E-commerce site wanted >>

[sysops]

Once again I've got to pull you up on this, you can start on a shoe-string budget and become successful over time. The only issue really is your own expectations, I agree that if your marketing spend is pitiful to non-existent then don't expect to be the next Asos by the year end.

That's mighty selective quoting there...

Your argument just doesn't stack up, look at almost any long-standing high street brand and they all started as small operations, corner shops etc with larger more established businesses to compete against, why do you presume that its any different on the web?

That's a ridiculous thing to say! It takes *decades* for even the fastest growing brand to go from a single corner shop to a successful chain. The difference is that a high street shop has traffic from day 1, and if the offering is right, they will start making enough money to pay themselves fairly quickly.

While I don't have a problem with the kind of service you provide, I do find the way you market it ethically questionable. You paint a much rosier-than-life picture of online retail, which encourages people to have a go. This is good for you, because it allows you to sell your product, but I'm willing to bet that the majority of your customers (this means over 50%) end up making a loss on the venture.

 

[quikshop]

That 50% failure rate you've plucked out of the ether, how does that compare to start up businesses in general?

While I don't have a problem with the kind of service you provide, I do find the way you market it ethically questionable. You paint a much rosier -than-life picture of online retail, which encourages people to have a go.

You tell me where at any stage in my forum posts or on the website do I say that success is guaranteed, or even easy?

What is now easy is the availability of tools that allow you to sell online thanks to managed Ecommerce services such as ours.

And yes, I absolutely do encourage anyone thinking of having a go at selling online to do so!! Even if their success is measured in how much extra spending money they have for their annual family holiday, who are you to dismiss that as not an achievement?

For those that don't make any money from their venture, at least they've tried which I suspect is infinately more rewarding than not trying and always wondering what if.

 

[sgpratley]

A bit far back up the thread bu this is still relevant:

What is expensive? If it takes a day to change a template design £150£250/£300/£450?

I'd say that any money you spend that doesn't increase sales is expensive.

Sure, changing a logo and the image in your header is money well spent, but if you've picked a system with a relatively good template design in the first place you're probably wasting your money tinkering with it compared with spending it on marketing, or good product photography.
When I say design though I mean sites we've built like this one:
saharalondon.com
That was 100% bespoke for the client who already has 10 stores and can afford that level of design. However I've seen competitors of theirs blow 40 grand on brand new sites with no business behind them when something more generic could have been had for a tenth of that and given them £36 grand to spend on marketing.

There's a limit at the other end as well though. People trying to go the DIY route with no online experience are generally not taking the costs of their own time into account, and there is definitely a cost if in the same time you could have been doing paid work.

So, if you are looking for a site, have a think about the following equation:

• How much profit do you need to live on
• How much profit from each sale will you need to spend on marketing (trust me, this is more than you think unless you are already doing SEO almost full time as a job)
• How many sales wll you need to make
• What effort will that take to keep the store up to date, ship the products and deal with customer service
• How will your store actually help you manage all the marketing channels you'l need to use to get that volume of sales, and how will it tell you where your marketing budget is being spent well or wasted. How will it help reduce the time in despatch and customer service.

I don't want to scare anyone off (far from it!) but people need to be realistic about the effort needed to see a decent return in eCommerce. If it's just a hobby that's all well and good and enjoyable, but a business you can live on needs a bit more thought about what it needs to support it.

That's why the majority of our clients either have existing high street stores and/or have tried the 'cheap' route and found that they are wasting marketing budget sending customers to stores that either convert really badly or just take forever to manage.

 

[Optegris]

A bit far back up the thread bu this is still relevant:

I'd say that any money you spend that doesn't increase sales is expensive.

Sure, changing a logo and the image in your header is money well spent, but if you've picked a system with a relatively good template design in the first place you're probably wasting your money tinkering with it compared with spending it on marketing, or good product photography.
When I say design though I mean sites we've built like this one:
saharalondon.com
That was 100% bespoke for the client who already has 10 stores and can afford that level of design. However I've seen competitors of theirs blow 40 grand on brand new sites with no business behind them when something more generic could have been had for a tenth of that and given them £36 grand to spend on marketing.

There's a limit at the other end as well though. People trying to go the DIY route with no online experience are generally not taking the costs of their own time into account, and there is definitely a cost if in the same time you could have been doing paid work.

So, if you are looking for a site, have a think about the following equation:

• How much profit do you need to live on
• How much profit from each sale will you need to spend on marketing (trust me, this is more than you think unless you are already doing SEO almost full time as a job)
• How many sales wll you need to make
• What effort will that take to keep the store up to date, ship the products and deal with customer service
• How will your store actually help you manage all the marketing channels you'l need to use to get that volume of sales, and how will it tell you where your marketing budget is being spent well or wasted. How will it help reduce the time in despatch and customer service.

I don't want to scare anyone off (far from it!) but people need to be realistic about the effort needed to see a decent return in eCommerce. If it's just a hobby that's all well and good and enjoyable, but a business you can live on needs a bit more thought about what it needs to support it.

