So you’re interested in selling stuff online, eh?
Perhaps you have dreams of quitting the rat-race to start your own online, eBay or Amazon business (which obviously involves waking up at 10am, working in your pajamas, taking long weekends whenever you like, and answering to nobody because you're the boss...)
Or maybe you just want a few extra bucks in your back pocket.
Whatever your reason for wanting to start selling online, eCommerce offers huge opportunities for anyone with an internet connection.
Of all the ways of making money online, it's perhaps one of the easiest to understand and get started with.
Our ten-minute guide to the world of online selling will show you where to start, and how to do it right!
How to Start Selling Online Professionally
We’ve broken the process down into six simple steps to take you from complete beginner to professional seller.
Let’s jump right in!
Step 1. Choosing What to Sell
You’ve probably thought about this step already.
In fact, most people start by thinking of products they can sell online and go from there. What starts as a daydream at the office often flourishes into a successful business, so be careful what you wish for!
Choosing what to sell is arguably the most important decision you will make as it will determine the demand for your product, price and profitability, market competition, sales, and marketing. Finding profitable small business ideas is one of the hardest decisions you'll make.
Of the billions of products out there, how do you know which one to sell?
For the full run-down on choosing a product to sell, see our “What to sell?” article. But in general, you're looking for a product that meets these requirements:
- You can make a profit on it. This one is pretty obvious. Don't forget to factor in things like shipping, packaging, and marketplace fees!
- There’s reasonable demand for it. One of the common mistakes new sellers make is diving into selling a particular product without checking demand. Don't be that person stuck with a garage full of things you can't sell!
- The competition is not too intense. Competition can really drive down your profits, particularly when there isn't enough demand to meet it. When a bunch of sellers are competing for a small pool of buyers... things can get ugly.
What Can You Sell Online?
The answer to that is: Almost anything. However, if you want to be successful at selling online, you should follow the strategies of top sellers and choose products that meet the criteria below.
Products related to your interests
The first thing you should do to get ideas for what to sell is to brainstorm your hobbies - the things you’re interested in. The reason why this can be a good idea is that you’re more likely to be invested in selling products you’re interested in. You’ll also have a certain level of expertise that can help inform your business decisions.
Once you’ve identified your hobbies, try and think laterally and outside the box to generate product ideas that aren’t so obvious. The more specific your niche is, the better.
Products that you discover online
Try to become intimately familiar with products that are selling well on the most popular online marketplaces, including Amazon, eBay, Aliexpress, and Alibaba. Obviously you don’t want to sell products that are already doing well in highly competitive markets, but often those hot products can give you ideas for similar, complementary, and less competitive options.
Products that are backed by market research
You can do your own market research, or use a tool like SaleHoo’s powerful market research lab to do the heavy lifting for you. SaleHoo Labs uses data from Amazon and eBay to determine the sell rate, average retail price, and competition for a massive range of products. You can simply browse by product category and set specific filters to identify products that you can be confident will sell online.
What Products are Selling Best Online?
This is the million dollar question. But the answer is not simple. As you will know from your own market research, there’s a wide range of products that are selling well online.
The thing is, that once a product becomes a “best seller”, it’s probably too late to start selling it as the market quickly becomes saturated. You need to learn to anticipate trends, or identify ways to sell items that are similar or complementary to best-selling products.
However, according to our own data and research, products in these five niches are always selling well. You’ll just need a bit of creativity (and a dash of intuition) to discover the next best-selling product.
Another strategy to consider is selling products that tap into consumer’s physiological needs. American psychologist Abraham Maslow created “Maslow’s Hierarchy of Needs” way back in 1943 and it’s still relied on by marketers and salespeople today. The hierarchy of needs are:
- Self-actualization: The desire to become the most one can be
- Esteem: Respect, self-esteem, status, recognition, strength, freedom
- Love and belonging: Friendship, intimacy, family, connection
- Safety: Personal security, employment, resources, health, property
- Physiological: air, water, food, shelter, sleep, clothing, reproduction
If you can identify products that fit into these deep-seated human desires, then you are almost guaranteed to have success selling them. You can see how luxury goods might fit into the ‘esteem’ need, home security items tap into our need for ‘safety’, and the latest and greatest pillow fills our ‘physiological’ need for sleep.
