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For the past six months I’ve been diving into Internet business models and there is one approach that seems to stand out because it actually works: Acting like your product is worth buying. Whatever you’re selling – whether it be a product for downloading, an SMS or text message service, or something like a blog where you’re selling ad-space – treat it like gold. There are two big things that can help, especially in the world of online businesses.

Sell something, even if it is just you. One trick to making sure your product looks worthwhile is tacking a $, €, and a £ somewhere obvious on your homepage.  You want a number up front and you want it strong. If you aren’t selling something directly to your viewers – as in you sell ads – it still gives viewers, including those advertisers, an idea of how much you value your own product. There is a large difference between $6 and $69, and even if it is not in the front of their mind, it makes a big difference to a viewer.

One of the hardest places to sell your product is one of the most important places to sell it, the press. On a “Contact” or “About” section, a company should have press links – mentions from established bloggers, news services, print media and online media. When a company hits any milestone, it should put out a press statement, even if it is only to services like PRNewswire. Put out a press release and someone will pick it up, wait a week and Google yourself, and then link to that article. Getting a company and product’s name out there is honestly not that hard, it just takes patience and you have to jump off that initial cliff.

Finding a Wholesaler/Distributor is a fairly simple process although many find this part most difficult. Nine times out of ten you are going to need to call the wholesaler as many of the decent suppliers of a product you’re interested in will not accept emails etc…

With “WebKinz” I decided to use trusty Google and managed to find a distributor in 10 seconds, I then phoned them to be given my area manager. I did the following:

“product keyword” + wholesaler
“product keyword” + distributor

That’s it.

Another very good but it is the longer, harder route (this is what people hate doing) Trade Shows. These shows are a place where you can find the vendors/suppliers you need to work with.

Just search on Google again for Trade Shows that match your business idea. There will, more then likely be a yearly trade show for your product/idea within your area. Some you have to pay for and others are free, you can turn up and speak to so many suppliers/distributors you’ll be spoilt for choice.

So with that part taken care of we now need to study our Competition. First, Basic research with some product keywords (brand name to start) I am going this to be doing this manually and not using any tools/software. So, I would just go to Google and type in “webkinz” don’t make this too complicated and just aim to beat the websites that are on the first page. We want to analyze why they’re there and what we can do to compete with them and improve on our business model to beat them.

I decided to choose three sites from the first page on Google for our brand name keyword:

Actually, some are irrelevant as they are information based sites like “Wikipedia” so I missed them out and choose actual eCommerce based websites selling the product.

1. www.webkinz.com/ -
2. www.hamleys.com/icat/webkinz -
3. www.ukwebkinz.co.uk/ -

One other website which was interesting that I might talk about in detail later seemed to be run by an Affiliate Marketer, niche site builder. I could tell this because of the Amazon and Google Adsense ads splattered all over it. So armed with the sites selling our product, we now need to Analyze the Business Model of the sites I have chosen - Keyword Search, Search Engine Optimisation, Internet Marketing, Site Age etc…

How many people are searching for your product, well, lets choose the brand name to start with and although very broad you should always aim to eventually rank well organically for your main product keyword. To give me a basis to go on I’m going to use WordTracker the results for this product are outstanding just for this one keyword. Enough to give me even more reason to open a store based around this very sort after product.

I would suggest you Invest in a paid for keyword service though, this will help you identify, organise and optimise your site for at least the top ten searched for keywords used by consumers online.

(I will update this part with some of the Tools I use soon)

I’m going to Analyze the site - http://www.ukwebkinz.co.uk/ -

Quick look at the age of the domain brings up “16-may-2007″ this is great news as they have managed to rank well for their main brand name keyword within a year and in Search Engine Optimisation terms is great going. They could optimise their “Title Tag” much better as at the moment they have “UK Webkinz - Online webstore” nothing terrible with it but it could use stronger keyphrases in the title to possibly rank even better. This would also encourage more clicks/visits to their site.

A better title would be “WebKinz Stuffed Animals and WebKinz Codes at UkWebKinz.co.uk”.

Keywords are important as well and I would take some ideas from what they have on their’s. Oh, on looking they don’t seem to have any other TAGS in their code so this is not fully SEO optimised. They would benefit from an informative Description TAG and a Keyword TAG. Outlined below is how I would set-up an index homepage.

That is a solid structure to use on all your product pages. When we get to the section of using a CMS “Content Management System” we will discuss having a unique “Title Tag” for every product and changing the keywords to match the product on the page. This is very important for SEO and will improve your organic product search results.

Another important factor in your Search Engine Optimisation is incoming links as this shows popularity of the site and is one of the many things Google uses to rank your site for any given keyword(s). They have 4 backlinks to their site which could be very wrong based on using this BackLinkChecker. If it’s that’s a great sign for us.

Very simply you would now need to build up your backlinks using a paid for service or do this or by contacting other related sites within your market asking for a link back to your site.

In 2008 this doesn’t work well so now online entrepreneurs are using Directories by submitting their site to them to build up links to their website. Another way is to purchase web links, known as Text Links which a really frowned upon - with Google anyway.

Read more about whether you should still use the paid for Text Link Ads model in your marketing efforts.

