Starting a business during a recession is like taking a leap off a cliff and hoping a crowd of customers will show up and catch you below.
I started my own unique gift basket website catering to 23 to 35 year olds and hand selected quirky products. My customers raved about my line of inventory, I enjoyed the creativity, and it was exciting to be a new business owner. But the overhead, stress of fulfilling orders, offering customer service, keeping inventory, and building the store proved too much. I had no time to market the business and eventually all the joy and passion I had for it got sucked out.
Here is what I needed to start my business:
A domain name – $10
A web designer – $1,200
A yahoo store builder and host for the site – $39.95 a month
A storage unit for inventory – $59 a month
Cost of start-up wholesale inventory: $2,650
Application for a resale license – Free, but many headaches and uncertainties
Countless phone calls to the IRS to find out implications of taxes and filing – Free, but required hours of time
Grand Total: $3,958.95
(Not counting hours spent at storage, gas for car to lug around inventory, and dealing with clients, phone calls, the IRS, my accountant, shipping orders, and paperwork).
So how did I do? I didn’t even break even. Eventually I had to liquidate my entire inventory to charity and shutter my business, eating most of the costs myself. I couldn’t keep up with the demands of fulfilling orders on my own, marketing, going back and forth to storage all day, and the constant expense of obtaining new products.
If I had to do it all over again would I? Sure, but I would have taken a detour and used a simple idea to keep my overhead non-existent, my time my own, and my apartment free of inventory and unnecessary stress. In all, I would have invested just over $100 and kept all my profit in my pocket.
Let someone else do the work for you:
My absolute favorite, most joyous, and completely thrilling part of the business building process was carefully choosing creative and meaningful products, creating a theme, writing fun copy, and supervising the overall design of my now defunct website. However, I loathed dealing with inventory, wholesalers, the IRS, shipping orders, and customer service. I honestly don’t know any business owners who enjoys it. But it didn’t occur to me for nearly a year that I could have successfully avoided each of those pitfalls by letting someone else do the work for me.
By signing up as an affiliate with shops and boutiques, you can earn a commission on their products without ever dealing with the sales yourself. Commissions could range anywhere from 5% to 75%, depending on the retailer.
This is how it works: You sign up as an online affiliate and the store gives you a unique ID that you can embed as a link into the products you’re advertising. When someone clicks on the product for purchase, that buyer is taken to the store’s website to complete their sale. All inventory, customer service, and any potential product returns lies with the store and you receive a commission that is tracked through that unique ID. You are simply acting as a bridge to advertise a product and show a potential buyer where to get it. Sounds easy enough, right?
Unfortunately, many small companies featuring great products don’t have affiliate programs. And if they do, without dedicated software, sales and commissions can be complicated for you to track. You’re also faced with offering products that may have expired or are no longer for sale. Without monitoring the store and keeping in touch with the manager, you’ll never really know what’s going on. And assuming you want to offer a variety of innovative products on your own website, you’ll need to work with multiple stores at once.
You really need a resource that taps into thousands of vendors at once where you can easily change out products and content in minutes. eBay is just one company that offers an affiliate program to encompass all products on its site. So whether you’re looking for unique gift basket items or high end items like a Porsche, you can earn a commission on every sale. To keep your site unique, you can also offer helpful product content with a humorous bent, pair products together, add some design and color, and start a blog and news section. You can also run Google ads to earn even more revenue.
How much do you earn:
The program offers various commission structures. For sales, here’s a projection of what percentage you could earn on each sale:
$0.00 – $99.99 = 50.00%
$100.00 – $4,999.99 = 55.00%
$5,000.00 – $199,999.99 = 60.00%
$200,000.00 – $699,999.99 = 65.00%
$700,000.00 – $2,999,999.99 = 70.00%
$3,000,000.00+ = 75.00%
Keep in mind that there are also other ways to earn. If one of your customers is a brand new eBay-er who creates an account to purchase the product you’re advertising, you could earn $25 per sign-up. To understand exactly what you can earn, you’ll need to check out eBay yourself and sign-up as an affiliate to determine your individual pay structure.
For more free information on how to use this system, organizational tools, automated store software and more, please visit: www.shouldistartanonlinebusiness.blogspot.com.