I started e-commerce - selling on the internet - when I was probably 14, on eBay. At first I sold a few personal things, then I found a market for things I could sell many times. And it turned into a business. I sold my first main item for about a year on eBay. Demand for that dropped off and I found a new item which I sold again, for about a year. Then I found a 3rd item which I sold. It was all on eBay for 3 years.
I was amazed at the power of "global commerce". Sending out 5 padded envelopes a day to people all over the country (and world) while in 9th grade felt GREAT.
I wanted to get rid of eBay and paypal fees. And I didn't like dealing with the bombardment of emails from uneducated ebayers who were probably never going to reply or purchase.
So I set up a very simple cart (agora) tied to paypal payments and it worked for a while. I added a few more products that I would buy wholesale.
Then I switched to oscommerce and hacked it up to meet my needs.
Now I am building my own system: accounting, inventory, product, and store/cart
I've never had a paycheck, so e-commerce is all I know.
With my "first" product, probably about $50. It was a box of 100 clear overhead projector transparencies. I bought some PDA screen protectors on eBay for my PDA. I realized how simple they were, and that I could make them for pennies. I took the 100 screen protectors to Kinkos (now the fedex store) and stood there for an hour cutting them to size for PDAs. And I made a few thousand dollars with that for a year.
Next few products initial inventory was pretty small too... just a few hundred dollars. Couple years later, I was debating whether I should buy $5000 worth of a product. I finally did it and it turned out to work well.
I can now figure out whether it is worth the risk of buying a certain quantity for a certain price. I have a sense of how much I can sell, and what would happen if I couldn't sell it.
Now I buy $30,000 without worrying, since I know I can sell it.
Things will not start "rolling" over night. It will take time. Started out with less than an order per day, and now it is almost 9 average.
Things will get rolling if people can find your site, and you sell a good range of products that are easy to navigate, get info about, etc. And if your site is simple to use and professional. Word of mouth will be great, but it takes time. You can spend money on advertising, but make sure the site is ready.
The industry is quite easy to enter into. Trust mostly comes from the design/layout/professionalism of your site. Do you have an 800 number? Are you easy to get a hold of? Are your images good? What about the product descriptions? People will tell their friends, and people will talk about sites on forums, so if you've been around for a long time, this trust will certainly be greater than if you just started. The trust can be build fairly quickly.
Credit card fraud has not be a huge deal for me. Try to setup policies and checks. If an order looks suspicious but you feel greedy and think it will work fine, dont ship it! Call the customer. If the number you call is disconnected, cancel the order. I can figure out pretty well just by looking at the contents of an order whether it is fraud. I know what an abnormal order looks like. And if it is like that, I will investigate further.
Returns haven't been a big deal. Try to sell good quality products.