In our next update we will continue with our Competition Analysis and then move onto Choosing the right eCommerce Platform that suits your business model.

So to recap from yesterdays Post - Revealed: “Build Sites that Make Money” eCommerce Store - I now need to find out more about the products people are buying from the categories and keywords I selected.

First off “star wars” this is a no brainer in this category but very saturated as like DVDs its just simple, everyone loves it, so why not sell it? Not to say we couldn’t go into this market as we could easily. Keep your options open for now.

Very quickly I see something interesting after having a quick search about. I took a big liking to “WebKinz” now I have no idea what they are or how popular they are as a product, but after about three minutes I can see why they sell.

WebKinz are very collectable it seems (remember beanie babies?) I was suprised to see they’ve been around since 2005 (you can tell I don’t have kids yet) as I would have said they were a fad and fads are good for so long - this may or may not be a long term eCommerce Store but it is definately a popular product that is selling in droves right now. According to NPD Group the product brought in more than $45 million (USD) in United States retail sales in 2006. That makes me smile a bit more!

So, I can see many eBayers are selling them, up to and over 30 items a day on the US eBay! Retail price seems to be at approximately $4.99 depends on the popularity of the toy. Just as a guess I would say a realistic mark up would be between $2.50 and $6.00 which are low margins especially for eBayers (with all the fees) with your own store you’ll have less overheads but also have to take into consideration less traffic to start with. This tells me this business is going to be a low margin high turnover product. I have been involved in this type of business model before so I understand the need for good traffic before I see any decent sales.

The High margin, low turnover model is slighty easier as you would require less amounts of traffic to make possibly the same profits.

I know that if I can get hold of a wholesaler I can charge more than ebayers do, why is this? because eBayer buyers go to eBay with a certain mind set (they want a bargain) its been driven into them. That was eBays USP or maybe it was when they started, come to eBay for a bargain like a car boot sale.

Visitors to eBay are savvy enough (just) to know its not a real company they’re dealing with (there are also large reputable companies trading on eBay now) and buying a product from, it’s me and you the normal everyday Joe. It’s worth noting, that even though they will probably get a far better service from an eBay Seller, they will still expect the same product, service, gaurantee etc…but at a much cheaper price. It’s this ignorance that makes many eBay Sellers struggle to be successful on eBay.

This is because eBays business model was started from one mans idea of selling your old stuff and making some money in the process P2P. Then the Auction format was born, which suited this model. Once they introduced BUYITNOW (new goods) it started a frenzy of Retailers and savvy eBayers sellers jumping on board and buying stock in brand new to resell to this hungry, bargain hunter traffic. The one thing that never changed was the eBay Buyers mind set, and that was and still is I’M GOING TO EBAY FOR A BARGAIN!
We don’t want bargain hunters, we want serious buyers!

I’ve been involved with many eBay buyers and sold over $40k worth monthly so I do understand the eBay buyers mind set.

To Our Advantage:

So while some of your competition struggles on eBay we use it to our advantage to scope the market, see how much is selling, copy the model and build our very own store. I promise you will have a different sort of consumer who visits your store usually from one of the search engines.

Their thought process is so different, which makes it easier to sell to them and provide better customer service. Even though we are going to sell the same product (or service) to them, we will make more money and be trusted much more as an eCommerce Store Owner. Ironcially even if I was the same person who ran an eBay Store with the same product.

Ok, there is one thing we will have to pay for to start with, “Traffic” - organic listings and other forms of Marketing, SEO etc, will kick in later. Obviously eBay has this in abundance but you do pay for it. I hear eBay fees are getting higher and higher and possibly this does not reflect the traffic levels they are giving to their eBay Sellers?

Anyway, so far I have been able to indentify a sort after product, highlight its popularity and approximate its sales. I now need to find a wholesaler, understand its consumers, when they buy, what the HOT sellers are and what postage price would be considered as a fair one.

Finding a good wholesaler/distributor could be the hardest part in setting up your eCommerce business so, this should be set out as the most important task you finalise before actually building your store.

In the next installment we will look at Finding a Distributor then our Search Engine Competition, Competitors Website Analysis and how many people are searching for the product (daily/monthly) and more.

In this three of four part series (not sure yet) I am going to reveal how to build a Successful eCommerce Store. I was involved in setting up a very successful eCommerce store in 2003 to 2006 and now that store turns over more than $10 Million per year and is only four years old. (I am no longer a part of the company)

The positive thing about creating your own eCommerce store is that the oportunity to make lots of money is still very much there. In all markets most Stores are ignorant to their oportunity to make lots of money. In terms of their effectiveness, most eCommerce Stores are a complete waste of time.

Seriously, there are so many badly designed, badly structured, badly coded, badly optimised (if at all) eCommerce Stores that this means there is so much room for improvement. You could choose any MarketPlace and still go after the Leader in the competition and make a killing using the correct Procedure.

The wealth of tools available to Internet Entrepreneurs in 2008 are stagering and will make it even easier to compete and take the top spot away from the Top Dogs in any online market. You don’t even have to have much if any knowledge about your chosen market because you can get hold this easily and I am going to walk you through this later in the series.

So, where do you start, what do you sell? and who are going to be your consumers?

