Hi fellow entrepreneurs!
As announced in my intro thread I am starting my Progress/Execution thread about my e-commerce business. Took me almost a month and you'll soon know why...
This is my very first entrepreneurial endeavour. Since I am still working on my day job, I wanted to try out something with limited risk, even if that means limited reward. I have chosen e-commerce. To make things at the start easier, I decided to try out dropshipping, even though this further limits profitability. But, so I think, even if dropshipping turns out to be unprofitable, most of the things I will have learned are anyway required skills if I decide to start an online shop without dropshipping further down the road.
My BIG PLAN at the beginning was simple:
Step 1: Open a shop.
Step 2: Run ads.
Step 3: Start selling, measuring, and improving.
I estimated each step should take not much more than a day or two. Let's see, how it worked out so far...
A quick note before I start: Being a beginner, I am absolutely thankful to any input from you. Also, I hope I can show to those who haven't started yet which questions can arise along the way and what kind of problems need to be solved.
The sad truth right from the start: I am working already for about 4 weeks on this project and acting (almost) daily. And I still have no shop online that anyone could visit. It turns out there are lots of formalities you need to go through, especially in the EU (and in Germany, as in my case). So that's where I currently am: just finished lots of formal stuff. Well, at least I also decided on the kind of products I'd like to sell. Let me give you a few details...
I. The fun part
Choice of product to sell.
Brainstorming gave rise to lots of ideas. Repetition gives rise to even more. Browsing categories of Amazon, eBay and similar shops yields yet more ideas. Further, I read a series of posts by Shopify. They are a bit lengthy at times, but have many good ideas (at least, I think so). In the end, I chose a product that had a rising trend on Google Trends, for about 5-6 years already. After that, I had another, related product idea, which also had a rising trend much more recently, about 3 years. Both have different seasonality patterns and I think that's good. I actually might be too late this year to sell one of the products, depending how things work out.
Finding suppliers.
I found a few blog posts mentioning supplier catalogues and search engines. The free ones were of now use, since they contained far too many retail stores. I ended up using lieferanten.de (a German search engine to search for suppliers by goods and other terms) and dropshipping.de (a German search engine solely for suppliers that provide dropshipping). Both are paid services, but the cost is ok. Just using lieferanten.de would have been enough in my case, since I did not find any suppliers on dropshipping.de, which were not on lieferanten.de (but, obv there are much more on lieferanten.de, which does not focus solely on suppliers with dropshipping capability).
Unfortunately, I still don't have access to the price catalogues of the suppliers, since all of them require a verification that I am running a business. My company registration is still in progress (see below), so I have to wait 1-2 more weeks...
II. Now the boring formalities
I wanted to formally register a company since I did not want to run the business as a sole entrepreneur - to prevent personal liability issues, and to facilitate the sale of the business. There is significant overhead caused by this decision. First of all, the company needs a name
and it takes some time to come up with something you think sounds nice. Further, less obvious, legal accounting rules apply which are far stricter (at least in Germany) than those for "single" entrepreneurs (double-entry accounting). I did not really know this before receiving a letter from the tax office requesting my opening balance sheet. Opening balance sheet? What the ...??? So I had another bullet on my todo list which cost me hours of additional reading. Being a "technical numbers person" the topic was quite interesting, so I ended up reading more than the minimum and spent more hours than strictly necessary to get the job done...
Lesson #1: To move fast, you need to focus! Don't spend your time reading news, random blogs and other superfluous stuff, even though it is interesting at times.
Choice of online shop system
You have to decide which online shop system you want to use. Shopify is quite popular and I had a very quick try on it and also its dropshipping functionality "Oberlo". Did anyone try that out already? It turns out most suppliers connected to Oberlo are based in China or far east and have delivery times of several weeks. This wasn't exactly what I wanted, so I decided not to use Oberlo. Also, I wanted a more thorough comparison of available online shop systems and started reading "online shop reviews". My take on it? First of all, there are basically two kinds of systems:
It was clear to me that I want to use a system like Shopify, but should it be Shopify? Another round of investigation started. Reading various comparisons etc. I realised that simply by reading blog posts it is difficult to get a good impression, but at least I could narrow it down to Shopify and VersaCommerce. The latter being very similar to Shopify, but a much newer (or less mature) product. Still, I gave VersaCommerce a try. Indeed, VersaCommerce kind of tries to replicate Shopify, but it is less mature. For me, it was difficult to create a nice looking shop. A shop created by Shopify somehow simply looks better, without any additional work from my side. Also, Shopify has a far larger community, so I decided to stop wasting my time on this decision and decided to go with Shopify for now. Also, the fact that I have read on this forum from several people using Shopify successfully (that's where I originally heard of it), made the decision quite easy.
