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How to Start an Online Store

How I made US $20,000 last year from my online store... Plus explicit instructions on how to start your own online store with my 21-step guide to success.

February 12th, 2011 by Pete Casale


 

How to Start an Online Store

How to Start an Online Store

I launched my first online store in 2008, at the start of the so-called global recession. My goal was to import branded Mixed Martial Arts clothing and equipment from the USA and sell it to online customers where I live in New Zealand. It was a simple enough concept, and it exploited a major gap in the market for branded clothing in a sport that is right on the tipping point here.

The launch of the store cost about US $12,000 all up. I saved some start-up costs by doing the website design and development myself, but there was no getting away from the purchase of physical goods. I had to stock my store with t-shirts, hoodies, shorts and other gear from scratch.

After taking such a risk with my own money, I was pleased to see the store paying off almost immediately. I kept my overheads low because, after all, an online store doesn't require any physical retail space, nor the need to pay staff other than for the shipping and handling of orders. And by arranging wholesale accounts with my suppliers, I still made a good margin on each sale while giving my customers great prices.

After 14 months, I broke even and by that time the store was generating a lot of cash on autopilot, with several orders coming in every day. Today, this highly streamlined business competes with a basic 9-5 wage and that's with limited input on my part. I am now also the owner of a considerable asset: a business that generates US$20,000 annual profit and around US$20,000 in stock, which would give it a very modest valuation of US$100,000. You can check out my online at MMA Gear if you want to take a closer look. It's ok, go have a look now. I'll be here when you get back.

 

Is an Online Store a Viable Business Idea?

So, is an online store a viable business concept? Yep, I'd say so. Of course it depends on your product and your route to market, but there are seemingly limitless possibilities to explore. That's what this 21-step guide aims to do; give you the information you need to assess and control the risks of your particular niche and get started at minimum expense.

MMA Gear was my first attempt at creating an online store and I made plenty of mistakes along the way. Some of them were very expensive mistakes. I learned how to do it all firsthand - from the storefront design, to dealing with wholesalers, to promoting at sports events. I had no guide to light my way and sometimes I ended up learning some tough lessons.

This is the guide I wish I had back in 2008. It's a comprehensive, step-by-step guide that you can apply to your own business. It's quite a long article at 6,500 words, and that's because I don't want to skimp on the important details that could save you thousands of dollars - or even make or break your business. I also figured that if you're serious about starting an online store, you'd take the time to read this through.

I'm going to tell you exactly you need to do - and exactly what NOT to do - in order to drive the success of your online store. I know my strategy works because I tried and tested it myself. This article contains all the secrets I know about creating an online store that is both streamlined and profitable, and building a better lifestyle for yourself as a result.

 

The 21 Steps to Online Success

Here is a quick glance at the 21 steps to starting an online store. If you want to break it down further, consider steps 1-10 as phase one (READY), steps 11-15 as phase two (AIM) and steps 16-21 as phase three (FIRE).

  1. Choose your product
  2. Calculate viability
  3. Assess the competition
  4. Unique Selling Points
  5. Re-check viability
  6. Keyword research
  7. The company name
  8. Register your domain name
  9. Set up a separate bank account
  10. Create a budget
  11. Create your branding
  12. Choose a website platform
  13. Select the product range
  14. Establish a supply line
  15. Re-check viability
  16. Online promotion
  17. Offline promotion
  18. Friends and associates
  19. Contra-deals
  20. Affiliate partners
  21. Sharpen your pencil


How to Start an Online Store

Without further ado let's get down to the nitty gritty. Grab a pen and paper and make notes as you go that are specific to your business niche. The more planning you make at this stage may save you from doubling up on work later just because you didn't think it through to start with...

 

1. Choose your product

This is a critical stage so consider your options carefully. The best kind of product for an online store is:

  • Not widely available (less competition)
  • Something you are interested in (keeps you motivated)
  • Something you already know about (minimizes research)
  • Unlikely to go out of fashion (at least in the next 10 years)

 

2. Calculate viability

Viability is a measure of how likely your business is to succeed, despite all the risk factors. Here are a number of factors worth considering before you make your investment.