That's why the majority of our clients either have existing high street stores and/or have tried the 'cheap' route and found that they are wasting marketing budget sending customers to stores that either convert really badly or just take forever to manage.

Excellent summary and some very true comments.

 

[sgpratley]

Thaks Phil

As for the other comment I made about monthly billing systems being really generic, I really meant systems with no month-to month contracts so there is almost no upfront cost for the supplier.

We could potentially spread costs over the year also, but the reality is that most of the people who requested this couldn't provide an adequate credit score so we'd rather that their credit card or bank took the risk rather than us.

I'd be interested in how you overcome this?

 

[Optegris]

Well it's quite simple. The monthly license isn't a credit agreement. It is a leased license to run the software that includes their hosting costs and upgrades/support.

If at any time they decide not to continue then the license is cancelled.

The difference between this and the owned license at £299 is the owned license is just that and a leased license isn't owned by the user.

Cost wise, it makes sense to pay outright for the license as this works out considerably cheaper especially in the second/subsequent years but the option is there for users who may want to spread their costs.

Saying that about 1% of our store owners are on a lease contract, everyone else has purchased the software outright.

 

[sysops]

That 50% failure rate you've plucked out of the ether, how does that compare to start up businesses in general?

I don't know.

And yes, I absolutely do encourage anyone thinking of having a go at selling online to do so!! Even if their success is measured in how much extra spending money they have for their annual family holiday, who are you to dismiss that as not an achievement?

It's an achievement if that's what they set out to do. It is not an achievement if they wanted to earn above minimum wage.

For those that don't make any money from their venture, at least they've tried which I suspect is infinately more rewarding than not trying and always wondering what if.

Ah, but there is trying, and there is trying. In most cases, the outcome is decided at the outset, based on the initial choices made.

 

[Jay08]

Also have to say OMC. Phil has been GREAT help and has answered like 10000 of our questions and problems. Also adding great new features. Am always checking what new features are cooking in the OMC labs

They work with Martin who has amazing design skills we are def going to work with him again.

 

[quikshop]

Ah, but there is trying, and there is trying. In most cases, the outcome is decided at the outset, based on the initial choices made.

I think you're right, some approach online retail in a half-hearted manner or expect everything to fall into place without any time and effort. And it doesn't matter how much they have to invest in their business, in that respect those who do fail are more likely to fail from the start.

But I've seen plenty of shop owners who come to online retail without any experience who approach it with an open mind and a willingness to learn and adapt, and its those who eventually turn their projects into full time jobs or significant second incomes.

 

[Cromulent]

As a person on the other side of the fence (i.e one just starting in e-commerce for the first time) I'd like to put forward my own ideas.

I have always been fully aware that my financial status means that I have no hope in hell when it comes to competing with sites such as Amazon, Play and other online music sites. So I decided to limit myself to a niche area of music while also having plans for areas which I can be become fully self sufficient by selling products that in essence cost be nothing or are a minimal expense. I've worked hard to come up with such plans and I hope that this is what provides enough of a difference to set myself apart from those who go into e-commerce as just simple resellers.

Am I being foolish with this endeavour? Quite possibly. Have I got anything from it? Absolutely. I have learnt so much in such a short space from taxes to law that I think I would be pleased even if it didn't work out as I had hoped.

I'm entering this fully in the knowledge that I need to stay focused and I need to be able to react and to provide a service which sets me apart from any of my competitors, I think I can do it. I also have a large lump of money set aside if I need it.

I just thought I'd write that as it is easy to see every argument from one view point only. I'd love to hear any comments as well (be as harsh as you like ).

 

[sgpratley]

I think that the one place that an individual can still make a big impact, and quickly is if they have a unique and defendable product for which there is demand and little competition. Not easily found but they do exist.

The sort of thing that would make a really GOOD dragons den pitch.

In that case the system you build it on is pretty irrelevant as long as it's not a complete nightmare for the user. Any modern eCommerce script or service could do well for you if your product is getting a stack of great PR and you have no competition.

There's an very readable analysis of how to come up with products like this in "The Four Hour Work Week" by Timothy Ferriss (ch 9+10)

Where your system needs to stand out is if you are selling products where you have to complete with other sites, look more professional, have better search and merchandising and so on.

 

[sysops]

I think that the one place that an individual can still make a big impact, and quickly is if they have a unique and defendable product for which there is demand and little competition. Not easily found but they do exist.

The sort of thing that would make a really GOOD dragons den pitch.

I completely disagree. Let's examine your example. Take the best Dragons Den product you want. Imagine it was your product. Which course of action will make you the most money:

1. Set up your own site and sell your product via that site.

or

2. Get your product into a few big online and offline retailers.

In case you don't know, it will be 2 every time. This is evidenced by the fact that we are frequently approached by DD products, and we can generally sell more of them than they can on their own sites

 

[sgpratley]

Actually I agree with you sysops, you can get yourself in front of more customers by using other channels.

