It’s been a secret desire of mine to run an online store for a living. The lure of being independent of answering to somebody else is an entertaining thought to have. Making money online has been a lifelong passion that hasn’t really matured to where I’d like to be. And after reading Steve’s post on eCommerce stores, I wondered to myself – why have I not started one a long time ago?
Then I realized – it’s not as easy as it sounds.
BigCommerce – one of the easiest platforms for an eCommerce store.
Having never ran an eCommerce store myself, I can only list some of the things I’ve learned while looking into this subject matter:
Pros of Starting Your Own eCommerce Store
- Low start-up costs – many eCommerce platforms host your website for you so there is no need for specialized servers. Different pricing plans are also readily available with some starting at less than $40 per month.
- No need to manufacture or carry products to get started. Drop shipping is readily available (although translating to lower profit margins) where products are shipped directly from wholesale distributors to your customers.
- You can be your own boss – who doesn’t love answering to anyone? You run the place – you’re the boss.
- Low overhead – granted you’ll need professional space much sooner than you think, an online store can be started from home (from that cozy couch you pet your kitty or your puppy).
- You can work at your own pace – it’s totally up to you how fast you want to grow your business and how much time you put into the work. If you’re as awesome as I’m pretty sure all of you are, you’ll be rich in no time.
- Potential of turning your small website into a large business that you can be proud of. Unlike the pesky little projects that have come and gone for me, an online store is not something you would sell for a quick profit. You build onto it until you can be proud of what you’ve accomplished.
Cons of Starting Your Own eCommerce Store
- Takes complete dedication. I can’t imagine working another job and running an online store at the same time. You would have to dedicate yourself to it in order to succeed.
- Customer support – you’ll have to deal with customers. This means having to answer the phone no matter where you are. Can you imaging dealing with complaints day to day.
- It could take 6 months to a year to generate profit. Drop shipping products usually results in a low profit margin from what I’ve learned. With money in, expenses out – it may be a while until you’re profitable.
- It can cost a lot to get running. Sure, you can try to get away with a basic out-of-the-box design, but chances are you’ll need a custom website design and SEO to really get ahead. E-commerce Search Engine Optimization is more difficult than a simple website. There is a professional position for this task alone. Depending on the costs of such services, it can get expensive to tweaking your website just right.
- You’ll most likely have to spend on advertising. Many of you already know how long it takes to grow a blog, yet alone a business. You’ll have to spend money on AdWords, which can get expensive – assuming you already know how to best use the platform. If you’re new to AdWords, there’s a steep learning curve, which may mean money wasted.
- You’ll probably have to carry products on-sight for better profit margins. This means meeting with suppliers and or buying in bulk. There’s the risk of not being able to unload your inventory which could mean going out of business.
- It may consume all of your time and then some. Imaging doing all of the above by yourself! You’d have to spend money on hiring help or leaving enough time to do the work yourself (for most this is impossible with a day job).
- You’ll have to find the right product or risk losses. Not all products are created equally. You’ll need to know what sells well and what has a decent profit margin to be worth the time. I know electronics have low profit margins due to high competition.
Is it Worth the Effort?
I’m sure something is missing here or could be wrong, but this is what I’ve gathered so far from doing my own research.
Looking at the cons, it’s easy to dismiss the idea of starting an online store simply because of all the information you must know and all of what’s involved. However, after hearing from a friend who has worked for many eCommerce companies, it is difficult to simply say it’s not worth it as there are many people who have started successful multi-million dollar operations out of their homes.
For me, the stories of people who have succeeded and went on to describing making their first million dollars is what keeps me coming back to this idea over and over. Although I will most likely not be starting an online store any time soon after learning the ins and outs, there is still a chance that the online payday loan industry picks up and works out great as a business model.
HockeyGiant.com – highly successful eCommerce website.
I don’t have the time and flexibility to sink as much of an investment into starting an online store as I would like, but I certainly would consider it some day. I, like you, am very interested in online income and I don’t see that changing. Thanks for sharing the pro/con list, it’s helpful!