Lesson #2: Don't overcomplicate things at the beginning. It makes sense to compare different solutions, but once you find a good solution, just go with it and don't waste time to find another one, which is just incrementally better. Anyway, it is difficult to know in advance, what the perfect solution should look like.
Having decided on Shopify, I remembered there are some legal regulations that apply across the EU if you are running on online shop. I started figuring this out and especially the new EU-wide "General Data Protection Regulation (GDPR)" is really a big hurdle. Want to track your customers? Yes, it is allowed, but you have to inform them via a "Data Protection Declaration" on your website on which data you are gathering, how you are using it. Further, give the customer a possibility to opt-out from this kind of tracking. You are using external services/providers which track the data for you? I.e., Google Analytics, Facebook pixel and the like... You have to inform your shop visitors on your data protection regulation that you are doing it and give them the possibilty to opt-out. And than, the most amazing thing: You have to sign a contract with every service provider you use which gets data about your customers, to ensure they are treating the data according to the EU General Data Protection Regulation! This is rather easy for Google Analytics and other big players - they all have onlinf-forms where you can do this with a couple clicks (if you know you need to do this). It gets trickier with other, smaller players, especially if they are outside the EU. E.g., according to my knowledge, many Shopify Apps have access to your customer data. So if you use some of them, you need to sign an appropriate contract first with the app developer. I haven't tried yet, but I think this could be difficult... You might argue that the EU authorities don't care about a new small online shop. And that's correct (for now they care more about Facebook and the like). BUT: Your competitors do and are allowed to sue you, in case you violate any of the above regulations. And this can become quite costly for a young business. Indeed, these regulations have facilitated a new whole business field for lawyers: there are those, focussing on suing as many companies as possible and other who focus on their protection. All this legal stuff took me the last couple of days and I am finally moving towards the more interesting part of the game...
TLDR:
For now that's where I am:
Finally, if you have any comments - be it questions, suggestions, criticism or anything else - I am very open and thankful to any form of feedback.
As announced in my intro thread I am starting my Progress/Execution thread about my e-commerce business. Took me almost a month and you'll soon know why...
This is my very first entrepreneurial endeavour. Since I am still working on my day job, I wanted to try out something with limited risk, even if that means limited reward. I have chosen e-commerce. To make things at the start easier, I decided to try out dropshipping, even though this further limits profitability. But, so I think, even if dropshipping turns out to be unprofitable, most of the things I will have learned are anyway required skills if I decide to start an online shop without dropshipping further down the road.
My BIG PLAN at the beginning was simple:
Step 1: Open a shop.
Step 2: Run ads.
Step 3: Start selling, measuring, and improving.
I estimated each step should take not much more than a day or two. Let's see, how it worked out so far...
A quick note before I start: Being a beginner, I am absolutely thankful to any input from you. Also, I hope I can show to those who haven't started yet which questions can arise along the way and what kind of problems need to be solved.
The sad truth right from the start: I am working already for about 4 weeks on this project and acting (almost) daily. And I still have no shop online that anyone could visit. It turns out there are lots of formalities you need to go through, especially in the EU (and in Germany, as in my case). So that's where I currently am: just finished lots of formal stuff. Well, at least I also decided on the kind of products I'd like to sell. Let me give you a few details...
I. The fun part
Choice of product to sell.
Brainstorming gave rise to lots of ideas. Repetition gives rise to even more. Browsing categories of Amazon, eBay and similar shops yields yet more ideas. Further, I read a series of posts by Shopify. They are a bit lengthy at times, but have many good ideas (at least, I think so). In the end, I chose a product that had a rising trend on Google Trends, for about 5-6 years already. After that, I had another, related product idea, which also had a rising trend much more recently, about 3 years. Both have different seasonality patterns and I think that's good. I actually might be too late this year to sell one of the products, depending how things work out.
Finding suppliers.
I found a few blog posts mentioning supplier catalogues and search engines. The free ones were of now use, since they contained far too many retail stores. I ended up using lieferanten.de (a German search engine to search for suppliers by goods and other terms) and dropshipping.de (a German search engine solely for suppliers that provide dropshipping). Both are paid services, but the cost is ok. Just using lieferanten.de would have been enough in my case, since I did not find any suppliers on dropshipping.de, which were not on lieferanten.de (but, obv there are much more on lieferanten.de, which does not focus solely on suppliers with dropshipping capability).
Unfortunately, I still don't have access to the price catalogues of the suppliers, since all of them require a verification that I am running a business. My company registration is still in progress (see below), so I have to wait 1-2 more weeks...
