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How about this for a plan
need your criticism
tonio321




msg:653646
 6:12 pm on Apr 11, 2006 (gmt 0)

I'm 25 years old and I've worked a blue collar job for the past 6 years, good company with great pay and benefits but lately I've decided if I want to get out and see the world and have options I need to pursue having my own business.

I have decided to start an eCommerce business that has been in the back of my head for the past year or so. I have been business planning for the past couple of months and I have found a niche that is pretty much untapped, a lot of my competition have websites that look like they were made in the 90's and barely anyone has the option to completely purchase online. Because of my low overhead I can offer the exact same products at a much lower price, but I will probably just keep it competitive rather than blow them out of the water.

I am planning this business a year in advance to save up capital, learn about the market and eCommerce in general. I will not be taking out any business loans for this venture, all startup capital is coming out of my pocket. (I actually sold my sports car in December to get this going) I've lurked webmasterworld forums for a while now learning from the precious experience and advice you guys offer and it has given me a great deal of confidence.

I know a little bit about html but just the basics so I've contracted the website design and maintenance out for now since I am still working full time and I really have no desire to design my own website right now. Since the website should be done next month but will not start selling products until early next year I am going to spend the next 8 months adding content and try to get the site listed on any search engine I can find. The minor content on the website I'm going to write myself but for articles I plan on contracting that part out since the prices I have seen are pretty reasonable.

I've already incorporated (LLC) and have my logo done, I am going to meet with my supplier(s) face to face next month so if you guys have any advice in that aspect it would be greatly appreciated. Do you guys try and negotiate the wholesale price or do you just accept what they offer? How is your relationship with your suppliers?

I also realize that I need to consult with an accountant and a lawyer so that is on the agenda as well. With this venture I'm not looking to get rich quick, honestly I value the experience more than the revenue with hopes that the business could eventually support me financially without a full time job. But any questions or criticism would be greatly appreciated. Thanks!

Tony

 

webjourneyman




msg:653647
 1:18 am on Apr 12, 2006 (gmt 0)

Your plan seems sound and youre off your but actually doing it, thatīs the hardest part.

I think I read here somewhere that if another webmaster sees your site as commercial, i.e. with lots of ads etc. the chances of him linking to it decreses dramatically.

So it would be a good idea to start with an info site and keep it ad free for a year or so while you build rank in the search engines.

Get those competitors to link to you, even provide a free rss site for them or others in similar niche to link to.

My personal philosophy is that it is better to write the content oneself, a) its less hassle (I know from experience that it is a hassle) and b) You educate yourself on your niche while you do research and write, something you need to do anyway.

I canīt advice on how to handle wholesalers since Iīm a total newbie myself :)

minnapple




msg:653648
 2:33 am on Apr 12, 2006 (gmt 0)

I have worked with many "basement" start-ups that now have successful businesses and just as many that failed.

Those that did their homework, worked hard, and were willing to adapt, made it. Those that failed, gave up too early in the game because they didn't have the drive to make a go of it.

You have done your homework, and you seem to have a realistic outlook.

You should do well.
Best of luck Tony.

crak_bot




msg:653649
 3:41 am on Apr 12, 2006 (gmt 0)

I know a little bit about html but just the basics so I've contracted the website design and maintenance out for now since I am still working full time and I really have no desire to design my own website right now.

Make sure your design company has experience with e-commerce sites. Most web designers are graphic artists and can make great looking, fancy sites but they usually convert like garbage. Remember, some of the best sites are the most simple.

Good Luck

jsinger




msg:653650
 5:28 am on Apr 12, 2006 (gmt 0)

Because of my low overhead I can offer the exact same products at a much lower price

You sure? Web prices tend to be mighty low. Could be they know something you don't.

duckhunter




msg:653651
 6:11 am on Apr 12, 2006 (gmt 0)

Well said minnapple. You spoke the words I preach to others starting businesses. Except "just as many that failed" should read "twice as many that failed"

Do you guys try and negotiate the wholesale price

You can certainly ask if payment terms can be tied to a discount. ie: 3% discount paid in 10 days or Minimum order size. $5000+ gets automatic % off.

Seems to be getting tougher to negotiate prices over the last year with rising costs. Every cost I have has gone up and so has the distributors so margins are getting squeezed.

You do sound like you have thought things through and hope to see you posting your successes down the road. Nose to the grindstone now, it's a long road.......

Raymond




msg:653652
 6:20 am on Apr 12, 2006 (gmt 0)

Do put up your website even when it's empty. Make 2 to 3 pages containing the basic keywords that you will be targetting. Your pages can be totally meaningless, but this will give you a head start when your site is ready to be launched.

