Having a Dream & Getting Your Hopes Up
Is it your dream to sell products online? Do you have products you made yourself or products you really love to use? If you think the world is ready to buy this product from you, then the thought of starting an online products-based business probably has crossed your mind. This is a decision that should not be undertaken lightly. It has to be well thought through because the opportunities for losing a lot of money are too numerous to count. Not only do you lose money outright, in terms of fees that you pay for developing a website that will eventually fail, you also lose money in other ways. In fact, the number one way you lose money is through wasted time, effort, and emotion. Getting your hopes up is more painful than losing money.
Use this guide for establishing your products-based online business and for managing potential risks. Also take some time and read our other resource which discusses tactics and strategies when starting an online business. Ask these following questions when analyzing product feasibility.
Do you have the right product?
While it is easy to get excited about a product that you have seen online, there are many reasons why it is not sold online. You’re probably not the first person to think, “Why don’t we sell “X” product online?” Somebody might have thought of the same thing before, might have gone through a rational business analysis, and might have concluded that the cost of going this direction greatly outweighs the benefits of doing so. Therefore, they did not do it. Be very cautious when you come up with an idea or come across a product that is not available online. That is a red flag. It is not a deal killer but it should give you pause to think.
How e-commerce friendly is it?
When we are talking about e-commerce for products, we are talking about shipping. Can it be shipped? That is the key question here. If you are targeting consumers and small-time buyer who don’t have huge budgets, you have to consider their shipping costs. If it is a small toy that can be put in a small box and can be shipped cheaply, that is more e-commerce friendly than heavy items. Consumers don’t want to spend too much money on shipping. For example: Even if there is a consumer demand for waste industrial rocks that can be used as decorations for the front yard, backyard, or landscaping, if the cost of shipping is too high, most consumers won’t buy it. This might not be an e-commerce friendly product choice.
How tightly focused is the product?
The more focused your product is, the less competition you have. For example, if you are selling wrenches, there is a lot of competition for that. But if you are selling left-handed Braille-encoded monkey wrenches, there’s way less competition for that. The less competition your product has, the better.
However, you have to balance lower competition with another key consideration in this equation – level of demand. The more specific or targeted the product, the less demand there is for it. Less demand does not necessarily kill a particular product. If there are only fifty buyers every month that look for a certain product but they are sure to spend $10,000 each to buy that product, then that is a market you would want to be in. However, if you are selling a cheap or low-cost product and you are targeting retail consumers, this could be a problem. Their budgets are smaller and there is just a few of them. You always have to weigh product specificity, level of competition, amount of demand, and consumer purchasing power when selecting a product to sell.
Is the product geared towards a department store or boutique?
This is a very important consideration because certain products can be compiled or grouped with other products. You can put it all in one website. This is like a department store approach for a particular product. A lot of products sell this way although it would not work for all products in the market. Some products require a boutique approach. Products that require high level of customization and products that are very artistic or personal in nature tend to sell better in a boutique environment.
Consider the positioning of your products, its marketability, and specific market strategy. This analysis will have an impact on your costs. If you are positioning to sell your products within an online catalog, an online department store, or a mega store, your costs are lower. It is because the other products that are stocked in your online department store average out the costs. This is called cost averaging. However, if your type of product needs to be sold through a specific boutique, then the sum cost that you put in to your particular website is pretty much riding on that one particular product or product category’s sales. Your ability to distribute your costs among differing products affect your ability to recoup your costs.
What is your point of differentiation?
Many online product sellers overlook this key question. They think that if their product exists, people would buy it. Wrong! There is such a thing called economy of comfort and convenience. If your product is not differentiated enough, someone would probably want to buy it locally or from another website. Moreover, they could even pay a little more money to get it somewhere else. Product differentiation must be large enough so they would buy it specifically from you.
