Idea bouncing - New e-website fulfilled by establish shop

[jammy_basturd]

Need to bounce an idea off you business-minded people!

I've got an idea for an ecommerce website, according to Google Trends the sector has been growing nicely for 2-4 years so far and from my research the current sites are all a bit amateurish, there isn't one predominant site and it looks to be relatively uncompetitive on the SEO/Adwords front. Obviously there maybe a reason for this, but that's what I intend to find out with a MVP of a website before scaling things up should the first basic iterations be successful.

So, I can build the website quite quickly, but wanting to do this as quickly and cheaply as possible I want to avoid the cost of stock and fulfillment whilst in experimentation phase. Luckily, there is a shop I know of in the sector, close by, that has a website but no ecommerce capability. My plan is to go to them and offer to sell the products they stock on my website; for each order that comes in, I would send the order to them, for them to pack and post.

For them, they get an online presence, some free marketing/advertising and the chance to dramatically increase their sales if the idea is successful. I would look to keep ~30% of the revenue to pay for marketing and server costs (I'm assuming most of their products are on a 50-100% profit margin).

If you were the owner of such a shop, would you go for this deal?

[jammy_basturd]

DSLiverpool said:

Do they already post orders out? If not they won't know where to start or be motivated just for you.

Seriously how many orders a day do you expect? I did 6 in my lunch time when I started out going home to pack and post.

I don't believe they currently post out orders. I'm not expecting a large amount of orders. I'll be driving traffic via Adwords and specifically targeting a certain product type. I'm not looking for a volume of orders for the first experiment iteration to be successful, just a show of demand and some data to judge profitability. It'll also be used to gather potential customer contact details in order to get some all important feedback!

Dejay1788 said:

You need to find out why they don't have an ecommerce presence themselves really. It could be that they think it will be a huge amount of work or don't think that they have the ability to pull it off, but with platforms such as shopify etc which make it incredibly easy to sell online it begs the question why they would pay you to sell on their behalf, surely they would have success themselves selling on a platform such as Amazon, who would likely take less of a cut depending on what they sell.

They're a "homely" type of company, very traditional. Setting up an online presence might be a lot easier now, but the marketing certainly isn't. I take your point about being cheaper to sell on the likes of Amazon.

[jammy_basturd]

Thanks for the feedback guys!

Just to answer a few of the questions first:

I have since discovered that they do already sent items out, but I gather that this is not very often.

30% is quite high, and you're right walm, I did mean 33-50% g.p!

For the experiment, returns would be sent back to me, I already have an office, and fully refunded. Again it would just be the feedback I'm interested in, the products are low value so unless I have some sort of mega-money order, I shouldn't be able to lose much money in the first iteration, especially if I limit stock numbers on the site initially.

MrSparks said:

For it to be sustainable you don't really want to be buying from another shop who buys from a wholesaler, your trust is all in them to make sure they have stock and ship it adequately. If they aren't good enough or can't keep up then ultimately it's your reputation on the line not theirs.

I would get the website built and then buy the product from them if it sells, you won't make money but you get an idea of how it could be.

The other thing, and I've just done this for two websites, is to create a blog... so for instance I'm about to start importing something in particular and I want to get the ball rolling in Google and also gauge interest, so I have created a WordPress blog on the domain (hosted by me, not wordpress.org) I have then made the category structure similar to how the eCommerce site would be and I'm adding the products as SEO optimized blog posts, and also adding any other similar items I can find.

I will then see what the visitor stats are like, if it starts generating a lot of traffic (obviously work involved in this) then I will either convert it into a eCommerce site or I will simply just use it to drive traffic to my main site... at the minute I have added affiliate links to products on Amazon and I also link to my own sites. I doubt it'll generate any money via affiliate sales but at the end of the day it's a fairly low competition niche so if I can get it to page 1 of Google for the related terms then visitors can read, learn, engage and then they'll be able to find my sales website easily enough when I tell them where to buy the product.

So there's two options for you smile I'm now going to be doing the blog route for numerous ideas, even if they don't go anywhere it gets them out of my mind and into something real, it really started to clear my mind over the weekend when I got these two up and running and at least it's out there doing something.

You're quite right, for it to be sustainable I don't want that supply chain, but at the moment I'm just wanting to gauge interest. I like your idea about the blog and it's very similar to what I was planning for this first iteration.

I had also thought about buying the product as and when it sells, as you say. This would also allow me to use stock from a couple of other shops too.

Is there a reason why you use a blog, instead of just adapting an ecommerce store? You could change the 'Add to cart' button to be the affiliate link and then it's much easier to change back should the idea/product be successful.

[jammy_basturd]

Without trying to give too much away, it's a niche, but a relatively large niche that covers many different products. People generally choose to pay a premium for such products, similar to The Body Shop.

I won't know if my website can be successful until I've tried and know a bit more about demand and marketing costs.

[jammy_basturd]

Yea, I think the idea that they will fulfil orders for me is a Plan B at best now. Though, FWIW, I would look to sell the products at the same price as they have in the shops, thus preserving their profit margin, but taking a small cut.

My plan now is just to advertise the products at full price, buy the items and fulfil orders myself, and if the demand is there then I'll set up accounts with wholesalers myself.