Before you go any further, you obviously have to figure out what you’re going to sell. Like I said, it needs to be easy to ship and have a decent profit margin. And you should have some interest in the product, or you’ll lose interest in the website, or it will be really hard work! These are the questions I asked myself, and the process I went through.
Can I make money???
So firstly, the most important thing is can you actually make money with the product. Almost anything can be sold online, almost everything is! But some products lend themselves to online selling better than others.
If you’re starting a business, online or otherwise, you’re already written some kind of business plan, right? No? Ok, well at the least, you need some numbers about what income goals you are trying to achieve. Is this a part time, supplemental income, or are you wanting to earn enough to support yourself and your family?
For me, its part time. So this is what I did. Figure out how much I want the online shop to earn this year. Break that down to per month. Figure out the profit margin on my product. Then calculate how many I need to sell every month to make my income. Decide if that is even doable, including how many hours of shipping and packing will that involve. If it’s doable, move onto the next step. If it’s not, think up another product.
So, while you’re thinking about that, I’ll tell you what I’m selling. Pilates and Yoga Dvds. I’ve recently started some Pilates based classes at the gym, and I love it. So I have some interest in the product. I know lots of the girls at the gym have DVDs that they do at home as well, on those days when they can’t get down there, or there isn’t a class. So I know there’s a market. Now, can I make money?
Let me run you through my numbers. I’ve decided I’d like my online store to earn $500 a month. Fairly conservative, like I said I’m looking for a part time income.
My product is DVDs. The profit per DVD is around $8. So:
Target: $500 profit / month.
Approx $125 profit / week (yes these are loose figures…)
Profit / DVD = $8
Therefore to make $125 per week, I need to sell 125 / 8 = 15.62.
So I need to sell about 16 DVDs a week to make my target. Doesn’t sound too bad! Is this really doable? I have no idea. This is what this blog is all about – finding out how realistic making your income online really is. From a physical point of view, it’s very doable. I can easily pick and pack and post 16 DVDs a week. So that box is ticked. The rest will be up to whether I can generate enough traffic to my website, so that I sell 16 units every week.
To me that sounds quite doable over the next 12 months. So Pilates and yoga DVDs it is.
Will the product sell online?
As I said above, some things lend themselves to online sales more than others. Apart from physical considerations like, is it easy to ship? Is it small enough to be handled easily? Is it so heavy that shipping costs are prohibitive? Is it tough enough to be sent by mail?
There are also the emotional considerations…will people actually buy this product online? Does it need to be tried on? I wouldn’t buy shoes online because I have odd shaped feet. Ditto for clothes. Of course these products do sell well online, but if you’re going to sell something like this, you need an excellent returns policy. But that’s another post
Going back to my Pilates and Yoga DVD example, it again ticks all my boxes. Dvds are durable, light weight, easy to ship. They also won’t take up much room in my study, so I can keep some stock on hand easily. So still looking good.
Check out your competition.
Before you commit to your product, you need to check what the competition is doing. How many people are already selling your product? Are you competing with the major chains? You’ll have a hard time knocking Target off the number one position in Google. Are there smaller stores? What do their sites look like? Are they discounting the product heavily to compete with ‘the big boys’. What will that do to your profit margin?
Click onto your competition and see what their page rank is. Page rank isn’t used much, admittedly. But it’ll still give you some idea of how long the website has been around, and how much google likes it. You’re going to start from scratch…if the top five search results have all been around for years, with a page rank of 5, lots of backlinks pointing at them, you’re going to have a tough time getting to the top of the rankings. Most people only click on the first, second and a few on the third link down. If you can’t realistically get there, you may need to rethink your product.
Do you know about your product? Are you passionate about it?
Ok, so to have a successful online shop, you don’t have to eat, sleep, dream, breathe your product. But it really helps if you know a bit about it, and you have an interest.
One way that you’ll be promoting your site is making blog posts and creating quality content around your product. If you’re selling blue widgets but you have absolutely no interest in or knowledge of blue widgets, that’s going to be hard grind. And it’s going to take you a lot more time to come up with content. Which all factors back into your return on investment equation. If you’re working 40 hours a week to make your $125, and you’re not enjoying it at all, you may as well go work on a checkout. You’ll be much better off!
So for me, I’m selling Pilates DVDs. I’m into Pilates myself, I can happily write blog posts about the benefits of pilates. I will road test the DVDs and review them…lots of ways I can promote my products, that I will enjoy. Or at least not find a dreaded grind. So that box is ticked too.
How will you be better than the competition?
Check out your competitions online stores. What do they do well? What do they not do well? Do their sites work? Try to buy something…does the shopping cart work well? Is it easy to use? Is it simple? Do you ‘trust’ their site. Look at all the things you don’t like about their sites, and make sure your site does it better.
Can you offer faster shipping? Can you do free shipping and still make a profit? Can you gift wrap? Value add in another way? Get thinking about why someone should buy from you.
For me, a lot of the sites in my niche are ugly. And on one of them I couldn’t even find the ‘Buy’ button. I will make my site more visually appealing, and have a stronger call to action. Ofcourse my customer service will also be excellent, I will answer emails and questions quickly. Nothing terribly exciting or new there, but its enough.
My product passes all my basic tests, so I’m ready to move onto the next phase. Find a supplier.