The point was a bit different, that if you don't have that uniqueness, you will have a very tough job competing and a well designed can help you convert more sales and be more efficient.

If you do have that uniqueness then the ecommerce system is less important.

Take something like Trevor Bayliss' wind up radio. he could have set up an ebay shop and sold a stack of those with the PR he got, never mind setting up something bespoke.

The question of whether you can make MORE money elsewhere is a different issue. But yes, he'd shift more by getting them listed in a big retailer than he would just on his own website.

 

[Cromulent]

The question of whether you can make MORE money elsewhere is a different issue. But yes, he'd shift more by getting them listed in a big retailer than he would just on his own website.

Actually the real point is this.

Sure he might sell more units if he sold through other channels but that does not necessarily mean more profit. If you sell direct then you take the retailers profit margin yourself. If you sell through other channels you need to sell at trade / wholesale prices and might actually make less even though you are selling more.

 

[sysops]

If you sell direct then you take the retailers profit margin yourself.

Yes, and you add to your overheads the retailer's marketing budget, and the cost of running a retail outlet (online or offline). It isn't the straightforward equation you think it is.

Some people look at 50% gross profit in retail and think "wow, I wouldn't mind a piece of that". What they don't realise is that there are significant overheads to cover.

 

[Cromulent]

Yes, and you add to your overheads the retailer's marketing budget, and the cost of running a retail outlet (online or offline). It isn't the straightforward equation you think it is.

Some people look at 50% gross profit in retail and think "wow, I wouldn't mind a piece of that". What they don't realise is that there are significant overheads to cover.

Costing is always going to be an issue. But don't forget that there are overheads associated with distributing to retailers as well. I'm not claiming that it won't add to expenses, I'm claiming that in some circumstances selling to retailers is counter productive and only the business itself can determine whether selling big numbers with retailers or selling small numbers direct (or both) is the best solution for them.

My only point was that it is not an open and closed case when it comes to selling via third parties there are far more things to consider. One should never assume that selling via retailers is the only successful business model.

 

[sysops]

Costing is always going to be an issue. But don't forget that there are overheads associated with distributing to retailers as well.

World of difference. We sell both to consumers and to retailers (although most of our business is to consumers). For retail sales, we work on 50% typical margins. For trade sales, we work on 12%. This is directly related to the overheads of both activities.

 

[Cromulent]

World of difference. We sell both to consumers and to retailers (although most of our business is to consumers). For retail sales, we work on 50% typical margins. For trade sales, we work on 12%. This is directly related to the overheads of both activities.

It depends what business you are in a suppose. I can't comment on your business as I don't know what it is and I don't know much about retail in areas outside of my chosen area.

If that works for you then fine, I guess you have found your solution but not every company finds the same thing.

 

[sgpratley]

I guess the message is do your research and if you find a market with huge margins, don't assume that equals huge profits.

I used to work in luxury skincare and we had 85% to work with but the steep marketing costs to sell at that price point level meant we had the same profits as some companies selling at half our price and lower marketing costs.

I see a lot of it in fashion, people going "Oooh look we can buy this stuff in Turkey and sell it for a tidy sum". You would not believe the store overheads and advertising that high street stores have to spend to do that in any sort of volume, and the financial black holes they get into if they get one season wrong.

If you have no business experience in your chosen marketplace, go get a job for 6 months with a competitor, even if you do it for peanuts you'll learn so many things along the way.

 

[Cromulent]

If you have no business experience in your chosen marketplace, go get a job for 6 months with a competitor, even if you do it for peanuts you'll learn so many things along the way.

Just don't sign a no compete clause!

 

While I don't have a problem with the kind of service you provide, I do find the way you market it ethically questionable. You paint a much rosier-than-life picture of online retail, which encourages people to have a go. This is good for you, because it allows you to sell your product, but I'm willing to bet that the majority of your customers (this means over 50%) end up making a loss on the venture.

As so many of Quikshops customers (quite a number of whom are also ukbf members) are still around I would refute that and whilst I'm sure across online retail in general there is a drop out rate, I have never found Dave to have painted anything but an honest picture of online retail - which is that you can make a success of it if you're prepared to put the hard work in, and to see it a a long term prospect and not a way of making a quick buck - an ethos I advocate myself on here frequently.

It is perfectly possible to make a success of an online business if you choose the right product/niche, are interested in it - so that that interest and dedication actually comes across to your customers, and you put the hours and money in, and dont think you'll become a millionaire overnight. Many people are quite happy to have their business generate extra spending money and allow it to build to a point where it could provide a full time income.

As Dave's an online retailer himself and uses his own software to run his own successful businesses I'm quite content that he paints an honest picture of the life of an e-tailer, including the pitfalls, there isn't any sales b*llsh*t in the service, which is why I like it as I know the advice comes from someone who's been there done that and not only has the t-shirt but still lives to tell the tale

I would never discourage someone from giving online retail a try, as long as they genuinely understood that like any retail or other business venture there are no guarantees that it will work, but that if they follow certain guiding principles about retailing online and put the work in that it is possible to achieve a highly successful business.