A Friend asked me how to start an online business
A friend of mine called me up today with questions on how to start an online business as a living - at the seller end, not the developer end. He wants to sell products that do not compete with those offered by his current employer into the same industry, technical products that he understands and has a source for.
The last thing I wanted to do was to bury him in tech-speak, even though he's a highly competent technical guy in his own right - but not in website development, or SEO or online traffic generation and business models generally.
As I thought of the best guidelines I could provide, I realized just how confused most people must get when starting out. I've been at this for years, and it would require a volume to document all of the knowledge and hard experience gained in that time, and by the time I did, it would long be out of date - online life moves fast!
So I did my very best to distill that experience on how to start an online business down to a few key points for a man in a well paid job who's nervous as hell about making such a move. Here's what I said - and I'd appreciate feedback from all of my readers on this - please add your experience to the mix - just don't try to sell anything:
Lesson 1: How to Start an Online Business - Don't give up your job Yet!
Don't leave your well paid job right now - just don't - no matter what anyone advises. You need to be up and running with your first revenue stream before you do that - and it's still risky, although the rewards are higher. So chill - your online business can be started part time. It will take longer but it won't take years off your life with the stress you'll suffer from resigning and having all of your 'eggs in one basket'. Use your income to finance your road to freedom!
Lesson 2: How to Start an Online Business - Don't start a price war that you can never win!
Don't let low price be your key selling factor (my friend's products generally sell for under $1000 into a range of industries such as construction. There is a constant demand so price is a factor but so is technical performance and there's no point in fighting a price war with large retailers!). Focus on leveraging your professional expertise (see below)
Lesson 3: If you want to sell physical products, Drop-Shipping is unbeatable
Far and away the best option for selling physical products for you is to drop-ship from your supplier, not from stock. This means getting paid before you order the product. We have for years been selling products in the US sourced from China (and the US when we can) and we are based in Australia. A good drop-shipping store works like clockwork. We have some more information below for beginners. At all costs, avoid paying for stock that might never sell except in a desperate fire-sale as you try to recoup a little cash.
Lesson 4: Sell products that people trust
I said this to my friend because he is selling into a professional market and the products are not an 'impulse buy'. you can sell impulse buyers products with which they are not familiar because the products tend to be low cost and they need to trust you and your website rather than the product. As long as you sell them good quality products they will come back and tell their friends.
Professional products are different. For professional markets you should sell a trusted brand if possible - if you are selling products for use by technically competent people, performance will usually dominate price as a selling factor. If your brand is not that well known, put up a technical comparison chart and leverage the name of a well known product (legally!).
Lesson 5: How to Start an Online Business - Sell Yourself and your expertise
First and foremost sell yourself and your expertise - that is your USP, not the product. If you have a prominent profile as a respected industry professional, then you will have a strong influence over the sale of your product to other professionals - even if the product is not well known. Obviously, this is not a factor for products purchased on impulse.
Lesson 6: Re-read point 5 - it's critical
Lesson 7: Howe to start an Online Business - Use your industry contacts
Leverage your customer industry contacts at the buyer and user levels. Starting off by going for organic traffic is truly tough unless you can leverage powerful long-tailed product descriptions on your eCommerce - business website. After you have set up your sales channel and website, introduce your product(s) to people who know and trust you. DON'T start by selling to them - it's a HUGE turnoff. If you need to know more about the art of ethical selling try a sales course in ethical selling from ISR - they are simply fantastic.
Lesson 8: Start with One product - or Just a Few Products
If you need to start with organic traffic very soon, start with one product - just one. Get a competent SEO practitioner and designer to do you a simple, trustworthy site and focus on specific geographical regions with long-tailed keywords.
You can rank fast this way and gain some sales traction. An example might be (and this is not researched keyword, so don't go looking!)- "Reliable survey laser for road building in New South Wales". Such keywords need to be thoroughly investigated to see the search volume and you will need several of them to make the traffic volumes you need; but they will rank!
Lesson 9: Get a fast, simple and attractive website shop
Get a one three or four page website with testimonials for the product, fast loading, one-page checkout, downloadable data sheet, trust symbols (PayPal etc), psychologically good colors for selling (there is solid science behind this), and a picture of yourself on the landing page with click-through to your biography.
