Ask me anything about eCommerce (2012)

[biophase]

Hi Biophase,

I have another question. I'm getting close to taking the plunge and ordering some product. I have plans for a product for 3 of my 5 domains. I realize I should specialize in one product per domain to make it easier to target but I still would like to have a decent selection. My question is this, using your suits as an example. Did you start with just one type of suit ?

Edit: one more quick question. I'm almost positive you've been asked this already but at 420 replies and counting, it's hard to find. Have you decided on which CMS you are going to use since interspire is discontinuing?

I started by dropshipping. I dropshipped all the brands that I could. I think I had 36 products when I opened my doors. I'm staying with interspire until I absolutely need to change. I will probably good to BC eventually.

 

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[PatrickP]

I wouldn't recommend this niche because you are making $5 per sale and you have 1 product. It better be a damn good T-shirt. I doubt any t-shirt place would take returns on custom printed shirts. It probably costs more to ship it back. Plus what are they going to do with it?

I like this. I used to think it was bad to have a small company and would try to make it look like a BIG corp. But found out you are right, some people really prefer a smaller company where they can deal direct with the owner.

 

[MakeItHappen]

The problem with this is that your call center can't really answer any questions with real answers. Most people calling have real questions about the products. I would say only a 20% call to see if something is in stock or to ask about their order. The other 80% will be asking product specific questions. There is no chart that can answer those.

Ok this makes sense!
I am still learning... BUT SOON TAKING ACTION!

 

[JamesS88]

Thanks Bio. I'm glad I asked. I did some digging and think I've found a solution for the product aspect, at least starting out. Now I'm working on the last three big puzzle pieces I have left: SSL, payment processor, and shopping cart. You're completely right about adult stuff playing by its own set of rules. I've ran into increased opposition EVERY step of the way due to the fact that its adult. Hopefully it pays off (barrier to entry


I've been looking at the different SSL's. I'm still not totally sure what I'm looking at. Do I need to worry about a dedicated IP? Which type of SSL should I get? I'm looking at them on my web hosting provider:
What type of SSL / Secure Certificate do I need? « HostGator.com Support Portal
I was thinking multi-domain.

I checked out applying for an LLC. I don't know if its the same for most states, but in mine, I have to have an agent for service of process. I'm not exactly sure how to approach that. I saw this on legal zoom, Pricing Packages for Creating an LLC | LegalZoom.com I wasn't sure if that was necessary, I'm assuming you didn't go that route. I also read a review and everything was pretty positive except for this little tidbit,

"All of LegalZoom's packages include a "customized" Operating Agreement. This is both helpful and potentially dangerous.
First, if you plan on having any sort of complicated tax arrangement with your LLC, then you're going to want to hire a lawyer to prepare your Operating Agreement.
While forming an LLC -- meaning filing Articles of Organization -- is basically a ministerial/administrative task, an Operating Agreement is a true legal document. There are a million ways to do things right or wrong when preparing an Operating Agreement.
If you're starting a company from scratch and are using your LLC as a pass-through entity, you can stick with the standard Operating Agreement terms that are implied by state law."

Hmm, now that I've sat here and reread that a few times, I'm assuming I would just use the standard Operating Agreement.

Finally, payment processor. Another hurdle because everyone considers adult material in the "high risk" category along with gambling and a few others. Not many processors or merchant accounts will even touch it. Out of the ones I've found, some charge as much as 14% per transaction!!! This one seems the most legit thus far, Adult Merchant Accounts - Instabill, they charge 8%, I believe. Although, there are probably several others out there. I'm researching as hard as I can but my free time has been extremely limited....the life and times of a slow laner lol.

I gotta hit the hay but I will check back tomorrow. Thanks again.

 

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[biophase]

Thanks Bio. I'm glad I asked. I did some digging and think I've found a solution for the product aspect, at least starting out. Now I'm working on the last three big puzzle pieces I have left: SSL, payment processor, and shopping cart. You're completely right about adult stuff playing by its own set of rules. I've ran into increased opposition EVERY step of the way due to the fact that its adult. Hopefully it pays off (barrier to entry


I've been looking at the different SSL's. I'm still not totally sure what I'm looking at. Do I need to worry about a dedicated IP? Which type of SSL should I get?

