I have some Ecommerce experience, in fact I built and sold a small Ecommerce business a couple of years ago, but I'm the first to admit that my knowledge in this area is not particularly broad.
I can build websites (as long as no heavy custom coding is required), I know a little about systems and processes and I'm good at SEO. My weak areas are PPC, graphic design, shipping, inventory and other areas that most would consider pretty critical in this field. I have always been a classic do-it-yourself kind of guy, but I realised recently that this mentality is holding me back, and thankfully I have a lot of experience in hiring freelancers on behalf of other people. So I'm building a new Ecommerce business utilising my skills, but outsourcing tasks whenever possible to speed things up and to get out of the habit of trying to do everything myself.
This is an entirely different concept to what I did before. My last Ecommerce business was a classic web shop model, selling car accessories via a substantial product catalogue, with automated order notifications sent direct to drop shippers. The business was totally reliant on SEO.
The new business will focus on one product only - a niche hair care product aimed at a very specific market that isn't being served effectively right now. I know that finding gaps in the hair market is virtually impossible, however without even a shred of naivety I can honestly say I believe I've found one. My cost of goods is about 25% of my anticipated retail price, so there is plenty of margin to play with. For this reason I'm bypassing SEO and I'm going to drive most of my traffic through paid ads, product reviews on major blog sites, offline magazine reviews and hopefully get some YouTube reviews too. I've never done anything like this before, so it should be fun.
Financial estimates
I don't want to go into too much detail because this is glorified guesswork right now.
The product will cost me about £4.30 + VAT (British tax at 20%). I want to retail the product for £19.95. I'm happy to spend up to £10 to acquire each customer and make approx £5.00 profit on each item.
Longer term, I should be able to reduce the product cost to about £3.80 + VAT, and after some A/B testing and fine tuning, il like to get my acquisition cost down to about £5.00, leaving me with about £10.00 profit on each item. Fulfilment costs should be covered by shipping charges.
I believe I can sell 50 units per day fairly quickly. That's £500 profit per day, or £182,500 profit per annum. There are at least 2 additional products I can add to the range later, and I'd also like to explore wholesaling.
It's really easy to get over excited and project unrealistic figures. These numbers are conservative and are used with feet firmly on the ground, so they should be achievable quite quickly.
Actions taken so far
I know it's all about action here, so this is what I've been doing over the last week or so:
1. Identified my target market and competing products. Whilst there is some crossover from competitors, no one markets their product in the way I intend to, nor does anyone specifically target the segment of the market I have identified.
2. Made some decisions about the format of the product. To cut a long story short, there were some options and I believe I have settled for the format that will generate the most sales.
3. Setup an account on Alibaba, browsed around and found a bunch of terminologies I knew nothing about. Did some quick googling to figure them out, and started looking for potential suppliers
4. Have had lengthy and meaningful discussions with 3 Chinese manufacturers. I found these discussions were really easy and informal, however I have a lot to learn about shipping, customs, taxes etc.
5. Following advice from a member of this forum, I also researched UK manufacturers and found just one to suit my needs. Thankfully after nearly 2 hours on the phone, I feel very comfortable dealing with this company and was surprised to discover how small the cost difference was after shipping, taxes and insurance. Decision made.
Packaging samples are on their way. The manufacturer has agreed to customise my product to my specification within a very reasonable cost and MOQ, and it can also be rebranded.
Sourced an additional ingredient I want to add from an American supplier. This ingredient is great for marketing and means the product is much more likely to work well. I want to add value here by selling products that actually help people.
6. Briefed my freelance coder to build a landing page driven Ecommerce website with strong call to actions and a focus on conversions. Showed him exactly what I want. He gets it, and hopefully site will be ready soon.
7. Crowd sourced a logo design, awaiting results
8. Identified a fulfilment company I would like to work with. Will contact them closer to the time.
9. Found a great deal on a mailbox address in London.
10. FINALLY settled on a brand name for the product. This was the hardest part by far.
Guys, if I could ask some questions:
My primary sales channel will be my landing page oriented website, but do you think a hair care product by a brand no one has ever heard of would sell on Amazon? If I could get a few reviews and subsequently better rankings, or sell it at cost for a while, what do you think?
The fulfilment house can also handle customer calls and payments. Costs aside, is this worth considering?