Ths online demographic has changed so much in the last few years that its not online geeks and single men that are opening up those fat wallets to spend online. Great news for us. Forrester Research stated back in 2006 that 50% of online shoppers are now females, this opens up pretty much any market you choose to sell too. Talk about spoilt for choice.

Where do you Start?

As mentioned before the tools availabe to us are almost laughable, I laugh because of how much information I can find out about my marketplace and my competitors I almost feel sorry for them! Just imagine trying to do this in the offline world…It would take forever to find out this type of inforamtion about your soon to be competitors. Now this isn’t the only key to becoming successful you need a few more key ingredients.

This statement is the most overlooked part of what I would say many online store owners fail to achieve - “Customers First, Money Second“. Remember that because I promise you if you get all else a little wrong at first you will beat your competition by Adhering to that Statement. It amazes me how manyt businesses mess this simple task up. Treat them like gold dust. I come from a customer service background and I used to thrive on it so I understand how important this is to any business. If you do not have nay form or customer service experience eithier go and get some by getting a job in the real offline world or seek advice from a customer service agent or employee a top class customer service representitive. It’s the single most best advice I can give you.

Similar to how I think about this blog in that it’s “Visitors First, Content, Marketing, Google, second“.

Start by choosing your market then we can use our tools to study our Market and within possible weeks or months have a store ready to compete if we want it. You have a variety of services you can use to do this or you can do it all manually. For the start of this series I will do it manually which may or may not be to acurrate be we can be almost on target enough to compete with them.

A service I have just signed up to is HitWise and in their own words this is what they can help you do -

Each day, Hitwise provides insights on how 10 million US Internet users interact with more than 1 million websites, across 165+ industries. Learn how to apply the Industry’s most timely and robust competitive insights to your online branding, search marketing, content strategies and online partnerships.

With a service like this at your disposal it makes it simplifies how to identify if you’re able to launch into a marketplace to compete and make a successful business. Back to the manual way of researching your marketplace.

Start with what you’re going to sell:

Forget for a second all you have read and heard about choosing a product to sell online - you can choose almost anything really, it does not need to be the most searched for keyword or keyphrase on Google. So go to eBay Pulse and take a look at what you can start selling.

eBay Pulse will help you identify what is selling but always remember eBay is a place for deals so many products that sell well on eBay may not sell well on your site. I have experienced this first hand. It gives us ideas to work on though so, I’m going to use the click and hit way of choosing potential ideas for You to start an eCommerce Store.

Don’t worry about what you like or dislike right now as unless you’re really are keen to sell something you like it may turn out to be un-successful anyway. It is better to go with something that you know is at least selling items daily. First category I hit on was Toys and Hobbies, again I just picked it with no thought out process, lets see what’s selling within this Niche.

First three Top Searches according to eBay are:

1. star wars
2. webkinz
3. fisher price

So lets drill down a few categories - I have chosen within Toys & Hobbies / Model RR Trains. I already like this so far as we have a number of store ideas.

First three Top Searches according to eBay are:

1. lionel
2. american flyer
3. marx

I do not have a clue what these search terms are at the moment but I need to find out if they are selling and in what quantities at what cost and what type of mark-up (margin) they have.

Looking to the left you can see the Top eBay sellers and their feedback level. This already gives me a good indication that this product sells just by the number of feedback they have. This can still be very misleading, so we need to delve deeper to get a better idea.

That’s it for now, we will recap tomorrow so see you then.

Coming from an eCommerce background usability is fundamental to me, but a well designed site is much more important in 2007 and most store owners need to think about the overall satisfaction of a visitors experience. Look superior to your competitors and this will further increase sales also making people remember your site (this is also counts for all those awful looking Blogs out there).

“I think Amazon is still messy but continues to drive millions of traffic through their checkout year in year-out”.

Amazon I feel, was started with a concept to make it easy to purchase a product not worry about how the store looks. This was back on the 90s, things have changed and design is just as important to a users web experience.

Here are just a couple of my favourite designs taken from the whole list CSS Websites Take ideas and try to incorporate them into your site design.

You’ll find it hard to distinguish the difference between a merchant and or affiliate. To become successful with an eCommerce retail store amongst other things I had to become a good affiliate and merchant, having a general understanding of how an Affiliate works not only helps your revenue but enables you to be personable with your affiliates understanding their needs and working together to push your brand and profits. Recently Ash Wills emailed me and asked me to take a look at the following eCommerce turnkey websites.

Lets take a look at Shopster - When you join Shopster, you get a top of the line E-Commerce website complete with inventory.

Straight away I see some professionalism in the design and layout of the website. This automaticallly gives me confidence to start reading more about their service.

You choose the products you want to sell from the 700,000 products in our warehouse. When you make a sale, we ship the order directly to your customers anywhere in North America. You never have to deal with the inventory and you make the difference between the price you sold the product for and the wholesale price in the Shopster warehouse.

Although it all sounds very appealing you will definately lose the experience you would have gained by setting up an eCommerce store yourself. I’m sure some will love the fast entrance into eCommerce but by missing out on the fundementals you will naturally lose certain business experience that may help you in the future. It’s really just a very un-inspiring way into eCommerce.

