Forum Moderators: buckworks
Ok, now let me tell you a little bit more about myself? I actually working in a medium size company doing mostly online marketing with a little bit of off line marketing. I am no expert at PPC or SEO but I think my knowledge of them is pretty decent. I've done affiliate, email marketing, some seo and some ppc before. I know starting out I might have to do my own ebiz part time.
Right now I don't have enough capital to start any business.
Any advice?
JB
Matt
You can probably figure that it will take 1-2 years just to break even, and 2-4 years to make enough to live on unless you happen to be very lucky and find a product that sells but does not have 93 million other websites selling the same thing.
Perhaps look into a franchise
Who says so? The Wall Street Journal and Fortune Magazine.
JerkboyJerk, Boy.
Jerk, Boy.
Start by ditching that name. Business, especially on the web, is all about trust.
trust . . . trust it is all about. If I see an image is not loading properly on an ecom site, I am less likely to buy anything from the site. If they don't care about that image of their produt, how are they going to care much about me or my personal details. You get the picture
hi all, thanks for all your replies so far =)
JB
Now that JB sounds fine :)
I don't have enough capital to start any business
most importantly, you need:
1. a solid product
2. a solid plan, and likely cash, to market it,
3. and the devotion to execute it.
everything else is secondary
I see lots of ecommerce sites come and go, but the above formula is always key. When I say "solid product" I mean, a product people want, and ideally, you are the only provider, its protectable (e.g. patent), its marketable online, etc... A lot goes into this alone, but most people don't realize what people want, and are buying already. This is probably the biggest problem I see. For example, I know someone who wants to sell baby bedding, because it's easy to drop-ship. However, there are thousands of these stores online, and few are very profitable from what I have seen for just that reason--too many competitors as a result of no barrier to entry--ultimately they all pretty much compete on price until margins are sometimes next to nothing. If this store had some uniqueness, such as how they sold the product, or perhaps their own brand, then maybe this would be a diff story. I am confident of this info because I know other people who sell baby bedding and no matter how much they make, they just are not taking much home at the end of the day.
So actual standard (fixed) costs on a small business that you run yourself:
1. CART
Commercial solutions run between $10 - $500 per month, plus a small setup fee. For most people with a new venture, a cart that costs $100 a month should be plenty to get them going very well. Best advantages to commercial hosted solutions often include--plug-and-play, someone else is maintaining it for you, making sure it's up and running, usually free upgrades for life, support, training, easy for newbies, hosting.
If you go open-source, expect to do it yourself, or hire some company to setup and customize, which runs $1,000 and up ($2,000 - $5,000 is typical). Then of course, you need to pay for hosting, upgrades, maintenance, etc... free support from community, and commercial support available separately.
To find out if hosted solution iis right for you, there is a good article on howstuffworks.com that goes into more depth about hosted software (asp model) and pros/cons. Personally, I use open-source for about 75% of operating my business, but not for ecommerce.
2. MERCHANT ACCOUNT & GATEWAY
At least $25 a month for the merchant account; plus the gateway (e.g. Authorize.net is my fav) which runs about $10 -$20 per month -- plus transactions fees (about $0.35 in total). Paypa* is an option, but I wont debate that here.
So your total fixed monthly costs probably be around $50 - $150. this is cheap compared to costs of brick-and-mortar.
Variable costs:
3. shipping - usually you pass these on to customers as they shop.
4. products - are you manufacturing something, reselling something, etc... drop-shipping for example is usually tough because it's so easy for someone to compete against you.
5. web design, product photography, office expenses, computer, and more
In my case, I design my own website, since I do this all day long at my day job; do my own product photography since I am an experienced photographer (incl. serious retouching in photoshop); hire inexperienced models for around $10 per hour; have a computer of course; and dont have office expenses except occasionally buying equipment, business cards, etc..
MARKETING
The big grey area. I personally depend on SEO a lot, which drives hordes of people to my site. I do my own, but you can hire a good company for around 5k, and 1k per month. PPC marketing, email marketing, viral marketing, affiliate marketing, etc... are also extremely popular.
I know people for example that do ALL their marketing off of their email lists that have built over the years, others that depend completely on affiliates, and others that depend on PPC--and these people can do really well. Off-line and traditional advertising can be really powerful as well.
These are all generic tactics, and quite often it's the company's that have the most unique/targeted marketing along the most unique/targeted products, that do the best; but point is, be prepared to set aside a lot of money for marketing (10% - 75% in the beginning).
in summary, find something you are good at, then query the real world out there as to potential demand. Sell it out of your car trunk if needed (it's happened before). Even that one of my online stores makes several thousands per month (and half is profit), I have not given up my day job yet. Maybe if I break 300 - 500k per year, then i will. basically, I just am reinvesting most everything back into growth of the business instead of taking out a salary. My wife runs the business by day, which is very little work actually. I figure I will need to hire help when I reach a few hundred K annually.
Until then, I recommend reading everything on WebmasterWorld, and all the best free info you can find on marketing, business, etc... Find some great (highly rated) books on Amazon, then check them out from your local library. I have not paid for very much in my desire tot learn how to run an online business. for example, Aaron Wall's site taught me most everything about SEO.
A lawyer is nice, but in a small start-up, why?
Accountant, again why?
i set up a sole proprietorship for $20 (business license)--if my biz get much bigger, I will shell out the couple hundred to become a LLC, or S-Corp that gives me personal legal protection.
Accountant--I use some simple accounting software, but in my first year, I just used a spreadsheet. I pay a little for someone to do my taxes, but even that I could do myself. Until I get big, not needed.
800 number? a luxury. it's really nice to have, but expect a lot more calls, and bigger phone bills. Again, I hear a lot of people say it's a requirement for any site, but i disagree if you have a great product, and great marketing, until you are making decent money. I even hide my non-toll-free number on my site. How much will sales increase if I put an 800 number on my site, and at what additional expense? Maybe if you had a contact page that said "Hi, my name is so-and-so, and I have a day job, which is why it's very difficult for me to take calls. If you l.eave a message, I will call you back..." some shoppers prefer sites with a small feel.
Web-design: expect to pay between n $500 and $5,000 for a site; prob around $1,000 - $3,000 average for something decent, unless you just find some free template on the web and can hack it up with FrontPage (until you can afford to hire someone if you need a professional looking site).
Even that one of my online stores makes several thousands per month ... I just am reinvesting most everything back into growth of the business instead of taking out a salary. ... 1-800 number? Luxery ... How much will sales increase if I put an 1-800 number on my site, and at
hmmmmmm. since you understand the importaince of investing in growth and development, i am suprised you wouldnt add the 1-800 number, if it is just to increase trust / professionalism. If we just ignore good conventions, then were always gonna be in the dark, unable to quit that "day job"
You might also want to look into FREE solutions such as JOOMLA CMS + VIRTUEMART
There are literally hundreds of extensions (modules, plugins, components) that can get your Joomla/VirtueMart eCommerce site to perform just as well as any of the more costly solutions.
[edited by: lorax at 3:55 pm (utc) on July 28, 2007]
[edit reason] delinked [/edit]
Where you may really need to spend money is in buying stock. I would make sure that you find the product(s) you want to sell first before proceeding further. You need to know things like MOQ and lead time, because it may really stretch your budget. You may need to make sure that you have a line of credit just in case.
If you do not want to risk taking in a lot of stock, I would suggest that you try out dropshipping first. I am not that sure about eBay though. Many products will sell well in an webshop but not on eBay. If you can find something that sells well on eBay, it will probably do spectecularly well in a webshop.
[edited by: Jerkboy at 5:04 pm (utc) on July 30, 2007]