  • Setup costs - How much money do you think you'll need to spend to get this online business running? If you're selling digital products like e-books or MP3 downloads, the cost of stocking your store is considerably less than if you're selling tangible products like designer watches or novelty t-shirts. Figure out how much cash you have to invest in the total setup costs: stock, web design and development, advertising, accounting, travel expenses, office supplies, etc. If you have to borrow money to start your business, remember to include interest and loan repayments in your ongoing costs. I'm not a fan of debt and I shy away from any business model that requires significant loans - and you should too. It's high risk and when you have so many business models to choose from, why expose yourself? I don't want greedy bankers taking half my profit anyway.

  • Setup time - How many hours will it take to set up? For every hour you spend on setting up this business, it's one hour less you could be spending on setting up a different business or enjoying some free time. For instance, it's not worth spending 100 hours setting up a business that makes $10 per week profit - is it?

  • Ongoing costs - How much is it going to cost to run this online store? Are there any overheads? Because it's an online store, your costs won't be as high as an offline retail space. However you will have web hosting, online advertising, handling and customer support to consider. Also remember the cost of increasing your stock levels periodically and building a broader product base.

  • Ongoing run time - How many hours a week will it take to run this business smoothly? Is it worth it? This will play an important role if and when it comes to selling your business, as the new owner will want to purchase a business that is productive and cash flow positive. Of course, in the early days of setting up your store, you will spend more time and money getting those initial customers through the door. However, once established, the day-to-day operations of your business should make it profitable after taking into account all the hours you have put into it. Think about it.

  • Profitability - What is a realistic revenue (sales) figure you can achieve within your first three months? Now halve that number. Would that be enough to pay for your personal run time and still make a profit for the company? In reality, many offline businesses aren't profitable in the first 3-5 years, but your online store is a highly streamlined passive income business. You can expect to see positive numbers sooner than a traditional offline retailer.

  • Demand and demographic - How much demand is there for your product among your target demographic? If your product is only good for barefoot horseback riders located in Tasmania, then the premise is limited. Likewise, ensure your target audience are keen online shoppers - targeting mainly retirees may not be as lucrative as young and middle-aged people who are more likely to be familiar with the internet and online shopping lore.

  • Miscellaneous risks - As with every type of new business, there are some inherent risks. Analyze the path of your online store and see where it's going, taking into account the following risks plus any others you think may apply. Try to cover every eventuality.

    1. Is your product currently in fashion, on the tipping point, or at risk of suddenly becoming obsolete?

    2. Are there any barriers to entry hindering new competitors from offering the exact same product, only cheaper?

    3. How easily could your competitors adapt to your USP? (See #4)

    4. How radical or original is your business model?

    5. How will foreign exchange fluctuations affect your margins?

    6. Are there any unforeseen shipping, import fees or taxes?


3. Assess the competition

Even the most wonderful online store in the world can struggle if the competition is well-established. For example, where do you go to buy books online? For most people, Amazon is always going to be the answer, largely because they have decent prices, established customers logins, fast shipping, and an easy interface.

If you can offer lower prices, better service and have millions of dollars to spend on marketing your brand, then you may have a chance. But since you probably don't have the cash to compete with Amazon, I recommend you choose a different type of online store instead. The lesson here: don't imitate or compete with large, established brands unless they fall into a completely different demographic (which is rare).

 

4. Unique Selling Points (USPs)

Unique Selling Points are everything. The more USPs you have, the better USPs you have, the better chances your online store has. But what the heck is a unique selling point?

It's something that your store offers specifically that others do not. For example, MMA Gear is the only online distributor of MMA branded clothing in the whole of New Zealand. That's a big one. It also kicks the ass of offline distributors; there are a few sports shops that stock some brands, but there is nothing as extensive as our range of clothes and cut-price training equipment. We also offer the best prices and fast shipping.