With Shopster you get a business in a box for $329.99 a year, with an option to pay monthly. All they leave you to do is the marketing and determine the profits levels for your product(s). They cater for Entreprenuers/Webmasters/Dropshipping and Affiliates.

Set-Up:

- No plug-ins / programming
- Easy for beginner
- Full customization options for advanced users
- Web based administration
- Complete storefront system
- Sell any of over 700,000 products and growing
- Set your own prices and margins
- Free manual and help docs
- HTML knowledge not required
- Graphic design skills not required
- Logo creator included

In comparison to starting your own eCommerce store what they’re offering seems very appealing. If you’re looking to get in eCommerce without the sleepless nights it seems they have covered everything.

I think services like this can work well if you make sure to work with the company and maintain close contact making sure to check stock and customer satisfaction levels as these two are fundemental in ensuring the smooth running of your store. The only thing that will remain is your ability to generate traffic and price competitively, if you have need too (you may not if there is not much competition in your marketplace) depending on the type of product you choose.

Do your homework before signing up by researching the marketplace you’re interested in and make sure to choose a product that is in high demand (sounds simple but some miss this part) otherwise all else will go in vain if nobody wants to buy what you’re selling!

If you’re not going to enjoy the procedure of setting up your own eCommerce website, I would also seriously consider becoming a great Affiliate for a merchant through sites like Commission Junction or Affiliate Window. Sites like Shopster really take all the fun, pressures and overall satisfaction away from building your own eCommerce store. That said, I can see the attraction for this type of service and with the influx of people wanting out of the 9-5 an into the land of online with dreams of fortunes awaiting them. The likes of Shopster and CuttingEdgeProducts servicing these people should do well.

CuttingEdgeProducts works in much the same way but they only offer a Dropshipping service and you are limited to selling their only product line which is Home Security Products. If you feel you can go up against all the other users who sign-up their service then fine, I personally wouldn’t fancy it. I not a fan of the look of this site and it lacks in professionalism that I would normally look for although they state they have over 15 years experience in this industry. A bad looking site does not always mean there is a bad service behind it. I’m all about nice looking design as well as functionality because I’m fussy, so I would look to improve this which I think would benefit them and improve thier sales I’m sure.

With CuttingEdgeProducts you get a business in a box for $595.00 which covers their one time setup fee, they have other options which are costly if you compare it to Shopster pricing who include these extras in their monthly or one time fee. Again you’re going to be left you to do the marketing and determine the profits levels for your product(s). They cater for Dropshipping only.

If I had to choose between the two I would opt for Shopster as they give more options for inventory and the added extras seem to be very appealing for the cost. CuttingEdgeProducts only has one flaw and its that they are limited to one product range. If you feel you can compete do your market research and try to be different to all the other Security stores out there. If I really wanted to sell their goods I would contact them and ask them to dropship their products for me with a view to eithier build the store myself or get someone to build it for me. This will set you apart from 99% of their customers. This is just one thing I would look to do.

Update Shopster: After speaking with their live help I discovered they will only ship to Canada and the Continental US only. Make sure if you are going to use the likes of Adwords to set-up Audience targeting to US/CANADA only. That could be costly mistake. Also CuttingEdgeProducts offer a full 30 day money back guarantee whereas Shopster do not, something to think about.

One thing you cannot buy from these companies is the drive, determination and desire to run a successful eCommerce store. Add this to hard work and it’s this sort of attitude that will set you apart from your competition.

If you’re running an online business (store) you should be fimiliar with the fast and smooth checkout procedure? the customer should be able to click and buy a product/service within three clicks (ideally).

Do you know what this does…it creates word-of-mouth marketing like you wouldn’t believe!

This has massive benefits, you could even be more expensive than your competitor for your product or service, but by having a faster loading site than them and a super fast checkout procedure you will end up with very happy customers! I remember using certain sites that got this process right (Play.com, Amazon.com) I immediately learnt a big lesson, get this right as one of the first things you do when building your online store and you have one foundation set.

I love it that consumers are impatient online (although I’m not sure why as all the stress is taken out when compared with offline shopping?) make it so simple (a two year old could order from your site) and you’ll have people talking about your service for years!

People may forget the actual product but they sure will remember how fast it took to order from your site. Do you understand why???

Because they’re impatient! they want in and out quickly to go about their day. Be fast, make it as simple as you can and you’ll have the basis of a good online store.

The next important part of this process is choosing the right merchant. Get one that suits your budget and solution. They must be able to grow as your business grows, there is no use having a merchant who can only handle 50 orders per day when you’re looking at acheiving at least 100. If their server falls over who’s to blame for the lost sales? I’ve been in this situation and we lost aprroximately $20k on one weekend because of a system fault. This is slighty different, but you must know your merchant and what they can provide you with, quality and service matched with great pricing.

