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Ecommerce Success Begins With Good Business Sense

There’s a false perception among many would-be home based business owners that all they have to do is build a website, buy a stack of shipping boxes from UPS, and before too long those homemade crafts and trinkets that are all the rage with their friends and family will suddenly make them rich. Ha! Not happening. 

Yeah, I’m sure that there are a handful of lucky people out there who do occasionally find such success despite having zero business sense and absolutely no plan, but for those of you who are serious about increasing your odds of becoming a profitable enterprise I’d like to share some advice.  I happen to operate an ecommerce site, so these tips come from my own observations and mistakes.  I make and ship game-related products, so for the purpose of this post, I’ll focus on home businesses that take orders via a website and produce a tangible product.

First and perhaps foremost, if you don’t have a whole lot of startup capital then it should be common sense that you need to pick a product that you can begin to make without the need for expensive machinery, computer upgrades, or a large storage space.  I hate to be the bearer of bad news but the truth is that no matter how well you plan ahead of time, there is still a chance your business will fail at some point down the road.  Better to fail and have your bank account intact than to fail and still owe the credit card companies thousands of dollars because you went nuts and bought all kinds of machines and gear during the startup phase.  Your product should ideally be something that you’ve already made from the comfort of home and that you fully understand.

Second, I would highly recommend that you focus your efforts on a product that is easy to replicate and does not rely on customization.  If you have to customize something per the customer’s request for every single order then it will slow you down beyond belief.  I’m not saying that customization-based businesses are necessarily doomed to failure.  They can, in fact, be very lucrative, but the energy expended on this kind of business model is huge.  I’m sorry, but I’m just not interested in exchanging seven emails and having three phone calls with each of my customers to make sure that their custom embroidered pillow looks just the way they want it.  Better to have a product that can be mass-produced quickly and efficiently.  This will also cut down massively on the number of returns and exchanges you have to deal with after shipment.

Speaking of shipping, you’d be wise to choose a product that can be easily and cheaply shipped without a high risk of damage.  The products that I ship are small, compact, and virtually unbreakable.  They are small because I don’t want to have to rent out a huge warehouse to make room for my product – I’d rather do it from my basement.  The size also makes it much easier to pack and ship.  The fact that my product is highly resistant to breakage or damage during shipment is a huge benefit.  I had to learn this one the hard way.  I used to make and ship a product that was huge, heavy, and susceptible to damage.  This became a major hassle because ridiculous amounts of time and energy were expended during the packing phase, and it turned out that no matter how well it was packed it still sometimes arrived damaged because of its properties.  This then led to dealing with sometimes irate customers, and it meant doing a long-distance exchange in each circumstance.  Needless to say, I learned pretty quickly that I needed to eliminate this particular product, and this move streamlined the business in a major way.

Finally, it would be a good idea to follow the advice of Warren Buffett by creating a business that offers you a distinct “competitive advantage”.  In other words, how could your particular situation or your particular skill set give you an advantage over potential competitors?  Perhaps you have a family connection who can provide you with cheaper materials than anyone else.  Or maybe you’ve spent a lifetime perfecting a talent or skill that few others can match as far as speed or quality is concerned.  Or maybe your marketing skills are so remarkable that your conversion ratio is through the roof.  The bottom line is that you need to find a way to get a permanent leg-up on the competition so that you have better flexibility with pricing and a better chance of eventually dominating your niche.

These are just a few things to think about before you launch an internet-based store from home.  As you can see, just a little bit of forethought and planning prior to startup can mean the difference between a business that bombs and a business that spits off cash like it’s nobody’s business.  Good business ideas are a dime a dozen, and the shrewd home-based entrepreneur understands that even good ideas can fail if not executed with an intelligent strategy in place.

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