Should I Launch This Ecommerce Store?

[Edgar King]

Hey everyone! I have an idea for an Ecommerce store.

I love cereal. If a couple of aliens were to arrive on Earth to take 10% of the people who love cereal, I'd probably be sucked right up. From Lucky charms, to Frosties, to honey loops, to Reese Puffs I love them all. Except oatmeal XD.

I was discussing with my friend who has makes a couple hundred each month with such a business. He explained how one can launch an e-commerce store with a couple of dollars really (Minus the website hosting costs and shipping).

1. Be passionate about the product or know the product inside out.
2. Purchase a few of the product (Like 2 or 3 in stock).
3. Solve pain points in a proven market as you go.
4. Sell it online and run ads to it (This would help me learn about web design and digital marketing in the process) for like a month to see how it is.
5. Use creative advertising to go even further.

The plan is to sell solely already existing cereal and then with time and capital gained from the business, use that to create a whole new brand cereal the market would love and sell that worldwide or nationwide. Yum.

So what do you think?

Are the margins too low? Is it Fastlane? Would shipping costs eat through the profits? Is there even really a need?

Or maybe I should save to instead sell a higher priced product.

I might still test it just to see where it can go and if it doesn't work fine. But any advice would be appreciated.

Thanks!

 

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[Milonfz]

Groceries are a very low margin product. Many resellers shop at Walmart because they are selling so close to wholesale that it doesn't make sense to even set up an account.

How are you going to differentiate yourself from the competition? What would you offer that Walmart or Amazon doesn't?

Cereal boxes are fairly large compared to the cost. Where are you going to store it all? What about a place to prep, shipping costs, etc.

Run the numbers, do the math and see if it makes sense.

If not, try again.

 

[Jeannen]

Unless you have something with a unique selling proposition like magicspoon.com, I hardly see how could you make a profit. How do you plan to get traffic?

Facebook Ads is definitely not an option here, unless you have a subscription model or if people buy multiple boxes at once

 

[Edgar King]

Haha, here in my country Amazon barely exists and Walmart not at all. I was thinking to differentiate myself based on variety and yes, adopt a subscription based model for people to have their boxes delivered in the week.

To get traffic I was going to run google ads to it. To start off, I was going to buy a few and just store it in my home and expand from there when need be.

 

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[rocking-m]

Start with a detailed business plan before you spend any money on a website or inventory.

A detailed business plan will force you to think through all aspects of your business and show if it is viable or not.

Don't leave any part of the plan blank - if you don't know an answer, learn and give it your best guess. Refine and make it more accurate as you learn more.

My opinion is too many people jump right into a business without good strategy and planning for success.

 

[Jeannen]

Start with a detailed business plan before you spend any money on a website or inventory.

A detailed business plan will force you to think through all aspects of your business and show if it is viable or not.

Don't leave any part of the plan blank - if you don't know an answer, learn and give it your best guess. Refine and make it more accurate as you learn more.

My opinion is too many people jump right into a business without good strategy and planning for success.

The business plan almost never happens as expected, a Business Model is more appropriated here (Google "business model canva")


Actually, the best way to test an idea with a low budget is to make a pre-launch page to see if people could be interested.

1. Ad
2. Landing page explaining the offer & unique selling propositions (USP)
3. People can give their email
4. You have automated emails sequence nurturing them and giving more info about the offer & USP
5. You send them to a reservation page where they can either get the offer (and pay) or simply enter their email again to "register" for the launch

You can tweak it, but that's the global picture

 

[rocking-m]

The business plan almost never happens as expected, a Business Model is more appropriated here (Google "business model canva")


Actually, the best way to test an idea with a low budget is to make a pre-launch page to see if people could be interested.

1. Ad
2. Landing page explaining the offer & unique selling propositions (USP)
3. People can give their email
4. You have automated emails sequence nurturing them and giving more info about the offer & USP
5. You send them to a reservation page where they can either get the offer (and pay) or simply enter their email again to "register" for the launch

You can tweak it, but that's the global picture

The business plan is never intended to be perfect, it's there to make you think through all aspects of you business before you invest resources. As you learn you tweak the plan, rethink your strategy and goals and execute based on new learning. There is a reason that 'do you have a business plan' is the first question asked if you look for investors or a loan to start your business. You can agree or disagree, but that's where the big boys start with all new ideas. Also, the business plan costs no money - so it's probably the best low budget place to start.

The pre-launch page sounds like the MVP from the lean startup, that makes some sense.

 

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[Edgar King]

The business plan almost never happens as expected, a Business Model is more appropriated here (Google "business model canva")


Actually, the best way to test an idea with a low budget is to make a pre-launch page to see if people could be interested.

1. Ad
2. Landing page explaining the offer & unique selling propositions (USP)
3. People can give their email
4. You have automated emails sequence nurturing them and giving more info about the offer & USP
5. You send them to a reservation page where they can either get the offer (and pay) or simply enter their email again to "register" for the launch

You can tweak it, but that's the global picture

Yup, this is how I was aiming to test it.

