eCommerce - Shopify & Oberlo

[Splats]

I’ve taken a bit of an interest in the idea of setting up an eCommerce store (drop shipping) using apps such as Shopify and Oberlo. I’m a bit of a natural sceptic and, as you can imagine, there’s a lot of content out there that are variations on, “5 ways to make $1M with Shopify from your phone during your daily dump ”. Alarm bells also ring for me when I see every tom, dick and harry offering courses on how to make money at eCommerce. Surely, if they really could make money from eCommerce their time would be better spent doing that than running courses?

I’m sure everyone thinks at some point, “hmmm, should I give this eCommerce thing a go” and there are certainly successes. However, for every big success you hear about there will be probably 10’s of thousands of failures. With that in mind, I thought I might give you some information about me to help you advise if I have a higher than average chance of making some money here.

First, let me start by saying my goal with this isn’t necessarily to make £10,000 a month or become an eCommerce millionaire. From the outset, I’d be more than happy if I could achieve an extra £500-1,000 a month from <5h a week (once established).

My current day job is wood burning stove installation. It stands to reason that I have a little more time on my hands during these summer months, so between now and October I can probably spare some time for set up.

I do possess a wide range of skills and knowledge that I think/hope might give me a higher than average chance of success. To help build a picture, I’ll list each skill and assign a rating from 1-5 for my level of skill/knowledge. 1 means I have some knowledge, 5 means I’m strong. Please note, this scale cuts off the extreme ends of capability. In other words, 1 doesn’t mean I’m as hopeless as old man Jones next door and 5 doesn’t mean I’m the world-renowned expert in that field.

I’ll start by saying that I have my own re-seller hosting account and have built over 25 websites in the last 5 years on the Wordpress platform. Visit Goval Stoves, for a look at my day-to-day business website (p.s. another summer project is to expand and update this).

Potentially Useful Skills

Building Wordpress Websites: 4
Custom CSS: 3.5
Proper Coding: 1
Onsite SEO: 4
Link Building: 2
Onsite Speed Optimisation: 4
Debugging & Site Problem Solving: 2
Written Content Creation: 5
Image Manipulation/Optimisation: 4
Creating Balanced Spaces: 4
User Experience Knowledge: 3.5
Facebook Advertising: 3.5
Adwords: 2.5
Building Organic Social Following: 2
General Creativity: 3
Experience running eCommerce Site: 1
Attention to DeTail: 4
OCD: 4.973

Hopefully, the above paints a picture. Compared to most people that decide they want to make extra money from eCommerce, I think I’m ahead of the curve. I have a solid knowledge and experience of building websites, SEO, writing content, using Facebooks ads and Adwords, etc.

I guess my question is, do the above skills translate to an eCommerce advantage or does blind luck (picking the right product at the right time) have a far greater bearing on the likely outcome.

I guess I’m kind of hoping for a polarised outcome of opinion here, i.e. either:

1. Dude, with those skills there is no reason at all why you can’t make £500 with eCommerce drop shipping if you are willing to invest some time/money and take a few failures on the chin. OR
2. Success in this industry has much more to do with timing/luck than the knowledge/skills you list above. You could easily piss away a little money and a lot of time and have a very low chance of success.

Over to you….

Edited by Splats on Sunday 9th July 16:14

[russy01]

None of it matters unless people want what you are selling. Or specifically want it off you...

[DSLiverpool]

Russ is spot on, you need a product in demand and it needs to be competitive.

I have a checklist for ecommerce products it's in the office but it's roughly as below,
Will clients phone up pre sale ?
Post sale?
To order ?
What's the fraud risk ie value and chargeback potential
Is it easy to store
Easy to post
Is it fragile
Will it fit through a letterbox
Can I afford to stock up inc variations?
How fast can I get it replenished

If you find an item that works with that check list then throw up a shopify theme and batter insta / FB etc

I know a beauty item started in sept 16 by 2 guys who knew hardly anything about it, the had a crap site but nailed Instagram themselves and are now doing amazingly well.

[russy01]

Yea daves right too... our website isn't bad - a modified Bigcommerce Job and its doing very well.

BUT a few years back we had a terrible website, I mean proper basic. BUT still we did mega business through it... partly because the demographic of my customers weren't bothered - but mainly because I gave them other reasons to buy the stuff from us...

All the skills you talk about are great, but can be bought and be done better by actual professionals in each field... so they won't be an advantage for long as a well performing competitor would just buy it in...

So... personally I'd forget all of that and really look into the viability of your product selection and if it's off the shelf how you will make people come to YOU.

