Choosing a Market

How did you get into yours?

[iseff]

I'm finally ready to open the doors on my first real ecommerce site - selling and shipping the products myself. One problem? I'm not sure if the market I'm entering will be profitable.

How do you guys, when searching for markets to enter, calculate whether or not you'll be able to make money? Are there any semi-standard formulas as to how many customers you'll receive, etc, etc?

I could explain further, but I'd like to hear the general before the specific.

Thanks,
Ian

[mcguffin]

Many of the key metrics for an e-commerce site are the same as if you were opening a physical store in your neighborhood.

I'm going to set aside referral programs (if someone else wants to chime in about those, that's cool) and talk exclusively about e-commerce sites that sell and ship stuff.

• What is the total cost to produce the product?
  
• Which costs are fixed and must be paid each month--regardless of whether you make a sale?
  
• Which costs are variable? How much can they vary?
  
• How many sales per month do you need to cover fixed and variable expenses--what is your break-even point?
  
• What is the acquisition cost of new customers?
  
• Can you afford to not pay yourself a salary for the first six months? How about the first year?
  
• How can you differentiate yourself from the competition--quality, service, features, or cost?
  
• How well established are your competitors in the marketplace?
  

In general, an e-commerce business is like any business. You need to understand the market, the competition, the target audience, and your product. If you have a good business plan and you're willing to spend long hours for little pay at the start, you can build a business.

[Essex_boy]

Im looking at 3 new sites - Jewellery made from a unique natural material, Tie dye clothing and a drinks site (no alcohol).

How did I find these?

All three have high margins that I can cut, when compared to others sites should I need to.

None of the above products are easily imitated they similar products available but totaly diffrent in essence.

Low start up costs - All products can be used by myself should the site fail.