To be competitive, it's good to be able to offer the lowest prices and the largest selection. However, this isn't always possible, in which case you must focus on other USPs that can boost your business. For instance,by offering many products within a particular industry, you become a "one-stop-shop" which helps people save money on shipping costs from several different online stores.

 

5. Re-check viability

Once you've established all possible USPs and had a good look at your competition, you'll have a better idea of your risk factors. It's a good idea to re-check your viability at this stage. You can do this by plugging all the principles mentioned in Step 2 into my Online Store Viability Calculator. I spent a lot of time creating and fine-tuning this formula which you can download as an Excel document here.

It works by simply entering certain values and makes weighted adjustments according to the importance of each value relative to other significant values. In a nutshell, it calculates the viability of your business idea and gives you a score between -20 and 20, with zero being a neutral value.
If your calculated score is in the negative, you will have a challenge ahead of you. If your score is less than -10, I recommend you seriously re-think your business plan. If your score is in the positive realm, then I think you have a good chance of making your online business work.

 

6. Keyword research

Use the free Google Keyword tool to find out what people are searching for on the world's number one search engine. Try typing in all possible synonyms for your product, including colloquial names and slang. The objective is to find the most widely-used search term and hone in on that phrase for your Search Engine Optimization.

 

7. The company name

When you've found your perfect keyword, combine it with something unique to form your domain name - for example if you're selling watches you might decide on Wild Watches or Watch City. If you can combine your top keyword with a secondary keyword, all the better, but don't do it at the expense of style or catchiness. For example, Digital Watch World is good but Online Digital Watch Warehouse is too wordy. In general, a shorter name lends itself to product placement better. Ultimately, your company name should become the synonymous term for your product - the same way some people say Hoover or eBay instead of vacuum cleaner or online auction. Before you settle on your company name, check the domain name availability (Step 8 below) as this is obviously essential for an online store.

 

8. Register your domain name

A critical step in your online shop is to get a good domain name. Your domain name should be the same as your company name or reasonably similar. If your choice is unavailable, go back to the drawing board and choose a different company name. Here are some tips on choosing a good domain name:

  • Use hyphens into your domain name to separate words. For example, if wildwatches.com is unavailable, you could add a hyphen to form wild-watches.com. Although this is not ideal if you have an established competitor at the hyphen-free domain name, and you may even be illegally infringing on their trademark.

  • Also with hyphenated domain names, this can prevent false positives or reading difficulty. Therapistfinder.com, anyone?

  • Your domain extension should be relevant to the country you trade in, such as wildwatches.co.uk or wildwatches.com.au. If you trade internationally, or trade digital products that do not require shipping, aim for the .com or .net domain.

  • Avoid misspellings, such as wyldwatchez.com. Nobody is going to be searching Google for a misspelled word.

For more information on narrowing down your domain name choices, read Becky's article on How to Choose The Best Domain Name.

This is also a good time to formally register your company name with the companies registrar and the Inland Revenue.

 

9. Set up a separate bank account

Trading via your personal bank account is cheaper than getting a business account, but it is a lot messier for your accountant. Besides, after you start shifting a fair amount of money, your bank will start to badger you about changing to a business account.

I laughed at my business banking manager when he suggested it to me over the phone. I told him I'm not open to spending any more than $0 in bank fees, but if he had a better offer for me, he could email it. It's none of your bank's goddamn business what you use your various accounts for. If they don't like it, tell them you'll change to a different bank - then do it.

However, since you need a separate account to keep your accountant sane (especially if you run multiple online businesses like we do) I recommend getting a secondary "trading as" account attached to your personal account, accessible within the same online banking login.

 

10. Create a budget

You may not have much money to spend on starting your online store - but don't let that stop you. Depending on what you sell, it is probably best to just start out small and build up.

