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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?
A minority of sites, of course, do nicely in terms of sales and --more important-- profit.
Talking about how much money a BUSINESS makes is hopelessly vague.
I'm guessing the first poster wants revenue info. But who knows?
So it is how much you get as income, same as salary, because in the case of salary, you really have no expense. In business, I would define it as the total amount of revenue minus total cash based cost(or if you want to accrual based, but that would be too annoying).
But either way, I just want a general idea : )
Also do you guys find it better to specialize in ONE TYPE of product? say I sell poker chips, I just specialize in poker chip and home gambling products. This way I can probably get these products cheaper but really don't have much product variety.
Another method is say.. new egg, where I am just the portal between consumer and suppliers. I will probably have razor thin margin but can have large volumn.
Which way is better?
The accountants may not be invited to parties, but guess who a lot of people visit every Tax Season!
See jsinger? THIS is why accountants are not invited to parties! ;)
I was an early proselytizer of the web. But by '99 I was urging the dumping of overpriced Dot Coms. (isn't it it interesting how the only people not sucked into that frenzy were those who actually ran websites?)
Anyone disagree with my statement that MOST commerce sites don't make money? I think that's one of the few valid generaizations that can be made about the profitablity of internet selling.
Anyone disagree with my statement that MOST commerce sites don't make money?
Now, if you mean historically as opposed to currently, I might agree with you.
It costs almost nothing to keep a site running once the huge upfront costs are paid. Like building an office tower or shopping center, if it turns out to have been a stinking idea, they don't tear it down.
Venture capital is flooding into web businesses (or it was until two weeks ago LOL).
In terms of "making" money, I was referring mostly to the myriad of small mom and pop sites not getting traffic, not selling much and not "making" money. In our field 80% of sites can't possibly be generating significant revenue. (You know the ones...that still say Copyright 2001, when a new product was last added)
How much can one make?
More importantly, how much can one lose?
These kinds of questions are unanswerable. Wal-Mart started as 1 store. I've known people who owned small car washes that make $150k/year with little to no work. I've also known people own businesses where they work 80+ hours per week and lose lots of money. A website can be the same way.
I'm sure there are some 1-2 man web sites that make $250k+ per year. As others have noted, there are also many many sites that make 0 or lose money since hosting isn't free.
Just be sure what you are selling on the net makes sense. 20lb bags of dog food does not fit into that category!
More importantly, how much can one lose?
Good point. While I'm guessing that most sites aren't profitable, I think a whole bunch hover near break even. If you are on the ball, you probably won't lose much, other than time, if your niche doesn't pan out. You can test an idea on EBAY, move to a simple Yahoo Store, and then plunge into something more costly and elaborate.
Key to making money with low risk: Doing most of the early work yourself. (and knowing how and when to delegate later on). Ideally, your web business should also be your hobby, which it was in my case.
Its safe to say that "MOST" ecommerce site don't make money or looses. But I say for every 10 ecommerce websites, there are 7 that are just casually ran, 2 semi-professional and 1 really professional so of course they loose money. However for those semi-professional and professionally ran website, I would say a 80% of them make decent profit. Don't we think so?
This is called "Entrepreneurship"
and is not a game for accountants or risk averse retailers.
It requires Guts/ belief in your idea/ perseverence and of course smart hard work.
I am sure I will make it so I persevere. After, a year and a half, I have broken even, and I am ecstatic.. Now I will make money.
Finally , I will sell my successful site to some VC or big corporation for millions and retire...
But I say for every 10 ecommerce websites, there are 7 that are just casually ran, 2 semi-professional and 1 really professional so of course they loose money. However for those semi-professional and professionally ran website, I would say a 80% of them make decent profit. Don't we think so?
We're currently making approximately $ 30,000 per month-- or net profit. Our site...actually mine, because I wrote the entire thing is unique in it's content. It offers more than the average e-commerce site in our industry. Many buyers use us as a free reference before they buy from the cheaper priced sites. It used to bother me, but when the business began to take off I could care less. It's all in the numbers.
I have a real good feel what our competitors pay for the same products because our sales reps have the same accounts. Why they try to constantly low ball each other is beyond me. We average 15 sales per week. At one point I considered competing with them but thought "why should I. I'd have to hire additional people, buy more office equipment, pay more insurance..and the list goes on"
I just don't get why some people feel satisfied when they "gross" 3% on a $ 12,000 order. It's so gosh darned stupid in my opinion. The credit card companies make almost as much as they do after they give the freight away. Btw, freight costs are expensive in my industry. That 3% doesn't even reflect their overheard costs.
At one time I would chat with one competitor and asked him why his prices are so low. "If you want the volume you have to have the low prices" was his response. When he started selling online he had 4 employees..now it's up to eleven. Where's the logic here I thought? Sure volume is great, but have we looked at the additional expenses AND potential headaches to boot?
Some people have different views on what is profitable and what is not. Me? I'm happy with my two person operation and the results we're getting. Naturally I couldn't have done it without Google and more importantly WW.
I see a lot of ecommerce site out there selling, well very commoditized products. I do have some access to very decent manufacturer price and realized that some of those "ebay" prices are amazingly low.
My question is, how do you prevent your products from being commoditized and squeezing your margins dry? Customize? do something that someone else doesn't have? (than you will be serving a very small group).. what do you guys think?