Ecommerce Business: How To Start An Ecommerce Business From Scratch (2019 guide).
What Is An Ecommerce Business?
Ecommerce stands for electronic business, which could essentially mean anything. However, in recent years the meaning has been defined as a business that sells physical merchandise through an online store.
The largest example of an ecommerce business is of course Amazon.com. A little later on, we'll discuss becoming a seller on their platform as one option for starting an ecommerce business.
Other popular options include drop shipping, white labelling and straight up producing and selling your own products.
For this guide, I'll be focusing on the 2 most popular business models, drop shipping and Amazon FBA.
Start A Drop Shipping Business
Drop shipping is a fulfillment method where an online store does not actually hold any of the products it stocks.
Instead, when a customer makes a purchase a third party (wholesaler/drop shipper) sends the product directly to the customer.
In other words, imagine that you have an online store that sells drones, however you don't actually own any inventory. You then reach out to me the wholesaler of the drones you wish to sell and we cut a deal.
The deal might be that I will allow you to purchase XYZ drone for below retail value at $800. You then charge your customers $1000 for the same drone, making a profit of $200.
Then, when a purchase is made, you forward the customers information (name and address) onto me and I will send it directly out to them. I then charge YOU the $800 I am owed. (see the diagram below for a visual representation)
The main thing to keep in mind is that in drop shipping you never have to pay to stock inventory.
Benefits of Drop Shipping
We believe drop shipping is the best ecommerce business you can start to get your feet wet.
- There are very few start up costs (other than maybe a Shopify Account)
- You can start immediately (you just need to find a wholesaler)
- You own the brand behind your online store (as opposed to having an Amazon seller account)
- You're creating a sellable asset (these types of businesses are sold often on places like Empire Flippers)
- You can rack up a lot of points on your credit card!
Disadvantages of Drop Shipping
Although it's an easy business model to get up and running, it does still have its pitfalls.
- Dealing with wholesalers can get annoying (often they're short on inventory, which becomes a huge problem)
- The margins are normally thin (even affiliate marketing can occasionally offer higher returns for less work)
- Your wholesaler can instantly remove your account (bye bye business)
- Finding a wholesaler who offers good margins can be challenging
Best Drop Shipping Courses
If drop shipping sounds like a good fit for you, then you might need someone to mentor you while you get your business up and running.
That's why I put together this list of the top courses that teach drop shipping:
This membership comes with 50+ hours of training, a private Facebook group (VIP only), weekly live Q & A and copy and paste templates. It's a great program that breaks the entire drop shipping process down, step-by-step.
This program is one of the most up-to-date strategies for 2019. The course goes incredibly in depth when it comes to all things drop shipping. The creator, Tristan Broughton has a strong background in ecommerce as well as paid traffic, which adds to the programs credibility.
This program is the brain child of Franklin Hatchett, one of the top ecommerce experts in the world today. Initially it started with Franklin and a group of his friends wanting to share their secrets and it quickly turned into one of the top ecommerce courses around today.
This course was designed by Anton Kraly, himself a successful drop ship store owner. I can personally vouch for Anton because I have met him a bunch of times and he sincerely cares about getting his students results. His course is easy to follow and the support you get is bar none. If you want a complete step-by-step solution to growing a successful drop shipping business, then this program is for you.
Start An Amazon FBA Business
We're all aware by now that Amazon is the largest online retailer in the world, in fact it's so big that for every $1 spent online, Amazon currently takes about $0.44!
One of the ways they were able to achieve this was through their FBA service, which stands for Fulfillment By Amazon.
This service allows anybody to setup a seller account, which can be used to ship and store products at Amazon's warehouses.
Then, at the same time you can sell these products on Amazon's giant platform.
In a way, it's the easiest ecommerce solution around today because you don't have to worry about warehousing and fulfillment.
Benefits of Amazon FBA
Here are some of the benefits to starting an Amazon FBA business:
- It's free and easy to get started
- You don't have to setup a website
- You immediately have access to Amazon's giant customer base
- You can start earning cash within a few weeks
Disadvantages of Drop Shipping
Even though on the surface, Amazon FBA sounds too good to be true, it does have its downsides, including:
- The margins are normally VERY thin (Amazon charges these fees)
- It's incredibly competitive as you can imagine!
- You have to buy inventory upfront (unlike with drop shipping)
- Amazon can cancel your account at any time
- Amazon has their own brand (Amazon Basics) that you may have to compete against
I've spoken to a lot of people in the Amazon FBA business and the most common thing I keep hearing is these 2 things…
- You have to keep reinvesting your earnings into new inventory in order to stay in the game
- Product opportunities quickly come and go, therefore always stay on the lookout for new products you can sell
These are the 2 main reasons why if I were to get involved with Ecommerce, I would choose drop shipping over Amazon FBA.
Best Amazon FBA Courses
If you'd like to try your hand at selling on Amazon, then you're going to need a strategy and a mentor to guide you through the process.
Here's this list of the top courses that teach Amazon FBA:
Recently updated and revised for 2019, this course offers a pragmatic approach to succeeding as an Amazon seller. Philip Covington breaks down the process in an easy to understand way, especially for anyone just starting out.
This program by it's name has a lot to live up to. They claim to have more than 10x the number of success stories than any other Amazon selling course on the market. It looks to be a great option for anyone looking to become an Amazon Seller.
The thing I like about this course is that it teaches a model that is very hands-free. Dan Vas, the creator values freedom in his life and business and so if that appeals to you, then this program may be a good choice.
This is a program by Beau Crabill who has created something unique in the Amazon Seller space. The course is designed to show you how to create a successful Amazon FBA business with ZERO advertising spend and without any new products or listings. If that sounds like your jam, then I recommend checking it out.