 

[Jeannen]

The business plan is never intended to be perfect, it's there to make you think through all aspects of you business before you invest resources. As you learn you tweak the plan, rethink your strategy and goals and execute based on new learning. There is a reason that 'do you have a business plan' is the first question asked if you look for investors or a loan to start your business. You can agree or disagree, but that's where the big boys start with all new ideas. Also, the business plan costs no money - so it's probably the best low budget place to start.

The pre-launch page sounds like the MVP from the lean startup, that makes some sense.

Yeah, in this case, it's a business model, the business plan is filled with $ prediction that are innacurate
But yeah no matter what, testing a MVP > All

 

[biophase]

What is the price of a box, what does it cost to ship and what can you get it for?

 

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[Edgar King]

What is the price of a box, what does it cost to ship and what can you get it for?

All of these... I don't know lol.

My original dice was to go to local retailers and buy their cereal from the different branches to have the best variety of cereal. But the average price of good quality cereal here is about 6$.

But now thanks to you guys, its expanded to include cereals globally so I'll have to learn about importing inexpensively and what not.

This was before I started going serious on copywriting and interview business so may not have time for this until later.

If anyone's going to take up this idea though, be sure to send me some free cereal and I'll be your first investor.

Aw men, now I really want to start this XD

 

[biophase]

All of these... I don't know lol.

My original dice was to go to local retailers and buy their cereal from the different branches to have the best variety of cereal. But the average price of good quality cereal here is about 6$.

I don’t know how you can even begin to ponder this as a business without knowing the answers to those questions.

 

[Edgar King]

I don’t know how you can even begin to ponder this as a business without knowing the answers to those questions.

It was the cereal men XD

 

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[Edgar King]

I don’t know how you can even begin to ponder this as a business without knowing the answers to those questions.

I've never run an e-commerce business so I just planned to buy cereal locally and store it in my house for the time being (Of which I easily know the potential profit for each box sold). And then when the site got orders deliver it to customers by bike. And then expand from there.

Little did I know, you guys would expand my realm of thinking later on from local to global. It's just that soon after I decided to be serious with my other activities (Interviewing and copy), know how much time it takes now for real efforts in those areas. If I did this now, I'd probably explode.

Do apologise for the waste of time but hey, I and some other people know more about the topic now .

 

[woken]

Low entry barrier.

When I do my online grocery shopping I’m buying my cereals from my supermarket. I’m not going to buy them from a separate shop.

Unless you offer cereals/ sweets that are available in other countries, and that’s another business.

I saw a guy do this and he does indeed have lots of orders, but the margin is low.

 

[rocking-m]

This was definitely not a waste of time! If nothing else it's a great example of learning before committing any resources!

This worked as it should have. You had an idea, you talked to others about it and learned about some things, you identified some things you didn't know and made a more educated decision that now may not be the time do to time commitments vs. expected return. I think you did what more people should when thinking about starting a business. You can always come back to this if you find some of the factors change in the future.

Well done!

 

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[biophase]

I've never run an e-commerce business so I just planned to buy cereal locally and store it in my house for the time being (Of which I easily know the potential profit for each box sold). And then when the site got orders deliver it to customers by bike. And then expand from there.

Little did I know, you guys would expand my realm of thinking later on from local to global. It's just that soon after I decided to be serious with my other activities (Interviewing and copy), know how much time it takes now for real efforts in those areas. If I did this now, I'd probably explode.

Do apologise for the waste of time but hey, I and some other people know more about the topic now .

I’m not saying you wasted our time. I’m just saying that your thought process is backwards. You asked about potentially starting an e-commerce store in which you had no calculations done on costs, shipping and profit margins.

What would happen if we said yes you should definitely go out in sell cereal? Then you would have gone out and bought a box of cereal, shipped it to a friend, and then figured out that you can’t make any money doing it. This is something you should figure out before you think about starting a business.

 

[Edgar King]

I’m not saying you wasted our time. I’m just saying that your thought process is backwards. You asked about potentially starting an e-commerce store in which you had no calculations done on costs, shipping and profit margins.

What would happen if we said yes you should definitely go out in sell cereal? Then you would have gone out and bought a box of cereal, shipped it to a friend, and then figured out that you can’t make any money doing it. This is something you should figure out before you think about starting a business.

True. Making sure at least in theory the idea can work with maths.

 

[rocking-m]

Your last reply is a little ironic to me..... making sure at least in theory the idea can work is exactly what a business plan is used for.

All the questions and answers in this thread were basically a conversational business planning session.

I've seen many alternative approaches to starting a business in the last 25 years but it always comes back to creating a business plan and learning. You can do it up front or you can do it while you are spending time and money but you will always go through the process.

 

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