As I teach in my seminars on small business international trade, we compete on design, not price; our tactic is frequency not volume, our strategy is to start a business that we can handle and grow within whatever means we have at our disposal - time talent and treasure.
Obviously I advocate plan A. You have my reasons for abjuring plan B. But you need not take my word for it, especially since you can test your hypothesis with little or not risk, and fairly quickly. Then you can know for yourself.
To be in business you must have customers, so simply name those people you are sure will buy from you. Then take a sample of your item into those very retailers or whoever and pose your hypothesis: "I believe if I import these you will buy them from me." Here at no risk or cost you will get a reply and after several of such encounters, you will have a good idea of what the future would hold if you actually executed your idea.
Now the internet is an extremely difficult place to make money because although web presence is almost free, the cost of driving customers to your product is far higher than any profit you are likely to gain selling anything online. The proof of this is as of 2009 online retail sales was still only about 4% of total retail sales in USA (3.6 trillion vs 145 billion). (See http://www.census.gov/compendia/statab/2012/tables/12s1055.pdf ) Caution, it opens as a .pdf.
If online was profitable, more would move to it. Another way of looking at this statistic is 96% of retails sales takes place the old fashioned way, bricks and mortar. The question arises, why would anyone elect to sell their products where they would miss 96% of their potential customers?
But all of this offers another scenario for testing the Plan B hypothesis that one will sell online. So simply build a free website, offer your items online for sale with say paypal as a payment method. Show merely pictures of the item you propose to sell, even if you do not have samples. You can get coupons from Google Ads for your first $75 in ad costs for free, so go ahead and save the gas of driving around to retailers and buy say $125 of google ads plus a free $75, and see what $200 in online ads gets you for your items.
What if you get orders? Then say sorry sold out, or buy what you offer and ship it, or whatever ever you like. The good thing is you got a good idea of what to expect at very little cost.
This strategy is compliments of the very many people over the last 15 years who reported to me results of trying to sell online profitably and got now where, and of course my own experience. As always though, I am keen on someone showing me a way to do it that works, so I can learn that and teach it too.
2 comments:
But John, that 4% reaches worldwide, and while 96% of businesses are still done at real shops, how much of that percentage will you be garnering if you're in a little corner of the world? 1%? 20%?
Hey Amy,
That 4%, according to the report, refers only to USA online sales, so in fact the web has a far wider reach than the 4%. Which makes my argument stronger: if the reach is so big, how come the percentage is so small? Access may be cheap and easy, but getting a buyer's attention is cost-prohibitive. If you can show me otherwise, I'd be glad to herald it.
For that 96%, you can reach virtually every retailer via independent sales reps.
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