I checked out applying for an LLC. I don't know if its the same for most states, but in mine, I have to have an agent for service of process. I'm not exactly sure how to approach that.

Finally, payment processor. Another hurdle because everyone considers adult material in the "high risk" category along with gambling and a few others. Not many processors or merchant accounts will even touch it. Out of the ones I've found, some charge as much as 14% per transaction!!!

I gotta hit the hay but I will check back tomorrow. Thanks again.

For SSLs, I don't really understand the differences between them. I get the cheapest one, $50 a year. Basically I do what I have to to get my business running.

LLC, you just need a simple operating agreement. It's only you right?

Payment processor, can't help you there. I don't deal with high risk stuff.

 

[JamesS88]

Thanks so much. I'm at work on my iPhone but I start my 3 days off tomorrow. I'm going to hit the ground running and implement everything you're passing on. Going back to what you touched on awhile back, what is in the $200 cost for each subsequent site other than SSL? It seems like everything else is transferable

 

[biophase]

Thanks so much. I'm at work on my iPhone but I start my 3 days off tomorrow. I'm going to hit the ground running and implement everything you're passing on. Going back to what you touched on awhile back, what is in the $200 cost for each subsequent site other than SSL? It seems like everything else is transferable

You need to purchase the software unless its hosted. You have that expense for every store. You do need separate SSL.You can use same CC processor and paypal accounts. I think the rest of the money went to things like logos, domains, misc.

 

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[JamesS88]

Awesome, thanks. I just got home and applied for an LLC and tax ID. I was told it will take...dun dun dun...20-35 days :/ The distributor I'm wanting to work with requires a tax ID and business license. I guess this is gonna put me on hold for a bit.

Is your business trademarked? I was just reading some horror stories about people getting their eCommerce business taken from them and even being fined into bankruptcy. I'm pretty sure I'm not infringing on anyone else, just curious if you have taken that step.

 

[jilla82]

Are there any extra steps that need to be taken when importing clothing?
or do most overseas exporters already follow the guidelines of the Textile, Wool, and Fur Acts (im assuming anything we wear falls under this)?

 

[comment]

So, I'm starting a new company, but I'm also looking at a side project whenever I have down time. I'm entertaining the idea of an ecommerce store that sells some kind of performance parts sort of like 2010 2011 2012 Camaro Parts & Accessories for Sale - Phastek Performance Online Store - Aftermarket Performance & Custom Upgrades for your late model muscle cars. Camaro SS V8 V6 LS LT LS3 L99 ZL1 does for Camaros.

I cant afford to stock 5000 parts that are all 500-8,000 each, so of course dropshipping would make sense, but finding a dropshipper for all these specific parts and manufacturers is impossible. I'm just trying to figure out if it's a viable option to take a customers order, then use their information to order a part from the manufacturer and send it to their address. I cant figure out if that would be legal, or it would fall under identity theft or something. Sending their order to a dropshipper is one thing, but typing their information into a form, or using it on the phone to order their parts to their house is a bit different. The question is if you think that is a real possibility, or I should find another way?

 

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[biophase]

I'm just trying to figure out if it's a viable option to take a customers order, then use their information to order a part from the manufacturer and send it to their address. I cant figure out if that would be legal, or it would fall under identity theft or something. Sending their order to a dropshipper is one thing, but typing their information into a form, or using it on the phone to order their parts to their house is a bit different. The question is if you think that is a real possibility, or I should find another way?

Isn't this the same as dropshipping? What do you think we do once we get an order to dropship? We have to provide that info to them in order for them to know where to ship it.

 

[biophase]

Are there any extra steps that need to be taken when importing clothing?
or do most overseas exporters already follow the guidelines of the Textile, Wool, and Fur Acts (im assuming anything we wear falls under this)?

I don't really know if there are any "extra" steps. I do know that the customs duty taxes on clothing seem to be complicated as they go by material, origin and other classifications.

 

[comment]

Isn't this the same as dropshipping? What do you think we do once we get an order to dropship? We have to provide that info to them in order for them to know where to ship it.