Step 2: Finding Suppliers
Once you’ve decided on a product to start selling online, you need to find a reliable supplier for that product.
Finding a supplier is probably the second most time-consuming part of selling online, and also comes with a raft of boobytraps to avoid - so be careful! A supplier is one of your most important business partners so you want to make sure you choose the right one.
Your business model will largely determine what type of supplier you work with. But let’s get down to the nitty gritty. How do you find a supplier you can trust?
There are several ways to look for suppliers:
SaleHoo’s Supplier Directory
SaleHoo can help you save time and minimize risk when choosing a supplier. SaleHoo’s directory has more than 8000 legitimate, low-cost suppliers of a massive range of products, located all over the world. SaleHoo’s staff check and verify all suppliers before adding them to the directory so you can be confident that they’re reliable and trustworthy.
Finding Dropship Suppliers
If you want to go at it alone, you can use search engines like Google and online marketplaces like Alibaba and AliExpress to find dropship suppliers. It takes a lot more time and you have to watch out for fraudulent businesses and scams. But if you’re willing to invest the effort, you can find good dropship suppliers this way. Start by searching “[your product] + dropshipper” and go from there. On websites like Alibaba, you can contact suppliers directly and ask if they provide dropshipping services.
Finding Wholesale Suppliers
Google is your friend when it comes to finding wholesale suppliers. However, you should be aware that often the best suppliers don’t have a lot of time and money to invest in marketing (and their websites can look really cheap), so they can be hard to find online. If you’re wanting to secure the best deal, you’ll have to do a bit of groundwork. One way around this is to work with local wholesale suppliers, or to visit trade shows and meet suppliers face-to-face, the old-fashioned way. A lot of the sellers on Alibaba, AliExpress, and other major online marketplaces will be wholesalers, so you can contact them and make enquiries. If you want a shortcut, there’s always SaleHoo.
You can find manufacturers much the same way as you find other suppliers - on Google, SaleHoo, and popular online retail sites. But if you’re getting them to manufacture your product, there are just a whole lot more boxes to add to your checklist. You need to be even more vigilant and ensure you do due diligence. Ideally, this means visiting the factory, meeting the manufacturer, and testing their products and service before committing to your first order. Finding a great manufacturer is essential to the success of your business.
Step 2.1: Contacting Suppliers
So you’ve found a few suppliers that you want to reach out to? Great! You’re making real progress. The next step is contacting them. This sounds as simple as flicking them a quick email. But you should know that the best suppliers get contacted by a lot of aspiring online sellers every day, so if you don’t make a good first impression, chances are they’ll just ignore you. And you don’t want that!
You need to know what suppliers want in a potential customer/business relationship, and you should also know what you want from the supplier. These are the top five things that a supplier is looking for when you contact them.
- A serious buyer mentality
- Clear, concise communication
- Good manners
- Long-term customers
- Low-risk relationships
The best way to achieve these objectives is by doing your research and not overloading the supplier with questions. To help with this, we’ve put together a list of 35 questions you should ask a potential supplier (just don’t ask all of them at once!).
We highly recommend that, whenever possible, you always opt for a telephone call. Email is OK, but it doesn’t give you that personal interaction which can help you determine the legitimacy, expertise, and professionalism of potential suppliers, which are all things you need to know when you're giving someone a bunch of money.
Step 2.2: Negotiating with Suppliers
So you’ve contacted a suitable supplier and you’re ready to commit? Now’s the time to get down to business and negotiate your deal.
Remember: your goal is to be able to source your products for less than what you'll eventually sell them for. Every little discount you can get will count towards your profits — and it can really add up!
So, how do you get a better deal from your supplier? Simple! You can:
- Order in bulk. The more you order, the better the price you can negotiate. If you’re just starting out this might not be an option, but it's something to consider for later, especially if this product seems to be working out well for you.
- Develop a relationship with your supplier. As you work with your supplier and show them you’re serious and consistent, most of them will help you out by offering discounts and other bonuses. If they don't offer... try asking. If your business is valuable to them, they'll try anything to keep you happy!
- Buy from the source (the manufacturer) if possible. If you can afford to order in bulk, buying directly from the manufacturer of the product (rather than a wholesaler) will get you the best prices. If you're not in a position to buy in bulk, consider splitting the cost with other sellers. You can sometimes find partners on wholesale forum sites (like SaleHoo's members' forum) and arrange to split a shipment.
