Types of online business: The Retail Website.

In part two, which is a sub series, I explain the various types of online home business. The first type of business is the most obvious one – A retail shopping site. There are two ways you can set about creating one of these. You can choose (if you have a lot of capital) to buy actual physical stock, the main problems you would then have is holding stock and should you gain any customers you would then have to add the costs of delivery. The other problem is that you probably would not be able to be competitive enough in your pricing.

By far the easiest way to have an online retail shop is use a drop-shipping company. A drop ship company is a company that you join with and instead of buying any stocks, you create a store and choose what stock to show, with the right company you can get good wholesale prices. What you then do is mark up the products at a respectable price preferably lower than the retail price. For example: you find a phone that retails at $200, the drop ship price is $165, and you mark up the price to $185 – this equals a selling price of $15 below retail and $20 profit for you! The beauty of the drop ship system is that you never have to hold stock; you never buy anything until the shopper has paid you for it and the drop ship company handles the delivery and the returns if there are any.

It sure sounds like a great idea when you first stumble across it doesn’t it! That’s what I thought too – until I discovered that it just wasn’t quite as simple as that. Sure – you can have a successful drop ship retail website, but as with all online businesses the problem is getting customers to your site in the first place, this can take either a lot of time and hard work or a lot of advertising dollars. There are literally tens of thousands of websites out there that sell drop shipped products and the business is extremely competitively priced. Unfortunately there are also many bogus drop ship companies and many people selling bogus or outdated company lists.

One tip for you – you should NEVER and I mean NEVER have to pay to join a drop shipping company, although you will have to pay for a reputable list, any companies that are on that list that require you to pay a fee to join are not worth the fee. I have made this mistake several times so that you don’t have to! The claims made in the pre-sell for these companies never give the full picture. I spent £1000 joining one company because they set up a site for you; their pre-sell claims were from 30% off and up to 75% off. Yes this was technically true, depending on the package you bought. However the higher percentages were for what I would consider to be “junk” or unpopular products. Not only that but the quoted prices were minus the delivery costs which often took the total price to almost or even over 100% of retail cost. The company are still trying to sue me for refusing to pay (3 years later)

So how do you have a successful drop ship website, well firstly aesthetics (visually appealing) are the most important thing when it comes to having a website. I cannot stress enough the importance of having a site that looks and feels totally professional. One of the main reasons I say not to use a free host and sub domain are for exactly this reason, you can never get a site looking fully professional with the limits of a free host. Also; the URL is part of the aesthetics, hence using your own domain, not a sub domain. There are many ways you can make your site look the part, if you know how to tinker with coding, this should be easy and if not you are best to use a host with its own site builder, you can then use (if you like) a pre-made script that contains the template or type of shop you want. For a newbie uploading and deploying a pre-made script can be daunting and confusing but there are many help forums for both the scripts themselves and the hosts you choose.

The second but probably most important thing is of course traffic and customers. I will be going into this in depth in a future post but for now there are plenty of paid advertising and traffic generating companies to chose from, however; this can cost you a fortune, because you must realise that on average only 1 in 1000 visitors might actually buy something no matter how good your products and prices are. I refuse to use paid advertising and use the free methods I have learned. These will be covered in detail in the post mentioned earlier. The summary of free traffic generating is this – Patience/persistence and time. If you do not have these three things in abundance, then you will fail to advertise to your full potential. Here is a list of some available methods:

1. Article writing.
2. Free traffic exchange programs.
3. Link swapping.
4. URL submissions.
5. Directory submissions.
6. Banner exchanges.

All of these things take a lot of time and effort with consistent repetitive tasks to be done. If you can stand to stick to the tasks you will see the result and reap the benefits. When you have started to drive traffic to your website how do you get them to buy from you? Simple answer is you need to offer something as an incentive, perhaps regular customer discounts or some free e-books for example. Here is my recommended drop shipping list portal Esources dropship portal

There you have it, for future posts be sure to check the johnash118’s online business start up tips category on my article and shopping site. Coming soon – The affiliate website!

Grab useful tips in the sphere of website traffic – your personal guide.