Well here's a few things that scare me about it.
1. Typing another persons information into an order form, or using it on the phone just feels and sounds illegal. I mean, its essentially dropshipping, but I'm not sure if I'd be crossing a line..
2. They order an aftermarket front end for their Ferrari at 360Ferrariparts.com, but then they get a box in the mail with a receipt that says its from Platinum Motorsports. (the part manufacturer)
3. Customer service, never delt with an online store, but someone who owns one said it could be a problem since I'm basically just overcharging for a part, then using their information to order it for them. (they pay 900 dollars for a front end you can buy from the manufacturer at retail for 750, so I go on their website or call them and order it with the money they gave me for the order).

 

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[biophase]

Well here's a few things that scare me about it.
1. Typing another persons information into an order form, or using it on the phone just feels and sounds illegal. I mean, its essentially dropshipping, but I'm not sure if I'd be crossing a line..
2. They order an aftermarket front end for their Ferrari at 360Ferrariparts.com, but then they get a box in the mail with a receipt that says its from Platinum Motorsports. (the part manufacturer)
3. Customer service, never delt with an online store, but someone who owns one said it could be a problem since I'm basically just overcharging for a part, then using their information to order it for them. (they pay 900 dollars for a front end you can buy from the manufacturer at retail for 750, so I go on their website or call them and order it with the money they gave me for the order).

1) I think people do this all the time. They collect an order and then order from Amazon or Ebay and ship directly to their customer.
2) You can tell the shipper to not include the invoice, just a packing slip. Getting a box from somewhere else is fine. It depends on the market and the deal you have set up with the manufacturer.
3) I would not be buying at retail. You can try it that way at the beginning but at some point you need to get better pricing.

Have you even called a manufacturer?

 

[comment]

So far this is an idea I've only had for 3 days now, so I haven't contacted anyone yet, I just got a one month package from volusion to check everything out and see how these types of websites work. I'm totally new to this kind of stuff, so buying wholesale is even new to me.

1) I think people do this all the time. They collect an order and then order from Amazon or Ebay and ship directly to their customer.
2) You can tell the shipper to not include the invoice, just a packing slip. Getting a box from somewhere else is fine. It depends on the market and the deal you have set up with the manufacturer.
3) I would not be buying at retail. You can try it that way at the beginning but at some point you need to get better pricing.

Have you even called a manufacturer?

 

[JamesS88]

A distributor I'm looking at had this on their site:

"We offer a FREE XML feed which is state-of-the-art method that can populate most shopping carts with our products, images, and descriptions. This tool will automatically update your website when we have new items, or if items are out of stock or discontinued."

Do you have experience with anything like that? It sounds convenient if its not too hard to implement.

 

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[XavierYZ]

Does anyone have any experience operating a store from Canada and serving the north American market
Is this viable? Can you drop-ship American made products to Americans from canada? Do you need an American business license ?

 

[kraze]

Does anyone have any experience operating a store from Canada and serving the north American market
Is this viable? Can you drop-ship American made products to Americans from canada? Do you need an American business license ?

You don't need an American business license. Only thing you really need is a business number, although some are happy with a copy of you business license and others don't really ask for much, just proof of a store you're operating, to ensure you're a retailer.

 

[DollarArticles]

Iv been into droppshipping for over 5 years now. But Im moving towards Amazon affiliate program.

No need to find droppshipers
No need to process orders.
No need to deal with customers.
No need for licenses or tax ids etc.
No need to do taxes, get your 1099 and thats it.

yes its less commission,
but I used to make bank with amazon, and with my method Ill be back up there in no time. Just a suggestion. not meaning to highjack, i think its a nice piece to add to this particular discussion actually. Please share your thoughts..

 

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[MakeItHappen]

Iv been into droppshipping for over 5 years now. But Im moving towards Amazon affiliate program.

No need to find droppshipers
No need to process orders.
No need to deal with customers.
No need for licenses or tax ids etc.
No need to do taxes, get your 1099 and thats it.

yes its less commission,
but I used to make bank with amazon, and with my method Ill be back up there in no time. Just a suggestion. not meaning to highjack, i think its a nice piece to add to this particular discussion actually. Please share your thoughts..