Now that you’ve decided on what product you want to sell and who you’re going to buy it from, it’s time to make everything official and legal! Yes, that means taking the step to becoming a real online business.
Step 3: Setting Up Your Business
So you’ve got all the ingredients to launch your online business, now you just need to make everything official. Every country has different requirements when it comes to setting up a business, so it’s always a good idea to speak to an accountant or lawyer to get professional advice.
However, to make sure you’re getting started on the right foot, here are the four main things you need to consider when setting up your business.
Choosing a business name
Make sure it’s something you feel comfortable broadcasting via your social channels as well as in person. For example, don’t name your business “Miss Kay’s Underwear Store” even if you’re selling underwear. Who’s going to want to share (or even click on) a store’s social page if they think it’s a joke? Make sure your business name is on-brand. Even better, choose something original so that the .com domain name is still available.
Registering your business
Business regulations are different across countries and, in the United States, they vary from city to city and state to state. A simple Google search of your country and city will tell you whether you need to register your business in order to operate legally.
Applying for a Sales Tax ID (or reseller’s license)
If you are serious about starting an online retail business and sourcing products from wholesalers, in most US states, you'll need a Sales Tax ID. A Sales Tax ID is a number you obtain from your state and/or local government that allows you to charge sales tax whenever a buyer in your state, county and/or city purchases an item from you, even if it’s an online purchase. Note: This is only relevant for businesses in the US, or with customers in the US.
Setting up payment options for your store
When you launch your online store, you want to be ready to start accepting money. That means you need to offer a range of payment options for your customers. These days, it’s common for online stores to cater for credit cards, Paypal, Stripe, Afterpay. You don’t need to be signed up to every payment option, but the more flexible you are, the more sales you will make.
Step 4. Choosing What Platforms to Sell On
Now that you know what you’re selling and your business is set up legally, it’s time to choose where you want to sell. There are a lot of options, but how do you know which is the best for you?
What Is The Best Platform to Sell Online For You?
I wish I could tell you that a specific online marketplace is the best one for you, but it really depends on what you’re selling and what you’re hoping to achieve with your business. Each platform has its own pros and cons, so it pays to do a bit of research into a few different platforms before deciding which one you will use to start selling online.
You should also consider starting your own online store using a platform like Shopify so you don’t have to compete in a crowded marketplace like Amazon or eBay.
What to Look For in an Online Store Solution?
- How many users does that platform have? The more users, the more potential customers for your business. That’s almost always a good thing!
- How many sellers does the platform have? The more sellers (particularly sellers in your niche), the more competition you’ll have. It’s a good idea to weigh up the number of sellers against the number of potential customers.
- What seller’s fees do you have to pay? Every fee eats into your profit margins. Do the calculations to see what the platform will cost you.
- What type of goods are you selling? Some platforms are more suited to specific types of products. For instance, Etsy has a reputation as being great for arts, crafts, and creative goods.
- How reliable is the platform? Are you confident the platform will exist 10 years from now? It’s hard to know, but if you build your business and customer base on a particular platform you want to be sure it’s going to stick around.
- How much flexibility does the platform allow you? Some online marketplaces have strict guidelines you have to follow. If you make a mistake, your account can be suspended. Whereas, with your own website, you have complete freedom. It’s up to you to decide what’s best for you.
|From $39.99 a month + referral fees of between 8% and 15% per item
|Arts, crafts, jewelry, collectibles
|$0.20 USD listing fee and 3.5% commission
|3.5% Final Offer Value fee
|3% Final Value Fee, or subscriptions from $1.99 to $99.98
|Japan-based, worldwide users
|$33 a month, 8% to 15% category fee, and $0.99 per item sold
|Worldwide (mostly US and Canada)
|Tech and electronics
|Free up to $99.95 a month and 8% to 15% commission
|Mostly free, but they take 2.9% of sales that they bring to you
|Arts, antiques, collectibles, jewelry
|$100 set-up cost, plans from $69 a month, $0.19 listing fee
|Worldwide (mostly United States)
|Free to join, 8% to 20% referral fee
Where Can I Sell My Products Online?
