Author Archives: theomc
Author Archives: theomc
Earlier today I got some really interesting drop shipping questions from one of my new students and decided to post them here for the benefit of anyone considering drop shipping. I’ve not named the student for privacy reasons because these questions were posted inside the course Q & A area, but here are his exact questions, along with my answers:
1) Which e-commerce websites rely on the dropshipping model?( I’m asking because I’d like to see some online stores best practices which I can use as a model)
“Lots of them! Even big online stores like Zappos, but you would never know simply by looking at the website. Here’s another autoanything.com. I LOVE the look of that store! Blinds.com was built entirely on drop shipping and made the owners very, very wealthy. In fact, they sold the store for something like $50 million.”
2) What are some failure points for beginning dropshippers? What are some reasons that people getting into dropshipping give up?
“Good question. Cutting corners is one reason. You can’t succeed if you don’t put in the effort to create a store that visitors would want to buy from. Tenacity is another reason, but this is no different to any kind of business. You’ve got to stick with it. Resourcefulness is another. That’s not to be confused with ‘resources’ because you could have two different people, one with $10,000 to start his business and the other with $100. The person with $100 could easily be the one to succeed, while the person with $10,000 fails. Resourcefulness is more about using what’s available to you in order to overcome challenges and find solutions to problems. We all have the Internet and we all have a brain. We can use these things to solve problems and move forward.”
3) What are some reasons that online drop shipping stores fail?
“There are many and some are listed above. Other reasons would apply to any online store, not just drop shipping. Not enough traffic is one, and in which case you just need to work on getting traffic. Poor quality products, poor customer service. Again, these things apply to any online store. I suppose the one thing that’s really different is that we are not in control of the orders being shipped out. This means that whenever you start with a new supplier, you need to be watchful. If you start getting multiple inquiries from customers about orders being late, that sort of thing, then you need to try and fix this with the supplier and if you can’t, ditch the supplier and find a replacement.”
This is a really valid question. I can almost guarantee that if you are thinking about setting up an online store, then you have at very least some niggling doubts about whether or not it’s possible to compete.
For most people, Amazon is the big beast and the one they feel most ‘afraid’ of. After all, Amazon have huge resources. They can launch in a new market and afford to run at a loss in that market for years if they want to.
How can you, as a new small business with limited financial resources, even hope to compete with giants like Amazon?
You can, but not in the way that usually springs to mind first. Price.
In fact, you should never even attempt to compete on price with stores like Amazon because you will lose almost every time.
However, you can compete in other ways, and these other ways are generating billions of dollars in e-commerce revenue for the ‘little guy’.
Think about it this way; If it were impossible for a new e-commerce store to succeed, then why are there still many, many new stores going from zero to $10’s of $1000’s in revenue a month within a relatively short space of time?
You can succeed, but only by choosing a specific niche and making your mark on that niche.
By making yourself an ‘authority’ in that niche. By providing value on your website – over and above the products you sell. This means you need to create content such as blog posts, articles, and anything else that will give value to your store visitors.
Let me give you an example:
Let’s say your store sells golfing equipment. Instead of just selling golf supplies, you could also provide a wealth of information on your store. Such as tips and guides on how to improve your golf, tips for complete golfing novices, best places to learn how to golf…
You could also have a live chat app running on your store. Even if you only have it running for a couple of hours a day, you will convert a lot of visitors into buyers that way.
There are tons of different ways to make your store stand out.
The main point here is that price is not everything and it’s certainly not the only factor in a customer’s buying decision. If it was the only factor, there would be no retail industry. It would be a constant ‘race to the bottom’ to sell at the lowest price and the whole thing would just collapse!
So yes, there is still plenty of opportunity out there for anyone with the motivation and determination to succeed with a new online store 🙂
We’ve all the heard the saying ‘keep it simple stupid’, KISS for short. There’s a lot of merit in that saying because the simplest way is often the best way. The more we over-complicate a task, the less likely we are to ever complete or even start it. But, simple is not the same as easy. We shouldn’t expect easy. We shouldn’t ask for easy, and the short video below shows you exactly why you don’t want it to be easy!
