E-Commerce Problems. US Business Setup.

[Whiphsh]

I've been looking into various business ideas lately (My joining date... I still haven't done anything besides losing 300$. I'm disappointed in myself :bgh

I really like the idea of e-commerce. I have a very limited budget so I thought I would start with dropshipping and move on to FBA with the stores that succeed.

However, as much as I've been researching this, I realized that dropshippers will probably not want to deal with someone without a business entity.

I'm from Eastern Europe and I could very likely succeed in creating a business here, but the market here is very small unless I plan to go international (which is not something I'm even thinking about at the moment).

+ VAT and whatever other importing duties will kill my profits if I import from Asia.

So I figured I could enter the US market...

Not so fast. I found out that I'll need a US Bank account, US Merchant account, business entity and tax ID.

Are all these truly necessary? There are some people who set these things for you, but the prices are ''huge'', I think the last one I saw was charged 1k for all this.

So I'm left with basically 3 options:

1. Do it locally (in a country with barely 3 million people, really?).
2. Find a business partner from US.
3. Do something else.

There are more options of course, but I don't even have the basics... I need to learn to walk before running.

Does anyone have any experience with anything related to this?

Would love to hear your thoughts

 

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[stephanduq]

I would just start locally. Your local market is so small, that there is a big chance common things from western europe or the US are being imported for very high prices. So plenty of opportunity to test ideas.

You also don't necessarily have to go to the US, aren't you in the EU? That opens up a market of 503.492.041 people! You just need to make translation and investing in local law specialists part of your plans. There is a tough entry to get into each country, but trading within the EU is not that complicated.

 

[magneto]

As someone who doesn't live in America, I would love to see someone shed some light on this whole topic. It's a big mystery to me.

I'm not even sure you can build a multi-million dollar (fastlane) ecommerce company based in America, if you don't reside and operate from America.

Would love to be proved wrong though.

 

[Whiphsh]

I would just start locally. Your local market is so small, that there is a big chance common things from western europe or the US are being imported for very high prices. So plenty of opportunity to test ideas.

You also don't necessarily have to go to the US, aren't you in the EU? That opens up a market of 503.492.041 people! You just need to make translation and investing in local law specialists part of your plans. There is a tough entry to get into each country, but trading within the EU is not that complicated.

I might indeed give local business a shot...

What's holding me back is that people get paid really low compared to other EU countries, so I'm not sure if the margins would be worth it (if drop shipping. I don't have the budget to import yet).

The awesome thing is that there isn't much competition here... Even if there is, they probably suck at SEO and I could easily outrank them.

Anyway, have you had any experience with international trading?

 

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[Ãœbertreffen]

Just because you start locally doesn't mean your business has to stay within to a specific demographic. Starting up shop in the USA really isn't a requirement. It boils down to the product and the market where the demand meet.

There are untapped markets all over. The product/market may be saturated in one country but untapped in another leaving opportunity and potential high demand. Due diligence is a key role here.

Start something, some where. It doesn't matter where. Work locally as well as push it further outwards. Doing so will allow you to expand and provide further opportunity.

 

[stephanduq]

In the Netherlands there is company called Suitsupply, right now it is taking over the US.

Why I mention this is because this company started selling suits next to a highway in the middle of nowhere. Now, dutch people are known for not caring about fashion at all, and if he would have opened a store in a city he wouldn't have had any succes.

So what happened here, the founder of Suitsupply focussed his entire attention on the road between two major cities, and our biggest airport. The people that drive on that road are pretty much all the people in the country that wear suits, and because he was in a cheap location next to a gasstation, he could lower his prices and make a very interesting offer. The result, his stores popped up all over europe, and is now in the US growing his chain of stores.

If your plan works on a small scale, it will also work on a big scale

Yeah, my company does international service. There are a lot of little things to check, but so far it goes quite easy. Just gotta stay on top of the books

 

[Whiphsh]

You guys are right, even if I make little to no profit, the experience would be worth it.

Do shops set up for a non English speaking country (Germany/Poland/whatever else) do much worse if they are in English?