If your online store requires you to hold stock, then you need to have a decent range so that customers won't be put off by the lack of selection. However, the more stock you need up front, the higher your risk. So you'll need to weigh up your initial expenditure against the strength of your competitors. If you cannot afford to offer a competitive amount of stock, you need to attack from another angle.

Maybe you can stock more of a particular brand than your competitors? Maybe you can focus on a more specialized selection of products? For example, stock only premium-quality brands and their top products, or a selection of highly recommended products with some well-written reviews.

Then there's the cost of website development, online and offline promotion, advertising and eventual staff costs. If you can't design your own website, either find a reliable user-friendly platform like Site Build It or WordPress, or commission a web designer and some lessons in HTML editors (the latter will cost a few thousand dollars but will give you considerable freedom long term). You'll also need to budget for your ongoing costs. You may intend to work for free yourself, which is fine (and recommended) at first. However, when it comes to selling the business, it will be severely devalued if it requires an unpaid full-time staff member.

With all these things taken into account, you need to draw up a budget and issue each factor a specific amount to spend.

Finally, once you've established a set budget for your online store, you'll be delighted to hear that Phase One is complete!

 

11. Create your branding

Your brand is everything. Essentially, you are limited by the quality of your graphic design. You are not going to be top of the pile when your website looks like a child spilled it on the carpet.

Think about it from your customers' perspective: if you go to a website to buy something, what goes on in your head? If your first thought upon entering the site is "this looks like some guy just made this website himself" then how seriously are you going to take that company? How safe will you feel giving them your credit card details?

If you cannot create a good logo and brand design for yourself, you'll need to hire a graphic designer to do it for you. Often this can be combined with the website development, if you need that as well.

However, beauty is in the eye of the beholder! You may be able to make yourself a nice-looking logo, but then again you may not be the best judge of that. Ask any parent if their child is beautiful and they will always say yes. That doesn't mean that the child is beautiful. For an unbiased opinion, ask your friends for their opinions, and tell them not to pull their punches.


Online Store Tip: How to Design Your Logo

 

On the other hand, if you can design your own logo and do a decent job, go for it! The way to start is by just getting a piece of paper and writing your company name. Then write it again in all capitals. Then try widening it out, increasing the space between letters, making the font thinner or thicker, narrower and taller or shorter and wider. Experiment!

Draw some sort of image that could go well with the company name. Don't go for something that is only significant to you, choose an image that people will associate with the wording of your company. In my case, I used the images of cogs behind the words MMA GEAR. Although this is a play on the two meanings of the word "gear", I liked the industrial feel it gave to the label. Emphasize the feeling you want the logo to convey.

Do lots of different ideas until you have a solid page of various concepts. Choose one you like and ask a few other people which ones they like. Then take those concepts and develop them until they really get a nice feel to them.

Once you've got a black-and-white concept you're happy with, then start experimenting with colors for your logo. Don't use too many different colors, I recommend either using two colors or using black/dark gray with one color. And don't just pick blue because you like blue, everyone likes blue and everyone wants a blue logo. Stand out from the crowd and be different.

 

Step 12: Choose your website platform

Choosing the right website platform for your online store is clearly an important step. I recommend using a free shopping cart program such as Zencart or OsCommerce - but only if you are comfortable modifying it yourself, so that the end result still looks professional.

As per the graphic design phase, you may have to hire someone to integrate your branding into the website design. Especially if you lack the time to figure out how to do it yourself. Often the job of modifying your e-commerce software can be done by the same people who do your graphic design. This is service I offer via my web design company Cre8ve Media.

If you want to pay for a low-budget do-it-yourself e-commerce package, there are several good options out there. Shopify allows you to easily create and run a secure, customized store from $29/month.

 

Step 13: Select the product range

Your product range should be large enough to be attractive to your customers, so balance this with your costs. I highly recommend finding out what sells the best and mainly stocking top-selling items. Most brand manufacturers will advise you on their top-selling products, and Google Keyword Tool can help you find out what people are searching for directly.