The other pages should be used for photos of the product at work and reinforcement that you are a true professional they can depend on. Use a supplier you know that you can trust and who will be up-front about all costs. Here are the questions you must ask a designer. (You can download these questions as a document).
Lesson 10: Have a parallel traffic growth strategy for organic traffic
Grow organic traffic in parallel with adding new products over time. This requires that you should add expert blog articles with properly researched keywords and authority links, external as well as internal SEO and new products on a regular basis.
Lesson 11: Alternative strategies to start an Online Business
The alternative ways to build an online business are as follows:
1. Build a store with many products and advertise for traffic
Ads on Google and Facebook are expensive so make sure you budget and target accurately. We just tested Linkedin Ads and they were simply outrageous! Count on the expense of needing a few trials to get this right. Your products are not impulse-buys so you need to investigate the customer buying process and see how you can improve it significantly. Your ads should be Geo-targeted at areas with suitable projects that use your product.
2. Sell on Amazon (not recommended).
You don't need a website to do this, as the Amazon closed environment has everything you could need, BUT: You need high margin products to do this, preferably unique products. Apart from the high Amazon commission, you also need to pay for Ads on the Amazon platform and if your product is commonplace, the competition is extreme. And of course, you need to ship your products to the Amazon warehouses. Their online support system for this is excellent, but you need to have your import sorted out (if needed).
3. Build a store with many products and grow traffic organically
Build organic traffic with a monthly investment in SEO (onsite and offsite). If you have reputable products, money to invest and a competent SEO supplier, this can work well. This can be done in parallel with paid traffic/ads and as your organic traffic grows, your ad-spend can be reduced incrementally. But be prepared to wait months for steady results from organic growth.
Starting an Online Business: Summary and Conclusions
That's the long and short of it, and I did not even enter the area of building a decent business starter website. My friend's business can definitely work, but he needs to start up quietly (and ethically vis-a-vis his current employer), and grow revenue to a steady stream before leaving his job. He needs to go through the ups and downs, the trials, tribulation and yes, the expense of finding his way around the online world.
Conclusion 1: You must understand the online business basics
You can't succeed in any business if you don't understand how your shop must look, how to attract the right visitors, what your USP is, what your advertising and logistics costs are and so on. Every aspect of offline trading has its online equivalent and you need to know what they are even if you are not doing all the work yourself.
Conclusion 2: You need a trustworthy online partner
Maybe most of all you needs a trustworthy online partner to build his site, and constantly advise him in SEO progress against goals, online market segmentation and advertising, and the use of social media. if you are serious about your business, then that's what you need to focus on - not running your website.
Conclusion 3: Online Business is not a 'Get Rich Quick Scheme'
Starting a business online of any sort is not a 'get rich quick scheme'. It requires the application of expertise, sustained effort and focus. It also requires the judicious and effective application of your limited resources. Money can only be spent once; time used can never be recovered. So spend time on your strategy, talk to experts who will help you whether you buy from them or not - honest people.
Conclusion 4: Don't Suffer from Shiny object Syndrome
"At its core, shiny object syndrome (SOS) is a disease of distraction, and it affects entrepreneurs specifically because of the qualities that make them unique. ... It's called shiny object syndrome because it's the entrepreneurial equivalent of a small child chasing after shiny objects."
One of our key lessons learned in how to start an online business is "stay away from shiny objects".
Shiny object syndrome will kill your project. It will drive you into the hands of one phony guru after another and leave you with nothing but less money, less time and deep cynicism not just about 'gurus' but even about your project.
You can get into despair in this way, thinking that you'll never make it. But here's the thing - you can make it for sure if you persist, using the solid guidelines given by people who know what they are doing.
People Who Can Help You to Start a Business Online
Almost all of the knowledge you glean from 'good' online courses is available free online. What the 'gurus' do is package it up as 'systems'. For instance, combining Facebook Ads with Drop-shipping. We've spent money on this nonsense ourselves in our greener days!
But if you want to learn all you need to learn about drop-shipping success, try Wholesale Ted's absolutely free videos on YouTube! The lady giving away this magic is a genuinely successful drop-shipper who makes a ton of cash from Print-On-Demand, drop-shipping and more. Here's her YouTube Channel
Finally (of course!) you can call us! We help businesses of all sizes including start-ups.