Learning how to start an e-commerce business

Couple months ago I was thinking about to start selling stuff online. I didn’t know what, I didn’t know but the only thing that I knew was that I just wanted to try it.

But I didn’t have a lot of free time, so I told the idea to my girlfriend and she started the business test after a couple days. Remeber, key factor in this experiment is don’t expend too much money because we just wanted to try the market and see if we could found a niche.

First thing was, what should we buy?

Couple things came to our mind: Electronic stuff, clothes, jewelry, etc. One of the key factors of what was the right topic to sell was the price, we wanted something really cheap with an ok quality and also that we could send in a cheap way.

Finding the right product.

Find a good supplier is not an easy task, is always a headache but in todays world is kind of easier. If you search on google something like “Cheap bracelet” you could find some good marketplaces. After find a good one, what we did was follow the rule #1 “Buy low, sell high” so we found couple bracelets with a really cheap price and good materials. After hours researching the provider’s website we found a few different bracelets that could be good stuff to sell. The final amount of the first order was about 24€.

Which price should I pick?.

One of the most difficult things about sell something is pick the right price, that probably is not an easy thing to do but this is what we did.

First, try to figure it out what was the average price on similar products on marketplaces like ebay or amazon. After do a little bit of research we found that the average price was about a 2,50€ / 3€.

But what about us? Is that a good price for us? Let’s see. (Remember, this is just a test not a real business)

Margins.

Get a great margin is not an easy thing, it depends on external factors and fees that you have to deal with them. Let’s talk about real shit and not just words:

Price of an average bracelet from provider : 0,30€
Ebay fee: 8%
Paypal fee: 0,35€ + 3,4%
Shipping fee: (national shipment) 0,37€
Envelope: 0,10€

That numbers comes to 1,40€ for an average bracelet and that gives you a 44% of earnings for each bracelet with the average price, not bad.

Numbers.

So far, since we started to sell stuff online, things had been good. Some numbers are 24 products sold, profitable experiment since day 4th and the most important thing the test have been passed with good feelings.

Remember, this was not a real business, you can’t say it with just a few dollars in your pocket, but it was just to see how the market works and see if there are some possibilities of growth with a e-commerce shop like that one.

Next steps.

After have great feelings on this first test, we will try to start selling more stuff, send offers to our first customers and start building a brand around this idea.

On next posts I will write about customer relationships, shipments, deals, offers and all that I can tell you about this e-commerce world.