What is it about your product handling or product positioning that makes your business different from the competition? One obvious solution to this is exclusivity. If you are the only seller of a particular product, this is a great advantage to have. However, exclusivity rights aren’t easy to get. This usually involves a contract with the manufacturer. It also involves having an operation big enough or pushing a large enough volume to warrant exclusive rights. Therefore, it is important to select a point of common point of differentiation. It can be about the levels of customization, price selection, quality, craftsmanship, and other factors. Find a way to differentiate yourself from the competition or else you’re just wasting your time.
Building Your Online Store
Now that you have picked the right product, are confident that it would sell, and your product addresses a particular target market effectively, it is time to build your online store. Ask the following questions to help you strategize your online presence. Failure to consider these questions may mean the difference between success and failure.
Domain name selection and registration
Am I interested in branding my store or do I plan to get more traffic from search engines?
Now that you have selected a product category to sell on your online store, it is imperative that you pick the right domain name for your store. You must take your time with this stage of website development. Your store’s name defines your store’s identity and may determine its future success or failure. Here are some basic issues to think about:
Does the name catch the attention of the reader?
Is the name descriptive?
Does the name contain keywords for search engines?
While it may seem to many business owners that a domain name can either brand their store OR be geared towards search engines, this is a false dichotomy. You shouldn’t be torn between these two concerns. In fact, you can choose a unique name for the domain name but optimize it for your keywords. Alternatively, you can choose a keyword domain name and adopt a trademarked brand name later on.
If you do decide to go with a brand name, make sure to use a motto or slogan that describes it. The description should have your keywords. For example, if you go with BoozakaMedia.Com for your online DVD store, use a slogan like Boozaka Media – Home of Premium DVD and HD movies. The description has your target keyword. You keep branding boozaka media so it develops an identity while your search engine optimization and link building uses the keywords in your description. This way, you get the best of both worlds: targeted traffic from search engines and a unique brand identity.
Once you have decided on the issue posed above, it is now time to register your domain name.
Domain registration works like this: the Internet is a series of computers that are connected to each other. Each of these computers use numbers for names. These numbers are called Server IP addresses. When users go on the internet, their browser translates the domain name they type into their browser to access the server IP number of the computer that is assigned that domain name. The browser then downloads information from that remote server. Domain registrars make sure that the domains they handle go to the right server computers. This assignment of a domain name made up of letters and numbers to server IP numbers is what you are paying them for.
There are many registrars out there. Among the more popular providers are: Godaddy.com, Enom.com and Namecheap.com.
You should consider the following when selecting a registrar:
Domain Pricing
Your domain registration is an annual service. You pay a fee for every year you want the registrar to handle your domain name. Registrars vary widely regarding how much they charge for basic registration as well as for add-on services like domain forwarding and privacy. Be careful who you go with because the fees might add up.
Easy Domain Management
Make sure the registrar you are considering has an easy to use online interface for making changes to your domain. In the course of a domain’s lifetime, a domain owner can do the following: change DNS name server, change contact information, change locking status, and change privacy settings.
Domain Privacy
There are a lot of spammers out there that “scrape” domain ownership information to get the email addresses of owners of domain names. These unscrupulous individuals then blast the owners with spam. Many domain holders now use Whois Privacy Management and similar systems to hide their identities from prying eyes. If someone wants to email you each registrar has a policy on how to handle these solicitation emails. The key concern to keep in mind is to keep your domain’s information as private as possible. Sadly, many registrars charge a fee for this service. Look for reputable domain registrars who offer this service for free.
Website Hosting Services
How do I select a hosting company for my websites
Now that you have selected a domain name, the next step is to select a company that will lease you space on one of their servers or dedicate a server just for your needs. Your website’s files will reside in this server or server space so your site visitors can retrieve the information through their browsers. Website hosts store computers which have a copy of your website on them. These computers communicate with the rest of the Internet through their data center’s network. The host is in charge of making sure that the computer your site is on is always reachable by anyone looking on the Internet for your information, safe from fire or electrical damage, and has a backup just in case the server’s data gets corrupted.
