Thursday, April 26, 2007

Consider this before you Make Online Selling a Career Move

If you are new to online selling or considering jumping into it headfirst, please take a few minutes to read this post. I am usually not a How-to kind of writer so forgive me if I don’t follow a standard format.

There are at least three major considerations you need to address before opening up a business online: (There are many more things to consider but these are key)

  • Do you have a product someone wants to buy and can you get sufficient quantities and steady supply? If you can’t answer positively regarding this question you should stick to selling items as a hobby or for extra cash. It isn’t a bad way to go -- you won’t get rich but you won’t lose your house either.
  • Is this a commodity product that everyone is selling already and being the lowest price is the major merchandising method? You will not last long, selling online, if you don’t have sufficient margin. Leave the low-priced, high volume game to the big guys.
  • Before you jump into online selling understand that from 15 – 20% of your total sales will be paid out to marketplaces like eBay and Amazon, Credit Card processors like PayPal and Google Checkout (eventually) If you choose not to go the Marketplace route you will spend from 10% to 20% on AdWords. Make sure you can afford to spend that kind of money before try and make a living at selling online.

Please don’t fall prey to the “Get Rich” fast schemes or the eBay Millionaire Stories. My company was profiled over and over again as an eBay Millionaire. While I made a good living for several years I was no Millionaire.

Think – Research – Test before you start an online business.

Just my 5 Cents (Adjusted for eBay economics)

1 comment:

Randy T said...

Randy,

Great essay, I wish I could insert it into 2 magazines currently on the stands.

Both the new issue of ENTREPRENEUR (ebay millionaire's secrets cover story) and ENTREPRENEUR'S EBAY STARTUP GUIDE feature a rosy puff piece with certainly fictional monetary information (albeit voluntarily from the seller who has both a book and software to plug) on.....an ebay DVD seller! If this guy even grosses (forget the actual NET) close to this amount of money, it sure isn't from his dvd sales, that's easy enough for ebay veterans to sleuth...
http://members.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=kossdvd#shipping

I still sell a very finite, niche defined amount of DVDs at my ebay store, only ever listing about 800 titles, with very lowball profits at all, so I shudder to think how many completely innocent people with NO ebay expericence and NO business experience are going to take the bait from these articles....these magazines are on every stand nationwide right now, so its ineveitable that at least upwards to 100 newbies or more(from my experience, whenever smiling media like this appears, it always happens) will take the bait, call the distributors, and get out the credit card....

Great blogging, I'm glad I caught up tonight!
Randy T