Is the Online World For You?
Regardless of the opportunities that Amazon offers, you still need not have an online store, or publish your own book or CD and put it online. Believe it or not, even in these high-tech days, there are plenty of people who do not have their own Web site or spend all their time online. The virtual world is different than a brick-and-mortar business, and you should think about your own personal goals and interests before making a final decision on whether or not to go virtual. If you are uncertain, you can always start out small and then build up. You can sell some items that you have at home through Amazon Marketplace to get a little flavor of e-commerce and expand if you get the bug. Before you know it, you could be a virtual success.
The most important thing to remember is that running a business takes work, whether it is a traditional “offline” brick-and-mortar store or an online WebStore. Though many of the advertisers say, “Make Millions of Dollars Overnight Online,” you will have to devote consistent time and effort to your e-commerce venture. The word “consistent” is extremely important. People may say they spend 25 hours a month promoting their business and cannot understand why it is not growing as intended. They may be cramming those 25 hours into a few days of work at month’s end because they knew it was important; however, this approach may or may not work. As with any business, it is much better to devote a certain amount of hours per day.
Here are some areas that you will need to consider as you move along in your business venture. As you can see, this is a step-by-step process, as is any other project you want to successfully complete. There is one surety: The more time you spend building your business, the better the chance you have at not only succeeding, but at making a significant amount of money.
- Gaining online knowledge: This book will help you in two important ways. The first is by helping you determine the best way to work with Amazon. You will learn that you have several options, with varying tradeoffs, and be able to decide which fits your business plan. The second is by giving you the basics about online retailing and marketing. When working with Amazon, many of the usual worries about an online business, such as designing a Web site from scratch, have significantly diminished or totally disappeared. You should still know the basics about these topics, though, because they are an integral part of e-commerce.
- Getting to know the competition: You need to keep up-to-date on your competitors’ sites. How does their inventory compare to yours? Regularly read the copy on their Web sites and/or blogs, and even sign-up for their e-mails. Then, you will know what changes you need to make and in what ways you are superior to these other retailers.
- Developing a business plan: When you know what product you are going to sell, you need to set your goals and a schedule for achieving them.
- Developing a marketing plan: Your business plan will list the goals, and the marketing plan will help you achieve them. All marketing plans need to include a variety of promotional vehicles. This is especially true with online marketing, since no specific step-by-step plan exists. New ways to sell products are always being created, and you have to keep up with them. You need to get in touch with your market and let them know how you can meet their needs.
- Deciding on a name: Even more so than with a brick-and-mortar business, your domain name is important from a branding and marketing standpoint. You want a name that is short, sweet, and easy to remember. Also take note that your Web address (URL) affects your search engine ranking, so you want a name that has your product included.
- Getting your home office ready: Even if you already have a computer, is it the right one for your online needs? Do you have an office set aside with a dedicated phone, fax machine, printer, and scanner? Do you have a backup system in case your primary one goes down? Who is going to be your online service provider?
- Acquiring the product: As explained later, you will have the opportunity to either purchase or make your own products and also sell them or create a store with available product. If you plan on buying the items, you need reliable vendors and confidence that the price will remain stable and not shoot up in a few months. If you are making the products, be sure that you have a large enough inventory. You do not want to keep customers waiting.
- Sharing best practices: You do not want to reinvent the wheel, so you can always learn from the successes and mistakes of other retailers. Networking time is worth the effort spent. Over time, you can also develop ways to promote each other.
- Hiring technical professionals: Find a reliable computer consultant or firm nearby to call for an office visit if an emergency arises. As long as your system is up and running, you are golden. What happens when it crashes? You need to have someone in the wings who is on-call when needed. Remember that you always need a backup plan for long-term technology problems.
- Managing resource time: Whether you are running this business for full- or part-time income, or for a continuous revenue stream, you do not want it to take any more time than planned. Plus, you want to make the most of the time you do have available. Time management skills will help you become aware of how you use your time to organize, prioritize, and maintain your Web site.
- Finding personal support: Even if you plan on running this business yourself, you need a backup person as well. This person can review any copy written for the Web site, blogs, or e-newsletters; help out at busy times; and fill in when you are not available.
Building Your Business
Creating an online Web site store, even with the ease of Amazon, does involve some setup and ongoing maintenance time. You do not want to always have the same products for sale, and you should beef up the Web site with marked-down items and sales. In addition, people do not automatically come to your site; it takes marketing and advertising. Online marketing is different from the traditional approach; there is no tried-and-true way to promote a Web site. Even the pros say that you have to use several different types of marketing to bring buyers to your store. This will require a couple of hours a day of work and, perhaps, some money to invest for product advertising.
This is also a self-motivating business, as is any privately-owned enterprise. You have no boss but yourself to motivate you to put in the necessary hours and work. You have to motivate yourself every day, set and review your own goals, and establish and follow your own schedule. You need to like logistics and organization, have good time-management skills, enjoy detail work, and be interested in the product that you are selling and promoting. If you intend to build this up as your only source of income, remember that you will be self-employed. You will not receive benefits from your employer. You will have to follow the federal and state income tax laws and find information out about a seller’s permit, local licenses, and sales taxes. Depending on your arrangement with Amazon, you may or may not have to be concerned about billing, accounting, storing, and shipping your product. You are responsible for finding and purchasing your own product and maintaining a Web site to display it.