It’s a great question and the first answer is going to depend on what you plan to sell. If you want to sell your used/new unwanted items just to get them out of the way or raise some extra cash, then Ebay is the best place for this.
However, if you plan to make a regular income selling new items that you source and then sell to make profits, Amazon is without question your best bet.
Amazon has twice as many shoppers as Ebay. So more potential customers to tap into. 300 million to be precise!
Amazon customers buy and spend more than Ebay shoppers do. Figures show that Amazon buyers are spending at least double on average per annum, than Ebay buyers.
The average Amazon shopper has a higher annual income than the average Ebay shopper and is willing to spend more on an item.
On top of this, Amazon has it’s own loyalty scheme called ‘Prime’ membership where customers pay an annual fee in order to gain certain benefits such as free shipping. This brings Prime customers back to shop on the platform over and over again because they naturally want to get the most bang for their membership buck. According to recent reports, the number of Prime members in the US is more than 60 million!
Why is this good for sellers? Because these Prime customers are frequent shoppers and will often purchase several items in one session. AND, because of their above average annual household income, they will readily pay more for an item than the average Ebay shopper. This means that you, the seller, don’t need to sacrifice your profits by selling at ridiculously low prices in order to make enough sales.
In order to fully benefit from this as a seller, you should be selling via FBA (Fulfillment by Amazon). This is where Amazon warehouses your items and ships your orders to your customers. In any case, you’d be crazy not to take advantage of FBA because it cuts your workload down and takes away the headaches of packaging and shipping orders to customers.
So providing you sell through FBA, all those Prime customers will see a little icon beside your item listings, letting them know that your item qualifies as a Prime purchase. Many Prime customers will ONLY buy items that qualify, putting you at an advantage over other non-FBA sellers.
There one really BIG advantage of choosing Amazon over Ebay if you plan to sell items regularly…
It’s less work!
When you list an item on Amazon, you don’t need to keep re-listing it. Nor do you need to take the payments for customer orders. Amazon do that on your behalf. FBA sellers don’t need to deal with refunds either, because once again, Amazon does this.
In summary, if you are in thinking about selling on one of the big online marketplaces, Ebay or Amazon, the only time that Ebay would be your best bet, is when you want to sell some unwanted personal items or perhaps a one-off lot of stock. Otherwise, Amazon is a much better option over all.
Amazon selling fees are quite low when you take into account the fact that as sellers we use their platform, leverage their trust and credibility, and make use of their registered customer base of close to 3 million shoppers.
Shoppers on Amazon tend to be prepared to pay a little more for items than they would on say, Ebay for example. Therefore we can set our prices that little bit higher, which helps to offset some of the fees.
That being said, we still need to know what these fees are so that we can work out whether or not it’s possible to make a profit on an item we want to sell. Sometimes new sellers simply look at the wholesale cost of an item, compare it to the selling price on Amazon, and think they can make a great profit. They completely overlook the fact that Amazon needs to make money too!
Amazon Referral Fee
This is a percentage of the selling price of each item sold on Amazon and it’s usually 15%, although there are some categories where this percentage is a little higher or a little lower. Generally, though, you can expect your referral fee to be 15%.
For example. If you were selling a dog lead for $22.99, Amazon would take $3.45 (15%) from each sale.
This only applies if you are using ‘Fulfillment by Amazon’,. This is where Amazon stores your items at their warehouse and then ships them out to customers as your orders come in. It’s a great service because it takes away the headache of packing and shipping out orders.
For most items this fee is around $2.60 If the item is large and bulky, it will be a little more than this and if your item is classed as ‘small and light’, it will be less.
If you are not using FBA, this fee does not apply.
Both the Referral Fees and the FBA fees are taken from your earnings. You don’t need to pay either of these fees from your own pocket.
FBA Long-Term Storage Fees
Again, this only applies if you are using Fulfillment by Amazon and these fees are very small unless you have stock at the FBA warehouses for longer than 6 months. Meaning, your stock is slow selling. There are ways to avoid this happening, but if it does happen, then you need to factor in around $0.55 per item per month
Professional Seller Account Fee
As a seller, you can either open an ‘Individual Account’ or a ‘Professional Account’
There is no monthly fee for an Individual Account, but you will pay Amazon $0.99 per item sold in addition to the costs listed above
The Professional Account has a monthly fee of $39.99, but you do not pay the $0.99 per item sold.
