Getting started (from an inventory and business planning POV)

[umpire]

I have a web property with decent authority and social followings. I think there is an e-commerce opportunity in this niche and I have the capital to get started on it.

Problem is my expertise is marketing/SEO, I have done e-commerce before but not taken it seriously so idk what I'm doing.

Current plan (please roast):

• Build out the e-commerce functionality. Probably on Woocommerce, unless this is a terrible idea? Magento looks like pain, Shopify is hard to customize, hard/impossible to self host and is expensive, Opencart looks dated. I know Wordpress well but not sure if people are using it for ecom.
• Set up dummy listings for some products, begin marketing, dropship from other B2C sellers for negative gross profit if they sell in the short term.
• If I get decent sales, reach out to the manufacturers directly, maybe use a 3PL.

My problem is, I have no idea what the profit margins would be which is making it hard to work out ROI on marketing.

How do I get a ballpark gross profit on a certain category of item?

The closest thing I can find is looking at the Amazon Associates category, which would be Electronics & Computers. They are offering 3%, so I assume Amazon makes like 10-15% gross? This sounds frighteningly low, or am I underestimating it?

 

[AlanJ1]

which would be Electronics & Computers. They are offering 3%, so I assume Amazon makes like 10-15% gross? This sounds frighteningly low, or am I underestimating it?

If you are starting in this category, it's the most over saturated unless you have a niche.
Amazon will make different %s depending on what type of product it is in the category. But yes consumer electronics is a low margin category.

If you are dropshipping, expect to pay more from manufacturers when buying as well.

 

[umpire]

If you are starting in this category, it's the most over saturated unless you have a niche.
Amazon will make different %s depending on what type of product it is in the category. But yes consumer electronics is a low margin category.

If you are dropshipping, expect to pay more from manufacturers when buying as well.

There's a specific niche inside of it I'm looking at. Probably not dropshipping in the long term, just to validate.

How can I find the margin of a specific type of product in this category?

 

[fisicx]

@umpire, if you wanted to buy one of these products where would you be looking? What criteria would you apply when filtering suppliers and sellers?

Now consider your own store. Would you buy from you?

Woocommerce is fine to begin with. Buy up some stock and sell from home.

Your biggest challenge will be marketing. Forget your social followers, they are unlikely to be customers. Which means you need to put your store in front of potential customers and stand out from everyone else selling the same product.

It’s not easy or cheap.

 

[umpire]

@umpire, if you wanted to buy one of these products where would you be looking? What criteria would you apply when filtering suppliers and sellers?

Now consider your own store. Would you buy from you?

Woocommerce is fine to begin with. But up some stock and sell from home.

Your biggest challenge will be marketing. Forget your social followers, they are unlikely to be customers. Which means you need to put your store in front of potential customers and stand out from everyone else selling the same product.

It’s not easy or cheap.

Marketing is not a problem.

I need help figuring out margins to help me plan ROI, this is what I have no idea about. How do I find out what the gross margin would be on a category of products without an existing supplier relationship?

If Woocommerce is a bit limited as you're implying, is the play for B2C to use Shopify and customise it?

 

[fisicx]

Woo is fine. What I meant was you may need to move to something different if the business really flies and you end up selling millions of the things.

Without knowing the product, your supplier, your costs and everything else it’s not possible to work out your margins.

Even if you got some numbers from a paid (eg market research company) they may not apply to you because you couldn’t get a good deal from a supplier.

Or you get a cheap supply from China and end up with a high percentage of returns.

This is maybe just one of those things you need to take a punt and hope the numbers work.

 

[AlanJ1]

How can I find the margin of a specific type of product in this category?

You go to suppliers and ask what price they are willing to sell to you at.

Can I ask what type of product / brand you are looking at?

 

[antropy]

• Opencart looks dated

The default theme does look a bit dated now, but put a new theme on and it looks pretty good:

Antropy’s CSS Only OpenCart Themes

Antropy’s CSS Only OpenCart Themes

www.opencart.com

Paul.