Home eCommerce Blog 3 Hurdles That Make it Hard to be an Online Retailer (and how to overcome them!)

3 Hurdles That Make it Hard to be an Online Retailer (and how to overcome them!)

Somebody here at SaleHoo must be doing a fine job, because we seem to have a huge influx of new members joining up!  As with all sellers new to online retail, our new SaleHoo members have a lot of questions about how to get started! 

In order to help new sellers get on their feet, I’ve revealed the top 3 hurdles that make it hard to be an online retailer and offered some practical advice on how to overcome them.

The first one is a common dilemma faced by sellers, the question of what to sell.

1. Not knowing what to sell

The fact that “what should I sell?” is the most asked question on our forum tells me that this is a major hurdle for many sellers. And I’m not surprised: Not only do you have to come up with ideas for items to sell, you also need to determine whether those ideas are actually going to pull some profits!

Tips for deciding what to sell

If you don’t know where to start, just browse around the SaleHoo Supplier Directory and visit our supplier’s websites to get some ideas for products to sell (you’ll find links to the supplier’s websites in the listings in our directory).

Record a list of potential items and contact the suppliers to find out how much you can source the items for (don’t just go off advertised prices listed on the site, these are often not the wholesale price. You'll need to contact the supllier to get these). Note down those prices, and compare them with what the same or similar items sell for on eBay, or whichever marketplace you choose to sell on.

If you can compete with those prices, you’re onto a good thing!

If the numbers don’t work out, it’s probably because your competitors - sellers offering the same items - are buying in larger bulk, and therefore getting better wholesale prices that they pass onto their buyers.

2. Competing with other sellers

As a new seller, you will inevitably run into situations where you are competing against other well established sellers.

The trouble is that those more established sellers can overshadow new sellers for two primary reasons:

a. They have massive buying power so they can purchase items for a lot less per unit than new sellers on a tighter start-up budget. This means their prices will be lower, and much more appealing to buyers

b. They have a lot of feedback, so buyers feel more confident buying from them.

There isn’t a quick fix for overcoming these hurdles: In order to compete with lower prices, you need to save as much of your profits as possible and put them towards a larger wholesale lot because when it comes to buying from wholesale suppliers, the bigger the order, the bigger profits. This is simply because wholesalers can offer volume discounts when you buy in bulk, so you will be able to offer your buyers better deals and make more sales.

To overcome the issue of having less of a feedback score than other sellers, consider buying a few cheap items to help add some “bulk” to your feedback profile.

3. Dealing with competitive marketplaces

This crosses over with my last point about competing with other sellers; On popular marketplaces such as eBay and Amazon, there is a lot of over-saturation of popular product markets such as electronics. This results in new sellers failing to make enough sales or profit to make it worth their while.

This is hugely disappointing for sellers who work hard and want to earn some well-deserved cash.

There are two ways to render this:

1. Sell on an alternative marketplace.

I’ll never deny that experience on larger marketplaces, especially eBay, is useful for all sellers, but I highly recommend that sellers diversify by listing items on a couple of different marketplaces.

This is a good move because other marketplaces have less competition, but still a healthy amount of buyer traffic. Some favorite alternative marketplaces are Addoway and Bonanza.

2. Avoid selling highly popular items.

Unless you can afford to invest around $100,000 on a wholesale order, most popular items are off-limits to you at this stage. So what exactly do I mean by popular items? Things like mp3 players, laptops, cell phones, jeans and popular DVDs.  Instead go for items that are a bit more off-the-radar such as sporting equipment, collectibles or antiques.  

What has your biggest hurdle been since you started selling online?

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4 Comments Add your comment
Many people fall in this particular error, why? They don't think ahead. Not only for actual gadgets which the market is already full of it. Here's an example of something new, like health products for better living in some parts of the globe. They are unknown totally, you hit with a new product that it really works, and of course not deceiving your new customers. Reply
Full Member
This is an important article for new sellers, Alice, and one of the reasons I signed up with SaleHoo over a year ago. When I decided that I was going to actually sell as a business there were a couple of hurdles that would have taken a lot longer to overcome and no doubt with several expensive mistakes cutting into my budget. I was completely new to retail selling, and not being familiar with the jargon it was difficult at first finding the information I needed or knowing what to trust. There are a lot of online sites ready to give advice to a newbie for a substantial fee which often turns out to be get-rich-quick-schemes that don’t work. A lot of times once you pay your money you’re on your own! The other major hurdle was finding reliable suppliers with quality merchandise at reasonable prices. Again a newbie not knowing what to look for or what to ask can easily get ripped off. Even though I was prepared to plug along as best I could I remember wishing I could find a source that understood the ins and outs of eBay, had practical advice and information about selling online and working with wholesalers, and maybe offered some reviews of possible suppliers. It was several weeks later that I found a site that offered everything I needed to feel confident about the decisions needed to find products to sell and relevant ins and outs of selling online. Thanks SaleHoo. As a seller I still have all the responsibility for deciding the best course for my business, but it’s been so nice having a committed resource like SaleHoo to turn to for answers and ideas. Colette TopCat2x2 Reply
Free Member
After spending a couple of years selling different things here and there and always trying to find that special niche I finally found that keeping it simple was the best solution. I now sell inexpensive items (mostly under $10), but I consistently sell a lot. My profit margin is pretty high (usually 1000%) and people are more inclined to buy multiples because of how inexpensive the items are and because I combine postage. It took me almost a year to become a power seller and every cent I have made has gone back into buying stock. So each month my store is getting bigger and better. I can now see that with continued work I will be able to earn an actual income from my store in the next couple of years. This is certainly not a get rich quick system, but an achievable goal that with a bit of hard work will continue to pay off. My opinion is that new sellers should not try to make big profits on each item, but smaller profits on lots of items. Yes, it is more work, but it is more fail proof than trying to compete against those big sellers with bigger buying power. As for what to sell, for new sellers with no start up cash I recommend finding an item you can buy for a dollar or two that can be marked up to $8 or $10 dollars. Think about what you have purchased online recently. Reply
Full Member
I am looking into becoming an on-line retailer and am looking forward to being a member of Salehoo. Reply
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