jwolthuis - 9:47 am on Nov 11, 2010 (gmt 0)
My goal is to have a grounded set of expectations for the first year ...
It's not unlike a brick & mortar business. Typically, 50% of businesses fail within the first 12 months. Of those that make it, 50% of those either give up or fail the second year.
It takes 3 years for an average B&M business or eCommerce site to have a positive cash flow. Even at that point, profits (if any) depend on the niche your in.
A good grounded set of expectations would be to set a 3-year goal to turn the corner, and not expect a positive result the first year or two.
Focus on cash flow, rather than profits. Even profitable companies can go under if they don't have cash on hand.
Manage your inventory-turns, fine-tune your shipping charges and costs (it's amazing how much shipping boxes can eat away at your margin), and keep your payroll costs low (or zero).
Forget paid-placement ads (way too expensive), and instead focus on free inbound links, positive reviews on message boards, and free product feeds like Google Merchant Center.
My source of information: Years of experience, both failing and succeeding. (I'm now working on making my 4th million... gave up on the first 3 ;-).