I’m going to outline some pro’s and con’s of the Merchants I have used over the past 7 years.

eButtonz

We used a whole solution at first with eButtonz offering very small online businesses a shopping cart and payment processor through WorldPay. We grew out of this option within five months, but none-the-less they were perfect for what we needed at the time. Their customer service and support was always fast and reliable. Shame we had to move on really because I liked them. They just couldn’t offer the support for the amount of transactions we were dealing with at the time. Things may have changed now? also we had problems with WorldPay…

Application Costs: eButtonz Costs

Worldpay

Ahh…wonderful Worldpay. No, not at all wonderful in my eyes, I think this can happen when a company like this has the huge amount of success they had in such a short space of time. Growing to the size they did obviously didn’t help them, lacking in customer service, quality and ease of use of their admin back end and their famous holding of your funds for months at a time, this is not a good business model to me. I really don’t like these guys if you couldn’t already tell…mainly there attitude towards small businesses at the time pissed me off! They almost took us out of business!

Again, my be good to customers stands true. They ended up losing out on a very large, potentially long-term customer with transactions exceeding 2000+ per day.

Application Costs:

* Additional Currencies: Domestic currency provided as standard part of Internet Merchant Account. $100 per additional currency.
* Chargebacks: due to the costs involved in reversing transactions, WorldPay will charge you $20 for every chargeback.
* Settlement: Settlement in GBP for a UK bank account is £0.35. Settlement to a bank account outside the UK and in local currency is £2.50.
The minimum amount that can be settled is £10.00 in GBP, and the equivalent of £100.00 for all other currencies.

Protx

What they say about themselves: We have grown to become the largest independent Payment Service Provider in the country because our solutions offer our customers exceptional value for money without compromising on the level of service and functionality we provide.

We have been satisfied overall with what they have provided us with over the years, although their servers have been hacked and we have experienced down time this is nothing when compared with others providers we have heard about. They have rebuilt their main front-end sales website, but I still believe they have a very amatuerish back-end administration, don’t let that put you off though.

They are fairly easy to set-up and integrate and so simple to manage, ie: refunds, transaction look-ups, fraud protection. Unfortunately they only service the UK. We did our research and found at $40 per month with no other charges allowing 1000 transactions per quarter (at the time (2003) being perfect for us) and they still are. I highly recommend them.

Application Costs:

Our rates are subject to negotiation for websites that process many thousands of transactions. For more information about our pricing structure please contact us.

(pricing details have been taken from the merchant websites mentioned in this article and are subject to change at any time)

In this article (post) I’m going to refer to the last business I was involved in (MyMemory.com) this will help me to list and identify the key areas we did well in and at the same time pass on some handy knowledge to you.

eCommerce has come such a long way since Jeff Bezos and his Amazon Jungle flew out the starting gates back in 1994! Since then there has been a flood of online start-ups, some successful others hitting that big [DOT COM BUBBLE] back in the late 1990’s. I’m going to outline some simple but often over looked rules that I came across and stand by when running and/or starting an eCommerce store.

When in social gatherings, most of the time you’ll get the what do you do question…hmmm…always hate that one. Then all of a sudden I’ll get the oh, you do that, I’m looking to get into that as well. I’ll say (sarcastically at first) really…9 times out of 10 these people are already successful in their own right but have been seduced by the media painting a rosy picture of wealth at your fingertips for little work.

Maybe they’ve read articles in newspapers stating how many millions can be earnt for only working a few hours a day! I’m not sure, but somehow the majority think an online store equals untold riches and is obviously far simpler to start than an offline brick and mortor business.

This brings me onto The First Golden Rule: Love Your Customers. I love my customers, often far too much and will go out of my way at times to make sure there are so happy they’ll talk about my business for years to come telling friends and family. This is what you should do. Be NICE, be AMAZING, be the BEST in your marketplace and tell yourself everyday your going to succeed and you will succeed! I’m 100% positive about this.

At first our (MyMemory’s) marketing strategy was simple, offer the same high quality sort-after products elsewhere but at the lowest prices using a workable mark-up. Making sure to back it up by outstanding quality and service. This general rule served us well and brought us success at first. You’ve got to remember in this market pricing is key (digital memory is very volatile, buy wrong and you could lose big time!) and because we started off using price comparison sites for instant traffic (back in 2003) you would show up at the top if you could offer the lowest price. I never really liked the way companies such as Pricerunner and Shopping.com operated but the ROI was fantastic at first and worked a treat.

It wasn’t long before we had a large mailing list and would be able to leverage this to boost our turnover on weekends when we would always do a newsletter offering massively discounted deals. It never failed to bring in $20k up to $70k on our best weekends. Our mailing list alone was worth more than the business in my opinion due to size of it, the loyalty and brand awareness it brought us.

The best way we found to run this business model was to go for high volume selling, low margins, mark-up would be at best 23% gross before and costs I would say we were hitting 10% margins after staff, advertising/marketing, rent, postage, etc..etc…costs. It would be a long time before we saw huge profits and at times this did get me and the other Director down. (we where very hungry for success quickly) We did have an exit strategy and 18 other shareholders to keep happy. Our turnover was looking healthy and our lifestyles where great so I shouldn’t have complained really.

The Second Golden Rule: is to buy your product at exactly the right price and turn it around as fast as you can. This worked very well for us as we would buy a very sought after product at the best price possible and add it to our spotlight product. In most cases it needs to be your best seller, get it out fast spreading the word which in turn would bring the numbers in and then a customer would hopefully go on to purchase other similar products at better margins.

