Editor’s Note: I’ve heard that starting an e-commerce store can be a good side hustle and that some people don’t ever see their products. They just buy and sell through warehouses and promote via their websites. I’ve never been interested enough to give it a try, but I hear it can be profitable! It’s amazing to think you can own a store and make money without ever leaving your house…
More people are starting to discover just how easy it is to start an eCommerce business. One of the easiest ways to start an eCommerce business is when you are not making any products at all. If all you are doing is buying and selling the products, you will have very little to worry about as long as you are making a profit from them.
In order to make sure you have the highest profit margin possible, make sure you buy wholesale, have an inexpensive warehouse to store products, and price your products to cover any overhead you might have.
Buying Wholesale Products
The first thing to do when buying and selling is to make sure you are buying wholesale. Even when buying name brand products, if you are purchasing at a high enough level, you will receive a major price break. Whenever possible, purchase directly from the manufacturer. Buying from a middleman supplier will only cut into your profits. Develop relationships with the sales department for the manufacturers you are selling to in order to make sure any applicable shipping costs will be minimized. You may even work out deals in which you are acting as a middleman or a drop shipper to bring down your costs for wholesale products & eCommerce.
Using Inexpensive Warehousing
Since you are buying a lot of products, you will not be able to store everything in the back closet of your house. You will need to have a separate warehouse for your eCommerce store if it’s large enough or you may be able to cut your costs by renting space in a warehouse in your area. An additional solution to get cheap warehousing for your eCommerce needs is to rent a storage container for your property. Storage companies ship the storage container to your property and will remove it again when you do not need it. If you have products you will not need for months, the storage container can be hauled off and stored at a separate facility. Just call to have the container returned when you need it.
Pricing Products to Cover Overhead
When it comes to actually selling the products through your eCommerce store, take into consideration any overhead you may have. Labor costs, rental costs for storage, and even maintenance costs for your facility should all be considered when figuring out the price you will expect others to pay. Be competitive by keeping your prices at or below the competition, but make sure you are able to turn a profit after you have covered all your costs. Keeping a rolling tally on your costs can help you to more accurately predict future costs and maintain your prices at a level that makes sense.
Are you interested in building an ecommerce store or do you have any tips to add to the above?
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