Selling On the Internet – Your Ecommerce Dream……. Or Nightmare!
Many people are rushing in to the internet scene thinking they will be able
to get rich or make a good living doing it. It just doesn’t happen that fast or
that easy. There are so many large companies out there that are way ahead of you
with their advertising and marketing online. They also have a very large budget
and can easily create large scale websites. You have almost lost before
starting, but don’t give up just yet you still might be able to make a little
bit of something on the side. Just don’t quit your day job.
As with any business there are start up costs, some of the costs can be
expensive, it all depends which avenue you take. If you have a large budget then
it will be easy starting out, but you might not recover the costs for quite some
time. Just be prepared for the long haul in getting revenue.
First and foremost you are going to need a website, so you need to choose a
domain name. A domain is the word phrase before the .com, .net, .org etc. Sounds
easy enough right? Well, most of the good names have already been chosen. The
good names that can bring better rankings on the search engines that are chosen,
but then that is a whole different story and article. There are still a few good
ones out there. You are probably going to choose what your store is called and
that is good also, that would be called branding. This can cost you anywhere
from $7 to $30 depending, some offers for the really cheap deals are for .info
and others, then the price will go up the next year’s registration.
Next you have to find hosting of the website. Hosting is a place to store your
data. It is like the hard drive on your computer. Your data is stored on the
servers and when someone types in your domain name which is now a website or any
of the pages while they are online the site will be delivered from the servers
to the website. It is a technical process that you don’t have to learn, but that
is the simplest way to describe it. Hosting costs have become cheaper now over
the years and you can get that for around $4 and up, this all depends on your
site size and how much bandwidth you will be using.
Ok, your are getting well started by now. Do you know how to design a website?
Most people want to do it their selves to save money. That is fine and dandy but
the programs to do so can cost quite a bit of money for making graphics and
writing the HTML (the computer language websites are written in). Not only that,
most people will make a very amateurish website and it will scare away
customers. You can however hire someone to do it for you. This can range
anywhere from $150 - $3000 and higher depending on the size of the website and
work the designer does.
Now you are probably thinking that is it right? Wrong. You have to collect the
money for the products you will be selling if you are selling products. If you
are making an affiliate site then you don’t have to worry about collecting money
for sales. You will have to find a reasonable merchant account so you can take
credit card payments. This is also part of the overhead costs for the web site
design as you will need some sort of cart system compatible with your costs.
For those using auction sites to sell their items, their start up costs and
overhead can reach into your pocket. There are always some costs with any
business. It costs money to make money!
Drop Shipping Versus Wholesale Bulk Purchasing
Now that you have your website all taken care of you need to figure out what you are going to sell. If you don’t have enough storage you are probably thinking that drop shipping will be something that you would like to do. This can cost you much more than you know. If the drop shipper isn’t the direct wholesaler you are going to be giving up a lot of your profit. We want to give you a few tips for finding the perfect drop shipper.Do some research prior to choosing a drop shipper. Look for their hidden costs, monthly fees, and their prices on products. They might not be the best deal you can find. Remember you are competing with a mass amount of websites online, some of those owners of the websites mark down products that you cannot compete with them. Another complication is that your drop shipper usually is the one making the profit not you.
We sell products online with our websites and purchase wholesale and do utilize some drop shippers. Some we don’t use or stop using once we find out how much we are paying for the products. You have to weigh is it worth purchasing the products and storing them or paying a little bit to have someone else do it. We also want to check different drop shippers to be able to relay our information to help people with their ecommerce dreams.
Here are some examples of drop shipping companies that you will not make much money with:
International Wholesale Gifts and Collectibles – IWGAC.com - IWGAC Review
They state on their website that they are a wholesaler and not a third party wholesaler. From our investigations this is not true. The do ask for a resale tax certificate, but this does not classify them as a wholesale company. It is a covering to make it look as such. IWGAC is in fact a middle man. They purchase from other wholesale companies.Here are some observations:
(049-28766) Apple Basket Canister Set of 3 – Priced at $42.11
The real wholesaler Young’s Inc has product code 28766 priced at $29.50, a difference of $12.61. You are already losing quite a bit of your profit. Is not storing a bit of product worth that to you? Young’s has a low minimum $150 first order and $100 reorder. So it is easy to carry their products.
IWGAC gives 10% off of $100, so you purchase a $100 from them you still would not make up the cost. Even for the 15% off of over $250.
For every product code with 049 in front it is a Young’s product.
These products are listed below.
IWGAC product listing049-10903 - Apple Ceramic S/P Shakers - $4.94 X 6 = $29.64049-26464 - Western Bath 3 piece set - $12.53 X 3 = $37.59 049-28766 - Apple Basket Canisters - $42.11 049-16626 - Country Apple Canisters - $47.90 049-29551 - Strawberry Basket Cookie Jar - $18.57 X 4 = $74.28 049-30730 - Seashell Cookie Jar - $22.29 X 2 = $44.58 Grand total is $276.10 - 15%(41.42) = $234.86 - Without shipping. |
Young’s the true wholesaler10903 - $3.40 X 6 = $20.4026464 - $9.50 X 3 = $28.50 28766 - $29.50 16626 - $35.45 29551 - $6.95 X 4 = $27.80 30730 - $15.00 X 2 = $30.00 The Strawberry Basket Cookie Jar was on sale at the time of their purchase - We got some when Young's had it on sale also. Grand total $171.65 - Without shipping. |
Continue reading Drop Shipping Versus Wholesale Bulk Purchasing - Your Ecommerce Nightmare.
©Stacey Pettibone 2011