Many people are naturally 9-to-5 employees; others are naturally, independently business-minded. Both of these are important in the business world; you have to decide where your interests fall. Even if you intend for this to be “found money” or extra income, you will need to have the same skills and interests as someone who goes into this full-time. This preparation time includes learning some business and retail basics as well. If you have never run a business, it is important to take a course in or research various business topics, such as merchandising, accounting, and marketing. Also, study product trends; what you decide to sell is most important. It could be something you know well or are interested in, or a product that is becoming more popular with time. Be careful, though: You do not want to sell an item that is growing in sales, but does not interest you.
As always, businesses do not succeed overnight. No one just hops on the Web and makes a large amount of money. Your competition, as with brick-and-mortar stores, will continue to grow, and it will take several years to build a reputation and sizeable customer base. Finally, the biggest difference between off- and online stores: Even when you are part of many online communities, and you e-mail, blog, chat, write in forums, talk on the telephone, and even make some good online friends, you will not personally see people on a one-on-one basis every day as you do in a brick-and-mortar business. This is a people business, but a virtual people business.
A Number of Plusses for Online Business
On the other hand, the advantages to Web retailing are many. An e-commerce shopping cart gives you the opportunity to make sales without being present in person. Because it is so easy to set up your Web site design and selling features, you can put together an online store in literally minutes without having to hire an expensive design firm. All surveys report that e-commerce will continue to boom in the near future. The forecast stands between 20 to 40 percent a year, depending on the industry. The highlights of an online business include:
- A 24/7 presence online: Your store never closes. Go to work in your pajamas. Work at night after the children go to sleep. Get up early with the birds. It does not matter.
- A global reach: The world is becoming “flatter” all the time, with people everywhere on the globe interfacing on a regular basis. You never know who is going to want your product — from Louisville, Kentucky, to Nagoya, Japan.
- Different interests and tastes: Similar to the point above, you do not have to be dependent on the likes and dislikes of people in your immediate selling area. People throughout the world have many different interests.
- Reduced advertising and marketing costs: Regardless of where you sell, there will be a marketing budget. Especially if you connect with a marketing-oriented company such as Amazon, you can more cost-effectively reach a much larger pool of potential buyers specifically looking for your type of product. With paid and non-paid marketing tools such as blogs, pay-per-click, and search engine optimization (SEO) methods, you can lead targeted traffic to your site at a relatively low cost.
- Traffic measuring techniques: You can determine when visitors buy and what they buy, and also what makes them come to your Web site, stay for a while and, most importantly, come back. With market research information such as this coming in on a regular basis, you can continually update your business strategy to make necessary changes to your shopping cart, improve sales with niche markets, and update your online catalog based on the emerging data trends.
- A wealth of support information: This is available to you through the helpline at Amazon and the many different Amazon forums that range from “new sellers” to “success stories.” You can ask seasoned sellers your questions to avoid reinventing the wheel. Similarly, these are not the only forums that you can plug into. There is a myriad of information online that offers tips about selling.
The decision to sell online will depend on numerous intimate facts about your personal goals, work habits, interests, type of industry you are looking to enter, and resources available to you. The case studies in this book will also give you a better idea on how other people made this decision and some of the successes and challenges they have had along the way.
Amazon will provide you with a great deal of customer service, product, marketing, and operational support if you do decide to take the online route. However, you need to do your homework about the Internet world if you plan on starting a successful business. Just as you would a brick-and-mortar business, you need to write a business plan with a business description, product line, name, target audience, timeline, costs, marketing strategy, accounting, and taxes. You also have to do as much reading and learning about virtual selling as possible. Since it is such a fast-paced, ever-changing environment, you will want to be well-prepared before having to face a lot of the general business challenges that will come your way.
Niches are becoming increasingly important online. People are looking for specific information and products about very narrow areas of interest. To help you determine the products you will sell, you definitely have to get to know the online marketplace. In addition to checking out Web sites through Amazon and other venues, you should be reading blogs, forums, and social networks. You will find out a lot more about the people who will be buying from your site and, more importantly, about their needs. Make a list of e-commerce Web sites that you like and why. Read tips from other sellers, such as those in the case studies in this book. Other people who are selling online have a great deal to offer you, and most of them will gladly answer your questions. The forums that Amazon has will also be very helpful.
You are particularly looking for stores that customers will appreciate because of their easy-to-navigate design; combination of relevant information and product; convenience and ease of use; and competitive price. By acquainting yourself with Google® AdWordsSM, you will find out the topics and Associate Web sites that are leaders in the field.
Today’s customers are interested in making informed decisions. They do not want products just foisted on them, but rather want to look at and compare the options. They want more information on the products they buy. Selling online successfully means to provide this information and the means for the consumers to make their own decisions. Smart marketers can customize messages to different audiences. Interactive marketing, which focuses on the demographic and psychographic characteristics of the consumer, makes the connection with the potential customers much more immediate. This is why interactive marketing is seen so regularly online. It is used for prospecting new customers, customer service, creating a conversation with customers, and ongoing promotions. You store huge amounts of information, but only give each customer the desired information.
Your customers also want the information they desire when they desire it. This is another plus of interactive marketing. Companies can provide information and be available to respond to questions 24/7 to compete globally.