The Third Golden Rule: is to use Magazine or offline marketing with care. It can spiral out of control and their pricing is ridiculous when compared with online advertising. The ROI for us was pathetic with offline marketing and I quickly started to cull lots of the magazines we were in. The best way to deal with Magazines when they approach you is to wait it out. Sales reps for magazines are on deadlines and under severe pressure to sell, use this to your advantage. When they call, say you’re not interested unless they can do it for X amount.

This being in our case at least 80% less then their rate card. I promise they’ll always call you back with an ad space. It does depend on your margins but I know knew I could work on gaining a reasonable ROI while keeping the product at a great price without having to compromise on the price the consumer would get it for. Win, Win we’re all happy. You don’t want to have to raise prices because of your marketing spend, you just need to use an abundance of common sense and get clever to work it to suit your business model.

The Fourth Golden Rule: Know your marketing - Brand marketing or ROI marketing which is it? Brand marketing is very, very expensive and in my mind obscenely wasteful. Measured, 99% guaranteed DROI (Definite Return On Investment) marketing is effective and it should be what most small businesses use when on a budget. A very expensive mistake we made (I still don’t know to this day whether it worked or not) was advertising with Viacom using the Tube (Underground Railway Service in London) the bill boards were on the inside of the main trains on certain busy lines.

The cost…hmmm…$40k and I still feel sick we went ahead and did it. This is what You could call a right cock-up but Brand marketing at its best. Not very measurable at all, apart from asking the customer at the checkout how they found us and on the phones. Most cannot be bothered or forget where they found our website URL. We never made any ROI worth talking about but it may have produced word-of-mouth marketing, enough to push our brand name and further establish us as market leaders in the digital memory arena.

Having an exit strategy in mind is only good if you follow it through. Have a definite goal and also have a great plan - what do you want from this business. How much do you want from it. Where do you see it in three years?? These questions should be answered if you’re to succeed in any business. Some people have a great idea for a business but do not understand the why, where and what if’s…also I would hazard a guess they think more about the money before anything else. People also need to understand what type of business they have…many just don’t know. Is it a lifestyle business where you just make a living (not necessarily profits) you run the business on your own and will never need or want staff to make it a hugely profitable scalable company. Investors love scalable businesses.

Once you have a loyal customer following you can then start to dictate your prices putting them up a percent of two. Keep up the same quality and service and they’ll stand by you. The great thing for us was that everyone else in our market were already stupidly expensive so it was easy to undercut. You may be thinking at this stage (it’s all a bit easy to just undercut and expect to do well in business) yes, this is partially true, anyone with half a brain can undercut a competitor. It’s a no-brainer as they say and well…many do this without backing it up with the quality and service the consumer deserves.

These are the parts they decide to miss out on. When all a business owner can think of to beat his or her competition is to go in lower it’s just not going to work on its own. You still need to be clever offering something they’re not offering. In our case the best quality and service came through. I wanted not only to be the best digital memory provider online but also offer the customer a seamless experience when purchasing, this is when we hired a web design agency to design our store with the buyer needs completely in mind at all times. I started to get engrossed by our customers often to a addicted state of mind. Wanting to know exactly when, why and how they arrived at the store and what they where interested in purchasing.

This all happened when I purchased Who’s On I love this software! - I loved the real time keyword referer results knowing what a consumer was seaching for (what keyword they had used) when they hit our website. This was very powerful stuff, If we didn’t have the product they were looking for, I would tell our purchaser to get it and of course this would end up in more sales for us. Simple but very effective!

I felt that once I knew all there was to know about our customers I could start improving the website so they would stay longer and obviously spend more but at the same time enjoy being on what I would still call today a very boring website. Not because of design but really the subject matter (digital memory). Not exactly stimulating, buying memory is boring for most.

Luckily I didn’t get too involved in the purchasing as this would have bored me silly not to mention this was not my strong point. Another stat worth mentioning was that 44% of all visitors left the homepage after 30secs, just goes to show you how fast you must act and use your homepage to sell or deliver to the visitor exactly it was they were searching for. These stats are approximate because who can trust the accuracy of AwStats and Google Analytics.

Still, non-the-less, this was valuable information we needed to know.

Using these simple strategies we built up a great name quickly and I started to feel the brand awareness building fast. Forum marketing happened on its own. People started to talk about how excellent our phone staff were and then how great the prices and service was. Even freebies we’d give away and the competitions we’d run, little things like this are very powerful marketing tool for any business.

The Fifth Golden Rule: become amazing at statistics and customer buying habits. Once you start understanding your consumer you can really start to provide the best products and experience for them so much so that you will have them wanting more and more even emailing asking when products are in. That’s when you know you’re you’re doing very well. It gave me huge pleasure and achievement knowing this and I wanted to make sure our customers were always very, very important to the success of our business. Don’t let your buyer think, don’t let them have the opportunity to call you to complain. Give them the best shopping experience you can with your store and they’ll come back for more time and time again, it’s that simple.

I’m haven’t mentioned PPC yet and I will go into it in detail in another separate article. What I will say is that It didn’t work for us at first and took a great deal of testing to find the correct keywords, but once you have done this it should pay off. In our market it was not very profitable and ROI was very little but we didn’t care because we wanted the customer not the profit. As long as we broke even we were happy. The value is in your customer you must remember this at all times.