If you have a large product range, you shouldn't invest in too much spare stock. This is because you won't know what will sell and what won't. I still have a few t-shirts that I bought when MMA Gear first started up that nobody has ever bought. Watch out for that.

Depending on what you sell, you may want to include some supplements for your products so that you have more of a one-stop-shop. Originally, my online store only sold Mixed Martial Arts clothing, and many customers looked elsewhere for sparring gloves and safety equipment. Then I noticed that a major safety equipment retailer had started to offer training shorts, which was one of our main product lines. And I realized that by sending my customers away to get their gloves, I was then giving my competitor the opportunity to take some of my shorts sales. So I decided to start selling all the gloves and safety equipment required for mixed martial arts training. This helped me retain more customers, keeping them away from the competition and increasing the average order value.

 

Step 14: Establish a supply line

Are you making the goods yourself? If so, figure out exactly how long each product takes to make and charge accordingly.

In the most likely case, you'll be sourcing your goods from a manufacturer or wholesaler. You would think that all wholesalers are easy to deal with, because they are interested in getting their products sold. Not so! I've had the displeasure of dealing with some very lazy wholesalers and manufacturers who couldn't care less about setting up a new account with a fledgling retailer like myself. In the end I found it was best to phone the person in charge and establish a supply line directly.

Ask them to calculate exactly how much shipping will cost, and how long an order will take to arrive. Expect mistakes and delays, especially when importing from far-flung countries. Also take into account the cost of importing and duty taxes if the product is being imported from overseas. Later on, you may be able to consolidate your shipping, especially if you are ordering from different suppliers in the same country.

 

Step 15: Re-check viability

Go back to your viability calculator and adjust your figures one last time. Now that you have investigated everything, you will have a better idea about the time and costs involved of your online store.

If everything still look good, go for it! Go, build your website, set up your store, and make your first wholesale order. It is time.

Online Store Tip: Logic Attracts, Emotion Sells

 

People are initially attracted to good deals or logical reasons to buy (such as special discounts or free shipping). When they receive a great service and have a positive shopping experience, a positive emotional link is formed. This is what tips them from a browser to a buyer, from a buyer to a return customer, from a returning customer to a regular customer.

 

Ready... Aim... FIRE!

Now you have a functioning online store. Functioning in theory, because you've probably not yet made any sales on it. And if you sit there waiting for those sales to happen, you might be sitting there for a long time.

When I set up my online store, I waited a week and nobody visited. Then one day, I saw one person had visited my site, made an order, then abandoned that order at checkout. I waited for them to come back, but they never did.

I assumed this was because my store wasn't good enough. I wasn't sure exactly how, so I went over everything to find out why my only potential customer got away. I thought the prices might be too high, so I reduced the shipping costs. I even emailed that customer and told them our costs were since reduced, but I never heard back. It was a dark time!

Since then, I've learned that there was nothing wrong with my store itself. The store was fine, it just had no reputation and no traffic. Luckily, I learned a lot about generating traffic and creating a reputation. I still remember celebrating my first ever sale with a night of hermaphroditic escorts and A-class drugs (just kidding, I think it was a delicious bakery lunch). I also remember celebrating my 100th sale, my 250th sale, my 1,000th sale. As ridiculous as those celebrations were, they never would have happened if I hadn't done the following promotions.

 

Step 16: Online promotion

Since you're running an online store, your biggest route to market will be various forms of online promotion. Start with the free methods like a Facebook Page and Twitter account, then move onto paid methods of lead generation, such as Google AdWords and Yahoo Search Marketing.

Facebook is a fantastic way to promote your store online, so make sure you read Becky's excellent article called How to Promote your Business on Facebook - which has since been published by SiteSell, one of the world's leading educational resources in online business.

Here are some more important tips for online promotion:

  • Set up a Google Adwords campaign that is both targeted and affordable. Once it proves to be efficient, replicate the campaign on Yahoo Search Marketing and Facebook Ads.

