By Laurence Bertone
If you’re thinking about starting your own e-commerce business there’s no shortage of information and “how-to” advice out there about how to go about it. The last thing the blogosphere needs is yet another “How to Start Your Own E-Commerce Business” article (1. Select Your Product, 2. Pick an E-Commerce Platform, etc.).
So we’re not going to do that to you. Instead, we’re going to tell you four true things about starting your own e-commerce business from scratch–with your own money–that we learned the “old fashioned way” by doing it ourselves.
#1: It’s Scary
If you’re like most people, there are some things about starting an e-commerce business that are going to take you just a wee bit out of your comfort zone.
For one thing, if you’re serious about starting a business you’ll probably need to, well… start a business. Meaning, establish a company. This is not something the typical person does every day, and you are probably no exception. The good news is it’s not as hard as you think. There are basically two things you will have to decide: what kind of company to start, and who to use to help you start it (hint: LLC and a company like LegalZoom).
The next thing you’re going to have to get used to is spending a little money.
Luckily, it doesn’t cost all that much to get an e-commerce website up and running. Many of the big e-commerce platform companies, like Shopify, Bigcommerce, and Volusion, for example, have free trial periods and reasonably priced entry-level subscription plans.
Another thing you’re going to encounter are these things called “business expenses.” These are things that you need to spend money on to keep your business breathing. There are lots of examples of big and small expenses: a printer (small), ink for the printer (big); a scale to weigh your packages (small), postage for those packages (big).
And then there’s this little thing called Inventory. That’s the stuff you have to buy (and store, by the way) before you sell it. The pucker factor is going to increase significantly when you have to drop your first $3,000 on a pant-load of products that, frankly, you don’t know if you’re ever going to sell. Especially when those 3 kilobucks are coming straight out of your beloved kids’ college fund. The only advice we can give here is: close your eyes, breath deeply, and buy the flippin’ inventory.
And then, there’s… Accounting. Remain calm–it’s not as bad as it sounds, mainly because there are some really cool accounting apps that will plug right into your e-commerce platform and make things easier for you. The coolest one is probably Xero, but you may also want to take a look at QuickBooks Online because a lot of accountants are familiar with QuickBooks.
If you don’t have any background or experience in accounting you should definitely get an accountant or a consultant to help you set the system up. After that it basically comes down to keeping your expense receipts and entering them into the accounting system regularly (“regularly” being subject to interpretation depending on your level of self-discipline).
But then there’s the scariest thing of all. We’re speaking, of course, about the Kraken of e-commerce. The Dementor of Internet retail: Google AdWords. What’s really terrifying is the way it sneaks up on you: $10 day, $20 a day, $50 a day. The best advice we can give you on this one is: you need to think about Google AdWords as a tax, kind of like the IRS (if you live in the U.S.) or the ‘Ndrangheta (if you live in Calabria). You just have to pay it.
Here’s some Google AdWords advice that the SEM (Search Engine Marketing) people are just going to love:
- Don’t think about it too much.
- Don’t measure it too closely (or too often).
- For God’s sake do not ever, under any circumstances, look at the “Cost per Converted Click” column.
Just pay the money, and tell yourself how cool it is that you are basically working for Google, just like Larry Page and Sergey Brin.
#2: It’s Difficult
It’s really not difficult to start an e-commerce business. It is, however, difficult to succeed at an e-commerce business, particularly if your metric for success–your “Key Performance Indicator” as it were–is earning more money than you spend.
There’s just no way to get around the elephant in the room here, and I’m not going to sugarcoat it: the vast majority of e-commerce startups fail. Yes, they do. Get over it. That’s not the point.
The real point is that it’s difficult to succeed even when you’re succeeding. There are lots of reasons for this, the main one being that you have to do everything yourself. The best advice we can give you here is: automate and connect everything that can possibly be automated and connected: online sales (hint: Shopify, Bigcommerce, or Volusion); postage and shipping (hint: ShipStation); accounting (hint: Xero). If you’re selling on multiple channels (hint: Amazon); inventory synchronization (hint: Stitch Labs).
And then, once you’ve got everything automated out the wazoo, what you’ll find is…it’s still difficult. You’ve still got a lot of things to do–and do well–if you want your business to succeed: Internet marketing (aka blogging and begging), picking and packing, shipping and receiving, ordering and stocking, customer service–the list goes on and on.
And then there’s the competition. The ones you knew about yesterday and the ones that just popped up today. The big, bad scary ones. The little tiny nasty ones. The ones that steal your images. The ones that undercut your prices. The ones that do both…
#3: It’s Fun
But here’s the dirty little secret about owning your own e-commerce business: it’s really fun.
Of course it’s fun to get orders. Getting an order is like a cross between catching a fish and winning a round of Bingo. We highly recommend setting up your phone to make that really clear, high-pitched “ding” tone and shouting, “Sold One!” whenever you receive an order. We’re convinced this will increase your life span.
But it’s also fun just to play the game. And it really is a game, one of the most interesting and addictive games you can play, a game of strategy and skill where the risks, rewards, and competitors are real.
#4: It’s Possible
And, last but not least, it’s important for you to remember that it’s possible. It’s possible to start your own e-commerce business. It’s possible to get your first sale. It’s possible to grow your revenue. It’s possible to reduce your expenses. It’s possible to beat your competition. It’s possible to succeed.
It’s possible, but it’s not easy. The best advice we can give you is:
- Be brave. Almost everything you do is going to be new and strange and a little bit scary. Don’t let fear of the unknown paralyze you. Move forward.
- Be smart. E-commerce is like playing chess, not checkers. Do your research. Do your homework. Learn.
- Believe. Believe in your business. Believe in your product. Believe in your strategy. But most importantly, believe in yourself.
Most e-commerce startups fail. Many succeed. Be one of the many.