Introduction How To Make Money Online With E-commerce
There are many ways in which to generate sales and revenue, and one of the most popular and common ways is to make money online with E-commerce.
What Is The Best Way To Make Money Online?
From all the publicity, there is no doubt this is the surefire way to make money online with E-commerce, see the following advertisements.
Neil Patel is a world recognised guru, who gives his thoughts in the article below:
These are articles from Shopify, who can ease the path to setting up your store on their platform:
Dropshipping – What Is It? Why Do It?
Often the E-commerce sales method involves Dropshipping, which means that the E-commerce website company has an arrangement with a supplier or suppliers, that they will directly fulfil any orders which are made for his particular products, to the customer or buyer. An example is the AliExpress and Oberlo model on a Shopify store.
So the customer places an order with you, which is passed to your Dropshipping Supplier, who will despatch his product(s) to the customer. The customer pays for the product at one price, your selling price, to your Company. Your Company pays your Dropshipping Supplier his selling price, which is usually much lower than your Company´s selling price to the customer.
A big advantage of Dropshipping over the traditional model for retailing is that there is no investment in stock or premises, and no direct handling of the goods sold by your Company, so it is a relatively risk-free and low capital way of starting to sell online.
What Are The Costs Involved in E-commerce and How Much Money Can I Make?
The margin between your Dropshipping Supplier´s selling price to you and your Company´s Selling price to the customer is the margin within which you must pay for all your costs and also make a profit.
Your Company´s costs would include payments to the platform which you use, for example, monthly payment to Shopify, Amazon, TREX or Slingly. The latter two are based on the WordPress platform.
Also, your Company will have to pay your own staffing costs and overheads such as office rental, heating, air conditioning lighting, computers and software, advertising, and your own accounting and audit costs as well.
Frequently the margin within which your Company operates is a factor of 2 times their cost price, which sounds a lot, but your operational overheads can also be significant especially the cost of advertising using Facebook, Google Adwords, Yahoo, Bing, YouTube (cost of video preparation and posting).
Your Company should frequently carry out Sales Campaigns to promote certain of their products at particular times. These Sales Campaigns usually comprise Sales Funnels which make an Offer or Lead Magnet so as to invite a potential customer to leave their email address, which is then used for informing of the Sales Campaigns which follow the Squeeze Page.
Sales Funnels will typically start with a DoorBuster Offer, something to really attract a visitor´s attention, and get them to purchase. This may be at cost or slightly over cost, so not a high-profit margin usually. Once they have purchased, and before they exit the site, there will be an Upsell Offer, which is usually more profitable for you as the seller. The buyer may decline this and be offered a Downsell Offer before they exit the site. The Sales Funnel can contain several Upsells and Downsells. Sometimes buyers can get a little annoyed if there are too many Upsells and Downsells, so be careful not to overdo the offers in your funnel.
So your Company hopes to entice a buyer to buy several items, rather than just the first Doorbuster Offer which was at the start of the sales funnel, and this will greatly increase your profit margin on each item, and your overall revenue.
What Are The Risks Involved in Ecommerce?
There are numerous hurdles which you have to overcome in order to achieve a significant level of sales:
1. Traffic – there need to be a lot of visitors to the E-commerce Website Company to stand a chance of getting some conversions. Conversion rates are usually low which can considerably affect your ability to make revenue and profit.
2. Trust – If they have never heard of your store, or if they have doubts they will receive the product they order, then visitors may not buy from you and click away to a store which they trust to buy from.
3. Fulfilment – Dropshipping fulfilment from China (for example), may have a time delay and an uncertainty so that people may not wish to spend their money on your site.
4. Platform Problems – Sometimes there are issues to overcome related to the Sales Platform which you choose to use, for example:
Amazon – There are lots of competitors on Amazon, and you do not own the customer, so you cannot build an email list from Amazon customers. Additionally, Amazon may decide at any time to close your store, and possibly offer the items which you were offering for sale, themselves, really? Yes, really!
Nevertheless, proponents of Amazon say that irrespective of the foregoing limitations, Amazon is still worth pursuing because visitors to Amazon are ready to buy, and therefore it is possible to achieve conversions at a higher rate than with other sites.
Shopify – There are regular outgoings with Shopify, for the store and also various app add-ons which are necessary for trading, so these need to be taken into account in the margin between your cost and selling price of products on Shopify.
TREX – Dropshipping fulfilment is from the USA, rather than China, but costs are higher as well, especially shipping (surprisingly, since shipment is within the USA).
Slingly – Regular ongoing costs of operating Slingly, and other similar WordPress commerce sites.
5. Build an Email List – This is an essential part of building your business so you need to carefully consider means which will allow you to do this (Amazon, in particular, puts great constraints on affiliates regarding ownership of the customer, and also even acknowledging repeat sales, these are Amazon´s contacts, not yours, even if you introduced the customer).
6. Build a Niche – It can be difficult to build a General Store, so the conventional wisdom is that you need to target your audience (customers) in a narrow niche, which you specialize in.
7. Marketing Strategy – Your marketing strategy should be geared towards your particular niche and how to sell to those customers in your niche. If you have success then you can Scale the business upwards.
There is a lot involved in setting up a successful E-commerce Website Company, and when you consider the costs of the setup and reliable arrangements with Dropshipping companies (which may be located in China or other countries), then it may be prohibitive for you to do so.
OMS Conclusion And Recommendation
You can make money online with E-commerce, especially the Drop-shipping model.
Amazon is recognised as a good bet to make money online with e-commerce because visitors have buying intent.
Shopify is another option but said to be hard to gain momentum.
In order to streamline the process, you need to ensure that you have a reliable fulfilment company to support your operation. That means the correct, quality products delivered on-time to the customer.
The last thing you want is for unhappy customers to make complaints and return goods, or have to track goods which have gone astray.
If you are fulfilling your orders from China, you need to select reliable suppliers, so will need to spend some time pre-selecting these.
Consider trying out Wealthy Affiliate (WA) where you can make a website for free, and try out your ideas for dropshipping and e-commerce, and learn a lot of lessons from the training and also from other community members before you commit a lot of costs to your e-commerce platform.
Click Here to see the OMS review of Wealthy Affiliate.