  • Use Google Analytics to track and monitor where your traffic is coming from and how successful your campaigns are.

  • Become a regular poster on popular forums in your niche. If there are no suitable forums, that's even better! Create your own forum as part of your website (there are both free and paid versions of forum software available). Forums are a great way of getting yourself known to enthusiasts of the industry. I don't recommend spamming any forum with pure advertisements - but do put a tasteful link in your signature and making regular, useful, well-written posts.

  • Make useful comments on other Facebook Pages related to your niche. As an experiment, I also set up an MMA Gear page as a human Facebook profile, which allows it to be tagged in photos of MMA fighters and events. This is great for getting more, unintrusive exposure for free.

  • Build lots of incoming links to your website. This is really important. Having lots of incoming links to your website is a good way to improve your "popularity" rank with Google, and this will boost your search engine ranking. First of all, submit your website to free web directories with a Page Rank of 3 or higher - Strongest Links is a great place to start. Then research other websites in your niche (avoiding direct competitors) and encourage their website owners to link to your site, especially if they already have a good reputation. This is an ongoing task that forms an important part of your website's success, so don't forget about it!

  • From time to time, web directories will contact you with an unsolicited approach to sell you a paid directory listing. Ignore it. Paid listings are going extinct - they are a waste of money. Nobody goes to a paid directory, or even a free one for that matter. The only reason you would want to be listed in a directory is for the Page Rank bonus - and you can get this elsewhere for free.


Step 17: Offline promotion

Product placement is a wonderful thing, except when you see it in movies and it gets in the way of the plot. If your industry has well-known figures, athletes or celebrities, it is in your interest if they are wearing, using, displaying or endorsing your product.

For MMA Gear, I gave a bunch of gear and tee shirts with our logo on them to various MMA athletes. It has worked really, really well. I believe that everything I give to our sponsored fighters pays for itself in no time at all.

Sponsoring is not always as expensive as you might expect. If a celebrity or well-known figure is given some of your products for free, they will most likely wear them. This is most beneficial when your shop is the only one that sells those products. Otherwise, just get your logo printed on the products before you give them to the celebrity.

Another form of product placement is to make some nice-looking t-shirts with your logo on them, and give them to all your friends and family. As long as the shirt looks good, they will thank you for it.

Now think of a nice t-shirt you've had in the past, and how often you wore it in public. How many people saw you over the life span of that tee shirt? Hundreds? Thousands? Now multiply that number by the number of people you'll give your logo-emblazoned t-shirt. Then you'll start to see the value of getting a few dozen t-shirts made. I recommend it.

Get a bunch of car window stickers printed with your logo on it, and send one sticker with every order you sell. Car stickers are great exposure - but only if people actually use them, so it has to look good. These tricks really emphasize how important it is to have attractive branding.

Now, you may wonder why I've not mentioned radio, newspaper or television advertising. This is because in my experience, these media are not good value for money, not when you're just starting up. I am only interested in advertising streams that pay for themselves in very little time. Paying for a radio advertisement may give you a few thousand people hearing your brand name, but most of those people will forget about it the instant that advert has finished. Neither magazine advertising, newspaper, nor television ads make sense for a budget start-up business. Don't even think about flyer drops or mass brochure posting, as they are impersonal and have a low success rate. It just isn't worth it.

Finally, try including a 10% discount card in each shipment. This gives customers an extra incentive to shop with you again, generating repeat income and taking them one step further away from your competitors.

 

Step 18: Friends and associates

It's time to call in any favors your friends owe you. Contact each of your friends individually (not a mass text message or email) and ask them if they wouldn't mind helping promote your new business.

They can do this by posting your online store link on their Facebook wall, wearing your nice-looking t-shirt, putting your sticker on their car, and generally spending a few precious minutes of their lives telling other people about your store if the subject comes up. Tell them that if you make a million dollars you'll buy them a small lump of coal as a token of your appreciation and friendship.

