If you’re planning on making a profit from your online store you will have to have some sort of calculation template to ensure that you’re not paying more than your making form your products. Each product that you will add to your site will have to be looked at in detail to ensure it will be worth your while to keep it on.
The comparison of the Brick and Mortar store compared to the online store can be used here for me to make my point. Let’s take a pair of shoes in this instant; you will calculate the cost of the product as the price of the product as charged at the manufacturer, transportation costs, packaging, site overheads and your profit. In my next post I’ll explain in detail how each of these are calculated.
EXAMPLE:
Weatherly Green Shoes.
Price of shoes at manufacturer: $50.00
Transport from Manufacturer to You: $8.00
Packaging: $5.00
Transportation to the Buyer: $10.00
Site overheads: $2.00
You’re Profit (30%): $25.00
Total cost of product: $100.00
This means your product still falls in an acceptable price range and you’re making $25 for very little work! For one sale this sounds like a little but say you end up selling 10 pairs of shoes a month, which adds up to $250.00. I’d like to remind you that this is only for that specific product. If you have 10 products that sell equally as good you will end up making $2500.00 a month from running between the manufacturer and the couriers. That is if you’re planning on selling about 20 products.
Please note that the example I’ve used is not the only type of products that sell. Electronics are making a killing on online stores not to mention the fact that people will buy anything online.
My next post will explain more about where to find your products and to ensure you make a success of your online store.
Tuesday, November 29, 2011
The Framework of an Online Store
The business plan for an Online Store is like any other business plan that provides products or services to its clients. Take for instance an Online Clothing Store compared to a Brick and Mortar Clothing Store. The Startup costs are NOT nearly the same but the principal of trade is. For a 9 to 5 store you will need a premises that you will have to rent to have a fixed location to sell your products from, with an online store its exactly the same just easier and much more cost effective. You will need a website and pay for hosting to keep it alive.
The best part is that customers actually pay for the goods before they even have it. This puts the advantage even more on your side.
The basic idea behind an Online Store is for customers to browse through your products, choose what and how much they want, then checkout and pay for the goods. You then receive notice of payment along with an address and order form. You fetch the products, package and post it. Whatever is left in your account can be seen as PROFIT! This is just the bare surface of how it works, later I will explain where advertising and exposure, shipping calculations, profit calculations, etc. come into the works.
In my later posts I will explain how and why the planning beforehand is so important to ensure your place at the top in 10 years from now.
The best part is that customers actually pay for the goods before they even have it. This puts the advantage even more on your side.
The basic idea behind an Online Store is for customers to browse through your products, choose what and how much they want, then checkout and pay for the goods. You then receive notice of payment along with an address and order form. You fetch the products, package and post it. Whatever is left in your account can be seen as PROFIT! This is just the bare surface of how it works, later I will explain where advertising and exposure, shipping calculations, profit calculations, etc. come into the works.
In my later posts I will explain how and why the planning beforehand is so important to ensure your place at the top in 10 years from now.
Introduction
I’ve started this blog not only to promote my web store design business but also to help others who are thinking of starting their own online stores in the near future. In this blog i will describe from step 1 all the way until your package reaches the customer’s door step what and when it will happen. This blog will look at both the pleasure and business side of owning your own online store.
As we all know EBay and Amazon have made a killing in profits the last few years and there’s an obvious reason to that, people will buy anything online! The future for online business is looking good and there’s no reason that you shouldn’t be a part of it. People are willing to go look for products online that they can’t find in their local stores. Other factors such as the variety in choice and even just the basic principal of efficiency affects why people buy things online. It’s still important to take the right steps to ensure that you will make money out of it.
It’s possible to sell virtually anything online, if all your ducks are in a row. In the next post I’ll explain the basic framework of an online store and where the difficult parts will come in. Please feel free to ask any questions.
As we all know EBay and Amazon have made a killing in profits the last few years and there’s an obvious reason to that, people will buy anything online! The future for online business is looking good and there’s no reason that you shouldn’t be a part of it. People are willing to go look for products online that they can’t find in their local stores. Other factors such as the variety in choice and even just the basic principal of efficiency affects why people buy things online. It’s still important to take the right steps to ensure that you will make money out of it.
It’s possible to sell virtually anything online, if all your ducks are in a row. In the next post I’ll explain the basic framework of an online store and where the difficult parts will come in. Please feel free to ask any questions.
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