10 Questions to Answer about Starting an Online Business - dummies

10 Questions to Answer about Starting an Online Business

By Greg Holden

As a budding ontrepreneur, you have lots of questions. But when you’re just starting out, some of the most important questions are the ones you ask yourself.

“How do I get from where I am now to where I want to be?” is likely one of your biggest questions, but there’s no single answer. Instead, ask yourself these ten questions. The answers will provide you with the way forward as you launch your online business.

What do people need?

What do people need that you know about or can provide? E-commerce really boils down to this: You identify something people need and are willing to pay for, and you provide it at a reasonable price.

Determining what people need is easier than ever thanks to the proliferation of online marketplaces. You can search for items that have sold on eBay. You can scan the many successful storefronts on marketplaces like eCRATER and Ruby Lane and see what sells there. On WorthPoint, you can do extensive research on antiques and see how much they are worth.

If you’re not sure at all whether an item you have to sell is worthwhile, you can put it up for sale on iOffer. Shoppers make offers on things they find; you negotiate the final sale price with them.

What do you have to offer?

Determining whether there’s a market for something is only one half the sales equation. The other is determining what you have to offer your customers.

Self-assessment and advance planning play a role here. Make a list of what you can do, and what you know about, including:

  • Something that gives you energy rather than drains you

  • Your hobbies

  • Your work experience

  • Your computer experience

  • Any programming expertise you might have

  • Any source of wholesale merchandise you already have

Chances are you have more to offer than you think.

In some cases, it’s not what you have to offer, it’s what your suppliers have to offer you. Do a search of the wholesale suppliers on Alibaba and Worldwide Brands for products that interest you and that, according to your market research (see the previous section), you’re certain consumers will want.

Do you have specialized knowledge or experience?

Finding customers isn’t just a matter of matching what they want to what you have. That’s important, to be sure, but you also need to build trust. Your customers will never meet you in person. They will always feel some uncertainty after they pay you online, hoping you’ll actually deliver what you say you will.

One of the best ways to build trust is to tell visitors why you are qualified to sell what you’re selling, or to discuss what you are talking about. You might say something like this:

I’ve been selling stamps online and at stamp shows for many years. I started selling while I had a coin and hobby shop in suburban Chicago. I am a member of the National Stamp Sellers of America, and I regularly answer questions about stamps on a variety of newsgroups. I have a feedback rating of 1,215 on eBay and am a Top-Rated Seller. I offer a seven-day return policy.

Simply creating a page about you and your background on your website will boost trust among prospective customers. A photo doesn’t hurt, either. This is no time to be shy!

Do you have connections to suppliers?

If your Uncle Ned has a manufacturing plant where he makes kites and other paper toys, you’re in luck. By all means, knock on his door and tell him you want to start selling online. Does he want to give you a selection of his offerings at wholesale so you can see how they’ll sell? Chances are Ned will give it a try (unless, of course, he’s already selling that merchandise online).

If you don’t personally know wholesale suppliers, you can look around your town or ask your Chamber of Commerce for suggestions. And even if you find a reputable wholesaler, you should keep looking for more with the following in mind:

  • You should be continually trying to improve both the quality and quantity of your inventory.

  • You need to think big: boost the number of items you already purchase so you can sell more.

  • Expand your sales options and your price range.

Hit the trade shows. Perhaps the best way to find good wholesale merchandise is to see it yourself and go to a trade show. You’ll meet wholesale suppliers on their own territory and help to give them more incentive to do business with you.

No matter where you are located or where you sell, obtaining a legal document that identifies you as a certified reseller is a good idea. That way wholesalers will trust you. Some states call such a document a resale certificate; in other states, it’s called a certificate of resale, or something similar.

Can you make something?

Items that are absolutely unique sell well online. The many sellers who populate Etsy provide you with examples of enterprising craftspeople who find buyers for their arts and crafts online.

In many cases, craftspeople and artisans make a living by selling both online and offline. They might have their own brick-and-mortar store or a booth in someone else’s craft store. It’s likely they travel to flea markets, art shows, and craft sales in their area, too. Selling online can be one component in the dream of supporting oneself by one’s art

What do you love?

