Tag Archives: over diversification

The 4 steps to creating a successful online business

There are plenty of people telling you how to start an online business and what to do, but how many people tell you what NOT to do?

I’m going to tell you what hasn’t worked for me. Sure, I have had much success with my online business, but as I look back, there are a lot of things I would have done differently.

Find a niche

If you want to be successful, you will need to find a niche. You can’t just be another e-tailer that lists your products among the masses and hopes to get a percentage of the sales. You need to be smarter than that. Ideally, it would be great if your product is so unique that someone in China can’t start making it and selling it on Ebay or Amazon. Even if you have fantastic customer service, if you simply distribute someone else’s products, you will be competing on price with many other sites. You do not want to compete on price alone¬†because you will starve your way to the bottom. There are too many big fish out there that can play the waiting game selling at a near loss until you go belly up. Believe me, I have tried it. You may enjoy a few days or weeks of sales until your competition finds out what you are selling things for and drops their price as well. It’s just not a good business plan.

Is your industry growing or shrinking?

We all enjoy a wave of selling for a time, especially in a market where the winds are blowing our way, but you have to keep an eye on your industry and where it is headed. Is it becoming saturated or is there still plenty of margin to be made? You don’t want to be in the sheet music business when tablets are being used by many to store all of their music. You better know where your industry is headed. You can’t rest on what has worked in the past without keeping an eye on the future.¬† Are you seeing your competition getting out of the business? If so, why? Is there more opportunity this year than their was last year or 5 years ago?

Don’t diversify too fast

Make sure that you can deliver your products to market quickly and that you are able to keep sufficient inventory to keep delivery times quick. Today, you are competing with ridiculous delivery times. Amazon even has a same day service in some localities. People are now expecting their order expedited at no additional charge. Forget trying to compete with Amazon on this one unless you are only selling to your local market. If you are only serving the local market, have delivery service that competes against the big boys, but put the cost of this service within the price of your product. You have to have everything from ordering and receiving your product to downloading orders enmasse perfected. If you try and sell everything from many different vendors, you will have a hard time meeting the minimums that these vendors require. You will also be spread too thin in areas like: product knowledge, sufficient inventory, maintaining pricing and the ability to add great content to your existing pages.

Love what you are selling

Do you love what you are selling? Is it something that you get out of the bed looking forward to doing? Are you excited when you talk to others about what you are doing? I’m not talking about how much money you are making, nobody wants to hear about that. When you do talk to a customer, do you leave that conversation feeling like that person is much richer for having talked to you? Do you feel fulfilled at the end of the day? It doesn’t matter how much you earn, if you hate what you are doing, you have made for yourself golden handcuffs.

Your online store should be a way for you to get your products to more people, not just getting more people to buy your products. Of course we want more people to buy our products, but the knowledge and experience that we offer as well as the actual products that we deliver should be an extension of ourselves, something that we are proud to ship.