Why not send a mass text message or email to all your friends? HAY GUYZ HELP ME OUT PLZ POST MA SHOP ON UR WALL LOL SMILEY FACE!

It is simple psychology. If you don't take the time to ask me individually, I am not subject to any time debt on your part, therefore I have no perceived time debt owed to you. I have been included in a mass communication, which I can easily ignore and I won't feel bad about not helping you. Even though you're my friend, no direct attention has been focused on me, therefore I do not feel prompted to act.

It's the same in an emergency. If you are giving an injured person resuscitation, you can't shout to the gathered crowd "someone call an ambulance!" Nobody will do it. Everyone will expect someone else to do it. Instead, during first aid training you are told to single out a random person and tell them directly to call the ambulance and let you know when they've done it. The same principle applies to asking your friends to help you promote your business: give a direct instruction.

 

Step 19: Contra-deals

What do you sell? What else do your customers also need, that you do not supply? Instead of letting my customers find their own supplier of these supplementary products and services, potentially wandering into the hands of my competitors, I can guide them into the hands of my friendly cohorts.

Arranging contra-deals with stores that do not pose a direct threat is a win-win situation. A contra-deal means that I direct my customers to their store, and they direct their customers to mine. Since we both offer different but complementary products and/or services, we can both keep our customers out of the hands of our respective competitors.

I find that the customer has to be offered an incentive to go to our contra partner, such as a 10% discount or free shipping. The latter works quite nicely, because the customer feels they are getting something for free.

 

Step 20: Affiliate partners

Affiliate partners are those who send warm customers to your store, and in return gain a commission on anything they subsequently purchase.

This works really well if you are selling digital products priced around $20 or more, where the affiliate snags a 50% commission. You can significantly extend your reach and make way more sales, for no extra effort. Becky uses affiliate partners to sell her digital course via her website, which all adds to her passive income stream, being a digital download.

It costs US$50 to set up a ClickBank reseller account which enables you to get your products in a huge online marketplace, where affiliates go to find new partners. You can set your product price and commission rate, so you can be as stingy as you like, although you will gain more affiliates by being more generous. Digital product commissions are usually 50-75%, while hard goods yield lower commissions of 5-20% due to higher fulfillment costs.

This idea works both ways. For instance, I have an affiliate link to a betting website, so that my customers can bet on major MMA events. Every time I send a customer who makes a bet, I get a small commission. This adds an additional passive income source to my online store. Just as long as I target complementary affiliates and not direct competitors.

 

Step 21: Sharpen your pencil

The final step is to fine tune your online store. Once your business starts to generate regular income, you may want to hire a part-time staff member to deal with all the customer queries, order processing and shipping. I pay a work-at-home-mom to do this on a per-sale basis, which works great. It suits her because she can complete her work whenever she has a suitable gap in the day and the more work she gets, the more she gets paid. It suits me because I no longer have to do all that work myself, and I can concentrate on the big picture stuff as well as my other businesses.

Special deals are great every now and then, and these keep your online store fresh and interesting. For instance, occasionally I'll buy an extra thousand dollars worth of goods to give away in special deals. I capitalize on the deal by offering it to a media source as a promotion, which creates free advertising while giving them a positive interaction with their readers / listeners / viewers.

Lastly, once you've drawn a line under your start-up costs, try not to spend more than what you've made, thereby keeping your business in the black. This will be tough at first but once your business gains momentum it will be easier to manage your cash flow. If you repeatedly have to put your personal money into the business, you have a liability not an asset. This matters when it comes to selling your business, as nobody wants to buy a business that costs more to run than it makes.

 

Final Thoughts

Whew! That concludes my 21-step guide to starting an online store. Reading it back now, I would have been so much better off if I had something like this to guide me when I first started my online store. I certainly learned from my own mistakes, and now I hope other people can learn from them too! Rest assured, you'll make your own mistakes, that's the nature of the beast, but hopefully nothing that will bring your business down. I hope this guide makes a real practical difference to starting your online store - and if it does, please let me know about it!

 


 

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