Have you ever heard scholar Joseph Campbell’s admonition to “follow your bliss?” In terms of e-commerce, that means selling or promoting something you love.

The thing you need to sell, or write about on your blog, or remote on an informational website, is

  • Something that gives you energy rather than drains you of it.

  • Something you won’t get tired of working with several hours each day.

  • Something that (if it’s a product) is relatively easy to pack and ship.

Take advantage of any expertise and experience you have in your chosen area of interest. If you have certifications, list them. Talk about what you learned in a class — or better yet, what you teach in your own classes or seminars. Your authority builds trust and makes visitors feel good about asking you questions or making purchases from you.

What do you have on hand?

One good way to start making a small amount of money online is to empty out your closet. That’s the way lots of businesses got started. Instead of opening up your garage or your basement and having a sale, take photos and write descriptions and put your merchandise up for sale on venues such as:

  • eBay. eBay is not as strongly oriented toward the lone entrepreneur as it once was. Most of its attention is going toward encouraging big-box sellers to list on its marketplace. Nevertheless, eBay is still a great place to get a new business off the ground and get experience.

  • Craigslist. Craigslist is the best place to find local buyers for all kinds of merchandise, but especially big items like furniture that can’t be shipped easily. Plus, you still get experience taking photos, writing descriptions, and answering inquiries.

What do your friends and family have?

Your own closets and storage areas may only be so deep. But think about your friends’ and relatives’ closets. Selling things for other people is a great way to get a lot of merchandise online quickly.

Being a consignment seller will build up your positive feedback as well. That way, when you start selling a more steady supply online, you’ll already have a track record and people will trust you.

Calling on friends and family is more than simply finding merchandise to sell. They can support you in other ways. Perhaps your niece or nephew is available after school to help you with packing and shipping, for instance. Perhaps your retired uncle offers valuable business advice.

Does someone already do what you want to do?

Very few online businesses are totally original. Most everyone begins by imitating what someone else has done before. (Just consider one of the biggest businesses of recent years, Microsoft, which has often reworked software originally created by Apple and other developers.)

The key is not to simply copy what others have done but to personalize it, do it better, and make your business uniquely yours. Scan the web for sites that sell what you want to do, or look up blogs that cover material similar to what you want to talk about. Don’t be discouraged. Rather, look for ideas and determine what these businesses dont do. How can you make this business yours? Think about:

  • Going local. Is there something about where you live that is special to our business that you can promote?

  • Getting personal. What’s your own background and experience? What kinds of personal observations or product selections that you can contribute?

  • Getting entrepreneurial. What kinds of promotions, contests, quizzes, or sales discounts can you offer to undercut the competition?

Don’t forget to do networking, either. One of the advantages you might have over the competition is the number and strength of our personal connections. Perhaps you belong to several clubs or trade associations; perhaps you are part of a circle of bloggers who write about food, or baby products, for instance. Use those networks to promote your site and for feedback on its development.

Trade names and trademarks are protected. But the general look and feel of a website and the idea of a business are not. Don’t just copy a business or website outright. But if you like the three-column layout of a page or the organization of a blog, you can adopt those approaches as long as you make sure your content is completely original.

Are you ready to put in long, long hours?

Selling online is not a magical process. You’ve got to devote time to finding merchandise, listing it, fielding questions, and tending our website(s) and social media pages on a regular basis. You’ve got to do this when you are low on energy, when your kids are making demands on your time, and when you’d much rather put your feet up and read a book.

How do you find time for all the tasks that go into selling online? You have to:

  • Make a commitment. Resolve that you’re going to stick with your business for a certain period of time (six months, or a year, for instance) and do everything you can to make it work in that time period. Then assess where you are and how to proceed in the next phase of development.

  • Establish a routine. Come up with a schedule for when you perform tasks such as checking your email, taking photos, and so on.

  • Go mobile. Smartphones can help you with email and other tasks while you are waiting to pick up the kids from school, for instance, or otherwise outside and on the road.

Be prepared to “squeeze” tasks in between other things — answering e-mail queries while making dinner, for instance. Unless you’re retired or able to run your online business full time, you’re going to have to “multitask.”