There are a lot of platforms where you can sell your products, but the two biggest players are definitely eBay and Amazon. However, there are plenty of viable alternatives, including setting up your own website with the help of website builders like Shopify, WooCommerce or Squarespace. Let’s look at some of the best online marketplace options for your new business.
- eBay - You’re probably already familiar with eBay being the big daddy of the online auction sites. eBay is great for selling all kinds of products, such as used goods, and one-off items you've purchased from liquidation sales (that's when a store is getting rid of a bunch of old stock, or going out of business). The thing with eBay is that prices can be pretty low, and for many products it can be hard to make a profit. You’ll need to make sure you're choosing the right product when dipping into the eBay marketplace.
- Amazon - Amazon is a bit more “high end” than eBay, mainly because they have a rigorous screening process you have to go through just to sell on their platform. That said, you can sell products at a much higher price than eBay. They also have more site traffic and people will see you as an actual store, rather than just a Regular Joe selling bits and bobs from around the house. Let’s not forget that Amazon has their FBA (fulfilled by Amazon) program which you can use to have them store and ship your products for you. This can allow you to grow your business without needing to hire more staff to help you pack and ship goods.
- Your own website - Having your own store gives you greater freedom, less competition and no seller fees, but it's a little trickier to set up. You can use platforms like Shopify to easily set up an online store, or integrate a plugin like WooCommerce with your Wordpress site. See our article, setting up your own webstore, to figure out whether this is something you want to do.
- Other alternatives - Other online platforms such as Etsy and Bonanza can also be used to build successful eCommerce businesses. Check out our complete list of alternative online marketplaces here.
Step 5: Marketing Strategies for Your Online Store (How to Make Your First Sale)
Congratulations! Your online store is up and running. Now you need to attract customers to your listings or website. This is where your marketing strategy comes in. You can’t just sit back and expect the money to start rolling in. It’s time to get to work.
How Do I Start a Successful Online Store?
You’ve already got the first ingredient to running a successful online store: A great product! But there are several other factors you need to get right from the beginning to ensure long-term success.
- Good quality copy in your listings: The words you use to sell your products should sell the benefits to your customers. Don’t just use the description the supplier provides. Inject some fun and personality into your listings with creative copy.
- Good quality photos: You’d be surprised how many people decide to buy something based on a photo. Make sure your photos are high quality and show the product at all angles. Include an in-scale image and highlight important features. Great photography is an easy way to set your listings apart from the rest.
- A marketing strategy: You should have a plan for how to promote your business outside of your chosen platform so that you can attract more customers to your listings and make more sales. This should include paid and organic marketing methods, such as Facebook advertising and email list building. Consider how to connect your online and offline marketing efforts. For example, you can use a modern cloud contact center system to streamline your customer interactions and enhance their experience. Moreover you can add your digital business card (created using one of the best digital business card solutions) with relevant contact options to streamline the entire customer interaction process.
- Ask customers for reviews: Positive reviews tell potential customers that you’re a trustworthy seller with a good product. You should ask your customers to leave reviews in order to put your future customers at ease when they land on your listings.
How Do I Become a Good Seller?
- Provide excellent customer service: Treat every interaction with a customer as though they’re your first and last customer. Be polite, honest, and provide all of the information they ask for. Your customers are your business’ lifeblood. Without them, you don’t really have a business at all.
- Fast shipping: Customers expect to receive their products quickly - often the next day. If you’re dropshipping products from China, make sure your customers understand that and have some other benefit, such as a lower price, that makes the wait worth it.
- Always be improving: Immerse yourself in the world of eCommerce. Try and pick up on trends before your competition. Offer additional services or benefits to your customers. Be adaptable and don’t become complacent. The online world changes rapidly and you need to be ready to change with it.
- Enjoy the ride: Starting your own business should be exciting and fun and, potentially, provide you with the freedom to work for yourself full-time. Try and take the time to appreciate the experience and be thankful that you’re not stuck in an office working a job you don’t like that much. When you’re enjoying your work, you’re more likely to succeed.
How Can I Market My Product Online for Free?
When you’re starting out selling online, you probably won’t have a big marketing budget like major retail brands. In fact, you might not have any money put aside for marketing. Thankfully, there are a lot of ways you can market your products online for free - as long as you’re willing to invest some time into learning how to do it.
