Investigating the viability, cost/benefit of breaking into eCommerce

**acdir** · 11 Jul 2008, 07:27 PM

Hi all,

I've been working for a fairly successful eCommerce business (even though almost 50% of our sales are direct results of our phone salesmen) for almost 2 years now. I've learned a lot from an SEO / Marketing perspective, and I already have a great technical background in web hosting and the like. So naturally, I've been considering starting an eCommerce website of my own, but I'm not the kind of person to go into these things blind.

I know eCommerce isn't exactly a new market. It seems to me that the market is filled up fairly well and even the niches are pretty well served. With already established supersites like Amazon and eBay, I have no expectations of becoming a millionaire. Some extra cash flow would be nice though.

So basically, here are some questions:

What can one expect as far as the level of difficulty for generating sales goes? If I do everything right and have decent optimization, when should I start to see some turnaround?

Is a discrete website better than an eBay or Amazon store, or no? Is both always better? If I only wanted to do one, which would I choose?

How much rides on the type of product that you carry? Can I make money selling anything or is it highly dependent on the product? How do most people get their product? I know of one method already from my time at my job, and was wondering if there are any other common ones.

What am I looking at as far as capital? Assume I can get webspace for free (I can), and I use a free cart system - or build the site from scratch myself.

Any information would be greatly appreciated.

**kobra** · 11 Jul 2008, 08:06 PM

What can one expect as far as the level of difficulty for generating sales goes? If I do everything right and have decent optimization, when should I start to see some turnaround?

Normal, allow for a year - but really depends on the amount/quality of SEO you are capable of and your offerings

Is a discrete website better than an eBay or Amazon store, or no? Is both always better? If I only wanted to do one, which would I choose?

Again, depending on what it is you are selling one to many avenues can be beneficial - - Your own site can receive repeat business from leads generated via the others

How much rides on the type of product that you carry?
Can I make money selling anything or is it highly dependent on the product?

Having monitored several this is indeterminate ground but I will give an example:
One individual opened a shop selling items where there are other large competitors - after 1.5 years this is still bumping along - steady but not a great conversion rate -
Same individual 6 months ago - opened another shop with items that IMO are in an underdeveloped market. In less than 6 months this shop is increasing in sales and has at month 3, surpassed their 1st shop and is continuing to grow

Upshot - Dependant upon the market and "value" added

How do most people get their product? I know of one method already from my time at my job, and was wondering if there are any other common ones.

Wholesale distributors & dropshippers most common

What am I looking at as far as capital? Assume I can get webspace for free (I can), and I use a free cart system - or build the site from scratch myself.

Business startup can be $1-3k for legal formation, licenses etc
Stock varies if you are a $1 per item shop or a $5-10k per item shop

**stevesh** · 11 Jul 2008, 10:03 PM

even the niches are pretty well served

I disagree - it's in the niches that the money is yet to be made.

established supersites like Amazon and eBay

Amazon and eBay aren't your competition, unless you're selling books or refurbished crap.

I have no expectations of becoming a millionaire. Some extra cash flow would be nice though

Then forget ecommerce and get a second job. All in, or nothing.

What can one expect as far as the level of difficulty for generating sales goes? If I do everything right and have decent optimization, when should I start to see some turnaround?

Depends entirely on you and the stuff you've chosen to sell.

Is a discrete website better than an eBay or Amazon store, or no? Is both always better? If I only wanted to do one, which would I choose?

You don't want to do one - you want to do everything.

How much rides on the type of product that you carry? Can I make money selling anything or is it highly dependent on the product?

It matters what you sell. The world does not need another candle or costume vendor. If you think you can compete with petsmart.com or Walmart on pet supplies, God bless you - I think you're wrong.

What am I looking at as far as capital? Assume I can get webspace for free (I can), and I use a free cart system - or build the site from scratch myself.

Capital? The good news about doing business online is that the cost of entry is effectively zero. (No, you can't get hosting for nothing - your buddy with the reseller account may disappear just when you need him.)

My host charges $4.00 a month for a starter account, which is fine for your Zencart site. Another $50 or so for a SSL certificate, and $30 a month for a real merchant account,and you're in business for less than 600 bucks a year. You'd spend more than that on permits for a brick-and-mortar store.

How do most people get their product?

I consider dropshippers to be the Internet's answer to Multi-Level-Marketing: the best companies in the field are deceptive regarding the amount of money you can make and most are outright frauds.

It seems to me that there are only two ways to make money online -

1. Find something nobody else is doing, and do it (very difficult).

2. Find something a lot of people are doing, but no one is doing very well, and do it better (much easier).

**swguy** · 12 Jul 2008, 12:17 AM

Originally Posted by stevesh

What am I looking at as far as capital? Assume I can get webspace for free (I can), and I use a free cart system - or build the site from scratch myself.

Capital? The good news about doing business online is that the cost of entry is effectively zero. (No, you can't get hosting for nothing - your buddy with the reseller account may disappear just when you need him.)

Ditto. Spend the few dollars it takes to get a serious commercial hosting account. This is not an area to save a few bucks. It's the foundation of your business.

Good luck,
Scott

**acdir** · 12 Jul 2008, 03:27 AM

Thanks for the insight, but for the record I can get hosted for free ;) I have quite a few sites that I don't pay for as it is.

One thing I was wondering, is it difficult to get eBay and Amazon stores synced up as far as placement and processing is concerned? I've got a pretty solid background in computers/technology.

Also the drop shippers are no good?

All or nothing as in people can't be successful setting this up in their free time?

**kobra** · 12 Jul 2008, 05:13 AM

Also the drop shippers are no good?

As in everything, there are good ones and bad ones...
Personally, I steer clear of any that charge a fee to use their service as I have found that the good ones are in business to services you and membership is not required as the more you sell through them the more succsessful they are.

All or nothing as in people can't be successful setting this up in their free time?

It is all about service, so if you can just get all you customers to only shop during your free time then all would be great.

You are either committed to making this a full success or you will net only a partial success

**stevesh** · 12 Jul 2008, 01:18 PM

Originally Posted by acdir

All or nothing as in people can't be successful setting this up in their free time?

I should have explained my opinion better.

What I was warning against is the attitude (most often expressed by the dropshippers and others who are trying to sell you something) that you can spend a little time and money setting up an ecommerce site, and then just sit back and bale up the money.

Building and running a business, Internet or not, is a lot of hard work.

Only you know what 'successful' means to you, but even though starting up a basic Zencart site involves a small amount of money and a little time, if the result is only a few hundred dollars a month, I'd figure I could spend that time and money more productively.

You can't dream too big.

**acdir** · 14 Jul 2008, 01:39 AM

I hear what you're saying, but I have no choice but to keep my day job in the beginning considering the bills will still be rolling in. I'm at a computer most of the day and I may have someone going into this with me, so between the two of us, if I set up a reliable / functional email support system, which I can, I think we can get all questions answered quickly and thoroughly. I can't offer phone support in the beginning. Hopefully the product I'm selling will be fairly straightforward though, and I would strive to make all of my terms and policies clear to customers via the site.

Thanks for all of the information guys.