Many people consider this the dream business, and sometimes even a bit unbelievable, and that is to open up a store online, drop-ship some line of products (or import them from China or wherever), do a little marketing, and quit their day job!
For those of us that have done it, we know it’s possible, and a reality. For those who have heard about it, some think of it as a nice pipe dream, while others believe it can actually be done but don’t know where to start, as all this web stuff seems all too complicated for them, and the learning curve might be too steep.
Well, there’s some truth to both sides. While it’s not as easy as the uninformed make it, ecommerce business has a basic process that can be understood, and applied. And really, with some determination, just about anyone with an average intelligence can learn it and make it work.
Here are some basic things I’ve learned in my 7 years of ecommerce I believe would be beneficial to someone who’s just starting out, or even just considering this business.
First you need to understand the big picture, and the basic process. The details will come later, and we will discuss them too. For now, this is the simplified version of what it takes to be an ecommerce business owner…
1) Research and market and decide on a product line or industry – Make sure you’re not just selling what YOU like, but what the market has demand for, and not extremely competitive. There’s no hard rule about what “too competitive” maybe, and your ability to compete basically depends on your ability and efforts. The flip-side of a competitive market is that the demand is proven, and you know people want the stuff. And in the same way a non-competitive market may simply have little or no demand! So pick something in the middle would be safe.
2) Be at least somewhat passionate about your chosen industry or product line – Since you will be writing about this line of products and trying to promote it, having a genuine interest for it can make the difference between going all the way with it and quitting prematurely. So make sure you at least have some interest in the market/industry.
3) Select a shopping cart software or service to use. If you are somewhat tech savvy, you can install a proven shopping cart software on your own server, and build your site from there. If not, you should go with a subscription-based shopping cart service such as a Yahoo Store or other similar services. We will discuss and review the different choices in depth in another section later.
4) Figure out where you will get your products to sell. Decide if you want to stock it in a warehouse and carry inventory, or simply find a drop-shipper (a warehouse that will ship products on your behalf). There are pros and cons but generally by stocking it yourself you’ll have a higher profit margin. The downside is the extra expense of the warehouse and the inventory costs upfront. You would want to make sure when the orders come in, you’ll be able to deliver the product(s) quickly.
5) Setup payment gateways – You need to accept credit cards to do business online. Basically, the right way to do it is to apply for your own credit card merchant account with a reputable bank. However, that may not be so easy to get, and some of the reseller services out there charge too much fees. Paypal is a good way to get started, as it will allow you to accept payment from customers who sign up with them and customers can link it to their bank account and/or credit card. Of course, you would need to configure your shopping cart software/service to accept paypal, and most do these days.
6) If you build it, they will NOT come automatically! Even when your site is done and you are able to put test orders through smoothly. Internet traffic will not come in without some dedicated work! Internet marketing is a science and an art. You need to love it and study it and apply what you learn, in order to get potential customers to end up at your site, and eventually convert them into buyers. All the other stuff is “easy” compared to this. Fortunately there are plenty of free methods to promote your website to qualified prospects, and we will get into that in the marketing section!
7) Setup a toll-free line and use a real address, even if it’s just a private mail box address. Toll free numbers and menu-based systems are a lot cheaper than you think. You can literally get one setup for about $10 a month, and it even comes with some free minutes! Private mail boxes are much better than USPS PO boxes. Why? Which address would you trust…
PO Box 12345, Los Angeles, CA 90001
or
123 Main St. #200, Los Angeles, CA 90001
Of course the 2nd one, because even though it’s a private mail box, it looks and feels like an office! In the online world, perception goes a long, long way, since peope really can’t see you in person! So be sure to make the right image for you business.
That’s it for now. I’m sure there are other aspects that are missing, and that’s okay. We will elaborate everything in the other sections and I look forward to getting deeper into the more advanced stuff.