In the next instalment, I will outline how I decided to concentrate heavily on SEO (Organic Traffic) instead of PPC. This was to be one of the best things we did at the time, saving the company over $500k per year. This was all accomplished by signing us up to the three best Affiliate Networks at the time. This leveraged lots of my time allowing our Affiliates to go out and promote for us.

Until then, remember - The Consumer Drives Brand Awareness be good to them. If you have time please also read Affiliate to eCommerce Mogul - The Real Secrets To eCommerce

I recently had a chance to sit down and talk with Dennis over at YoungMoneyBlog about his up-and-coming E-commerce business, One Greek Store. Dennis is a 22 year old college student attending the University of Florida pursuing a degree in Marketing and Political Science. He may not be quite an A-list blogger or an E-commerce mogul yet, but what makes Dennis’s story worth the read is the fact that he’s actually setting up his own E-commerce business from his college apartment. One Greek Store is still extremely new but is already experiencing tremendous growth.

Matt: Okay well lets start off by you introducing yourself. Age, location, a bit of background. How did you get started in online business? What made you get into it?

Dennis: I am 22 years old. I am from Gainesville, Florida and will be graduating this year with a degree in Marketing and Political Science. I got started with the online business idea from being a member of an Asian American Fraternity. I recogized that this portion of the Greek community, along with Hispanic/Latino Greeks and Multicultural Greeks were not targeted by many of the major online retailers. Along with the personal relationships I have through my fraternity and other organizations, I felt that a greek store business would do well.

Did you have any sort of online experience before starting One Greek Store?

Originally, I wanted to build a website and work closely with a local business to produce our products. Essentially I would give a local Greek business some online prescence in exchange for a piece of the profit. One Greek Store was the first business venture I’ve ever done.

Okay well continue with your story - how did it evolve in your mind and then in reality?

First we wanted to work with a local retailer… that fell through. So our next step was to outsource all of our production to a local seamstress/embroiderer. But what we found was that these local businesses didn’t product clothing to our quality standard with a fast turnaround. Our final evoluation was to purchase an embroidery machine and do everything in house.

So you do most of the work yourself? In your apartment?!

Yessir. About 80% of our work is done in house … apartment… we also do screenprinting that is outsourced and we order general products, like paddles and pins from a distributor.

So tell me how that works. Give me a walkthrough of a typical operating day in an eCommerce business run out of a college apartment. How do you have it organized? What are some common problems? Does it affect your life much?

In a common day, we would recieve an order, whether its online or through the fone. Once we get that order, we check to make sure we have products in stock… like blank garments and greek letters. If we don’t have the garments/letters, we order them from a distributor. Once we have all the pieces together, we put it through our machine and get it made. We then ship it out to the customer. This is done constantly everyday for the week… including weekends. We also target conferences and different Greek events that we could potentially sell products. Therefore we have premade products in stock that can be sold.

In terms of organization, I am working with 2 other partners. I handle most of the sales an customer interaction, one of my partners handles the finances which includes ordering products from distributors, and the third partner handles the production. But for the most part… all of us can do each general task. As a startup, our major problems have been learning the business. We’ve also had trouble dealing with distributors and manufacturers. Also there was a huge learning curve for us to learn how to operate the embroidery machine. One of my partners even got a needle stuck in his finger haha.

Life wise, im sooooooo busy. I have school, business, organizations, a gf… it’s crazy.

Hah yea I read about that little incident on your blog. So how did you go about finding suppliers? Have you learned any tricks of the trade as far as dealing with distributors and manufacturers?

I found suppiers from a lot of digging. My partners and I did a lot of google searches and asked a lot of questions from embroiders/seamstresses. We then called a bunch of people and asked more questions… the more we asked the more we found. We then tested the people we found and asked them to send us samples… or to make products for us to sample. We finally found a few that we liked that met our satisfaction. Also, we are now able to attend tradeshows for the clothing retail business… which has helped with our connections. I haven’t really learned any new tricks perse. Just that we have to be determined in finding the right people to work with.

If you don’t mind my asking … how is the buisness doing? Is it profiting? Are you expanding it - will you eventually have to move the business out of the apartment? How is the growth comparing to what you planned on going into it?

Sure, the business has been doing great. We expanded to three more machines last week. We are also reasearching retail space and hope to have enough moeny to rent one by the beginning of August. I don’t think we’ll be profitable for a while … hopefully by the beginning of 2008.

Are you guys alloting yourselves a salary at the moment or just putting it all back into building the business?

Everything is in the business. We’re a startup … so we literally work 7 days a week whenever we have time to work. Being a student takes a lot of time out of our schedule which forces us to work through the night if necessary.

How did you finance the startup?

My partners and I pulled money out of our savings and we used credit cards. I admit it was VERY risky… but we felt that we were young enough to take that risk. If the business fails, we will have time to recover any lost.

So how did you guys manage the web development front? Is one of you a programmer, did you hire someone, or did you use software to power the site?

None of us know very much about web stuff. I know some basic things… but nothing significant. We use virtuemart.net which is a free open source shopping cart. The software is easy to use and allowed us to save a lot of money from hiring a programmer or having a custom shop made.