I would not suggest spending too much money on lawyers/accountants (yet). Capital is crucial, and you don't want to burn too much too early.

You seem to be more prepared than most new webmasters, maintain this attitude and you will do great.

Best of luck Tony!

Essex_boy




msg:653653
 6:44 am on Apr 12, 2006 (gmt 0)

You really need drive and be prepared to take teh knocks that come along.

I only play at it so give in quite easily when things turn about face.

Stay at it and make sure yuo have enough cash in teh bank.

wantfieldh




msg:653654
 7:56 am on Apr 12, 2006 (gmt 0)

Yeah don't waste too much money on CPAs and Attorny.

You can find what you need for a ecommerce website on the web. As for tax, if you are the only one in business, than all you do is stick your net income/loss to your personal income.

Get one of the Turbo tax will do.
Sales tax - just make sure you tax only people from your own state, and if you have a special county tax, tax those people in your county those additional taxes too.

Save all your money for web design, SEO, Google if the cost/return make sense.

topr8




msg:653655
 8:01 am on Apr 12, 2006 (gmt 0)

>>> a lot of my competition have websites that look like they were made in the 90's

don't be deceived into making assumptions about your competition
they might be doing well with websites like that, cutting edge isn't where its at with ecom imo

larryhatch




msg:653656
 8:54 am on Apr 12, 2006 (gmt 0)

From your post at the top, it looks like you have good writing skills.
I agree you should write your own content, even if suppliers provide their own. -Larry

jsinger




msg:653657
 1:48 pm on Apr 13, 2006 (gmt 0)

>>> a lot of my competition have websites that look like they were made in the 90's
don't be deceived into making assumptions about your competition
they might be doing well with websites like that, cutting edge isn't where its at with ecom imo

Spoke to the IT head of one of our suppliers recently. He often asks brand new web retailers how their sites will beat established competition. Answer is usually that "Our site will be prettier (or cooler) than the competition." The IT pro then roared with laughter.

Some of those plain jane 90s sites are great SE food.

tonio321




msg:653658
 2:29 pm on Apr 13, 2006 (gmt 0)

I truly appreciate the responses

In saying that their website looks like it was designed in the 90's I was speaking more in terms of navigation and just something that is up to date rather than the actual design. I would like to place an order from my competition just to see how their service is but honestly I'm afraid to give my credit card info on their site. Most of the sites do not say anything or give the impression that the transaction would be secure, it seems as if the info is sent to them by email and then they call you.

I have surfed the internet for years as a consumer, and I would say 70% of the products I buy are online so I can really appreciate a well organized website that does not require me to investigate to find what I am looking for. With my site the main theme is simplicity, I'm not looking for anything lavish or over the top.. I just want a site that is straight forward, direct to the point with plenty of information.

You guys have made me reconsider about writing my own content though, I think I would have a stronger grasp on my products if I did write the content myself. Also I'm sure it would help in taking orders over the phone and explaining the points of what I am trying to sell.

You sure? Web prices tend to be mighty low. Could be they know something you don't.

You may be right about the prices, but I've checked their prices in the stores and it seems as if the competition is selling their products for the same amount they sell in the actual store, that kind of suprised me. As it is right now if my competition is selling their widget for $15.95, going off of just my expenses and a decent profit I can sell the same thing for $8.95 if I wanted. (This example is actually from one of my suppliers who retails as well) But as I said I'll keep it competitive rather then blow them out of the water, then if they decide to compete I have no problem staying in the game.

luckychucky




msg:653659
 2:45 pm on Apr 13, 2006 (gmt 0)

My advice would be to use good old simple html, and stay away from Flash as if were the plague.

tonio321




msg:653660
 3:28 pm on Apr 13, 2006 (gmt 0)

No flash at all that is for sure

Essex_boy




msg:653661
 6:48 pm on Apr 13, 2006 (gmt 0)

Agree with that.

One thing I will say though is keep uptodate on your tax situ and never get behind

ecommerceprofit




msg:653662
 9:54 pm on Apr 13, 2006 (gmt 0)

Pretty sites (not flash, java, etc.) but good looking sites are essential in my opinion. I hate those 90s sites that look horrible - I stay away from these sites as a consumer unless I am desperate for a product I cannot find elsewhere. Even if the price is lower I just don't trust these sites - if they are too lazy to update their web site then how do they run their business? The IT guy who laughed in a previous message is not the guy I would go to for advice. You can have a good looking site and still be search engine food.

derekwong28




msg:653663
 4:07 am on Apr 14, 2006 (gmt 0)

Tony, you have made thorough plan. If anything you may have overplanned, I certainly would not have incorporated at this stage.

