NetBusinessBlog

Revealed: “Build Sites that Make Money” eCommerce Store – Part 2

Posted on 21. Jan, 2008 by Dave in Advertising, eCommerce

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.