Generally, if you intend to sell more than 40 items a month – which hopefully you do – then the Professional Account is the one to go for.
Even when factoring in the fees, there’s good money to made as a seller on Amazon providing you do your calculations first. Of course, there’s more to it than just making sure you can turn a profit. You also need to know how to choose the right items to sell, where to get them, how to create listings that convert to sales and more. Even so, Amazon is still a great place to sell. New sellers can still make their mark and it doesn’t require a big start-up budget either 😉
Want to know a quick and easy way to turn more of your store visitors into buyers?
Add a simple animated video to one of your pages.
You could do this on any page, but it’s really effective on the ‘About Us’ page or the ‘Delivery Information’ page.
So what should your video be about?
If it’s on the ‘About Us’page, you could create a short video to inform visitors about your company/product line/customer service. If it’s on the ‘Delivery Info’ page, you could create one that explains your delivery times/policies, along with information about returns and refunds.
Here are some ‘Do’s’ and ‘Don’t’s’ for your video:
Starting your own e-commerce store has never been easier – and more difficult – than it is today.
So what does that mean? How can be it be easy AND difficult at the same time?
Okay, let me explain . . .
It’s easy because you no longer need technical know how. Low cost, user-friendly and purpose built online store platforms have taken care of all that, and now almost anyone can set up a half decent store without too many headaches.
It’s easy because online shopping is a fast growing industry and the more money that consumers spend online, the more opportunity for new online store owners to make their mark.
It’s easy because many wholesalers are now willing to drop ship for online retailers. This means you can start and operate without ever investing any money in stock. In fact it’s more than possible to get going with as little as $100 – $200 in your pocket.
Sounds amazing right?
Yes it does and that’s the problem. Because it sounds SO easy, it attracts hoards of wannabees who are under the misconception that all they need to do is throw up a website, list a bunch of products and hey presto, cash in the bank!
If it really were THAT easy, almost every new online store would succeed. But they don’t. In fact, 90% of them fail miserably.
But it’s not as bad as it sounds. Most failed online stores failed for very specific reasons. The two biggest causes of failure are:
To succeed, you need to master the art of getting traffic to your store and then converting that traffic into sales. One without the other is useless, you need both.
Fortunately, you don’t need deep pockets in order to promote and market your new store online. Most of your marketing can be done without spending any money at all. Getting your visitors to buy from your website requires some ‘know-how’. Some new online sellers think it’s all about pricing their products as low as possible.
In fact, you could charge higher prices than your competitors, but get more sales than they do. Pricing is only one small part of the equation and it’s way down the list as far as ‘what makes people want to buy from you’.
Want to learn more?
What exactly is a fatal flaw you may be asking!
The best way to explain is by relating it to works of fiction. Novels. Every novel has a hero/heroine and almost without exception, that hero or heroine has a character flaw. The flaw (whatever it is) prevents the character from getting what he wants (succeeding). But by the end of the novel, the hero has recognised his flaw, overcome it and ultimately succeeded.
Whether you realise it or not, this is the backbone of most novels. Whether that be mystery, crime, romance or whatever. Because people like happy endings. They like a good result.
Occasionally though, the flaw is what’s known as a ‘fatal flaw’. A fatal flaw doesn’t have to mean the hero dies – although he may do. It just means the hero never managed to overcome his flaw by the end of the novel and as a result, he failed in his quest… solve the crime, get the girl, kill the monster, whatever! In fiction writing this called a ‘tragedy’ and in fiction, they don’t happen too often.
In real life though, they happen all the time…
What are the potentially fatal flaws that prevent us from succeeding online;
Fear of failure prevents us from taking action and without action, nothing can happen. This can be cured by…guess what…taking action!
Lack of belief in yourself can be cured by gaining the right knowledge and then acting on that knowledge. Even if you don’t get it right the first time, you will gain confidence.