Dave mentions FB/ Insta etc... with the right offer these channels can generate mega business immediately and it can almost seem easy. But with a poor or uninteresting offer these channels can also swallow your £££ quicker than a wag.

Be careful. But I wish you the very best of luck...

Also if you put a site together please post us the link for critique - it's amazing how you can become very 2D when designing your own stuff.

[Splats]

Hmmm, so it sounds like it's all smoke and mirrors and most people are voting for option 2.

The concept I would perhaps disagree with is the idea that competitors can/would easily buy in the skills they need and squeeze the market. This is certainly true if you stumbled on gold (unlikely) and caught the attention of knowledgeable and well funded big player. However, I'm not sure I agree with the statement that anyone can just throw money about, buy in skills and services and BOOM make money.

Specifically, this was the mistake I made with the stoves. I built and developed a website, brand and marketing, figured out how to advertise and pull leads, developed materials to help me sell, set up trade supplier accounts and went live. Then I won business and went about trying to get the stoves installed. Uh-oh. Suddenly, I ran into extortionate labour rates (they don't need me, I need them), poor quality workmanship, reliability problems, crap customer service, inconsistent branding. I even had money to throw at the problem; I offered one guy £1,000 for a days work and he still couldn't be bothered. In the end I dropped £3k on tools, read and learned my ass off and started installing myself to the highest standard I can muster. If I wanted to sub-contract out any element of the business now I could do so without giving away too much control or paying over the odds. This is because I am capable of doing it all myself and understand a) the full picture and b) the pieces that form the full picture.

What I am doing is nothing special and theoretically, could all be subbed out. Anyone with some money to spend could pay people on eLance to create a brand, logo, website, content, SEO, run facebook ads, run adwords, get installers to fit the stoves, get a commission only sales person, etc, etc. However, to do this though they need to see the whole picture and that's not possible (IMHO) without living and breathing your way through some of these tasks. More importantly, by the time you lay out all these costs, what's left for yourself?

I kind of see this in the same vein as "thinking up a £1M idea isn't difficult, it's the execution that's the problem". Surely, if all you had to do was pony up money to have other people do everything for you then my theoretical "future" eCommerce competitors would have already done it? Why wait?

Russy (to use you as an example), you list a 458 in your garage so you've probably got a bit of wedge down the back of the sofa. If you really believe it's easy to sub it out and corner the market why wouldn't you search on Flippa (or similar) for eCommerce sites that are doing well in their niche and then simply employ the services of others to replicate the business model to a higher standard and corner the market? It just can't be that easy or everyone with spare capital would be doing it and it would be the answer to every, What to do with my £50k lump sum post on the PH business forum

[jammy-git]

You're over thinking this. Research some products, put a Shopify website together before the month is out and spend a couple of hundred on FB ads and other marketing strategies. Go through a few failures till you find something that sticks.

The main thing is to start.

[russy01]

"What I am doing is nothing special and theoretically, could all be subbed out. Anyone with some money to spend could pay people on eLance to create a brand, logo, website, content, SEO, run facebook ads, run adwords, get installers to fit the stoves, get a commission only sales person, etc, etc. However, to do this though they need to see the whole picture and that's not possible (IMHO) without living and breathing your way through some of these tasks. More importantly, by the time you lay out all these costs, what's left for yourself?"

Yes ok... but what you are trying to do is much more simple than that. With Bigcommerce, shopify etc you CAN get a website online for tuppence, then just throw some ads at it. You are listing fancy branding, SEO etc etc - this doesn't need to be done out of the box and won't have a short term affect anyway.

If you have the right product at the right price etc it should sell (It works on marketplaces right). Then when you start putting a bit of cash through the bank you can start building out other areas...

Have you ever sold on marketplaces? I suggest you go stick it on ebay and see how you get on? Will give you an idea on how to run the business with no risk at all?

Edited by russy01 on Monday 10th July 08:22

[akirk]

I think that there are some core business misconceptions here - two or three of which stand out:

1 - business is all about supplying what a customer desires / needs in such a way as to make it the obvious choice for them (easier / cheaper / faster / etc.) So, don't spend your time focusing on how clever / good a business you can build (seo / marketing / websites / etc.) but as suggested above - learn your market - get out selling and once you have the product which works, then you can build the other bits...

in our business we see a lot of companies who are very good at running their company / telling others what they have to offer / being expert at their thing... but forgetting to stop and understand what the customer needs or desires - this business-centric approach (v. customer-centric approach) is very often what is holding back a company - you can run an amazing company with fantastic websites and systems - and make no money

2 - growing a business is all about people and quality of people - so finding a process and just subbing it out is easy in concept and very difficult in practice

