Are you interested in selling items or services on the Internet in order to begin generating revenue? If so, then this article is a must read for you — I’ll be sharing the top five tips everyone should know when creating an online store.
How-To Create an Online Store — Top Tip #1
Know your product — When deciding exactly what sort of merchandise or services your new online store will be offering to customers, you should try to choose goods or services that you, yourself, would be interested in purchasing. Always steer clear of goods or services that you’re unfamiliar with, or uninterested in. You need to be intimately familiar with your products or services. If you aren’t, you wont have confidence in them, and that will translate into tougher sales. If you know your products and are enthusiastic about them, it will show. If you’re enthused about your products and services, there’s a much greater chance your customers will become enthused as well.
How-To Create an Online Store — Top Tip #2
Know your competition — You need to do some research before you open your online store. You need to find out everything you can about your main competitors — which ones are successful and which ones aren’t, what are they offering and how are they offering it, what sorts of promotions are they running, and do they appear to be working for them? This is one of the most fundamental rules of any business. You need to know as much as you can about anyone that’s competing with you for sales. Knowledge is power!
Make it a point to zero in on your top direct competitors. Make it a point to visit their online stores and become familiar with as much as you can about them. Find out how much they’re selling items for. Can you undercut them and still make a reasonable profit? What can you offer customers that your competitors aren’t currently offering?
How-To Create an Online Store — Top Tip #3
Test your products — One of the biggest mistakes that a lot of people who are interested in opening a new online store make is this: They love the idea of operating their own online store, they fall in love with a product, and put out a whole great deal of effort and expense in getting everything set-up and operational. Then, they find out that their products don’t sell! There just isn’t a significant enough demand for them.
Don’t waste your time and money. Do adequate market research before hand. Try selling your products on a very limited and a one-by-by scale. Try to sell a few on eBay or Etsy, or some place like that. Try to gage what sort of demand there is for your product. Do they sell easily? Or, does nobody seem to be interested?
Practically every successful business in the world pumps a lot of effort and resources into market research before rolling out a project. It saves pumping out a lot of wasted effort and resources later on. Putting forth the effort in the research phase will never be wasted — it will always work to tune your business and profit earning potential. If you go in blind and you misjudge the demand for your products or service, it can quickly put you in the poor house. Don’t make that mistake.
How-To Create an Online Store — Top Tip #4
Don’t fall in love with your product — Or, with your service, if that’s what you’re offering. I said earlier that you need to be familiar, confident and enthusiastic about your product. And, you do! But that’s different from falling in love with your product. We, as humans, don’t see the things we’re in love with in a realistic light. And, if you’re in love with your product, that can cause you to make bad business decisions.
Here’s an example that relates — I had a friend once who was a talented woodworker. When he retired from his regular job, he decided to start a small business selling his crafts. He rented space at a large weekly flea-market with the intention of selling his creations. Quite a while after he started I spoke to him and asked how it was going. He reported that it was terrible — we wasn’t making any sales. Every week, he was barely covering the rental cost of his space. Many weeks he wasn’t even covering that.
I went down to the flea market he was set up at and had a look at his booth. I was immediately struck by his prices — they seemed quite high. A look around the flea-market and trip to another flea-market in the area revealed that his prices were much higher than the prices other people selling similar items were charging. So, I told him he had to lower his prices. He wouldn’t go for it.
“Look,” I said, “There’s a guy with a booth on the other side of this flea market selling stuff very similar to yours. His prices are half of what yours are. I’ve been watching his booth, and in thirty minutes he made half a dozen sales. You’ve had one sale in the last four hours. It’s your prices!”
He wouldn’t listen to reason. He could have cut his prices and still made a decent profit on each sale. But, he wouldn’t do it. “My stuff is worth more!” He said, “Do you have any idea what sort of work goes into making these things?”
In business, your stuff is worth exactly what someone is willing to pay for it — not a penny more, or a penny less. No matter what kind of work or skill went into the creation of your product, in business, it’s worth exactly nothing if nobody is willing to buy it. That’s the way it is. My friend was in love with his product — that was his problem. His product was too precious to him — he wouldn’t insult it by offering it for a price less than what he thought it deserved — not what his customers thought was fitting. Don’t fall in love with your product!
How-To Create an Online Store — Top Tip #5
Advertise your store — A good many people today still seem to be mired in the “build it and they will come” mentality of the 1990’s and early two-thousands. The Internet doesn’t work like that anymore. There was a time when you could set up a webpage, spend a couple of hours submitting your site to search engines, then sit back and watch massive web traffic role in. I know! I was there! Unfortunately, those days are over. But, a good number of people don’t seem to realize it.
If you’re going to take your online store seriously, you’re going to need to advertise it. Advertising and promotions is going to be a constant and ongoing task that you’ll need to engage in. Don’t make the mistake of under promoting your online store. You’re going to need to do research, set an advertising budget, and find out what the most effective methods available for advertising and promoting your particular online store are.
You should certainly investigate and take advantage of all of the free and worthwhile advertising and promotional methods you can, but if you’re really serious, you should be working on how you are going to set-aside an advertising budget. That’s business — and businesses on the Internet are like any other. If you really want to grow your business, you’re going to have to spend money.
The first year that Amazon.Com was in business, the company spent $100.00 in advertising and promotions for every, single customer they attracted to the website. Do you think the average purchase of each of those customers was $100.00? Not by a long shot. Amazon purposefully lost money (and A LOT of it!) up front in order to build for the future of the company. Now, you don’t have to go to an extreme like that — unless, of course, you’re planning on trying to build your business into a billion dollar international brand. But, if you’re truly serious, you will have to invest in advertising and promotion.
Be smart and set a reinvestment budget for advertising. Advertise wisely, always trying to get the most bang for your buck. And, when you make a sale, put aside what you need to put aside for taxes. Then, put aside at least 25% of what’s left over for advertising and promotional expenses. In doing so, your take home profits might be a little lean in the early goings of your new online store, but you’ll be building for the future. It’s better to go through some lean times now and see your business flourish down the road, than not to reinvest and not have a business at all down the road.