A fellow called me today about his plans to import clothes and sell them on the internet. As usual, I told him what I know about that plan, and the essential problem of it costing him $250 to get a customer to come by a $100 sweater. The facts:
1. Amazon.com offers webinars on how come online stores do not pay, and ideas on how they might in the future.
2. Online sales is less than 8% of retail sales in USA, at about 20 years of trying. At the height of the mail order catalog boom in the 1980s, about 8.5% of retail sales came out of catalogs. If online sales were going to get higher, would they not have done so by now?
3. Since online sales are about 8% of retails sales, that means brick and mortar are about 92%. Why would anyone ignore 92% of a market? I teach how to go after the 92%, and treat any online sellers as just another customer. Sell TO online stores, don't sell online yourself.
I assured him I was not trying to discourage him, only that he could certainly test out his idea if he reformed it as a hypothesis, and gave it a test by opening a yahoo or amazon store for $40 a month, and use google ads to advertise for three months, with pix of his items and prices, and see what he gets. No need to actual import anything or start a business since this is just a test. What orders he gets, or not, will give him insights into whether to proceed. If he gets orders, it will not be the first time an online seller informed a would-be buyer he is "sold out."
For from say about $150 to $500 he can find out if his idea will work, by testing it first. He can spend $500 max and know if it will work, or $50,000, or more, and know it it will work or not.
How come I think I know so much about selling online? Because I have been doing it myself, at a profit, since 1999, at least. It won't do to guess in business, you must constantly test. Entrepreneurs do not take risks. I take a clear position because if someone can prove me wrong, I'd be delighted to learn of it. 15 years so far, and no one has done so.
Feel free to forward this by email to three of your friends.
1. Amazon.com offers webinars on how come online stores do not pay, and ideas on how they might in the future.
2. Online sales is less than 8% of retail sales in USA, at about 20 years of trying. At the height of the mail order catalog boom in the 1980s, about 8.5% of retail sales came out of catalogs. If online sales were going to get higher, would they not have done so by now?
3. Since online sales are about 8% of retails sales, that means brick and mortar are about 92%. Why would anyone ignore 92% of a market? I teach how to go after the 92%, and treat any online sellers as just another customer. Sell TO online stores, don't sell online yourself.
I assured him I was not trying to discourage him, only that he could certainly test out his idea if he reformed it as a hypothesis, and gave it a test by opening a yahoo or amazon store for $40 a month, and use google ads to advertise for three months, with pix of his items and prices, and see what he gets. No need to actual import anything or start a business since this is just a test. What orders he gets, or not, will give him insights into whether to proceed. If he gets orders, it will not be the first time an online seller informed a would-be buyer he is "sold out."
For from say about $150 to $500 he can find out if his idea will work, by testing it first. He can spend $500 max and know if it will work, or $50,000, or more, and know it it will work or not.
How come I think I know so much about selling online? Because I have been doing it myself, at a profit, since 1999, at least. It won't do to guess in business, you must constantly test. Entrepreneurs do not take risks. I take a clear position because if someone can prove me wrong, I'd be delighted to learn of it. 15 years so far, and no one has done so.
Update -
I posed this question to a correspondent in India who has an ecommerce site:
Q: I am arguing strictly online cannot turn a profit... I wonder if that is true in India too...
A: I think you are bang on. Now we just use the online as one channel of communication and brand building. ... It is a myth that buying online is very cheap as no matter how much u spend online in terms of advertising, it seems like its a drop in the ocean and the ones gettin rich are google and fb...
Feel free to forward this by email to three of your friends.
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