II. Now the boring formalities
I wanted to formally register a company since I did not want to run the business as a sole entrepreneur - to prevent personal liability issues, and to facilitate the sale of the business. There is significant overhead caused by this decision. First of all, the company needs a name
and it takes some time to come up with something you think sounds nice. Further, less obvious, legal accounting rules apply which are far stricter (at least in Germany) than those for "single" entrepreneurs (double-entry accounting). I did not really know this before receiving a letter from the tax office requesting my opening balance sheet. Opening balance sheet? What the ...??? So I had another bullet on my todo list which cost me hours of additional reading. Being a "technical numbers person" the topic was quite interesting, so I ended up reading more than the minimum and spent more hours than strictly necessary to get the job done...Lesson #1: To move fast, you need to focus! Don't spend your time reading news, random blogs and other superfluous stuff, even though it is interesting at times
.Choice of online shop system
You have to decide which online shop system you want to use. Shopify is quite popular and I had a very quick try on it and also its dropshipping functionality "Oberlo". Did anyone try that out already? It turns out most suppliers connected to Oberlo are based in China or far east and have delivery times of several weeks. This wasn't exactly what I wanted, so I decided not to use Oberlo. Also, I wanted a more thorough comparison of available online shop systems and started reading "online shop reviews". My take on it? First of all, there are basically two kinds of systems:
- Online Shops as a service (e.g. Shopify), configured mostly via a web interface.
- Online shops you run and host yourself, most of them based on WordPress (e.g. xtCommerce).
It was clear to me that I want to use a system like Shopify, but should it be Shopify? Another round of investigation started. Reading various comparisons etc. I realised that simply by reading blog posts it is difficult to get a good impression, but at least I could narrow it down to Shopify and VersaCommerce. The latter being very similar to Shopify, but a much newer (or less mature) product. Still, I gave VersaCommerce a try. Indeed, VersaCommerce kind of tries to replicate Shopify, but it is less mature. For me, it was difficult to create a nice looking shop. A shop created by Shopify somehow simply looks better, without any additional work from my side. Also, Shopify has a far larger community, so I decided to stop wasting my time on this decision and decided to go with Shopify for now. Also, the fact that I have read on this forum from several people using Shopify successfully (that's where I originally heard of it), made the decision quite easy.
Lesson #2: Don't overcomplicate things at the beginning. It makes sense to compare different solutions, but once you find a good solution, just go with it and don't waste time to find another one, which is just incrementally better. Anyway, it is difficult to know in advance, what the perfect solution should look like.
Having decided on Shopify, I remembered there are some legal regulations that apply across the EU if you are running on online shop. I started figuring this out and especially the new EU-wide "General Data Protection Regulation (GDPR)" is really a big hurdle. Want to track your customers? Yes, it is allowed, but you have to inform them via a "Data Protection Declaration" on your website on which data you are gathering, how you are using it. Further, give the customer a possibility to opt-out from this kind of tracking. You are using external services/providers which track the data for you? I.e., Google Analytics, Facebook pixel and the like... You have to inform your shop visitors on your data protection regulation that you are doing it and give them the possibilty to opt-out. And than, the most amazing thing: You have to sign a contract with every service provider you use which gets data about your customers, to ensure they are treating the data according to the EU General Data Protection Regulation! This is rather easy for Google Analytics and other big players - they all have onlinf-forms where you can do this with a couple clicks (if you know you need to do this). It gets trickier with other, smaller players, especially if they are outside the EU. E.g., according to my knowledge, many Shopify Apps have access to your customer data. So if you use some of them, you need to sign an appropriate contract first with the app developer. I haven't tried yet, but I think this could be difficult... You might argue that the EU authorities don't care about a new small online shop. And that's correct (for now they care more about Facebook and the like). BUT: Your competitors do and are allowed to sue you, in case you violate any of the above regulations. And this can become quite costly for a young business. Indeed, these regulations have facilitated a new whole business field for lawyers: there are those, focussing on suing as many companies as possible and other who focus on their protection. All this legal stuff took me the last couple of days and I am finally moving towards the more interesting part of the game...
TLDR:
For now that's where I am:
- I know what I want to sell.
- I have a list of suppliers I can contact once my company registration is finished (hopefully in 1-2 weeks).
- Decided to use Shopify as online shop system.
- Figured out most legal issues around launching an online shop and integrated them into my Shopify account (not publicly available yet).
- Choose nice design for the shop.
- Create a logo.
- Configure the shop (payment options).
- Start reading about marketing and related topics (Google Analytics, SEO, running Google Ads) - I know there are some good posts on this forum and have to dig them out.
Finally, if you have any comments - be it questions, suggestions, criticism or anything else - I am very open and thankful to any form of feedback.
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