By far, the leader when it comes to teaching Amazon FBA. This is THE most popular course for when it comes to selling on Amazon. It was also the first to start teaching this model. If you're looking for a complete system that can get you results fast, then this program is for you.
Best Ecommerce Tools
In order to run a successful ecommerce business, it's important to equip yourself with the necessary tools.
These are all the tools we recommend to up your ecommerce game:
Ecommerce Website Tools:
BigCommerce is the number 1 competitor to Shopify and has all the same capabilities. When deciding on which one to use, it really just comes down to personal preference. Each have free trials, so test them out and decide which one is right for you.
WooCommerce is for anyone looking to build their online store on a WordPress website. It's by far the best solution and integrates seamlessly with almost every tool you will need to grow your business.
Ecommerce Research Tools:
JungleScout is a must for anyone starting an Amazon FBA business. It helps you research and find products that have the best potential for earning money on Amazon.
There's little doubt that ranking your product listing pages on page 1 of Google will help to bring in more sales. Ahrefs is the go-to solution for anyone serious about search engine optimization (SEO).
Supplier & Product Research Tools:
Ever wondered how so many people are making money by selling products found on AliExpress? Well, AliDropShip is probably a big reason for it. Just install this WordPress plugin on your site and in minutes you can start selling anything found on AliExpress.
Salehoo is a MUST for anyone starting an ecommerce business. It's the largest search engine of drop shippers, wholesalers, liquidators and manufacturers. It allows you to filter by type, country and much more. Not only that, it also ranks suppliers in order of trust and quality. It's a game changer!
WooDropShip is similar to AliDropShip except that is uses the WooCommerce WordPress plugin to manage your online store. Once you have it setup, you can quickly sync with any product listed on Ali Express.
Dropified is an alternative to Salehoo and it specifically tailored to anyone focusing on Drop Shipping. They have a database of over 7,000 suppliers that you can reach out to when looking for products to sell in your online store.
Inventory & FulFillment Tools:
Inventory Source makes managing inventory easy with your online store. For example, someone using drop shipping to sell products can easily sync with their suppliers products and automatically send orders as they come through. They also house 180+ internal suppliers and if yours doesn't exist, you can easily add them in.
Shipwire is your solution for when it comes to fulfilling orders for your customers. They allow you to ship inventory to any of their warehouses to hold. Domestic and international shipping is also available.
TradeGecko is another powerful inventory management system that integrates with most online store platforms including Shopify, Amazon FBA, WooCommerce and BigCommerce.
Shipping Easy is another great shipping solution for online store owners. Not only can it help you get the best shipping rates possible, it also does things like manage tracking and returns, manage inventory and send marketing emails after a purchase is made.
Ecommerce Marketing Tools:
One great way to drive more sales is to offer an affiliate program and Post Affiliate Pro is the best in the market. It integrates with almost every online store platform including Shopify, BigCommerce and WooCommerce.
If you're a relative newbie to the online business and marketing world, then expect at least a 3 month learning curve before you even think about starting an online store.
For someone new to the game, I almost always recommend getting started with either drop shipping or Amazon FBA.
Spending thousands of dollars on building a prototype of a product you are inventing is a big risk. Therefore, getting your feet wet by selling existing products either through Amazon or your own online store will help you learn the ropes before bringing something new into the world.
It really depends on the type of ecommerce business you're looking to start.
I would say the most affordable option is drop shipping, due to the fact that you don't need to buy any inventory. Ongoing costs may only include a Shopify account, plus additional research and marketing tools.
If you're looking to rely on free traffic from Google, then you can get away with running a business for less than $300 a month if you were to do all the work yourself. Keep in mind that your time is valuable and so when possible, look to outsource things like customer support as soon as you start receiving sales.
For those looking to get involved with Amazon FBA, the ongoing costs will mainly come in the form of replacing inventory, which is a good thing because it means you're making money! Aside from that, picking up an account at JungleScout is a no brainer, starting at $39 a month.
All in all and aside from inventory, you can probably get away with running a lean operation at again less than $300 a month. When you can, look to hire for new-product-research and customer support.
It's hard to know how the ecommerce industry will look in the distant future, however right now it's a ripple that will soon turn into a tidal wave.
According to Statista, online retail is set to hit $4.5 trillion by 2021. That's up from $2.3 trillion in 2017.
With the emergence of platforms like Instagram, purchases made on mobile are up by 30%!
When all is said in done, I'm pretty confident ecommerce will remain a thing for a long time and even could help to replace incomes for the billions of people set to lose their jobs to automation over the next couple of decades.
This type of business is perfectly suited for someone who:
- Is a fairly pragmatic person
- Feels strongly about selling something tangible and physical
- You can't think of a specific passion you can turn into a business
- You like systems & procedures
- You're organized
- You don't mind spending time at the computer
- You want to build a business that can eventually be sold
If at least 4 of these sounds like you, then you're probably well-equipped to run an ecommerce business.
Of course there is! and so remember, there is nothing wrong with a little risk! Fortune favors the bold and without risk, there would be no reward!
You can of course play it safe and stick to a nine to five. However, if you want to get more out of life by becoming an entrepreneur, it's best that you learn to get comfortable with risk.
If this scares you, then drop shipping is the least riskiest way of leaning into an ecommerce business.
More Ecommerce Training
Ready to get started or looking to expand your knowledge before starting your ecommerce business? I recommend your next step be to take one of these two free trainings:
Option 1: Drop Shipping
Click here to watch this free training from drop shipping expert, Anton Kraly.
Option 2: Amazon FBA
Click here to watch this free training from the masters of selling on Amazon, Jason Katzenback and Matt Clark.
Aside from that, drop any questions you have in the comments below. We answer every single one. 🙂
Have questions? Drop them below, we answer every single one!
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