Why websites are over-rated… for online importing businesses

You do not need to create a website to start selling products online.

An e-commerce website will cost you anywhere from $1,000+. It will take time to build, and involve a lot of your time by having to manually manage your inventory, sales process and advertising.

Cost

Instead of spending over $1,000 on a website I suggest investing $1,000 (or anywhere from as little as $50) buying products from overseas suppliers. You wouldn’t buy a car without testing driving it first, so why buy a website without testing the product and making sure it will sell?

Advertising

You could create the best website in the world, but without advertising you won’t have any buyers viewing the website. People specifically go to Trade Me and daily deal sites to buy products. Don’t reinvent the wheel to compete for your sellers’ attention. You will pay a commission to use their established platforms, but they are simple to use, they work and they bring in customers. Use the profit calculator as part of the E Start-Up Package to factor in this commission to ensure your selling price is making a profit.

Multiple Products

Trade Me and daily deal websites allow you to sell multiple products that are unrelated. For example, say you are selling baby products, a computer product and a car product. The products don’t complement each other and therefore if you were selling on a website you would have to incur three times the advertising costs to reach out to your three different customer profiles. However, on Trade Me, you could simply list the items in their appropriate category and reach out to three separate buyers without incurring any costs. Unless you are selling on a mass scale (such as The Warehouse) it makes sense to use an established platform like Trade Me.

Inventory Management

Using a free inbuilt Trade Me tool, you simply put in the quantity of the particular product you have and let Trade Me do the rest. As soon as one item sells, the next is automatically relisted without you having to do anything. With Trade Me’s payment details and inbuilt credit card payment system all set-up, it takes the effort and hassle out of all inventory and sales management. Although there are many other platforms that could be integrated into your website to do this; they take time to research and implement. With all the above factors combined, at this point in time I don’t believe there is a better trading platform for an online importing business.

For more useful insights like this, check out the E Start-Up Package.

If you have any questions or comments I’d love to hear them. Enter into the comments box below or contact me.

The 10 – 20 for $10 - $20 Principle (10-20/$10-$20)

Do you want to make between $100 - $400 per week?

What is it?

Sell between 10 and 20 products per week for $10 to $20 profit margin per item and make between $100 to $400 profits per week. See the below table for any combination of items sold and profit margin per item.

For example, sell 16 products per week at a profit margin of $18 per item and you will make $288 profit per week.

The reality is that not every product will have the same profit margin, some will be above $20. I would not recommend selling a product unless you are making more than $10 gross profit per item, because of your time investment in handling the payment.

How long does it take to achieve this level?

It is certainly achievable and realistic to reach this level of profit within the first 3 months. The key factors to achieve this are:

Discipline to reinvest the profits – You will be making money from day 1 when you sell an item; the key is to reinvest all the money from sales directly into maintaining adequate stock on hand of current selling products. Simply set-up a new bank account for your importing and don’t take any out for personal use.

Continually research new products – It is unlikely you will sell 10 to 20 items per week of exactly the same product. Therefore if you want to continually grow the business and the amount of products you sell, you need to keep doing the market research and searching for more. This complete process is outlined in my e-book for sale HERE.

Why Drop Shipping Doesn't Work on Trade Me

What is drop shipping?

Drop Shipping (DS) is when you to buy an individual product from your supplier and the supplier sends it directly to your customer. Therefore you don't have to purchase any inventory until you have actually sold the product to your customer (saving you money). You simply partner with a DS supplier and list their products for sale. Many items on Amazon and E-bay are fulfilled with drop shippers, as are thousands on sites on e-commerce websites.

Why it doesn't work on Trade Me?

Cost - drop shipping adds a large cost onto your product price as you are only sending one product from your supplier (China) to your customer, instead of 20+ at a time. For example, to send one of Product X from China to NZ may cost $20. However if you purchased 20 of the same item it may only cost $40 for all 20 items ($2 each instead of $20); therefore you make more money buying in bulk from the supplier and holding the stock physically in your home.

Time to deliver - It normally takes 10 workings days to receive your item from China. Is your Trade Me buyer going to be happy to wait this long to receive their product? Compared with Courier Post who will deliver the item overnight. Plus you also make $2 margin on every courier post item sent.

Quality Control - If the product goes straight from your supplier to your end customer and you don't physically see the product, how do you know the quality is controlled?

Violates Trade Me's Terms and Conditions - Section 4.2c of Trade Me’s T&C’s states; “You will only list items that are in your possession, except where Trade Me has approved otherwise in writing" 

Advantages of Drop Shipping

No upfront purchase of stock - with drop shipping you do not need to purchase any stock. Instead you only purchase a product once you have sold the product to your end customer.

More product variety - you can offer all of your suppliers stock for sale (without physically holding the stock) therefore your buyer has more choice.

Reduced Risk - Because you do not have any money invested in physical stock, the risk with starting an online e-commerce business is substantially reduced. If things don't work out, you are not left with thousands of dollars of stock that you cannot sell.

No Storage Required - because you never hold the stock on hand, you do not need to store the stock and take up space.

My Experiences with Drop Shipping

I have tried DS only once on Trade Me sales. It resulted in the customer waiting nearly three weeks to receive their goods and therefore resulted in me receiving negative feedback. This had a huge detrimental effect to my business at the time and I have not tried it again.

There is an opportunity for DS outside of TM (e-commerce websites or daily deal websites), provided you can specifically state the expected length of delivery in your own terms and conditions and the consumer knows this prior to purchasing the goods.