Awesome to hear, stephanduq! How long has your current business been running for?

 

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[Ãœbertreffen]

You guys are right, even if I make little to no profit, the experience would be worth it.

Whether you shut the doors down on a venture or push through to success, it's all experience. If you happen to close the doors, you learn from it and do better next go around.

That's education you've learned solely by doing. No book or college can be in your shoes and hold your hand along the journey.

Do shops set up for a non English speaking country (Germany/Poland/whatever else) do much worse if they are in English?

Let me make sure I understand you completely.

Lets say you plan on opening up shop in Germany. Are you asking if you have a retail location -- you're curious to know if it matters if it's in German or English?

If so, I think it really depends. What percentage of the area speak English? Is English a second or third language to the majority? Is the area a tourist area?

What you don't want to do is get people uncomfortable. Even on the internet, many when given the chance would prefer to speak/write in their first language. Even though English can be the universal language to business, that doesn't necessarily mean that includes everyone.

Let's say you have an E-Commerce store that has a 50/50 split of customers from the USA and Germany. It would be important to have the website in English as well as German bare minimum.

The same aspect can be true in a retail location. It's important to know your market.




Are you planning to start online, B&M, or a combination of both?

 

[Whiphsh]

Yeah that was kind of what I was asking. Thanks.

Since I don't have nearly big enough of a budget, I thought about starting online with drop shipping from EU wholesalers and gradually moving to storing the items myself. Not looking beyond that since it would be a long road anyway.

One problem I see is that it would probably only be profitable to drop ship/sell to the country where the drop shipper/you are located ( unless the items are very lightweight? ), local shops will very often offer a much better price because of the shipping cost.

 

[Ãœbertreffen]

Yeah that was kind of what I was asking. Thanks.

Since I don't have nearly big enough of a budget, I thought about starting online with drop shipping from EU wholesalers and gradually moving to storing the items myself. Not looking beyond that since it would be a long road anyway.

This is the route you should go, especially if your area has a small population with minimal foot traffic.

One problem I see is that it would probably only be profitable to drop ship/sell to the country where the drop shipper/you are located ( unless the items are very lightweight? ), local shops will very often offer a much better price because of the shipping cost.

If the product is available in your planned target markets and there's nothing that sets you apart, then I would take it that your way to compete is by price only? If so, I typically don't recommend it. Find out what areas are of need. What is the product lacking? What is the market asking for? Then do that.

Setting yourself apart by price only is not value-oriented. Cut-throat business will make it that much harder for success. It's like bleeding out very slowly.

You don't need to be revolutionary. No one is requiring you to re-invent the wheel. Take a common product and put a marketing twist on the product. Heck, even having the best customer service in an industry well known for horrible service could help gain traction.


If nothing sets you apart and your main focus is the USA, yes, I agree you do have some difficulties ahead. If the product is heavily available in the USA then more cases than not the product is going to be purchased within the Contiguous United States.

However, I've personally handled product and shipped to countries where the main headquarters of a brand were located and yet customers were still purchasing from us in the USA. Branding and setting yourself apart can make a difference.



Also, have you read The Millionaire Fastlane by MJ DeMarco? If not, I'd recommend grabbing it from Amazon pronto! It will lay down a road map in greater detail.

 

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[Whiphsh]

Thanks for the reply!

Honestly, I don't want to compete by price, but I will still need to get feedback at the beginning to become trustworthy and be able to bring the prices up, won't I?

Also, If I live in Lithuania, but want to drop ship in another EU country, do I only need to get all the legal stuff done in my country or do I have to set everything up in the country I'm targeting, too?

Would be stupid if I had to, honestly.

I can probably find the answer in google, there I go.

And yeah, I've read the book However, it's been a while. I'd probably benefit from going through it again.

 

[JAJT]

You can get a USA LLC fairly easily, and relatively cheaply.

Then just apply for a Tax ID, also cheap/easy if I recall.

I don't see why you'd need a USA-based bank necessarily, at least to get dropshipping info. Many distributors and such want to see the business/tax ID to see you are "legit" but a USA bank should be less of an issue.