- Social media marketing: Every business worth its weight in salt should have a social media presence. Facebook, Instagram, LinkedIn, Pinterest, Twitter - they’re all great for promoting your business and products and you don’t have to spend a cent. You can build an audience simply by sharing interesting and engaging photos and content associated with your product or niche.
- Start a blog: Blogging is still one of the most popular content marketing methods. If you’re selling outdoor/hiking equipment, why not start a blog on your website that your audience will enjoy. It can be great for SEO and will likely help convert customers over time.
- Start a Youtube channel: Vlogging is another option. If you’re good in front of a camera and having something interesting to say, why not set up a Youtube channel and start talking to your audience and customers that way?
- Positive PR: Do something that’s newsworthy. You’ll have to get creative, but if you can do something that generates media attention for your business that’s some of the best free marketing you can get. Just make sure it’s not a cheap “stunt” that could end up doing damage to your reputation.
- Competitions: Try giving some of your products away via competitions that you can run on whatever social media or website channels you’re using. It might not be 100% free, but it can be a great way to draw attention to your business and products.
Paid Marketing Strategies for Your Online Store
If you have some money to spend on paid advertising, it can definitely be a worthwhile investment. Paid advertising allows you to target specific audiences with your products and generate traffic to your listings immediately. Paid advertising is the only method that some online sellers, especially dropshippers, use to make sales. If you can, it’s optimal to use a mix of free and paid marketing to give your online store the best chance of success.
- Facebook Ads - Facebook is the world’s largest social media platform with 2.4 billion users. It also has one of the most advanced advertising platforms that allows you to target people based on their location, age, gender, interests, and online behavior. This is an extremely powerful tool for online sellers. It does cost money, but you can start with a strategy that costs just $10-$20 a day and once you find an advertisement that’s working and converting customers, you can start spending more. The more you advertise, the more data Facebook collects on your audiences. This helps with targeting and retargeting, helping Facebook to connect your ads with the people who are most likely to purchase your products. Facebook Ads are a case of having to spend money to make money. Consider hiring a Facebook ad agency to help you maximize your ROI.
- Instagram Ads - Facebook owns Instagram, so the ads you set up on Facebook can also run on Instagram. You can choose to run ads on Instagram as posts or stories and you can target people the same way that you can with Facebook. You want to create ads that are native to the platform, meaning they don’t look like ads and blend into
- Google Ads - Google is the world’s most-used search engine. Google Ads lets you place ads within search results. You know those recommended links you see at the top of search results? Those are paid ads. Google also allows you to target specific keywords relevant to your product or niche. You can set a monthly cap on how much you’re willing to spend on your Google Ads, but the average cost is said to be between $1 and $2 per click. Google also owns Youtube, which is another platform to consider advertising on.
- TikTok Ads - TikTok is a social media platform known for its short-form videos, ranging from dance challenges to comedy sketches. Launched globally in 2018 by the Chinese tech company ByteDance, TikTok quickly gained popularity for its user-friendly interface and algorithm-driven content recommendation, propelling it to become one of the most downloaded apps worldwide. TikTok Ads offer various formats, including In-Feed Ads, Branded Hashtag Challenges, Branded Effects, and TopView, making it a versatile platform for promoting dropshipping and eCommerce stores. With precise targeting options based on demographics, custom audiences, and lookalike audiences, businesses can reach their desired customer segments effectively. Crafting engaging and visually appealing content is key to capturing the attention of TikTok's predominantly young user base, allowing dropshippers and eCommerce businesses to showcase their products in a creative and entertaining manner, ultimately driving brand awareness and conversions.
- Influencer Marketing - Influencer marketing is a strategic approach where brands collaborate with individuals who have a significant and engaged following on social media platforms to promote their products or services. Influencers, often recognized as authorities in specific niches, leverage their credibility and reach to create authentic content that resonates with their audience, fostering trust and driving brand awareness. This marketing strategy capitalizes on the influencer's ability to connect with their followers, making it a powerful tool for expanding a brand's reach and generating consumer interest and loyalty.
Almost every online marketplace has its own paid advertising platform to promote your products. You should start by focusing on the platforms that your customers are likely to be engaging in most. Paid advertising is fast becoming a must have for growth and success in ecommerce. It’s worth becoming familiar with the different platforms as soon as you have some money to experiment with.