The thing is you don't have any control as an affiliate of amazon you account could get banned any time (this already happend to a lot people making a living with amazon like with adsense) and the commandment of entry is very low because anybody and his mom can create a website with wordpress in 5 minutes...
i know how to make money with amazon but it's just not a business i want to build my future on

 

[biophase]

So far this is an idea I've only had for 3 days now, so I haven't contacted anyone yet, I just got a one month package from volusion to check everything out and see how these types of websites work. I'm totally new to this kind of stuff, so buying wholesale is even new to me.

The reason I asked you is because you are going on this path of questions of what ifs that could be useless and time wasting. If you call the manufacturer and they say, sure we will dropship for you, then all your energy in this path is wasted. Don't do this to yourself. Ask the question first, then if they shoot you down, revisit this path.

 

[biophase]

A distributor I'm looking at had this on their site:

"We offer a FREE XML feed which is state-of-the-art method that can populate most shopping carts with our products, images, and descriptions. This tool will automatically update your website when we have new items, or if items are out of stock or discontinued."

Do you have experience with anything like that? It sounds convenient if its not too hard to implement.

Sounds like they will give you a direct feed of their inventory. I don't have experience with this but I know many companies use things like this.

 

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[biophase]

Does anyone have any experience operating a store from Canada and serving the north American market
Is this viable? Can you drop-ship American made products to Americans from canada? Do you need an American business license ?

From my experience if you can open up a store that serves Canada in anything you would do ok. Canada seems to have a need for ecommerce stores that ship within Canada to Canadians.

 

[biophase]

Iv been into droppshipping for over 5 years now. But Im moving towards Amazon affiliate program.

No need to find droppshipers
No need to process orders.
No need to deal with customers.
No need for licenses or tax ids etc.
No need to do taxes, get your 1099 and thats it.

yes its less commission,
but I used to make bank with amazon, and with my method Ill be back up there in no time. Just a suggestion. not meaning to highjack, i think its a nice piece to add to this particular discussion actually. Please share your thoughts..

I think that this is going backwards. Yes, you get all the perks you listed, but you don't have control or a brandable business. Do you think you will make more with Amazon affiliate because your product pool is larger? Why do you think you will make more that way.

I think most people going the opposite direction.

For example, let's say I create an affiliate site, Johnscheapipadcases.com. I start it via affiliates and make 6% per sale. I get decent traffic and gross $10k a month, making $600 month.

The usual next step is to go dropship and say you increase your margins to 25%. Now you are making $2500 a month.

The usual next step is to go direct to China and increase your margins to 80%. Now you are making $8000 a month.

 

[DollarArticles]

I think that this is going backwards. Yes, you get all the perks you listed, but you don't have control or a brandable business. Do you think you will make more with Amazon affiliate because your product pool is larger? Why do you think you will make more that way.

I think most people going the opposite direction.

For example, let's say I create an affiliate site, Johnscheapipadcases.com. I start it via affiliates and make 6% per sale. I get decent traffic and gross $10k a month, making $600 month.

The usual next step is to go dropship and say you increase your margins to 25%. Now you are making $2500 a month.

The usual next step is to go direct to China and increase your margins to 80%. Now you are making $8000 a month.

Interesting. lets dive into this a little further.

Ok your going direct to china.
Ok and we are selling Ipad cases.

Ok since we are going direct im sure we will be buying in bulk and having it shipped here. Which means Ill need storage. Before I get to ahead of myself. Ill need a business license. Warehouse space which means a year lease. Ill also need a phone number, tax and resale licenses. Contracts and etc.
Now with that done. Ill get my products shipped. And since I doubt ill be able to take orders package and ship $8000 worth of ipad cases alone. So Ill need a staff. Ill also need someone to answer the phones and deal with customer inquires and complaints.
Ill need to build a website and do the seo or pay to have it done.

If you live in California like me warehouse space is at least 1k or more. Usually more
Hiring American labor, ie. shippers and customer service is going to run another 4k a month full time. Atleast.
Your at about 5k into your profits. After inventory. Paying the light bill and heating and insurance. you dont have much left. Oh and I forgot old uncle Sam.