DC @ Young Adult Money recently posted..Kill your debt faster: How to make extra money while working a full-time job
Maybe I’ll pave the way with my failures and mistakes and report on them so you can have a smooth ride
Lol. I’ll probably go bankrupt by then.
It all looks fairly simple doesn’t it. I guess you just need a product to sell and a target market to sell to.
Glen @ Monster Piggy Bank recently posted..Tattoos at work – Does it impact on your employment opportunities?
I ran into an online cigarette store just yesterday where they sell by the bulk. There’s a huge market for smokers
And they probably make decent profit!
Thanks for the pro/con list, it does provide some very good insight. Like DC, I don’t know that currently we have the flexibility of doing something like an E-Commerce store. It does look like it takes a sizeable time investment, which is something I don’t have a whole lot of these days.
John S @ Frugal Rules recently posted..Giveaway: Win an iPad 3 For Yourself This Christmas!
Something nobody has a lot of these days
I imagine its more of a time suck than blogging. Still, I’d like to try my hand at it. Currently just trying to figure out how to re-organized my life so that I can have time to do it.
I wouldn’t know where to start! Ebay offers a platform so you don’t have to do a website but it takes a big % of sales. I am better off selling services until I find a product I love so much that I want to sell to the whole world!
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Pauline, if you were to consider it seriously, Steve from My Wife Quit Her Job has a really nice series of walk-through emails that introduce e-commerce stores.
There are some great tools out there. I guess it comes down to the product you’re trying to flog and the amount of time you’re willing to put into it. I guess as bloggers we’ve dedicated a fair amount of our time to this already. I’d imagine how much more would be needed to control things such as marketing, orders, customer service etc.
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My biggest concern is customer support. I’d have to do it myself and that’s not something I’m excited for AT ALL.
I think that’s what I’d be concerned with too. I’m a pretty empathetic person and hate letting people down. Best of luck though, I’m sure you’ll make it work.
Jamie Dickinson recently posted..Terrible Money Saving Tips
Now I have to figure out where to make room for extra time
I’m posting another article on ecommerce stores next week most likely to discuss various aspects in details. Thanks for your encouragement!
It is an intriguing idea…but I know I dont have the time to get anything like that started. We are hoping that I will be able to blog full time in a few years. Maybe then?!?!?1
Holly@ClubThrifty recently posted..Enter Our iPad3 Giveaway!!!
Making enough to support yourself as a full time blogger would be awesome
I think you can do it at the pace your blog is growing!
It would be nice…but I am not overly optimistic. I make a lot more than I did 5 or 6 years ago so it would take a lot to replace my income. I would be willing to take a pay cut though just for the improvement in our quality of life.
Holly@ClubThrifty recently posted..Enter Our iPad3 Giveaway!!!
It sounds interesting but time is such a factor. I feel like there aren’t enough hours in the day as it is, and starting an online store would take up a lot of time. But kudos to those that succeed at it
Mackenzie recently posted..Caramel Apple Cookies
I thought much the same. But I’ve attended a few webinars where people have shared their stories of struggle and success and they motivated me to think big. Time will definitely be a huge issue, so will finding the right product, suppliers and shippers – but if there is anything I learned in business so far is that great things aren’t easy to accomplish.
If you were to develop a store you’d obviously have to be closely related to that niche. Take for instance the hockey store you mentioned: they have to know all of the equipment that it takes to play hockey, they have to know the good brands and good quality products, etc., etc.
I have no real interest in doing that, but it is a fascinating idea.
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Good point Jason. I wouldn’t want to give customers support on a product I have no clue about. Maybe I’ll go with umbrellas lol… how difficult can it be to figure out an umbrella.
I did this for 4 years. I started, ran, and closed my online store all by myself. It is much harder than you could ever imagine. The advertising costs alone are high. Eventhough it doesn’t cost much to get started, it costs a lot to maintain. I lost the quality of life that I enjoyed because I was dedicated to making it work. I easily sold over a million dollars worth of merchandise after year 2, but it just wasn’t worth it to me.
Dropshipping can be very tricky. There are only a few legitimate dropshippers out there. There are many websites, but their prices are ridiculous and they don’t ship on time. You have to rely on them and it doesn’t bode well for happy customers. I did do dropshipping, but it only worked once I found a reputable company to do it.
