How to start your e-commerce business
I created my own e-commerce store. So it’s easier than you think to create one too. For instance, you use Shopify like everyone else. Similarly, you can create your own e-commerce business for less.
Most people use Shopify because it’s easier. For instance, they give standard templates. So you can have your store up the same day. I prefer having my own unique site or a site like someone else uses.
The reasons I don’t use Shopify
Firstly, I don’t want to pay a monthly fee. $79 for the store minimum or you can buy the lite version but can not have a store, just sell on other platforms
Secondly, Owning my site is better than renting it. So If your business is slow you still have to pay the fee.
Thirdly, Shopify uses templates, my site is original and designed just the way I want it.
Fourthly, Shopify charges transaction fees. My site doesn’t because I own it.
Lastly, my goal is to be Independent of platforms like eBay, Amazon, and Shopify, not a partner with them.
What’s my goal
My primary goal is to be independent of online platforms, not partners with them, Therefore when I use eBay and Amazon I pay them a 10% to 15% fee on my sales. So they are actually my partner since the profits they take compared to mine is half.
In other words, if I have a sale price of $100. My profit is $50, or 50%. eBay takes 12% or $12 of the $100 sale price. So $12 is 24% of my profit. Therefore eBay is a 24% owner of my business. So it gets even worse. If my gross profit is 50%, then my net profit will be about 25% or $25. Therefore eBay is my 50% partner because they make $24 and I make $25 on my net.
What’s the Solution?
7 years ago I asked an ex eBay seller why he left eBay. He was their biggest seller of posters. His answer then was he wanted to be independent of eBay and Amazon. So what about the money I asked? The profits he netted were the same as he was making on eBay.
So how is that I asked? The marketing costs to get customers were equal to the fees he paid eBay. Sometimes even higher.
Therefore being independent to promote my e-commerce store is very expensive.
Let’s look at the numbers
When I first decided to get away from giant e-commerce platforms like eBay and Amazon, I looked at the numbers. The numbers didn’t look good then and still look lousy today.
My asset recovery business sells mostly used technology. So if I want to sell a refurbished Microsoft tablet on my e-commerce, I compete against these guys. Walmart, eBay, Amazon, and Best Buy on the first page of a google search for this item. So these are the top 4 positions in the search.
Therefore, my top competitors for almost any search will show these 4 giant guys before me. For Instance, they all sell used refurbished computers, like me. So the others on page one google search are Microsoft, Newegg, BackMarket, and other giant e-commerce platforms.
I see Microsoft in my above example as not in the first 6 positions on the above search. Therefore Microsoft can’t score higher than the others and it’s their name on the product!
So what does this all mean? It means that I have to pay more to promote my e-commerce store selling on someone else’s major platform like Amazon, eBay, or Walmart.
Amazon eBay and Walmart are e-commerce stores
These are the big three are giant e-commerce stores. They have several hundred million people viewing their sites daily. I have to compete with them using my baby e-commerce store or sell on their platforms, which I do.
Here’s one of my eBay stores. https://www.ebay.com/str/cetism
Amazon store https://www.amazon.com/s?me=A1PTLANM9JTVQ7&marketplaceID=ATVPDKIKX0DER
My $1,000,000 e-commerce store
Here’s my e-commerce store with over 1 million dollars in products. https://mozacktech.com/
My e-commerce business was created and uploaded with products for under $1,000. The only way to do this is to read my blog post on Outsourcing Your Life. So you can see exactly how I go about finding the right person. This web designer still makes sites for me and helps with other stuff too.
My connections with Ingram Micro, Tech Data, and others give me a product I can drop ship from their inventory (see my video on drop shipping). Other refurbished products I sell from my inventory.
The bottom line is net profit. So do I make more selling direct after marketing and advertising costs through my e-commerce store, or on major platforms? Today, major platforms are my largest source of sales and profits. So e-commerce business will grow over time. And someday will surpass my major platform sales with good SEO, and marketing.
Mike Addis, Carlsbad California