Those with an e-commerce store

[The Spark]

Hey all,


I am very curious on opening up an online store as I feel as though it makes much more sense personally and is more exciting then brick and mortar. The thought of eventually being able to monitor and just fulfill orders of a successful site sounds great.

The worst part and yes you can flame me all you want is I have no idea what to do for a product (ebook, physical, affiliate etc?)

I am trying to brainstorm a few ideas now.


First is the actual store setup:

Shopify.com seems very attractive, an all in one beautifully customized e commerce shop with hosting. Or shall I just slowly build a


Product:

Let's just say I use physical.

Do you use a drop-shipper? Do I store a bunch of stuff in my house?



I really just want to hear the experiences from different business owners/ e-proprietors who had successes and failures. People like Vigilante have inspired me recently to jump head first into this realm but I figure first I need to do some strategic planning.


Thanks a bunch.

 

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[Vigilante]

I was doing a lot of eCommerce before I opened a store. I have been selling on eBay for years (100,000,000 buyers on eBay!), Buy.com, Amazon, Sears.com, and other sites. My eCommerce store was Phase II. I knew if my product wouldn't sell on eBay, with their 100M buyers, it wouldn't sell on it's own. So, I wouldn't start by building an eCommerce store... simply because it's not going to throw off enough revenue early on to be significant enough for you. That's just me... a lot of people take different routes.

When I did decide to open an eCommerce storefront, users here recommended BigCommerce to me and I think it is OK for a template store. My eCommerce store accounts for less than 1% of my current eCommerce revenue. It needs to become more significant over time. I have a large consumer electronics client who owns a top eCommerce store... and about 1/3 of their revenue comes from their eStore. The reason to build your own store is because once it is established it can never be taken from you by a policy change, a fee change, or a strategy change by an external factor such as Amazon.

And, I don't believe in drop shippers because I want to corner a market, and drop shippers by definition are available to anyone. Find an angle, a supplier that doesn't do eCommerce today, or some reason for existence. You have to find a need a fill it. Don't open a store for the sake of opening a store... I did that before and it didn't work. Until you find a REASON for existing - a reason people would buy from you - don't do it.

My daughter had written on her white board "Find your place to stand and move the world..."

I hope you find your angle. I will be here in the shadows cheering you on.

 

[The Spark]

Thanks for the response, can you explain "my eCommerce store accounts for 1% of my eCommerce revenue"

If I am correct you run a self defense products site? That isn't the revenue stream?

 

[Vigilante]

Most of my revenue through eCommerce comes through selling my products on Amazon, eBay, Buy.com, and other sites... the SAME products I feature on my own web site.

I sell someone a surveillance system on eBay, for example. We then ship to that customer. The end goal is to convert that customer from eBay (which costs you roughly 10%) to becoming a repeat customer of your own store.

Take the guy on here that sells Sushi knives. He shouldn't rely solely on SEO an CPC marketing. He should be actively finding other venues on which to reach and sell customers... and then bring them into his eCommerce store as repeat customers.

Your lowest cost of operating will ALWAYS be your own store, assuming your marketing costs are under control. How to get them there en masse is the key. Today, Amazon and eBay and Buy.com have way more customers than I do, and relatively cheap exposure to gain sales. The better job we do on those venues, the more of those customers will convert to repeat customers and hopefully migrate to our site, which is where we get a higher profit margin.

Think about eCommerce from an average customer perspective. Last Fall, I was working on a launch for an eCommerce retailer who was selling refurbished xBoxes. You had 2 choices of how to buy their product :
1. via. their unknown web site (you really don't know who you are giving your information, financial data, address to, etc...)
or
2. via. Amazon marketplace, who allowed them to sell their Xboxes on Amazon

Where would you, as a customer, be more comfortable? Answer is unanimous... on Amazon. You perceive at least some element of protection when you buy on the Amazon marketplace. The merchandise was identical at both places.

It takes time to build up a strong reputation. You could have the coolest web site, great products and prices, and a decent checkout process... but you have to earn my TRUST. Yes, you can get safety certifications, etc... but perception is more valuable.

