Finding a product to sell
This is the first thing to consider when starting an E-Commerce business, choosing what product you want to sell is the hardest part of starting your new business as it will define your company and image to the public.
Is it a good idea?
Once you’ve chosen your product you’ll need to evaluate if it’s worth investing in, some markets are completely engulfed by large retailers. For example if you decided to purchase a large amount of USB drives to sell online, you might encounter issues as it’s an extremely competitive market as its popular item.
You may want to consider investing in a niche product or something that is in trend as it will have high demand with limited supply, the only issue when deciding this is trends do eventually die out, recently fidget spinners took off and companies invested in thousands of units, now they have shelves full of product they can’t sell as they’re not nearly as popular and the market is over saturated.
Buying your product, different methods
There are many different ways of buying your chosen product, one option is to buy directly from the manufacturer, and this will allow you to buy at a lower price resulting in a larger profit margin. Another idea is to buy in bulk, manufactures are looking to get rid of stock and selling in bulk is one method of that, you’ll be able to get high discounts this way.
One of the most popular methods is importing products overseas from China, websites such as https://www.alibaba.com and https://www.aliexpress.com/ make this easy for a retailer to buy in bulk as they are in touch with large scale manufactures based in China that can make the same product and sell it for cheaper than in the UK.
Competition, How are you different?
One of the main things to remember is what makes your product different, hundreds of companies selling identical products with a niche added to it and profiting solely from that added bonus. One thing to consider is warranty, adding long term warranty to a product makes it attractive to the consumer as they won’t have to worry about damaging or breaking it. Think about including items in an order, this could be a discount or a coupon for a customer’s next order.
The main thing to remember is that other companies are doing something identical to what you’ll be selling. If the market is oversaturated and the profit margin is low, then it’s probably not the best idea to choose that market, back to my previous statement. Find a market that is new, limited in supply or reliable.
Where to sell
Choosing where to sell is essential to growing your business and will directly affect the number of customers you’ll receive. Websites such as Amazon and EBay allow consumers to buy and sell through them. They already have platform you can use to promote and sell your product on, of course they’ll take a commission on the sales so that will decrease you’re profit margin.
Another way to sell your product is to set up your own website, there are many different companies that will build websites for you and allow customers to make secure and safe purchases on it. The advantage of this is you can control exactly what your website will look like, allowing a personal touch to the site and making it unique. You won’t be charged a commission by retailers which will allow for a higher product margin and you’ll be able to freely promote your website using social media.
The disadvantages of creating your own website is there are large initial costs to get started, you’ll have to hire website designers that can charge thousands on their work, you’ll have to pay to keep the website alive and you’ll directly be connected to the customers if anything goes wrong. Additionally with building the website, you’ll have to spend money on optimising your website to allow it rank higher on Google searches, if the website isn’t optimised then you’ll receive a lot less traffic and won’t be able to sell as much.