Creating a Brand for Your Online Store
A great way to differentiate your online store from the masses is by creating a professional and recognisable brand.
When creating a brand make sure it meets these criteria:
- It’s simple, memorable, and professional
- It’s original (check that the domain name is available)
- It aligns with your business, its values, and aesthetic
- You won’t be embarrassed of it in 10 years
How to Create an SEO Strategy for Your eCommerce Business
While social media and content marketing strategies, outlined above, definitely help with Search Engine Optimization (SEO), you’ll want to have a specific SEO strategy that bumps your business up the list on popular search engines.
You’ve got a lot of great tips to work with there, but if you’re after some additional resources to give you that extra edge on the competition, check out these guides:
- eCommerce Marketing: 6 effective ways to promote niche products
- How to use advertising to get more customers
What You Need to Know Before You Begin
Before you get started investing time and money into an online business, you want to be sure that selling online is right for you.
So let’s look at the pros and cons of selling online so you can weigh them up and make an informed decision.
The Pros of Selling Online
While working from home in your pajamas is definitely a plus, there are plenty of other amazing reasons to work from home while building your own eCommerce business:
- You can work from home, make your own hours, and choose how far you want to take it. The possibilities are endless. Want to make a few extra bucks to save? Want to create an online eCommerce empire? The choice is yours! There's no glass ceiling, which means no boss to suck up to. It's pure freedom.
- It's something you're probably already familiar with! If you’ve bought or sold something online, you basically understand how it works. Which, ultimately, makes selling online an easier skill to grasp than many other home business options.
- You can follow your own interests. Are you passionate about fly fishing? Cake decorating? Refurbishing antique dolls? When you start selling online, you can often turn your hobbies and passions into a profitable business.
- It’s not as difficult or risky as starting a "traditional" business. You don’t have to invest a lot of money when you’re first getting started (not to mention, you won’t have to worry about buying or leasing a physical property). It has a very low barrier to entry, which means practically anyone can give it a go! What’s stopping you?
- You don’t have to worry about storing inventory if you don’t want to! (Hint: It’s called dropshipping, and I’ll get to that later!)
- It’s fun! At least, we think it is. By the end of this guide, we’re sure you will, too!
The Cons of Selling Online
Like anything in life, selling online comes with a few downsides. It's important you're aware of these before you begin, so you set yourself realistic expectations.
- It takes time. It may take you a month or two to start seeing consistent results. The chances of you accumulating over $100 worth of sales on your first day is, well, highly unlikely.
- There's a learning curve. If you’ve sold a few things online before, you’re already one step ahead of your competitors! However, you’ll need to step up your game to sell online professionally.
- You wear all the hats. As a business owner, you’re an incredible team of one (at least starting out). You’ll take on the roles of accountant, marketer, web designer, as well as everything else. This also means that you shoulder all the responsibility. If something goes wrong, you can’t blame anyone but yourself.
- It's not all passive income. You'll hopefully be dealing with regular sales, regular shipments, and regular customer inquiries, which means that your business will require you to do real work and invest time and effort. That is, until you can afford to hire staff! Even then, you’ll want to remain involved in everything that happens.
To simplify, this isn’t a get-rich-quick scheme.
But if you're happy to spend a little time building a reputation, developing your brand, and optimizing your processes... the sky's the limit.
Choosing an eCommerce Business Model
There are several different business models to consider before you start selling online, each with their own set of pros and cons.
You will want to think carefully about which business model is best for you. They all require different levels of financial investment and will determine how you structure your business.
The simplicity of dropshipping does come at a cost. You usually pay a higher price to your supplier compared with buying in bulk, and you’ll usually incur a dropshipping fee.
Shipping also tends to take longer as most dropship suppliers are based in China. But dropshipping is extremely popular and many people have built successful eCommerce businesses using it. Dropshipping is best for people looking to dip their toe into selling online, those who don’t have a lot of capital to buy in bulk, and people who want to keep their workload to a minimum.
See our Complete Guide to Dropshipping.
Dropshipping is the darling of the eCommerce world. Why? Because the barrier to entry is so low. You don’t need to make any financial investment to get started. Meaning, you won’t pay a cent until you make a sale.
