management 🕑 9 Min Read Human Resources for Nonprofits Marlena Moore This Week Organizational Management 🕑 4 Min Read Engaging Association Members in Advocacy Initiatives: 3 Tips Marlena Moore Feb 13, 2024 Organizational Management 🕑 11 Min Read 31 Free Nonprofit Webinars for February 2024 WildApricot Feb 1, 2024 The Membership Growth Report: Benchmarks & Insights for Growing Revenue and Constituents Get the report now!