There are so many things that I can tell you about running an ecommerce store that I can’t fit in this comment. If you have any questions, shoot me an email. I can probably answer almost every question because I had them myself.
Grayson @ Debt Roundup recently posted..Save For Retirement or Pay Off Debt?
I have a million questions for you! Expect an email
I’m considering potentially starting up a hand-made jewelry business. I like that I can choose whether or not to make it a part-time or full-time job and it would be doing something I really have a passion for.
Gillian @ Money After Graduation recently posted..The Financial Perks of Being Childless by Choice
You might be better off using Etsy to sell your products. Ecommerce stores can be complicated. Have you seen Etsy?
Interested in making side income. Not so much interested in all the hassles. It sounds like a good deal though if you had the time and the patience.
Debt and the Girl recently posted..Why You Should Be Careful in Where You Volunteer
I’m thinking about it in terms of a full time job tbh. But if you find any good side income gigs that don’t have all the hassles involved with online stuff, I’m all ears
I know some people who do really well, but you have to be pretty motivated. I don’t know that I would be the best person at it, but if it’s your think, it can work.
Kim@Eyesonthedollar recently posted..How We Paid Off $30,000 in Credit Card Debt
Hmmm, what product would motivate me…. hmmmm.
I have an ecommerce site, for ebooks that I’ve published. So far, I only have three titles up there, but you have to start somewhere!
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Indeed! One of the tips I’ve been seeing over and over in entrepreneurial community is that simple is best. Even 3 titles should do well if you have a very presentable and convincing storefront. Lucky for me, I have some knowledge about what works in online sales so it should be a good head start on most people.
There will be pros and cons to everything in life but if it’s something you are passionate about and you can overcome the cons than I don’t see what should step in the way. We only have one chance to do what we want on this earth.. so we take and run, look back and wish or look back and say why didn’t someone hit me! Life is risk.. we all have choices. Great article.. I’d do it if I had the time and a great idea! Cheers Mr.CBB
Canadianbudgetbinder recently posted..How to Earn Optimum Points Fast at Shoppers Drug Mart
Thanks Mr. CBB
I agree, there’s always going to be risk, but we gotta try it even if to fail or else we can’t complain.
Seems like a big hassle. Sometimes we spend more time trying to get out of something than the time it actually takes to do it. An internet store might take more time than a regular job but pay less.
It’s not something that I could commit myself too.
Justin@TheFrugalPath recently posted..Finding Your Path To Financial Independence
Thanks for your opinion Justin. I’ve heard of many people making full time income running an online store that’s why it sounds very appealing to me. I’m going to interview a few people who have ran their own stores to see what it’s like.
I’m fascinated by this entrepreneurial path. I’ve never had an interest in retail, but I would think you’d need some sort of niche. It does have an allure, work from home and all.
Barbara Friedberg recently posted..MORE EDUCATION LEADS TO HIGHER PAY
From what I’ve heard and read about, most people suggest finding a unique niche that everyone else is not pursuing. I guess electronics are out of the question and clothing can be difficult but very profitable. The markup on T-shirts is amazing. Shirts come from China at something like $2/per and sell for $20-25 over here. But with clothing, you have to carry inventory constantly because it takes so long to ship. I can’t imagine getting into international shipping though – sounds very involving.
I only suggest starting an online store if you are an artist who selling your own products. Everyone else is doing it to make money, and that is a hard way to make it.
You are better off promoting a top converting affiliate product with a high commission. High commission is the key, if you can pay for traffic and still make a profit, you have a winner.
Make money now, not 6 months from now. Concentrate on ways to get traffic besides SEO, then you will make money with anything.
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Have you tried it or something?
I’m very interested in starting an online commerce as well. This is an excellent business model that doesn’t require much capital compared to other startup models.
The 4-hr Work Week by Tim Ferris and Startupbros have some great insight in how to develop and streamline your commerce. There is enough information on the net that you can learn how to hedge your risks. I have found a niche that interests me and have developed a business plan. My plan is to put this in action in 6-12 months when I have more time.
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