3 - business diversity - if you have a business why are you looking to split your focus? if you want to be in the eCommerce world - do it in your current market - find out what others are doing and do it better or cheaper, but keep your businesses aligned - having diverse businesses can weaken both. Have you maxed out the profitability of your current business - could you expand regions / sell more / do something else as well?

the thread comes across slightly as a desire to make money easily - get rich fast, and that is rarely possible - web businesses can scale well, that is their advantage - their disadvantage is the scale of the market within which they start. Let us take some examples:

- your stove business - regional market and potential clients to some extent can be identified (e.g. you could approach new house builders and do a deal with them, allow them to offer a stove as an optional extra, you get the contract, they get a cut etc. You could identify geographical areas and target them - drop leaflets through doors etc.

- an ecommerce business selling widgets - where / who / what is your market, potentially everyone, so you have no ability to target initially - so yes, the market could be huge, but so is the scale of marketing - far more challenging, and likely to be far more competitors out there...

- a targeted or associated ecommerce business - sell stuff linked to your current work:
- - word supplies, talk with local wood suppliers - offer the ability to order through your website and have them drop-ship - you have the customers from your installations, and they can supply - build it up as a niche business
- - another site for stove maintenance / parts / etc.
suddenly you have the scope to start a business and know the market to whom you need to sell - and then if they work locally, expand them

but don't go into it thinking it is easy - yes there are businesses / websites which can make money without effort - I have and have owned passive income sites - but generally they are not simple and they take time to establish

[Splats]

akirk said:

I think that there are some core business misconceptions here - two or three of which stand out:

1 - business is all about supplying what a customer desires / needs in such a way as to make it the obvious choice for them (easier / cheaper / faster / etc.) So, don't spend your time focusing on how clever / good a business you can build (seo / marketing / websites / etc.) but as suggested above - learn your market - get out selling and once you have the product which works, then you can build the other bits...

in our business we see a lot of companies who are very good at running their company / telling others what they have to offer / being expert at their thing... but forgetting to stop and understand what the customer needs or desires - this business-centric approach (v. customer-centric approach) is very often what is holding back a company - you can run an amazing company with fantastic websites and systems - and make no money

2 - growing a business is all about people and quality of people - so finding a process and just subbing it out is easy in concept and very difficult in practice

3 - business diversity - if you have a business why are you looking to split your focus? if you want to be in the eCommerce world - do it in your current market - find out what others are doing and do it better or cheaper, but keep your businesses aligned - having diverse businesses can weaken both. Have you maxed out the profitability of your current business - could you expand regions / sell more / do something else as well?

the thread comes across slightly as a desire to make money easily - get rich fast, and that is rarely possible - web businesses can scale well, that is their advantage - their disadvantage is the scale of the market within which they start. Let us take some examples:

- your stove business - regional market and potential clients to some extent can be identified (e.g. you could approach new house builders and do a deal with them, allow them to offer a stove as an optional extra, you get the contract, they get a cut etc. You could identify geographical areas and target them - drop leaflets through doors etc.

- an ecommerce business selling widgets - where / who / what is your market, potentially everyone, so you have no ability to target initially - so yes, the market could be huge, but so is the scale of marketing - far more challenging, and likely to be far more competitors out there...

- a targeted or associated ecommerce business - sell stuff linked to your current work:
- - word supplies, talk with local wood suppliers - offer the ability to order through your website and have them drop-ship - you have the customers from your installations, and they can supply - build it up as a niche business
- - another site for stove maintenance / parts / etc.
suddenly you have the scope to start a business and know the market to whom you need to sell - and then if they work locally, expand them

but don't go into it thinking it is easy - yes there are businesses / websites which can make money without effort - I have and have owned passive income sites - but generally they are not simple and they take time to establish

Hi, this is a good/interesting post. I'm not looking to split my focus as such, I just don't like having all my fingers in the one pie and with a bit more downtime during the summer I have the opportunity to consider other possibilities. I've been in situations before where my income has effectively disappeared over-night due to the actions of others. In my ideal world I'd prefer to make £X thousand per month from 5 independent sources as opposed to a single source.

I'm in no way ploughing ahead with eCommerce; I'm still tossing things around in my head, learning a little and getting a feel for what is "real" and what is marketing to try and get you to sign up to Shopify, Oberlo, Tutorial Courses, etc. The message so far is that the chance of failure (and lost time investment) is high and the videos on Youtube are over-simplifying the process. The general theme seems to be:

1. Pick a niche, preferably one you have experience of
2. Start looking on Amazon, eBay, etc for best sellers in that niche
3. Find the same or similar product on aliexpress and add it to your store
4. Rinse and repeat this process, test and measure and try and find something that works for your targeted audience.