Not all website hosting companies are the same. While many use large state-of-the-art data centers which have 24/7 systems engineering support, many are small-time “mom and pop” reseller or independent operations which might be vulnerable to data outages or service interruptions. Also, smaller providers might not be able to provide 24/7 technical support.
Stay Away from Resellers
How to select a web host: look for a host that can guarantee 24/7 service uptime. While no one can guarantee 100% uptime, try to get a provider that can get as close to 100% as possible. Go with a provider that has a large dedicated support team that is always waiting on standby to answer support tickets. As much as possible, find a host that either owns their own data center or leases a large chunk of a data center. Try to avoid resellers. Go with direct providers. The problem with resellers is that you don’t know what their service provision arrangement is with their wholesale provider. Some use a white label model. Others use a leased system approach. The bottom line is that the more layers of bureaucracy or contacts between the company you have a hosting contract with and the “source” provider, the longer it may take to possibly get problems fixed.
Web Hosting Reviews
Content Management Systems (CMS)
Does the site use the correct e-commerce platform?
There are many e-commerce platforms out there. Basically, an online content management system is where you input information regarding products and services. It interacts with a payment processing part of the platform. It also influences the search engine optimization, the overall presentation of the website, and the look and feel of the website. It is a very important piece of software. Some solutions cost thousands of dollars, while others are free. Free solutions are called open-source. There are many open-source packages available right now but you have to hire somebody to install it and customize it. Regardless of these costs, open source still costs way less than closed source solutions.
You have hire people to input or encode the data of your product catalog into your ecommerce platform. You also have to hire people to customize the front end of your platform. Finally, you have to invest money into the search engine optimization of your platform so your product listing can be found by search engines.
Another advantage of using an ecommerce platform is its ability to store thousands of products and to process hundreds, thousands, or even millions of searches every day. You will also enjoy the ease of updating and reorganizing content. This is important for optimizing your site for search engines. Ecommerce platforms also make payment processing friendlier, enable automation, and makes it easy to optimize for search engines. These features must be found in the ecommerce platform you select. If not, you are looking at an underpowered piece of software and you might be wasting your time and money.
CMS Software Reviews
Does your site structure appeal to your target market’s shopping needs?
Just because you are selling products online doesn’t necessarily mean you have to copy your competitors’ website(s). If they sell through a catalog model, it doesn’t mean that you have to follow suit. They may be doing something wrong that keep them from fully succeeding. Get in the mind of your customer. How do you think they would shop for your product in an online store? Do they prefer a directory system? Do they prefer to search? How do they select or navigate through an e-commerce website before they make a sale?
It’s very important not to assume anything about how your target market does its shopping. Herd mentality and blindly following other people’s patterns may lead you to producing a “me too” website. It would just be another generic and mediocre e-commerce site. This is not a point of differentiation. You have to stand out. You have to get in the mind of your target market so you can figure out their expectations when they are shopping for a certain product. There is no easy and clear-cut answer to this. You have to fully research it and experiment on it so you can provide a particular shopping experience that your target market needs and requires.
Are there resources or information that appeals to your target market?
In most cases, when people go online to buy something, they don’t buy immediately. They are always looking for information first. This is where you establish your credibility and authority. You have to give your target buyer enough information. This information convinces them that you know what you are talking about and you know what you are doing. You have to prove that you can deliver a product that they need, when they want it, exactly the way they expect it. This is done through informative articles. Guide them around the website and feed them information that they need to buy. Keep in mind that there are people that search resource catalog websites for information and then they buy locally. You can’t prevent this; it is a fact life.
However, you cannot afford not to provide information because if you do not, somebody else will. If you want to gain credibility, you have to give useful, accurate, and timely product information. It enables your visitors to make an informed choice to buy (not necessarily from your site). Nevertheless, if you provide information, the more helpful you will come across to them. It makes you look more competent so there is a higher the likelihood that they might buy from you. Moreover, the more helpful and indispensable your site becomes, the more valuable your brand gets. This is not a one-time thing. This is done continuously for several years. The effort is well worth it .