That means you don’t need to place any large orders or store excess stock. You just need to decide what you want to sell, find a supplier that provides dropshipping services (if you are dropshipper you need to advertise your dropshipping business to get customers), list your products on your preferred online marketplace, and start selling.
Basically, your supplier does most of the heavy lifting and your main job is to make sales. Simple, right?
Here’s how dropshipping works:
- A customer purchases a product from your online store (at retail price)
- You place an order for that product with your supplier (at wholesale price)
- Your supplier packages and ships the product directly to your customer
Sourcing from wholesalers
Sourcing products from wholesalers is a more traditional retail business model. It’s used by brick and mortar stores and eCommerce stores alike. Once you’ve decided on what product/s you’re going to sell, you find a reliable wholesaler and buy the product/s in bulk. Getting the best price usually requires some negotiation.
Buying in bulk requires that you have significant cash to spend up front. The upside is that you’ll usually get your products at a cheaper price than you would with dropshipping. That means higher profit margins for you every time you make a sale.
Once you’ve ordered the product/s, it’s up to you to arrange storage, to list them for sale online, and to organize shipping. Alternatively, you can use a third-party fulfillment service like Amazon FBA or Shipbob (there are many options to choose from) to handle the packaging and shipping for you. However, this comes at an added cost that eats into your profit margins.
You can see how sourcing from wholesalers can be more labor-intensive than dropshipping, but the financial benefits can make the extra work worth it.
Sourcing from manufacturers
Sourcing a product from the manufacturer is a similar process to sourcing from a wholesaler. The main difference is that you can work with a manufacturer to create your own product, or a private label product.
The initial investment is higher as you’re creating something new, but if you want to build a brand and sell a unique product, then sourcing from a manufacturer is the business model for you.
There are a lot more hoops to jump through in terms of product development, design, testing, packaging, and legal obligations, but if you’re ready to set in for the long haul and build a business that you can differentiate from the majority of online sellers, sourcing direct from manufacturers is a good option.
Making and selling your own products
If you’re creative, artistic, or have a unique skill, then by all means, you can make your own products and sell them online. Whether you crochet beanies, build wooden chopping boards, or engineer new technologies in your bedroom, there’s bound to be a market for your creations. Think of it as turning your hobby into a business.
You can even start selling your own products as a side-hustle, while you’re still working. If you are successful, you may be able to turn it into your full-time job.
The main thing with selling your own products is that all of the responsibility is on your shoulders. You can only sell as much as you make, so you have to invest your own time into production.
The main benefit is that, aside from the cost of materials and your time, you don’t have to make a significant investment up front. You also don’t have to rely on suppliers. It’s all on you.
Where to Go From Here
You should now be well on your way to running a successful online store. It can be an exciting journey, but it’s important to never stop learning so that you’re always keeping up with - or staying ahead of - your competition.
Here are some extra resources that are going to help you as you navigate through the early stages of selling online.
You could look into our advanced strategies for increasing your eBay sales or your Amazon sales.
You may also want to start considering your pricing and shipping strategies.
Finally, if you’re selling on your own webstore, you need to focus on social media, email, and content marketing to get customers to your store and keep them coming back.
Now that you’re up and running, here are some practical tips to keep you on track:
- Tips on packaging and shipping.
- Tips for importing into the U.S.
- Tax basics.
- Other strategies to kickstart your eCommerce store.
Additionally, here are some other great blogs to follow that frequently post content to help you along your online selling journey:
- A Better Lemonade Stand - Richard shares his best for eCommerce.
- eCommerce Fuel - The online blog for an awesome conference.
- KissMetrics - All about marketing & A/B split testing.
- Practical Ecommerce - Tips and tricks for the eCommerce store owner.
- Social Media Examiner - The ultimate blog for social media marketing
We hope this guide has helped you understand the basics of selling online! If you follow the tips and tricks we’ve shared, we know you’ll be an eCommerce mastermind in no time.
eCommerce is a fantastic (and fun) way to make some extra cash online — and potentially build a full-time income. It also gives you the freedom to be your own boss while doing something you really love.
If you’ve found this article helpful, be sure to share it with your friends! As always, thanks for counting on SaleHoo to provide you with the tips and tricks needed to create your dream store.