Starting an Online Business
Q: Hey Steve! I am looking to start an online business. This stuff is all new to me and I am not even sure where to start, but my first question is this: Where do I find products to sell? I don’t know any distributors. Who do I call? I don’t want to look like a dummy. Thanks for any help you can give me.
A: Consider these startling statistics:
According to Forrester Research, in 2009, retail sales rose 2.5% in 2009. While that is surprising enough, consider this: Online sales during that same time rose 11%.
If you are looking to start a business, even a part-time business, you would be hard-pressed, especially in this economy, to find a sector growing at an 11% clip. Forrester forecasts that e-sales in the U.S. will go from about $173 billion this year to about $250 billion in 2014. That’s booming China kinda growth my friends.
So the answer is yes, starting an online business is a smart move.
Here are the pros and cons:
Pros: The cost of entry is low, you have access to global markets, it is an automated, 24/7 profit center, you can look every bit as big as the big boys, the overhead is low (more on that in a minute), but the profit potential is large.
Cons: It takes work to get people to learn of the site, there is no personal contact as with a retail store, creating credibility (and thus customers) can be a challenge, it takes time to get things really cooking, and customers cannot physically see or feel your products.
The pros definitely outweigh the cons.
Here are the 7 Steps to Starting an E-Commerce Business:
1. Create a great site: This is No. 1 for a reason. You simply have to have a great looking, intuitive, easy-to-navigate site if you are going to be taken seriously by potential e-customers. Your site must look professional. Pictures and content must load quickly. There can be no dead links. Have a robust “About” page.
The good news is that it is very easy and affordable today to create a great site – look for online hosts that have pre-made templates that you can customize.
Web surfers who come to your site will judge it in about three seconds. That’s all you got. You better impress them the moment they hit it.
2. Pick your products: I have a buddy who owns an antique store. His business success motto is: “It’s all in the buying.” He knows that if he can find the right product at the right price, he will make a profit.
The same is true for you.
Where do you find these great, inexpensive products? It all depends on what you plan to sell, and how much. It may be a matter of spending weekends at yard sales and on Craigslist and picking up some good, cheap stuff. Or, if you want a more formal arrangement, let me suggest that you check out the wholesale search engine I have at my site. There you can find thousands of wholesalers and distributors for almost any sort of product you need.
3. Have an online catalog or store: Think about when you shop online. There is always a catalogue of sorts of products from which to choose: Tiny pictures with product descriptions below, right? That is what you have to do too. Happily, you do not have to create this from scratch. Your e-commerce site host (see below) will offer a store creation tool, with point and click ways to add products, pictures, and descriptions.
4. Have the ability to process payments: This issue is two-fold: The financial ability to process credit card payments comes when you have a merchant account. Google that term. The physical ability to process such payments is, again, something your host will offer. Google “online merchant services” or “E-commerce hosting.”
5. Market and promote the site: All of these steps are important, but this one is maybe a little more important. People have to find your site. No matter how nice it looks or how cool your products, if no one knows about the site, it is a waste of time, money, and efforts.
Master search engine optimization (SEO.) Engage in viral marketing. Tweet. Have a Facebook fan page. Try pay-per-click. Advertise.
6. Fulfillment: You have to deliver what you sell, on budget and on time. Don’t forget to add the cost of shipping into your prices.
7. After sales support: How will you handle returns? What should you upsell? Your support is the difference between having a one-time sale and creating a customer for life.
Today’s Tip: In these trying times, people need all the financial help they can get. That is why I was happy to donate an article that became part of a great new book called “It’s My Money & I Want It!” by Harris Glasser. If you need help insurance companies, denied claims, credit reports, etc. then this is the book for you. Steve says check it out.
© 2010 Steven D. Strauss, “America’s small business expert.” www.MrAllBiz.com