Forum Moderators: buckworks
Of course, the answer depends on a wide varity of variables, such as the product being sold, margin, advertising cost, ect ect.
But to be simple, how much do you guys think a small to medium size website selling nich products make on average per month?
Note I said business and not site - the people who I have met who are successful treat their ECommerce store just like a regular store and have the qualities of dedication, vision and committment.
The art is finding something what a small business can manage well and has good profit margins. If your model involves sending out hundres of items a day to work well then 2 people might struggle as you coudl have lots of sales enquiries, a huge amount of shipping to deal with and alot of accounting.
Rule of thumb would be to have something that you don't need to ship more than 30-50 items a day if theere are only 2 people - but that is a rough guide. Obviously anything you can sell via electronic download is great.
Hope this helps
My ecommerce site is an off-the-shelf site that I bought for about $300 and sells products from a network marketing company. We ship to about forty countries around the world.
It also acts as a recruitment tool for people who want to get involved in network marketing.
Basically, as long as you have the traffic to the site, then you'll get the revenue. You can take a commission on every sale you make, but try and make sure the day-to-day running of the site/business is something you enjoy. You'll worry less about the revenue if you continue to have fun with your site!
One of the things that helped me crack the 6 figure nut was attending the WebmasterWorld Pubcon in NO. These conferences are valuable so I'd say get involved in that if you're not already.
While I'm guessing that most sites aren't profitable
... you probably should read a little bit to see some comparison charts regarding online sales: 2003: $95.7 billions; 2008: $299 billions in online sales: more then 63.000.000 of US citizen will buy mostly online in 2008
(from what used to be ForestResearch.com - I gathered these data about 1 year ago)
for Easy_Coder: good for you!
Just about anyone could rack up a million dollars in sales each month. The key is to keep expenses way below a million dollars.
I started out 6 years ago and and grossed 2500 my first month. Last month I had my first 6 figure month.
That simply shows how meaningless your numbers are. How much you gross is immaterial.
How much did you invest, and how much did you net after all expenses?
How much time did you invest. Money has no value without time.
Is that for a digital product or hard goods?
After all that you have a net profit of 45%?
Some make huge sums, but, to agree with another poster above, the majority fail!
I read somewhere that 90%+ of all new traditional businesses fail within 2 years. The upfront costs are generally lower in ECommerce, so the failure time maybe longer.
The reason for failure for all new businesses is inevitably the owner and their "business sense/plan".
A sound commercial proposition is just that, whether you are running a chimney sweeping business or the latest Hi-Tech website.
Millions per year can be made by a single individual on the web, that is also true of someone with a traditional business.
It is just as easy to go bust on the web as it is with a traditional business.
I don't believe people with little knowledge of ECommerce should attempt to start an ECommerce business. They are probably better off starting a traditional business, or better still, working for a traditional business that will teach them the ropes.
Jeff Bezos & Mrs Bezos.
:D
I have run 6 figs monthly ecom sales for over 8 years - when I started my overhead was a lot higher than it is now. But I don't even have margins of 45% so no way I can cut overhead enough to take home that much.
There are great labor saving devices and software coming out all the time that will just about let you automate the process.
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I am amazed at the "anyone can run a million dollars a month" comment.
Bringing in that amount of sales is a huge undertaking and it usually takes a large amount of start up capital or a lot of sweat equity.
I would instantly trade a profitable company doing 3 million in sales for a break even company doing 30 million. PM me if you want to trade :)
Amazon may not have been making money but the owner was doing just fine!
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I read somewhere that 90%+ of all new traditional businesses fail within 2 years.
I guess that Amazon was funded in its infancy by venture capital.
How much could Jeff Bezos take in pay from the cash invested in his Bezos? Another issue is how much equity to relinquish to venture capitalists in return for their "generosity". Any thoughts?
The article I read said that 90%+ of all new businesses failed to show positive cash flow within the first two years.
Positive cash flow is profit, taxable income, most businesses fail to achieve this within two years and don't have a life line that allows them to try beyond.