I don't generally buy from unknown/startup/obscure web sites. I buy from known entities. I am literally NOT going to give my credit card information out easily. There are a LOT of things you can do to mitigate those types of concerns and gain credibility, but it doesn't happen overnight. In an age of scams, identity theft, and justifyably skittish consumers... you must earn trust. Having a good looking web site doesn't garner trust.

So, your eCommerce strategy needs to be more than just opening an online store and hoping people trust you. Especially in areas such as consumer electronics, jewelry, designer clothes and accessories, and other high touch, high cost, or high perceived value items.

 

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[Vigilante]

Buy.com sells on eBay
BestBuy.com sells on eBay
Sears sells on eBay
LandsEnd sells on eBay

and on and on goes the list.

WHY? Because eBay has more customers. BestBuy.com knows that they can win customers on eBay and hopefully convert them into becoming BestBuy.com customers. They also use eBay for certain channels of merchandise, such as closeouts.

If LandsEnd sees value in crossover marketing on eBay, I am going to play follow the leader. They're smarter than I am. I am going to COPY the industry leaders strategy, and then diversify and improve where I can BEAT them because I am smaller, nimble, and focused.

Develop multiple CHANNELS in your eCommerce strategy. One channel is your own web store. If you are selling consumer products, one channel is eBay. If you are selling crafts, one channel is ETSY. If you are selling downloadable content, one channel is Lulu.com or Payloadz.com. Want to sell training videos? Sell on Youreeka.com. Want to sell documents, like legal documents? Sell on Gazhoo.com. Want to sell web site templates? Also Gazhoo.com. Want to sell eBooks? Amazon or Cerizmo.com. Did you know you can sell your blogs on Amazon's kindle marketplace on a monthly subscription basis?

Point being for every industry, there is likely a marketplace you can attach to while you build your own.

 

[biophase]

Vigilante, interesting post. I do 100% of my sales from my stores. I don't use Amazon or Ebay at all. I never looked at it from a customer acquisition stand point though. I didn't like Amazon's store fees or payment methods and always felt Ebay was also too expensive. I may relook at them from a marketing perspective and see if it may work.

 

[MJ DeMarco]

I don't use Amazon or Ebay at all.

The cost of the listing serves as the advertising expense and getting in front of eyeballs. It really isn't much different than CPM advertising. In other words, how much would you pay to get your product in front of 1,000 people who are looking specifically for a product like yours. $10? $50? At some point, the listing cost might be expense due to the # of exposures that convert to new customers and/or awareness.

 

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[Vigilante]

Also worthwhile to note that eBay has switched their fee schedule to be heavily weighted towards success fees

(ebay calls them final value fees - meaning most of the fees are on the backend after you sell an item) vs. listing fees which used to make eBay a more risky proposition.

On PPC like Google Ads, you pay regardless of conversion rates. On success fees like eBay, you pay only a % after the item has sold. eBay still has some listing fees, but they're pretty nominal compared to the success fees.

 

[biophase]

I just made a new account and ebay and added some products. My strategy is to not sell anything on ebay by pricing it a few bucks higher than in my stores. I'm purely using it as a marketing tool. I don't know how I will exactly track this, but my insertion fees are only $1.50 per product and I have them running indefinitely with a large quantity.

 

[The Spark]

My issue with Ebay is the new 9% total value fee....that is a lot of people's margin if not a huge chunk.

 

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[Vigilante]

Fees for selling on eBay

In electronics, you pay 7% of the first $50, then 5%. Powersellers get an additional 20% off of those fees. And, you pay 0% FVF on whatever doesn't sell.

Someone posted elsewhere this great eBay fee calculator. eBay Fees Calculator 8.2 by Ryan Olbe (updated July 12, 2011)

Run the math on what you want to sell and see if it works for your business or not.

For me, 95% of $1,000 is always worth more than 100% of $0.

 

[biophase]

My issue with Ebay is the new 9% total value fee....that is a lot of people's margin if not a huge chunk.

I'm mainly using it Ebay for marketing, so if I don't sell anything I won't be paying any of those fees.