To me it seemed plausible that I might be able to find something that could run at £500 per month of profit, especially when I can keep my start up costs down by doing everything in house. However, I get the impression you guys are saying the above is smoke and mirrors and a positive outcome through this 'trial and error' approach is unlikely. That's cool, a polarised (yes/no) opinion was sort of what I was looking for.

As identified, the big appeal with eCommerce and a web based business is obviously the potential for scaleabilty. Ramping up my stove business will be difficult and will take a lot of time. In an ideal world, I'd have a fleet of vans and installers covering a large area of Scotland. Even if I can achieve this, it would likely take 5-10+ years to organically scale the business to that level. A successful eCommerce business can be scaled to a worldwide audience is days and that does hold appeal.

Now that I can see how easy it is to set up an eCommerce shop, I have been thinking about stuff within my industry (stove accessories, fans, gauntlets, spares, etc). If nothing else, it would be a way for me to further distance myself from my competitors, none of which have an online store and it might add more credibility to the business. I could also direct customers (past and future) to the store and potentially upsell a little. Drop shipping wood is a good idea (thanks), find a supplier that covers my geographic location, build wood packages on the site (0.25 ton, 0.5 ton, etc) and roll it out to my customers. A lot of them do ask "where can I get wood" so this would be solving that need.

[akirk]

I don't think that it is impossible to do as you suggest - it is just a reality check that it is not as easy as it comes across online - there are plenty of websites telling you how easy it is to make money by doing xyz (and they will sell you an ebook as well!) but in reality any business is hard work and about the hours, very very few people make money by being in the right place at the right time - some do, but not many...

any time you can leverage what you already have, then you gain a headstart and make it more difficult for others to compete...

[akirk]

Splats said:

As identified, the big appeal with eCommerce and a web based business is obviously the potential for scaleabilty. Ramping up my stove business will be difficult and will take a lot of time. In an ideal world, I'd have a fleet of vans and installers covering a large area of Scotland. Even if I can achieve this, it would likely take 5-10+ years to organically scale the business to that level. A successful eCommerce business can be scaled to a worldwide audience is days and that does hold appeal.

Be careful with this thinking - yes at a conceptual level it sounds right, but in reality it may not be this simple...
With your physical business you already have a trade / name / market / reputation and you understand how to build the business - it will take time to grow, but the slow growth is also slow decline - i.e. a more stable business
With online, the scaling to a worldwide business in days is not as simple as you suggest - yes in concept you can do that - in reality that worldwide audience doesn't care about you - you have no market traction / no reputation / etc. It is a concept that hooks people in but if it were that simple many more people would be overnight millionaires and that rarely happens - a successful online business can take as long to build as the offline business...

We have a number of clients (we are Digital Management Consultants & build websites etc.) with online eCommerce and every one of them has found it more challenging than expected - there was a belief that people would just want to buy, but there are huge barriers to adoption online - it is so easy to find alternatives / it is hard to build trust, brand & reputation / it is hard to get the market to make a decision - offline by contrast can be a lot easier, if you are talking to someone about a wood burning stove, you are there for them to trust, they can see the product, they can't see your competition, etc. We had one client in an industry where he built a new concept (similar to others but with a twist), however we had to demonstrate to him that to build traction in the market he would need to compete with the competition's marketing budget (c. £50m - £100m p/a) and that market is all about advertising penetration...

so don't assume that the global access of online translates into global interest - when you build an eCommerce store it is rather like building a shop in a field in the middle of nowhere - you can have the most amazing product and customer service, be the cheapest available etc. but if no-one pops in, you will fail - so yes scalability is huge, but so is the marketing effort...

[Splats]

I think I have a angle to play here. It's a growing niche with increasing traffic volume and low competition at the moment. However, I'm thinking an affiliate website is the way to go with links back to amazon.com and amazon.co.uk. I'm also thinking white-hat SEO and going after the organic traffic as the main driver with perhaps some facebook ad experimentation too.

I can start this on Wordpress for less than £20 and 10-15 hours of my time. I can add a few products per day in half-an-hour and see if it gains traction on Google over the next 6 months. The benefits an affiliate site gives me is a complete lack of risk and the ability to offer goods that are competitive, delivered quickly, and from the most reliable source out there (amazon). In time, if it did well I could re-invest revenues in setting up drop shipping on some products. For example, clever, funny and custom T-Shirts and Hoodies would do very well in this niche.