Is the site written to sell?
One cardinal sin that product website owners commit is assuming that just because they have particular inventory and matching content that their target market is looking for, this automatically means their target market will buy from them. They assume that it makes them attractive to their target customer. Nothing could be further from the truth. Having quality information and products online is just the first step. You still have to convert your visitors. You are leaving money on the table if you do not write your website to sell. There is a certain formula for selling online. It follows a classic dynamic of selling offline. However, they don’t follow the same implementation. There is a very big difference between online and offline selling. The psychological mechanics are the same but there are specific implementations that are unique to each of them.
The same psychological mechanics are at play: you have to get your target buyers’ attention, awaken their interest, get them to decide, and get them to take the action. This is the classic formula used by car salesmen and real estate brokers. They are really good at this and have mastered it so they can make millions of dollars a year. You can master it too. It all depends on how much time, effort, sacrifice, and patience you want to invest.
The secret to the formula is – There is no secret. It is different for each person. While the general dynamics is the same, the specific implementation and execution are different. That’s why many people outsource their website ad copywriting to professionals. Writing your own sales copy on your website is like performing your own brain surgery or pulling your own teeth – not a good idea. When it comes to writing your site to sell, you need to outsource to the right person or the right company. Don’t trust one person to do this. Normally, ad companies have a dedicated staff that is in charge of coming up with, testing, cleaning up, and optimizing ideas. It is well worth every penny.
Can your website take payment or process payment and shipping quickly and easily?
If your website cannot process payments, your website cannot make money. Common sense, right? Sadly, this truth is lost on many would-be ecommerce entrepreneurs. They think that by putting up clunky, overly difficult payment systems, they would still generate sales. They think that one size fits all. It is quite the contrary.
You have to pick your payment system to work with the mentality of your target market. Is your selected payment system used by your target market? Is your payment processing system linked up with your shipping system? Processing payments and filling order by hand may be great for a small online boutique where you get a maximum of a hundred or two hundred orders daily. However, if you are going to sell very small items and you get thousands of orders each day, payment processing, order fulfillment, and shipping can become serious headaches. Make sure you seamlessly connect your website’s order taking to payment processing and order filling to shipping. Some software packages even have modifications for warehousing. Whatever set-up you have for filling orders, make sure your software interacts with that setup to make your life easier instead of harder.
Generating Traffic For Your Product Website
Even if you have the best-looking product website powered by the most robust software featuring the best written ad copy, if you don’t have any traffic you are wasting your time and money. Traffic is both the lifeblood and the mother’s milk of internet commerce.
No traffic, no business.
It is as simple as that. Generating traffic with a high content value ecommerce website is actually easier than you think. In a very real sense, quality content generates its own traffic. If you invest a lot of time and money into background product information and consumer guides that are high quality, accurate, informative, responsive, and up-to-date, your website will generate traffic. It may not be instantly or may not even be a year after you put your website up. But if you invested in quality content, word-of-mouth and search engines will eventually drive traffic and traffic volume will eventually catch up to your website’s quality level.
Why is that?
The golden rule of the Internet that many webmasters and website owners try to ignore, avoid, or forget is: Quality content is king. It is the mother’s milk of the internet. That is what the internet is built for. One website would link to another website. This is true for social networks like Facebook and Twitter. This is how people share information. People are looking for quality content. Whoever gives them this quality content will reap rewards, It may not be exactly now or tomorrow, but they will reap the rewards eventually. The key to traffic generation is to produce quality content and to keep producing it. High quality content builds the authority of your website. It builds the trust factor of your website. Highly trusted websites are linked to more often. Highly trusted websites get more word-of-mouth or get used as a citation more often. You have to look at your website as a storehouse, not just for your products, but also for information about your products.
