Ten Commandments To Make Money Selling Online
When people talk about selling online, it is often easy to forget that it is a space where the opportunity to grow still exists at an extraordinary level. Pre-Covid, global e-retail sales were projected to be $4.8trillion (up from $2.8 trillion in 2018) and the obvious implications from this year's events are that this is likely to be even higher.
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 Wholesale Community 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
StartupStockPhotos / Pixabay
An online business is no different to any other company, the companies that are successful do not win by chance. They have a distinct plan. 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 that plan
Startup Stock Photos / Pexels
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 2020 has taught us anything - it is surely 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
Free-Photos / Pixabay
The time for online sellers to pick a specialist marketplace and stick to it is over. Marketplaces such as OnBuy.com are increasing sellers revenues in a way that wouldn't have seemed possible 5 years ago, and don't ignore the power of 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
Free-Photos / Pixabay
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.
- 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
Karolina Grabowska / Pexels
We cannot stress this enough: 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 products
- Good service
- Good price
6. You shall never ignore price stability and FULL product sale price
David Bartus / Pexels
One of the most common mistakes you hear repeated again and again in online selling is - "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 many factors which impact the final sale price of an item including:
- LIFETIME OF THE PRODUCT
- SHIPPING AND STORAGE
Think of fidget spinners or loom bands. 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
tianya1223 / Pixabay
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, 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
PhotoMIX-Company / Pixabay
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
athree23 / Pixabay
A sale is a contract and the once vague world of eCommerce is now built to hold sellers to their promises. This involves:
- Your description
- 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
10. You shall always be a scientist
Chokniti Khongchum / Pexels
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.
Who are The Wholesale Community?
The Wholesale Community an advice and networking site with a free B2B marketplace for eCommerce buyers. We have 235,000 members and work to give our members the tools and stock that they need to be successful online and grow their sales into a competitive and exciting business.
Free download of Ten Commandments poster here.