A followup to Stores Online Lunch that a went to. I was talking about Ebay and Amazon, and the discussion went into when you would use a service like StoresOnline^[1] with someone I know.

The details of the discussion are not relevant to this post, just the rant I went into about StoresOnline.

My point was that someone should first shop their product at smaller sites first, which customers have better trust in. The guy agreed. It makes sense that this would be the case, you wouldn’t want to spend all of your money with a product that you don’t know if anyone will buy or not. Well, at least not with your own money.

First Steps of creating a product

If you have a product that you wish to sell, then develop it. When you have finished, answer these questions.

1. How long does it take to develop the product?
2. How much money did it take you to produce your product?
3. how would labor be if you take how long you worked on the product between minimum wage to 15 an hour?

Find a product online or at a store, if you can, that matches your product. If you take 2 and 3, add them together and it is more than the price at the store, then you have a problem. If the product is even less than 2 then you have an even bigger problem.

How can you develop a product that costs more than what a person can get at the store? Your product would have to be of the top quality to be even considered, but to get that, you would have to first sell your product.

Now, what you can do, is take a hit initially in order to gain a good reputation. If you love what you do and can afford to do that, then so be it. If you add extra costs, like hosting and everything else that goes into running an online store, you’ll get nowhere.

Second Steps of creating a product

Do Research. Lots of research. What products are already out there, what do they have that you don’t have, how much would it cost for you to manufacture the same product? There are a lot of areas that you can research. One of the most important is how to get raw materials (if needed) to produce your product cheaper.

Patents. You have to figure out if there are any patents out there that you use to produce your product and if so, then you’ll need to redefine your product. It would cost you even more money, if you find out later that your product uses a patent from a company and that you need to pay them.

Research on developing products. Developing products isn’t new, many people do it and do it very well. You can learn from them by reading their books and learning from the best. You could just jump in and hope that you succeed, many people do and succeed, however, if you really want to go further, you’ll put in the extra effort.

Reality: You can’t build a business working 4 hours a day

Good luck trying. Most people who are surveyed after starting a brick and mortar company say they work over 60 hours a week at the beginning. Even if your company is online, I wouldn’t expect to work less than full time once the company gets rolling and the more hours you put in the sooner the ball will be able to get rolling.

Anyone that tells you otherwise is trying to scam you. Certainly, there might be a few areas that don’t require as much effort, but the rule of thumb is that you will be working your ass off, until your company is making a profit and you can hire other people to work their ass off for you.

Reality: When first starting you don’t need a large storefront

People do just fine selling crap on eBay, Amazon, and other online storefronts. So many online places are doing it now, that you don’t even need a web site starting out. At least not one that requires anything more than a few static pages detailing what your company is.

Here, when starting out, just get cheap hosting at a place like Yahoo! or just buy a cheap template (there are many out there) and learn some HTML and put the following up.

Pages:

1. Company home page.

   Has details about what the company does and pictures of the product.

2. Company “About” page.

   Make sure you list your companies phone number (even if it is to your cell phone), email address, physical or mailing address. You can put a little something about your company, to add some more content.

3. Product Page.

   Lists your services or products, if possible. Make sure you list details about the service or product. The more details the better the customer will be able to compare and decide which product is best.

   You want people to understand what all your product has, does, and why they should buy it. If you say, “Buy this product because I make it and it is awesome!” I would wager a guess that barely anyone is going to, unless they have a lot of trust in you.

4. Feedback.

   When you get feedback, list it on the site. A person may or may not take it with a grain of salt.

There you have it, four pages, that require minimal amount of work and updating. If you can, it might be better to split multiple products or have a summary of your products on the “Product” page and then have separate pages that have more details.

Start with an Auction Site

It is better to test your product as you create them in your own time on an Auction site that only requires you pay a fee when you sell a product. That in opposed to a service that requires you pay a monthly rate regardless of whether you sell anything or not.

You will always have to pay a small fee for credit transactions, but if you get big enough to open a merchant account, then you’re probably making enough to pay the fee for that merchant account to get the smaller fee.

The auction sites get out of your purchase is a fixed rate and a small percentage of the full price. Yes, it is terrible. When you only sell a few products a month, it isn’t that bad. When it does get bad, is when you sell a lot of products, then the expense isn’t worth it.

When you outgrow the Auction Sites

When you do start selling enough products, the next step should be to find a hosting account where you can pay a small price for hosting (doesn’t have to be dedicated) that will give you access to running an online store.

If you don’t wish to or don’t know how to run a hosted site, then a service like StoresOnline is something that you are looking for. You already know that your product sells well and know what you can afford and what your production is.

Here are some alternatives to StoresOnline that you have, in order for you to make the best choice.

• Yahoo! Small Business

  The prices are many times less than StoresOnline.

• Price Grabber

  Price Grabber is where I find most of the products that I want, that isn’t books. If you sell electronics or other merchandise that is also found on the site, you can be listed along site others. The best part that I find, is that there are reviews and ratings. If I find a lower price on one of the “trusted” small business sites, I’ll be more likely to choose them.

  Also, what you can factor in, are hard to find or rare products that a few people or no one else has. If you have that product more people will be willing to give you a try.

  The hardest part will be gaining trust, but once you are “in” then you’ll find more people come knocking at your door. There are quite a few sites that I have a lot of faith in. You could too be one of those sites. Well, it might take a year to get there, but okay.

These are a few, there are others. Just do your research and find one that you like. If you decide that none of these fit in to the level of which you do business, then you can afford to hire web developers and people who know what they are doing in IT to do everything you need to run an online business.

Businesses Fail

It is a fact. A large percentages of new businesses will fail, that is also a fact. If you want your business to succeed, you will have to put in the effort and money (however small or large you can afford) to push it along.

If it was me and I have planned on developing a small business before, then I wouldn’t want to spend more money than I had to.

Notes

^[1] Links were purposely left out to keep from advertising the sites. I believe everyone knows or can find the sources if they want.

Disclaimer

Possibly Related Posts:

• Bullet: E-Book Library Management and Content Server
• Using ZendFramework 2 beta1 For Directory Project
• The Way of Kings and Cosmere Theory
• “In Time” Movie Premise Flawed
• Completing HTTP Library For PHP