Alright well do you have any other advice for anyone planning on getting into the eCommerce industry?

Just do it.

I’d like to thank Dennis for the chance to get to know him a little better, and I wish him and his partners luck with One Greek Store and any future projects!

The main thing I’d like you guys to get out of this interview is the work ethic that goes into starting up a web business. It’s not easy money.

Hello everyone. This is your captain speaking. First I’d like to introduce myself. My name is Eli from BlueHatSEO.com. I do a little SEO here and there when needed. It’s not everyday that someone like Matt offers you an opportunity to do a guest post on one of the best internet business blogs on the net like NetBusinessBlog. So I’d like to start off by expressing how extremely honored I am for the chance to write this post and demonstrate a few things to the NBB’s community. Writing about the business aspect of SEO is not something I get a chance to do very often so I think this is a great opportunity to talk about what I think is one of the toughest business transitions in the industry. The move from affiliate to full blown E-Commerce publisher.

The reason why I say that E-Commerce is the toughest transition to make is because if you’ve ever attempted it, whether you were successful or not, you find out very quickly why it’s called the big boys club. In the affiliate market industry you have several people above you. First the manufacturers. Then the suppliers.. Next the E-commerce sites. Lastly the affiliate network. Everyone above you wants you to succeed. Your success means their success. In the E-Commerce world the model of authority changes. It is just you and the manufacturer. The manufacturers want you to succeed but not so much that it hurts their real cash cows, the local retailers who will spare no time complaining about their online competition. Frankly you are nothing more than a necessary pain in the ass. In that spirit the manufacturers use their biggest asset, the suppliers/distributors, to put up barriers so the average Joe can’t just jump into the business. You go through the suppliers and the suppliers make sure you don’t upset the manufacturers. Understand that to them it’s fine to field complaints about places like Tigerdirect or Walmart being too price competitive. You just laugh and say yeah that’s them! Fielding questions about some guy/girl in a bathrobe out of their house is a different form of headache for the manufacturers. A headache they are not willing to accept. So what about the average Joe? How do we break into the business?

First understand that I’m going to explain in deep detail how, but that the information I’m telling you does not come from lots of research and reading. It doesn’t come from learning from other people and attending conferences, nor lots of personal success or luck. Instead it comes from tons upon tons of failures. I’m too embarrassed to say how many failed E-Commerce sites I have laying around on my servers in ratio to successful ones. Let us just say the numbers aren’t pretty. I learned the true secrets the hard way and in an effort to help you not do the same I present to you this guide.

The Niche

The obvious first step is to pick your niche. You should be an expert on this by now. So this step should be easy right? Sorta not really, this is where the most average Joe’s fail. When searching for niches as an affiliate marketer you look for easy to sell items that have low competition for their keywords. In E-Commerce its exactly backwards. You’re looking for those products that are seemingly impossible to sell online with extremely high competition for their keywords. I’ll explain why. The natural Internet nerd like ourselves wants to sell something we like or use ourselves. For instance computer parts or electronics. You can easily find long tailed phrases with low competition and get your hands on lots of products to ship. However, you are force to compete with everyone else. If you think you can score the same margins and prices as places like Newegg or CDW you are kidding yourself. They will absolutely crush you and leave barely anything left for the rest of the competition to wipe with. I hate to be blunt about it, but that’s the harsh reality of the situation. Instead do some retail research around town. Try going to a local mall and start writing down every product you see that would possibly have a big gross margin(the dollar amount between your buying price and selling price) that you think might be difficult to find online. You will be shocked at where you find these products. They aren’t on the bottom shelves at large retail outlets they are typically hidden in specialty shops.

After you have compiled your list ask yourself some questions about the products. I’m going list an example. Please don’t take it literally because I have done no actual product research on it. I’m strictly using it as a superficial point of reference. Lets assume you walked into a kite shop. So now we have a potential product to sell, kites.

1) Does this product potentially have a high gross margin? Yes, I would imagine kites would have a high gross margin because they seem fairly cheap to make and yet certain ones like two stringed kites sell for very expensive.

2) Does this product potentially have a MAP price(minimum advertised price allowed by the manufacturer)? Kites possibly do but more than likely don’t because kite shops are sparsely located in places where kite flying is popular like coast lines. *Products with MAPs in place are very good for starting in ecommerce because they allow you to get the product cheap, and still be able to compete with your prices against the heavy competition.

3) How hard will it be to get my hands on this product? With kites I would imagine it would be pretty hard. There probably aren’t very many kite distributors, and the few around are probably big enough to service the entire country.

4) Is this product easy to find and buy online? One search on froogle for the word “kite” gives me only 36k results. By comparison yeah I’d say its pretty hard to find the right kite online. *The harder to find a product the better. It means there is probably loads of information about it, but few selling it. Meaning, if you manage to get your hands on some product fulfillment; competition will be easy to deal with.

5) Are there plenty of variations of this product? Yes there are many many different types and shapes of kites. *Variations are a good thing, it means you may possibly be the only etailer to sell a particular model that a customer may be looking for. It also means your website will be large enough to draw enough traffic to convert. People may come to your site looking for one model or specific product but then decide on another while browsing your site.