Not saying droppshipping isnt viable. I know for sure it is, Ive done it myslef. And also biophase is also a prime example. But it surely isn't for the faint of heart. You at the same time have to be moving enough products to be at the phase of having warehouses and all that. And im positive it can be done. But it is alot of work. Were talking corporate type setup. Managing employes, inventory and all that.

Once again Im sure it can be done and im sure there money in it. but its alot of work.
I was making $700 per month easy with Amazon sitting at home in my PJ's. And its not that easy to get banned unless you do something stupid or illegal. Im actually about to watch a video on someone making 100k per month on amazon. Hopefuly its a good video, or I can at least grab a few tips.

 

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[DollarArticles]

Matt Clark's '100k from Amazon Webinar' Replay | Affilorama

 

[craig1928]

Biophase, I was looking through your camoadvantage site out of interest and your return authorization form is 404ing, just letting you know in case it's not supposed to be like that.

 

[biophase]

Interesting. lets dive into this a little further.

Ok your going direct to china.
Ok and we are selling Ipad cases.

Ok since we are going direct im sure we will be buying in bulk and having it shipped here. Which means Ill need storage. Before I get to ahead of myself. Ill need a business license. Warehouse space which means a year lease. Ill also need a phone number, tax and resale licenses. Contracts and etc.

Now with that done. Ill get my products shipped. And since I doubt ill be able to take orders package and ship $8000 worth of ipad cases alone. So Ill need a staff. Ill also need someone to answer the phones and deal with customer inquires and complaints.

No, Ipad cases are very small. Let's just assume that you are selling $50 Ipad cases that you paid $10 for. $10k of Ipad cases is 200 of them. 200 Ipad cases will fit into 2 boxes and sit in a closet. 10000 cases would barely fill up a large closet. You ship out 9 cases a day from home. One hour tops.

Yes, you will need a phone number and business license. And you will have to answer emails and calls.

Ill need to build a website and do the seo or pay to have it done.

You already have this done, which is why you were already selling $10k of Ipad cases.

If you live in California like me warehouse space is at least 1k or more. Usually more
Hiring American labor, ie. shippers and customer service is going to run another 4k a month full time. Atleast.
Your at about 5k into your profits. After inventory. Paying the light bill and heating and insurance. you dont have much left. Oh and I forgot old uncle Sam.

This is totally unnecessary at this point in your business.

Once again Im sure it can be done and im sure there money in it. but its alot of work.
I was making $700 per month easy with Amazon sitting at home in my PJ's. And its not that easy to get banned unless you do something stupid or illegal. Im actually about to watch a video on someone making 100k per month on amazon. Hopefuly its a good video, or I can at least grab a few tips.

Yes, you can easily make $700 a month doing nothing, but you can easily increase that to $8000 a month doing not much more.


Here is what I mean by going backwards...

Imagine that, eventually your branded China cases become popular and you decide to sell them on Amazon for $40. You ship your inventory over to Amazon FBA. Your product is listed on Amazon at $40 with Free Super Saver shipping. Now you are only making $20 a sale. But Amazon is handling everything for you.

Then some guy comes along and makes an Ipad cases affiliate website and has your product on his site. Every he sells one for you, he makes $2.40, you make $20. He's doing the work of SEO and website handling for your product.

See how that is forward moving?

Or, what if you decide to wholesale your cases to others? You call up other Ipad case ecommerce stores that run on dropshipping and offer to dropship for them. They sell your cases and you ship them out for them.

People don't generally go the opposite direction.

By moving forward, you are giving yourself more avenues of income. In this scenario you have your original affiliate URL, converted into a store making sales, you have your Amazon store making sales, you have other ipad case stores making sales for you and you have other ipad affiliate websites making sales for you.

If your website falls off the face of the earth, you aren't dead in the water.

 

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[Vigilante]

For example, let's say I create an affiliate site, Johnscheapipadcases.com.

johnscheapipadcases.com is taken. do you think if I get johnscheapipadcases.me that will be just as good?

 

[DollarArticles]

Awesome writeup biophase, After watching the video of the guy thats making 100k a month. Your explanation is exactly what he was doing. Kudos to you!