SELLING ONLINE

Copyright© Online Knowledge Systems Limited 2012

What should you sell online?

• The first and most critical choice is what to sell
• There must be sufficient margin in the product to cover the online marketing and shipping costs – so you are looking at a minimum of £100 price per unit
• It must be sufficiently unique to avoid comparison across other sites – so branded products are out
• It must be something that people are actually searching for in order to purchase but not something that dozens of other sites are already selling
• The product must be available via a drop shipping wholesaler

How does online selling work?

• Decide what you are going to sell
• Identify a drop shipper who will provide the product to your buyers at a competitive price and who has automatic links to your payment provider
• Identify using Google tools the keywords that offer the maximum number of searches and the minimum amount of competition for your product
• Develop a simple business plan that brings together forecast revenue and all costs (including Google advertising and shipping). Test your assumptions and carry out sensitivity analysis to see how robust your idea is under different traffic, conversion and growth scenarios
• Develop a cash flow plan that confirms that you have enough cash at the start to avoid going bust under the most pessimistic scenario
• Buy an appropriate domain ie with a name that matches the keywords
• Set up a website with shopping cart and online payment capability
• Use an SEO expert to optimise the site for searches on your keywords
• Launch your new business
• Set up pay per click campaigns to drive prospects to your site
• If volume grows sufficiently you may be able to achieve significantly lower costs by sourcing direct from the manufacturer. This of course introduces logistics costs and risks to your business

How do I stop others copying me?

• This is a key question. The answer lies in three things
• The unique value that you add for your customers
• The skills, knowledge or resources that you need to serve the market – including website development, SEO and other online marketing
• Possibly volume and price leadership should you achieve, firstly, sufficient volume to procure direct from the manufacturer and, secondly, sufficient volume to achieve uniquely favourable pricing
• If you are unable to identify and build up any of these things, and you attract demand, then your margins on the selected product are not defendable in the long term

The idea for this guide and much of the content came from a brief presentation by Will Humphries of Sitebites