I think this approach might be worth a shot and I'm 75% certain I'll take some action and see what happens. My first ever website was Crampons Guide and it hasn't been updated in about 7 years. The website is terrible, I know nothing about mountaineering so the content was all researched, most of the links are broken, it's very seasonal and, very few people serious about buying crampons would purchase them from Amazon. If I'd known a quarter of what I know now then, I'd never have even set it up. However, over the years from the tiny bit of traffic it has managed to capture and the odd sale it has made me about £500. This justifies the initial time taken to set it up so it's never been a loss. Worst case scenario, the same happens again and I end up with something that trickles income over many years.

[Splats]

akirk said:

Be careful with this thinking - yes at a conceptual level it sounds right, but in reality it may not be this simple...
With your physical business you already have a trade / name / market / reputation and you understand how to build the business - it will take time to grow, but the slow growth is also slow decline - i.e. a more stable business
With online, the scaling to a worldwide business in days is not as simple as you suggest - yes in concept you can do that - in reality that worldwide audience doesn't care about you - you have no market traction / no reputation / etc. It is a concept that hooks people in but if it were that simple many more people would be overnight millionaires and that rarely happens - a successful online business can take as long to build as the offline business...

We have a number of clients (we are Digital Management Consultants & build websites etc.) with online eCommerce and every one of them has found it more challenging than expected - there was a belief that people would just want to buy, but there are huge barriers to adoption online - it is so easy to find alternatives / it is hard to build trust, brand & reputation / it is hard to get the market to make a decision - offline by contrast can be a lot easier, if you are talking to someone about a wood burning stove, you are there for them to trust, they can see the product, they can't see your competition, etc. We had one client in an industry where he built a new concept (similar to others but with a twist), however we had to demonstrate to him that to build traction in the market he would need to compete with the competition's marketing budget (c. £50m - £100m p/a) and that market is all about advertising penetration...

so don't assume that the global access of online translates into global interest - when you build an eCommerce store it is rather like building a shop in a field in the middle of nowhere - you can have the most amazing product and customer service, be the cheapest available etc. but if no-one pops in, you will fail - so yes scalability is huge, but so is the marketing effort...

An interesting read. Perhaps scalability was the wrong word to use. More relevant is the fact that with an online business I can choose where to focus it geographically. I install stoves in the Northeast of Scotland because I physically live here. There may be a stronger unsatisfied market in another country elsewhere in the world. However, here is no way for me to serve it without physically uprooting the family.

With an online business this is less of a barrier. For example, the niche I am eyeballing has far greater traction and awareness in the states than in the UK. With that in mind, I'd build any site on the .com domain and focus more heavily on amazon.com links. I'd also try to tailor content as much as possible towards an American readership. So yeah, this isn't so much scaling to world domination. It's more about being able to focus on a market that isn't in your physical back garden [yard ]

P.S. A Kirk, I like your site...also, you canny beat a good venn diagram

[loafer123]

Splats said:

P.S. A Kirk, I like your site...also, you canny beat a good venn diagram

I like it too, but I am irrationally annoyed that your menu isn't vertically aligned with your logo, that the selected menu text isn't aligned with the others and that the sections below are a mix of centred and left aligned.

Perhaps I am OCD = 9.895?

[akirk]

thank you for the kind comment on our website - venn diagrams are always popular!

there are always niches where it can be worth playing (we have a number of websites doing just that) however, we have the advantage of spending our time building websites which can help when it comes to automation... and if you can build for the costs you are saying, then yes, it makes sense...

however you mentioned up to 5 hours a week (260 hours a year) let's say you value your time at £20 an hour (cheap) then that is still over £5,000 a year profit you need to make to pay back that time - so do look at time / cost / opportunity / etc.

your points on geography do indeed make sense - so will look forward to seeing what you do!

[akirk]

loafer123 said:

Splats said:

P.S. A Kirk, I like your site...also, you canny beat a good venn diagram

I like it too, but I am irrationally annoyed that your menu isn't vertically aligned with your logo, that the selected menu text isn't aligned with the others and that the sections below are a mix of centred and left aligned.

Perhaps I am OCD = 9.895?

yup - OCD!
menu alignment changes based on browser and viewport size etc. the slightly off alignment with the selected menu actually breaks the flow and by being disruptive means the eye picks it out more rapidly

text alignment, some works better left and some centered

but at least you have taken time to notice!

[loafer123]

akirk said:

yup - OCD!
menu alignment changes based on browser and viewport size etc. the slightly off alignment with the selected menu actually breaks the flow and by being disruptive means the eye picks it out more rapidly

text alignment, some works better left and some centered

but at least you have taken time to notice!