e-Commerce has been around almost as long as the internet itself. You’ve seen them before – everything from a website selling someone’s own hand crafted goods, to giants like Amazon. The advantage to selling via your own online store are the freedom to set your own profit margins and choose your own products, however many online entrepreneurs are turned off by the stiff competition and the need to purchase and store your products upfront.
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Online stores can be an excellent way to make money, but it will take a lot of time and effort. On top of that, you will need to supply an initial investment in products and storage. Nonetheless, when you choose the right products and the right market, you can be earning in a relatively short amount of time.
HOW DOES e-COMMERCE WORK?
My own personal best profit margin was something around 400% selling jewellery, before the product source dried up, so the profit is there to be made. It works like this:
You buy or make the products → You list your products for sale on the internet → Customers buy your products → You ship the products → You keep the profits and invest in more products
WHY START YOUR ONLINE STORE
There is a reason people choose to get started in e-Commerce. Despite the stiff competition and the demanding, repetitive tasks, there is money to be made and all you need is an internet connection. Here are just a few good reasons:
- Work from home (or anywhere)
- Choose your profit margins
- Improve sales for an existing business
- Choose your level of investment
- Many online sales platforms available
HOW TO BUILD AN ONLINE STORE
Building an online store can seem daunting at first, but the availability of so many selling platforms can actually make this quite simple. The first thing you will need is an idea of your products. Will you be selling goods you have made yourself, buying and selling within a specific industry, or buying items on special and on-selling?
ONLINE SALES PLATFORMS
Here are some of the top choices for selling your chosen products. These e-Commerce websites allow you to create a store without the effort of building a website from scratch, although you may find the competition is very stiff:
- Online classifieds
- Social media
Some of these platforms can be expensive in terms of fees and may even take a percentage of your sale, so shop around. The cheapest, though most labor intensive approach is to build a website from scratch and add an online shopping cart.
MAKE e-COMMERCE WEBSITE
Despite the extra effort involved, there are several good reasons why you should consider your own website. First of all, you pay less fees and charges than with most other platforms. Secondly, the level of competition is improved: Once a client is on your site, they aren’t looking at other sellers on the same platform. Thirdly, you have a lot more opportunity to promote your products via simple advertising techniques – more on that later.
Here are the basic steps you will need to follow:
- Choose a website building program
- Add a shopping cart plugin
- Add a payment gateway, such as PayPal
- Upload your products
- Write content to promote your products
My top choice for building a website is SiteRubix: You can start out for free. It’s simple, cheap and if you choose to upgrade later you can have your own .com domain names and email addresses too.
HOW TO SOURCE PRODUCTS
This is a key question: Where can you get the best products for the best deal? If you are making your own product you already have the answer. Other options include finding a niche market and selling relevant products, such as movie paraphernalia or kitchen appliances. You might also simply be looking to offer great deals – buying items for cheap at an online sale and selling them at full price on eBay.
- Thrift stores / garage sales / antique stores etc
- Auctioneers and liquidators
- eBay “deals”
- Wholesale Central
- Worldwide brands
WHAT TO SELL ONLINE
Here is the money-maker: Your products. Unless you produce your own goods, you need to be able to identify the market, purchasing trends and other factors, such as urgency and repeat business. Here are a few great ideas that always stay relevant:
- Research “daily deals” on eBay
- Use our own interests and hobbies (be a trusted expert vendor)
- Smartphones and their accessories
- Other technology gadgets like tablets, laptops
- New video games and game consoles
- New athletic footwear like Addidas, Nike, Reebok, and others
- Personal drones
- Designer items like bags, belts, watches,…
- Collectibles like gold & silver coins and medallions
- Most things Disney, DC Comics, Star Wars, Star Trek
- Branded products
INCREASING SALES AND PROFITS
Once your store is set up, you might find yourself checking your orders every 30 minutes, hoping for a sale. There are better ways to spend your time, that will help increase your business.
Firstly, much like drop shipping, you need to focus on two key factors: Getting traffic to your store and converting that traffic into sales. To increase both, you need to learn how to run an online business, make your offer attractive and buy the right products. You also need to lower the costs of running your store, and free up time to grow the business and conduct research.
You can do this by signing up to multiple online sales platforms, using popularly searched keywords and promoting your products via social media. If you have your own online store, you can also write product reviews that will be found by people using search engines, and direct them to your products.
You should also start an email list as soon as your store is open – when you have enough people on your email list, you will be amazed at the power of email marketing.
This is another key aspect of growing your online business. High costs means low returns, and you may find yourself going to a huge effort to sell products only to find low profits.
LARGE ORDERS: If you can get wholesale or discounted rates, you can offer a better price and get more sales. You can also increase your profit margin and get more per sale.
THE RIGHT SALES PLATFORM: Keep checking the performance of your online stores. Where do you get most of your sales? Which has the highest fees? Can you cut back on low-performing platforms and redirect the customers, thereby decreasing your fees?
SHIPPING COSTS: Where possible, try to have your products sent to you free of charge, and offer cost effective shipping so your customers don’t mind paying.
Operating an online store can be very time consuming, especially if it is performing well. You have to research products, trends and keywords, upload products, manage inventory, take orders and ship products.
There is a way to minimise the drain on your time, but it will cost you – outsourcing. You can pay others to do most of your time consuming tasks for you, such as:
- Upload your products
- Write content
- Research keywords
- Take orders
- Store and ship your products
- Customer service
It is important for you to consider whether more time will equal more money, then decide what to outsource. If outsourcing means you only break even but you have no work to do, you should find a way to increase profits, or outsource less of your business.
WHAT TO WATCH OUT FOR
An online store can eventually be worth millions – just look at Amazon or eBay. But, it is important to know what you are getting yourself into.
- High flexibility
- Freedom to run your business your way
- High availability of sales platforms
- High competition
- High workload
- Full risk (upfront purchase required)
Online retail is so common now that there are so many pitfalls to be aware of. Not just scams, but also mistakes you can make on your end. Always be aware of what you are spending and what you are doing, and research all offers before you accept.
COST OF PRODUCTS + STORAGE: What is the initial investment, and how long before you sell out of everything? Make sure you understand the whole cost.
MOQ: The Minimum Order Quantity. You may have found a great price per unit, but can you afford to buy ten thousand units?
SHIPPING COSTS: This includes packaging supplies and transport. How big or heavy are the products? Is your price still competitive after all the shipping costs?
RESELLERS POSING AS WHOLESALERS: I have run into this many times. They tell you they are a wholesaler, but really they are just selling slightly below (or even at) retail rates. You won’t make margins on these products – research market rates before you buy.
WHOLESALERS CHARGING ACCOUNT FEES: This is not always an issue, if they really do have good products and rates. Do your homework before you sign up.
SCAMMERS: Be very alert. One of the most common scams is simply to take your money and not give you the product. You can also end up buying and selling fake products without realising – this has happened to me.
SELLER FEES: eBay and other platforms will charge you. Make sure you understand the fees so you can sell your products at the right price. If you can, redirect customers back to your own site.
LINKS AND RESOURCES
Online stores are now my least favourite way to generate a passive online income, but the opportunities are huge if you can put in the time and resources.
Read more e-Commerce topics here: All e-Commerce Topics
There is a terrific blog post by BoomerGP on Wealthy Affiliate that can help you understand hot products and selling on eBay – click here.
My preferred method for building an online store is via SiteRubix.