What Is It?
There are several different types of online stores a person could use to make money online. The most traditional one and easiest one to start is to create your own online store and run all aspects of it.
How Does It Work?
Traditional online stores are the ones where companies run all three parts of it; selling products, inventory management and shipping. If you are making your own goods with a unique brand you want to cultivate, want a very simple store to start with or you have a brick and mortar shop that wants to extend online, this might be for you.
To start your own online store you will need to choose a platform. Typically people choose one of the most well known systems like Shopify, BigCommerce or WooCommerce. These relatively easily allow you to setup the store, taking care of online payments, calculating taxes, etc. For an example of how easy it is to initially setup a store, ECommerce Platforms does a great job walking through setting up a Shopify store in 15 minutes.
Next you would then need to setup all the products in the system. Unlike the other types of online stores, there is no need to hook this up to an inventory management or shipping system. Some systems allow people to make those areas more powerful with add-ons but it isn’t necessary.
As you are managing your own inventory, when you are setting up your products make sure you keep the number of units available up to date in the system. For the most part this is straightforward as it will subtract items when you make a sale. However it doesn’t know what goes on offline, like offline sales or if new shipment of products is available.
Since you are taking care of shipping yourself, unlike dropshipping, you will need to come up with your shipping strategy such as free, exact cost or fixed rate shipping. This is an very important decision to make as it can make or break a company that either prices it too high to make it unattractive or it ends up costing them too much money on every sale. Your shipping is then setup in the system so it is clear to the consumer.
After this is all setup, you are ready to go live. Once live, if someone orders your product then you will receive a notification and you take care of shipping the item. The systems often also have the ability to print out shipping labels and enter delivery tracking information online to make it even easier
This all sounds fairly straight forward to setup and it is. The difficulty is simply in the effort to maintain and promote it. You need to manage and store the inventory, ship out each item and deal with customer service issues. Unlike many hustles, this is a lot harder to do if you are going to school or have a full time job.
Also just as important is that since you are not on an existing marketplace like Amazon or Etsy, you will need to advertise it so people know it exists and why they should go to your store instead of others. Brick and mortar stores have a strong advantage here as they typically have the brand and people already doing all the above so this is a straight forward add on to them. Smaller shops may find this a lot of work.
How Much Money Can You Make?
This is not a get rich quick gig. Most stores that are just starting out make less than $200/month profit the first couple months once you factor in all the expenses. Sure you don’t have the expenses of systems like dropshipping but you also have extra manual effort.
Many make none at all. More successful, well advertised ones can eventually make $1,000-$2,000+/month in profit. There are cases of people making $10,000+/month in profit but they are very rare.
Websites – Online Stores
- Establish a tight niche that offers high quality products not easily replaced on Amazon. This will help you stand apart and develop a loyal client base.
- Advertisement and marketing is key when starting out. Many sites fail as they simply don’t have enough traffic going to their site. With dropshipping the margins are so thin that you need to make up with it with a lot of quantity.
Categories: Long Term Payoff