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He didn't need to take pay from the company, I believe he had an adequate amount to live on while the co. started.
There is no such thing as generosity - just folks who think that their $1 invested today will be worth more tomorrow.
As long as you don't give up controlling interest it doesn't matter how much % of a privately held co. that you give up to investors.
When you go public in a big way like he did your profit is in the value of your remaining stocks (just like cuban did with broadcast.com)
It comes down to the bottom line.
Are you better off owning a 25% of a company worth 30 billion --- or 100% of a company worth 1 mil.
Last I heard bezos was worth over 4 billion dollars - I think amazon has only had 1 positive quarter in it's history (and if I remember correctly that was due to a technicality in their accounting - a one time depreciation correction or something)
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There is more to making money than the limited view of what is left at the end of the month. I made over 200k profit flipping 2 properties last year - during the year that I owned them they (apartments) operated at a loss. The $ was made because the market appreciated.
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The article I read said that 90%+ of all new businesses failed to show positive cash flow within the first two years.Positive cash flow is profit, taxable income,
This sounds like the nonsense put out by the franchise industry. (to show that small businesses can't make it on their own). And MANY small corps never make a profit as everything is taken out in salaries.
How could such a study of "cash flow" be done, especially when the business disappears? Usually these studies--and there have been tons of them-- simply check to see whether the business is still listed in the phone book. Often a business that is nicely profitable is sold, or changes its name. What if the owner dies? It is very hard to get clean stats on this stuff.
Also many utter failures stay in the phone book for years...decades even! A franchise may be sold and re-sold many times with each sucker (I mean franchisee, losing his shirt)
Fact: many closed businesses were actually profitable. A law firm or medical practice for example.
BTW, I suspect that a lot of SBA funded corps fail due to owner fraud in some degree.
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Opening a business IS risky, but a sharp, hard worker can limit the downside.
They are not necessarily UNprofitable. They just do not make an adequate profit. There is no sense in working for yourself £10K a year if you can get a job as a bus driver paying £20K a year.
Some businesses will actually lose money. They die quickly.
Many businesses will make just about enough to keep going, but fail to properly remunerate their capital and labour. They die slowly, and obviously have no capital or resale value.
Some business will make a satisfactory profit taking account of the capital and labour expended. They survive. But agin they will have little capital or resale value as anyone can quite easily start a similar business.
A small number of businesses do better than "adequate" and find a marketing position which generates super-profits over and above the cost of capital. These thrive.
But in general if you are to thrive you need some sort of a monopoly (of a location, a brand or a product, or a vast amount of capital to withstand losses in the early phases). There are no super-profits to be made by selling the same stuff as everyone else, except at an even sillier low price.
I don't believe in selling the same stuff as everyone else, but "monopoly" is very hard to come by.
I noticed a few other tactices that could be used to make good money.
1) Customize
2) Sell base unit cheaper but sell add on or accessories at a premium.
Anything else people out there uses?
About 18 months ago, I decided to divesify in webpublishing by buying profitable websites. Now we have over 130 websites with another 350 being developed.
I can now truely say that there are MUCH EASIER ways of making money online than e-commerce. i.e. no goods to carry, no chargbacks to worry about, no customer service, no shipping calculations, no packing, no returns, no rude customers, and best of all little or no staff.
At first I thought that the e-commerce business is much more stable because the margins are higher. Which means that I could always drive traffic with PPC. However, this has proved to be an illusion because we have to pay the saleries of 4 full-time staff. In a severe downturn, it is quite possible that we could lose money.
Although income from webpusblishing is volatile, we are on an upward swing at the moment whereas the e-commerce side is taking a dive. I am now getting our staff to spend more time on the webpublishing side of our business.
Only the sites are way more serious and informative than MFA sites
Skills in IT do not necessarily translate into good logistical or sales skills. Ecommerce should be a solution, rather than a problem, because if you lose money shipping products then no amount of traffic to the website will make you a profit.
Therefore the real issue in making money in ecommerce comes back to how much you can keep it purely ecommerce, not logistics or sales.