The Power Of Email Collection
It took a lot of time effort and money to get people to your website. Do not waste that opportunity by having them go in, get the information they need, and then get out. Chances are, most of these people will never come back. You have just wasted your money, effort, and time. In order to leverage these one-time visitors and turn them into sales, create a way where you can collect their email addresses. You can easily do this by offering free e-books and free updates, giving a discount card, or providing anything of value. Think of what could be used as an incentive to convince them to sign up to your mailing list. Once you have them on your mailing list, make sure you send them updates regarding the changes to your website, special promotions you have, new additions you made – anything of value to get them to come back. This is not a magic bullet or an instant solution. It takes a while to generate a well-qualified list. However, that list builds value over time. The longer your website is around, the longer your list gets. It grows in value with size. Don’t get discouraged when only one person signs up a week or even if it takes forever to get sign-ups. Remember this, sometimes one customer can order thousands of dollars’ worth of products. It may have taken you a long time to get that one customer but it sure is well worth it when they order. Never lose heart, keep working, and keep pushing.
Paid Traffic Methods
It involves paying someone to put your ads on a website or a network of websites. If people click through these ads, they will be led to your website. The model is very simple although the implementation takes many shapes and forms. Google has Adwords, Yahoo has Yahoo publishing network, and there are other networks like Adbrite, Azoogle, Neveblueads, among many other. Many ad networks work with the same general model but the key here is to choose carefully among them. It is easy to lose money with paid advertising.
It is crucial to keep your eye on your ROI or return of investment. Monitor your ROI from these differing advertising sources. Always optimize your advertising media. If you are using banners, swap your banners around. Figure out which banners gets the most clicks from a particular location and time. Try to customize the experience and campaigns so you only put the best working ads on the best sites. Then continue to trim your campaigns and select which of these give the best results. Devote more money on these effective ad campaigns. Kill the campaigns that did not work. This is a constant process and it isn’t done overnight. Companies outsource this to professional. When selecting among professional advertising, make sure you look at companies who has a proven track record of delivering high ROI. Get references because those competent and affordable companies are few and far between. Most are just rip-offs and are after your money so choose very carefully.
Unpaid Methods Of Generating Traffic
Unpaid sources of traffic include search engine optimization and social media/social network marketing. These sources of traffic are outgrowths of the quality content you have. You make your website search engine friendly. It is easier for search engines spiders to crawl your websites. Ultimately, what they are eating is your content so your content must be “yummy”. If your content is garbage, then there is really no reason for them or for people to visit your site. You have to invest in high quality content so that, organically, people will link to you. They will discuss you, find you important, and refer you to more people. The same dynamic applies to social media network marketing. When people around Facebook are talking about your particular product category because you have high quality product content or premium material on your website, chances are higher that they will talk more about your website. When people test you out or try you out, they would tell their friends. This word-of-mouth phenomenon is the gold standard of marketing. Once you established a certain level of credibility and authority, then more and more people will come to you and buy from you. It takes some time to get there but a lot of that can be done through high quality content. Content opens the door while quality customer service keeps them inside your store and keeps them coming back.
The Bottom Line: When Starting an E-commerce Website
Putting up an online products website or ecommerce website is not to be taken lightly. It will take a lot of time, planning, and clear thinking. The more time you spend on planning, researching, and fully testing your idea, the more likely your website will be useful. The more time, effort, and money you spend in testing your website and investing in high quality content, the higher the chance you will be successful. The ultimate key to success is building your brand. Make sure you invest in your brand, content, quality customer service, and quality products mix. When your brand gains solid gold status through the years of quality customer service experience, work and authority content invested in it, the higher the likelihood that your brand will last forever. This means you can sell your business for a nice chunk of change. You can even pass your business to your kids. The key here is to build a business that is designed to last. Think with the customer’s welfare in mind and you will never fail. Keep customers firmly in mind and your chance for success are greatly increased.
