As I mentioned about a month ago, my wife and I are starting an online store. So far everything has been going really well and I am pretty excited about what the future hold for both my wife and I and our little online shop. In this post I thought I would go through what we have been doing over the last month with the shop and why I think we are going about things the right way.
Testing Testing Testing
Having only limited experience with selling products online, I was a little nervous about how this whole process would go, however, I decided that rather than jumping straight in, that I would do some serious testing and see what my results yielded.
So I built a new website and tried my hand at selling the same type of product on Amazon. I found quite a few products that were similar to my own and that had a good price range to test out how much I should be selling my own product for.
Search Engine Testing
As the main place I was expecting to get traffic from was search engines, I decided to go full blackhat and buy links for this new website and see how easy it was going to be to rank for some of these terms. In total I spent a little over $200 for a monthly linking service to help my site rank, but the results were well worth it.
As you can see, towards the end of the month my site started to rank in the top 5 of Google. I stopped paying for the service once I hit this point, as I just wanted to confirm how easy it was going to be for me to rank for this term before I committed to buying large quantities of stock.
In total I sold 3 items in the week that I hit the top 5 in Google, and I suspect that it would have been a lot more if I would have bought a 2nd month links as everyone knows that most people only check the first 3 search results. So I was very encouraged by this as I feel that the products on Amazon are of at least equal quality to my own, and I believe I can seriously compete on price.
The thing that really shocked me was the price of the items that I sold. In total I had 10 items on my site and the 3 items that sold were all the most expensive items I had listed. I really didn’t expect this, and it gives me a good feeling because my initial pricing expectations were about 25% lower than the items that sold. So hopefully this means that there should be some healthy profit to be made.
Our next step is getting our supply chain management in place. Seeing as the product that we are selling is only small, we are going to run everything from our house initially, and then depending on the number of sales, we may move onto drop shipping.
In total I expect that we will spend around $5,000 in buying product and another $500 to $1,000 on advertising and promotional activities. I realise that this sounds like a lot of money, but instead of investing in my next penny stock, I am trying an online store, which will hopefully diversify my income sources.
So long as the website can sell between 3-10 products per month then we should be able to make our money back within around 6 months, and from there on out we should be in profit land.
Let’s see how we go 🙂