Should I choose a fulfilment house close to my location, or close to my manufacturer?
I can build websites (as long as no heavy custom coding is required), I know a little about systems and processes and I'm good at SEO. My weak areas are PPC, graphic design, shipping, inventory and other areas that most would consider pretty critical in this field. I have always been a classic do-it-yourself kind of guy, but I realised recently that this mentality is holding me back, and thankfully I have a lot of experience in hiring freelancers on behalf of other people. So I'm building a new Ecommerce business utilising my skills, but outsourcing tasks whenever possible to speed things up and to get out of the habit of trying to do everything myself.
This is an entirely different concept to what I did before. My last Ecommerce business was a classic web shop model, selling car accessories via a substantial product catalogue, with automated order notifications sent direct to drop shippers. The business was totally reliant on SEO.
The new business will focus on one product only - a niche hair care product aimed at a very specific market that isn't being served effectively right now. I know that finding gaps in the hair market is virtually impossible, however without even a shred of naivety I can honestly say I believe I've found one. My cost of goods is about 25% of my anticipated retail price, so there is plenty of margin to play with. For this reason I'm bypassing SEO and I'm going to drive most of my traffic through paid ads, product reviews on major blog sites, offline magazine reviews and hopefully get some YouTube reviews too. I've never done anything like this before, so it should be fun.
Financial estimates
I don't want to go into too much detail because this is glorified guesswork right now.
The product will cost me about £4.30 + VAT (British tax at 20%). I want to retail the product for £19.95. I'm happy to spend up to £10 to acquire each customer and make approx £5.00 profit on each item.
Longer term, I should be able to reduce the product cost to about £3.80 + VAT, and after some A/B testing and fine tuning, il like to get my acquisition cost down to about £5.00, leaving me with about £10.00 profit on each item. Fulfilment costs should be covered by shipping charges.
I believe I can sell 50 units per day fairly quickly. That's £500 profit per day, or £182,500 profit per annum. There are at least 2 additional products I can add to the range later, and I'd also like to explore wholesaling.
It's really easy to get over excited and project unrealistic figures. These numbers are conservative and are used with feet firmly on the ground, so they should be achievable quite quickly.
Actions taken so far
I know it's all about action here, so this is what I've been doing over the last week or so:
1. Identified my target market and competing products. Whilst there is some crossover from competitors, no one markets their product in the way I intend to, nor does anyone specifically target the segment of the market I have identified.
2. Made some decisions about the format of the product. To cut a long story short, there were some options and I believe I have settled for the format that will generate the most sales.
3. Setup an account on Alibaba, browsed around and found a bunch of terminologies I knew nothing about. Did some quick googling to figure them out, and started looking for potential suppliers
4. Have had lengthy and meaningful discussions with 3 Chinese manufacturers. I found these discussions were really easy and informal, however I have a lot to learn about shipping, customs, taxes etc.
5. Following advice from a member of this forum, I also researched UK manufacturers and found just one to suit my needs. Thankfully after nearly 2 hours on the phone, I feel very comfortable dealing with this company and was surprised to discover how small the cost difference was after shipping, taxes and insurance. Decision made.
Packaging samples are on their way. The manufacturer has agreed to customise my product to my specification within a very reasonable cost and MOQ, and it can also be rebranded.
Sourced an additional ingredient I want to add from an American supplier. This ingredient is great for marketing and means the product is much more likely to work well. I want to add value here by selling products that actually help people.
6. Briefed my freelance coder to build a landing page driven Ecommerce website with strong call to actions and a focus on conversions. Showed him exactly what I want. He gets it, and hopefully site will be ready soon.
7. Crowd sourced a logo design, awaiting results
8. Identified a fulfilment company I would like to work with. Will contact them closer to the time.
9. Found a great deal on a mailbox address in London.
10. FINALLY settled on a brand name for the product. This was the hardest part by far.
Guys, if I could ask some questions:
My primary sales channel will be my landing page oriented website, but do you think a hair care product by a brand no one has ever heard of would sell on Amazon? If I could get a few reviews and subsequently better rankings, or sell it at cost for a while, what do you think?
The fulfilment house can also handle customer calls and payments. Costs aside, is this worth considering?
Should I choose a fulfilment house close to my location, or close to my manufacturer?
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Last edited by a moderator:
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
