How to make money selling online
The most important thing to realise about online selling is the immense size of the opportunity. In 2021 over 2.14 billion people are expected to shop online. IMRG Capgemini Online Retail Results for January reveal that UK online sales grew 74% year-on-year in January 2021. There is a huge opportunity for anyone to make money selling online.
Having said that - a large number of people who think about setting up as an online seller forget to think about the economics that apply. At The Supplier Central we have learnt over the years what makes the difference between those that go on to make their millions, and those that give up after a brief dabble.
So, we've put together our Ten Commandments for selling online.
1. You shall always have a plan
Selling online, no matter how big or small, is no different to any other industry, the companies that succeed are those that have done their planning and know what will make them successful rather than just throwing balls at a coconut shy and hoping some fall off!
So, what are the questions you should be asking at the very minimum?
- What are your products?
- Where will you buy it?
- What price will you buy at?
- Where are you selling it?
- How much will it be?
- How will you ship it?
2. You should always be willing to break your plan
Whatever your plan is, you should always be ready to pivot - never forget that Nokia started selling rubber boots and Shell Oil was an antique store selling shells!
Always reviewing the market for what you are selling, nearby opportunities and where you might be able to utilise your footing and experience for expansion into a new area is key. If the Twenties so far have taught us anything - it is that everything can change in a very short period of time, and we should always be prepared to look in a new direction.
3. You shall always know your selling options
The time for online sellers to pick one website to sell on, or territory, and stick to it, is over. The smartest sellers are increasing their revenue in way that wouldn't have seemed possible 5 years ago, and selling on multiple marketplaces in different countries. Don't ignore the power of having your own website (through Shopify or similar) and then use social to increase your sales on networks you may not have thought of - 2 million users save shopping pins daily on Pinterest and 87% report they have made a purchase because of this.
4. You shall always know your buying options
There are two reasons it is important to understand your potential suppliers as much as possible whether wholesalers on a marketplace like ours, or manufacturers, or auctioneers:
You need to have multiple potential sources to de-risk your business. If your inbound supply chain breaks for any reason you want to have alternatives lined up. This is even more important given the socio-economic climate we are in. This happened to a lot of online sellers in 2020
You need to be able to shop around for the best product at the best price so you can be knowledgeable when negotiating but also not miss any potential bargains or quick wins. Buying price directly influences selling price and profit.
5. You shall remember your buyers above all others
Hear us loud and clear: THE INTERNET IS NOT MAGIC. Especially with shopping comparison sites, you can no longer run to the internet hoping to catch hapless buyers, and you certainly can't build a long-term business on that. Commerce economics include eCommerce and the same building blocks apply to any successful company:
- Good service
- Good price
6. You shall never ignore price stability and FULL product sale price
We can’t tell you how many times we have heard people say - "Well if I buy them for £80 a unit, and sell for £100, that's £20 profit". NO, it's really REALLY not.
There are so many factors which can impact the final sale price of an item including:
- LIFETIME OF THE PRODUCT
- SHIPPING AND STORAGE
Think of fidget spinners. The selling price decreased extremely fast and they flooded the market - the was no scarcity and a very short fad lifetime. Think of selling furniture - shipping and storage of a dining set and chairs would very quickly exceed the £20 price difference, especially once you factor in free returns when you’re shipping London to Doncaster and back!
7. You shall always covet laziness
The key to success for making proper money is having a foundation you can scale from. Where you can automate something, do it as early as possible. Running to the post office and back from your spare room might keep you fit and make you feel busy, but get anywhere near serious scale and you will not be able to keep up, fail your customers and lose your business reputation very fast. You would be better off being "lazy" and taking a small hit to use a system to manage. Think of this with listing tools, customer management tools, stock management systems, warehousing... the list could go on forever!
8. But NEVER be lazy on products
Your products must be sellable and the information you list must be as detailed but as simple as possible. A good rule of thumb is "would Siri find your product?" - if someone asks Siri for something really specific such as "Under 5s blonde fabric doll", would it know to answer with your product at that specific a spec from your information? Do you have barcoding to help websites sell?
9. You sell never fudge to buyers
A sale is a contract and the once vague, wild-west world of eCommerce is now built to hold sellers to their promises. This involves:
- Adhering to Distance Selling Regulations
- Company information
Apart from good manners and legality... why bother?
Sixty-eight percent of women say they consult product reviews before making a purchase, while 56% will look at social media pages or ask contacts on social networks for advice (Nasdaq)
10. You shall always be a scientist
You need to constantly be in a cycle of experiment -> research -> react. Think of it as a shopkeeper - who was buying what this week? What are the stock levels? What should you order that will sell next month? What is losing sale rate? What is fashionable right now? This will keep you on top of your business and ensuring you are driving it forward.
For a you want a handy cheat sheet poster of our Ten Commandments - download here.
This article is brought to you by The Supplier Central...
The Supplier Central: who are we?
Started in 2004 at the beginning of the eCommerce boom, we have built up a community of over 240,000 online sellers and wholesalers with a mission to help the eCommerce community make money selling online.
We continue to bring the best advice, trends and eCommerce suppliers to our community which has resulted in over 1.1million messages between our business members, and over 168,000 threads of advice, questions and bulk stock to buy and sell.
We work in partnership with the biggest brands in the industry to make sure we have the best advice and news at our fingertips to help our members move operate their businesses in the most efficient and effective ways to maximise their eCommerce revenue.
We use the advice from our in-house experts, suppliers and partners to send weekly newsletters of advice, trends, free events, suppliers and stock offers to our 45,000+ email subscribers.
You can join the site and get advice or buy stock for free, you can also sell goods/services for only £15/month, making us the largest advice and B2B marketplace site in the world.
For advertising, partnerships or just for a chat please contact Helen Parker (Director) on firstname.lastname@example.org.