eCommerce is a growing business and, in my opinion, the best way to start making money online. I have experience with eCommerce and I would recommend it to anyone who wants to create an online business. Here are 7 reasons why.
1. eCommerce sales are growing everywhere
eCommerce sales are growing every year as a larger and larger share of total retail sales are done online. More people than ever have access to the internet, and consumers in general are becoming more comfortable purchasing products online.
ECommerce sales in the US are fast outpacing regular retail sales and surpassed $300 billion last year. This is not limited to the US, as eCommerce is rapidly growing in Europe and all around the world. Things are only going to get better and now is the best time to get involved.
2. Low startup costs
A domain name (website URL) costs about $10 from Namecheap, and a basic Shopify plan costs $29 per month. Alternatively you can use WordPress and the WooCommerce plugin (which is free) but then you would need a separate hosting plan. Plans are available from Hostgator for as little as $4 per month. (I would recommend Shopify however).
Whatever you decide, you are looking at a cost of maybe $40-50 to start up your website. This is a clear area where drop shipping has an advantage over other forms of eCommerce. Amazon FBA (selling your own product on Amazon), for example, is becoming popular but requires at least a few thousand dollars (ideally more) of start-up capital to be truly successful.
3. You will get (relatively) quick results
It’s possible to set up a drop shipping store, start bringing in traffic, and start making sales in under a month, even if you’ve never done it before. This is very quick compared to:
- Sourcing products, which requires extensive background research and potentially traveling overseas
- Niche affiliate marketing sites, which can take a long time to get ranked by search engines (or not get ranked at all)
- Blogging, which can take months or even years to build up an audience and become profitable
4. The work is front-loaded
While it does take a lot of work to set a store up, once it’s done you can, for the most part, leave it alone and it will continue to make you money. All you will need to do is forward orders to your suppliers, and at a later stage this can be fully automated. So if you are willing to put in the necessary effort at the beginning, delay gratification and “front-load” the work, you can reap the benefits later on.
5. An eCommerce store is scalable
Once you have a system that consistently makes sales (a system that “works”), you can simply scale it up (increase traffic) and provided there is demand, you will make more sales. Let’s say you are paying for traffic with PPC (pay per click) advertising and you have a 2% conversion rate, meaning you make 2 sales for every 100 visitors to your site. In this case you would just need to increase your daily advertising budget, pay for more clicks, and conversions will increase accordingly.
6. eCommerce stores can be fully automated
While I’m not at this point yet—I know people who are. Once you get to a certain level of success and experience, you can standardize all of your operating procedures and then automate/outsource them. This is the most advanced step of running a store, and the closest eCommerce will get you to truly “passive” income. For those just starting out this seems like a long way away, but it is a lofty (yet achievable) goal.
7. You are building an asset (there is high potential to sell your website)
When I was in Chiang Mai I participated in a day-long workshop with Empire Flippers, one of the largest website brokers on the internet. The sites listed by Empire Flippers regularly sell for 18-20 times their monthly profit. So if you have a site making $1000 profit per month, you can potentially sell it for tens of thousands of dollars. The high multiplier is a nice bonus of eCommerce (and internet business in general) and many go into eCommerce with a pre-planned “exit strategy” to cash in and sell their store.
Do you have any experience in eCommerce? Do you think it’s a good way to make money online, especially for beginners? Is there something else you would recommend? Let us know what you think in the comments section below.