QUOTE(siringo @ Jun 18 2007, 11:42 PM)
"... there is going to be LOTS of work to do as I learn more about what is required to do it correctly ... I'm going to have sell alot of XYZ to make as much money as I'm earning now" (not that I'm earning lots) ... I am thinking of getting into a retail business as I believe it will keep me on track, having to continually promote the product I have on the shelf just so I can get some money back from it.
All excellent points and valid concerns ... nothing wrong with retail either, but it does have additional expenses both in time and money that a web service / deliverable don't have.
Just a couple of observations from my own experience, maybe they'll be helpful.
- There is a real art to maintaining the right balance of inventory to keep everything in stock at all times. I have had many instances where an individual item will sit on the shelf for months and months with no orders. Then one day I'll get an order for 3 from one person, the next day I'll get an order for 2 from someone else and I'm short 1 for filling that order. An increase in inventory is needed to cover those occasions, but that inventory may sit un-purchased for months again. It's really hard to predict, and is influenced by lots of different things. A hiccup that pushes your site up in the search engine results one day may land a load of orders for a single item and then fall off completely after the search engine readjusts. And just when I get to selling something well, my vendor runs out of stock and won't have more for a couple months. The solution would be always maintain large inventories, but that's hard to justify and hard to do with limited funds and still-limited sales.
- Another challenge is that vendor offerings change each year ... just as you reach good search engine placement for an individual item, it may be discontinued in favor of a new design. I do well with my individual product detail pages, but notice that most of the larger sites out there don't at all, which is an advantage for me, until the item is discontinued.
- Automate everything, or everything that is reasonably automatable. This has been my primary focus for over a year, and I'm still far from my goals due to the learning curve, as well as a few wrong paths followed too far along the way. Pick (or develop) a site management (CMS) / cart system that can be easily integrated with your accounting software, with your shipping providers, with your payment processor, with your inventory management system. Set up systems that tell you what inventory to order and when, and ideally generate PO's automatically. Set up reporting to tell you how you're doing on inventory levels, sales, advertising costs, ROI, etc., and do so in a way that you can compare your progress to last week, last month, and last year. Eliminate as many steps as possible in all of your processes, from ordering inventory, to out of stock notices when inventory is depleted, to paying bills, to processing orders. This, in my opinion, is key to success in retail, especially as an sole proprietor.
... I don't want to start an online business, I want to start an online company that runs multiple online businesses ... I just have to make this venture happen and become successful.
Brilliantly put. I feel the same way. Though I could continue on the path I took some 20+ years ago, I simply can't meet my personal goals, live where I want to live, and feel extremely vulnerable to job cuts as I get older. I feel I absolutely must make my business work, but I am trying to be realistic and am take my time building a strong foundation in order not to overextend myself financially, maintain control, and hopefully ensure long-term success. I knew absolutely nothing about running a business when I started. The past 3 years have taught me a ton, and have shown me just how much I still have to learn.
I honestly thought by now I'd have 3 to 5 sites online, all actively making money, even if just a little. Instead, I have one, with 3 others partly developed, and 10+ other ideas I experimented with but abandoned. I just keep pulling myself back to work on the foundation, to streamline current operations, to getting my one site working very well before stretching myself too thin with additional obligations.
Hope some of this is helpful.
Edited by arlen, 19 June 2007 - 09:16 AM.