Whether it will work will depend greatly on the terms and conditions set by your suppliers e.g.

1. How much stock you have to take in. Obviously the less stock the better, and if they can dropship for you, it will be better still.

2. Do they have a minimum advertised price policy i.e. will you be allowed to sell their products below a certain price? Most of our suppliers have such a policy because they do not want internet sales to interfere with their bricks and mortar distributors.

The other question you have to addresss is in the event that your site gets sandboxed for a very long period of time, can your business survive on advertising.

tonio321




msg:653664
 6:33 am on Apr 14, 2006 (gmt 0)

Tony, you have made thorough plan. If anything you may have overplanned, I certainly would not have incorporated at this stage.
Whether it will work will depend greatly on the terms and conditions set by your suppliers e.g.

1. How much stock you have to take in. Obviously the less stock the better, and if they can dropship for you, it will be better still.

2. Do they have a minimum advertised price policy i.e. will you be allowed to sell their products below a certain price? Most of our suppliers have such a policy because they do not want internet sales to interfere with their bricks and mortar distributors.

The other question you have to addresss is in the event that your site gets sandboxed for a very long period of time, can your business survive on advertising.

Again I am really greatful for every reply I've received here.

I know in order to get my products at the suppliers wholesale price I would have to order a certain amount of products, unfortunately they do not drop ship (which is what I originally planned for) or else I would have this business up and running this summer. So the reason I am planning this business a year in advance is to save up capital and also get my facilities set up which will be basically run out of my house.

As far as the minimum advertised price I'm not sure, but their brick and mortar distributors are on another side of the country (literally) and I am one of the few if not only distributor in my entire region for this product. This is why I am going to meet with them face to face and get a good grasp on their requirements and their expectations so I can see what direction I need to take with my business.

I'm glad this was brought up because it was one of those minor things I would have overlooked but very critical, I'd hate to get this business going then my supplier decides to pull the plug on me.

oneguy




msg:653665
 9:08 pm on Apr 14, 2006 (gmt 0)

Pretty sites (not flash, java, etc.) but good looking sites are essential in my opinion.

I agree, to the extent that they provide a consumer / customer with confidence. Doesn't really have to be fancy, just needs to look professional enough for the audience you're targeting.

There are other things that can help with that without having much to do with html. You'll want to look into the pros and cons of publishing a phone number, showing testimonials, and other things of that nature.

OlRedEye




msg:653666
 2:46 am on Apr 17, 2006 (gmt 0)

One of my e-comm sites has that 90's look. I hate it. So I sat down, redesigned the site into a much more current, clean design, using all the knowledge I had since gained in useability and conversion issues. Lovely site.

Conversions plummeted. I had to take it off, and put the old ugly back. Seems like i'm stuck with it now :)

larryhatch




msg:653667
 2:57 am on Apr 17, 2006 (gmt 0)

I wonder if perfectly crafted, slick, modern looking sites put some buyers off.
Maybe the plain-jane look reminds them of brick and mortar, or inspires trust somehow. -Larry

tonio321




msg:653668
 6:45 pm on Apr 24, 2006 (gmt 0)

Just an update, pretty interesting but I did a search for my companys name, just random since the website isnt even posted up yet and my company profile on alibaba came up toward the end of the first page on google. Thought this was pretty interesting since my site isnt even up yet.

jsinger




msg:653669
 10:02 pm on Apr 24, 2006 (gmt 0)

We had a thread a few years titled something like "Ugly Sites Make Money" which discussed--as I recall--those obnoxious all-on-one-page sites where you scroll forever to reach the bottom.

While no one defended their aesthetics, there was fair agreement that such sites were often <h1><blink>.VERY PROFITABLE!</blink></h1>.

jeowind




msg:653670
 6:24 am on Apr 28, 2006 (gmt 0)

been at the e-commerce game for about 2 years now. left my full time job last November and can offer these bits of hard-earned advice:

- Cash is King -
- Resist the temptation to finance ANYTHING with a credit card
- Always ask if there is a way to get a better price.
- look for non-traditional ways to get your product at better prices. i.e. ebay wholesale lots, china (its not as difficult as you think), india (little more difficult), etc...
- Did i mention that cash on hand is critical
- Don't waste money on flash (and i dont mean the programming code). Capital goes fast, so dont spend on unecessary expenses (like lawyers) PERSONAL OPINION WARNING - How do you stop a lawyer from drowning? Take ur foot off his head.
- WORK YOUR A** OFF - If you dont, your competition will
- Adapt when necessary
- Be prepared to have your social life suffer. It doesnt have to all the time, but i can remember many saturday nights that were spent programming my first site.
- And finally, work hard and always have cash on hand!

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