Procrastination is a tough one and we all suffer from it from time to time. Yes even me 🙂 It’s all down to discipline and setting yourself a regime that you can stick to.
Cutting corners. This is a big one and I see it frequently with some of the students of my courses. It’s natural to be in a hurry to see results, but cutting corners is one sure way NOT to get the results you want.
Easily distracted. So easy these days with social media, YouTube, mobile phones. Switch everything off (if possible) while you are working and definitely close down all social media sites!
Shiny object syndrome is a real success killer. I suffered from it myself for a short while several years back. Decide on the method you want to use as your vehicle to start making money online and stick with it. Forget everything else and focus on ONE thing. If you’ve ended up on a ton of email lists, unsubscribe from them. Clear your inbox, clear your mind and focus!
Okay I know this is a not a complete list, but if you’ve been attempting to make money online for more than a few months and you’ve still not seen any success, grab a pen and be totally truthful with yourself. How many potentially fatal flaws do you have ? 🙂
As a new seller on Amazon, you may be feeling a bit uncertain about which categories to start selling in. When I started selling back in 2013, I had no idea which categories were the most popular or which were the most competitive, and I know from my student’s feedback that choice of category can be a sticking point.
With that in mind, I’ve sectioned out some of the main categories on Amazon.com into high, average and low volume:
Updated May 2018
Health & Household
Beauty & Personal Care
Home and Kitchen
Toys & Games
Kitchen & Dining
Patio Lawn & Garden
Tools & Home Improvement
Arts Crafts & Sewing
Camera & Photo
Computer & Accessories
Cell Phone & Accessories
So does this mean that selling in low volume categories is a waste of time?
No, not at all! However, you should expect to sell less in these lower volume categories and if you plan to use FBA (Fulfilment by Amazon) to store and ship your items to customers, then you should definitely consider selling in a category with a higher turnover.
Generally, when starting out, it’s simpler to sell in a ‘medium volume’ category. There are literally 10’s of 1000’s of suitable products to sell in these categories and you won’t face the same fierce competition associated with the highest volume categories.
However, even the high volume categories have sub-categories with less volume and less competition. So it’s a good idea to ‘drill down’ a bit and uncover some of these potentially very profitable sub-categories.
Amazon offers endless possibilities, but that’s part of the problem! Don’t let too much choice hold you back. Choose a category and stick to it until you have your first product listed and selling on Amazon. Action is the key!
It’s no secret that Facebook can be an incredible source of free traffic and sales for our business.
Whether it’s selling physical products from our own store, getting extra traffic to our Amazon listings, or simply driving traffic to a blog, Kindle e-book, or anything else.
Back in the days gone by, we could post on a Facebook page and every single one of the followers of that page would see that post on their news feed. In other words, our posts had a 100% reach.
Unfortunately, things don’t work like that anymore…
Facebook wants people like us (people who use Facebook for business purposes) to spend more money on advertising. So because they want us to spend money, they now limit the number of followers who see our posts.
If you have a page with 1000 followers, previously when you posted on that page, all 1000 of those followers would have had that post displayed on their news feed.
Now, only approx 100 – 200 of the followers will see that post unless they actually visit your page.
Obviously, this is not good because the whole purpose of a Page for Business is to get business. Facebook is saying that now if we want everyone to see our posts, we should pay to ‘Boost’ the post, or run a paid ads campaign.
So with that in mind, here are two very inexpensive types of paid ads on Facebook:
‘Boosting’ a post is an inexpensive way of getting more people to see that post. So if you have a post that you really want everyone to see, click the blue ‘Boost’ button on the post and pay a few dollars to reach more people.
Running a ‘Post Engagement’ paid ads campaign is also very inexpensive. Post engagements are simply likes, comments, shares, clicks and often you will pay only a few cents per post engagement.
So is there anything you can do to increase the reach of your posts without paying anything at all?
Yes, there is..
Facebook gives more weight to posts with pictures and/or videos. These posts will have an increased organic reach.
Short posts with images get more shares, likes and comments than do longer posts. People have very short attention spans when they are on social media!
Hope these tips help you!
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