A reader of Starting an Online Business for Dummies asks this question, which is one everyone wonders when they’re thinking of starting an online storefront:

“In other words, how much can I expect to make and how quickly? Obviously, there are a huge number of variables to this, but from what I’ve read, there are virtually no examples given or case studies cited that offer any clue as to the bottom line. It would be helpful to know, for example, about an actual case that described someone who opened an online store, what they did, and how much they were making in how much time.”

There is no perfect answer to this, of course. No magic wand. But I would suggest that she is asking the wrong question. Here’s what she (and you, the budding businessperson) should be asking:

“What do I feel so passionate about that I will work my butt off night and day to make as many connections as I can with other people to spread the word about it?”

Note that I said CONNECTIONS rather than sales. Connections lead to sales. To be successful online these days, you need to connect with potential customers (or readers, or subscribers) through a process of triangulation. You need to combine three things:

1. Social marketing
2. One or more marketplaces
3. Your website

Everyone wants to know how much money they can make online. You need to have some rough idea if you are creating a business plan. But I’m saying that’s not the best place to start. If you make unrealistic projections and fall short, you’ll get discouraged. Look at your business from a different perspective: your talents, your interest, and your message. Find your passion and work to tell people about it every day, on Facebook, on Twitter, on your blog, and on your website.

Just so you don’t think I have nothing to say to the question directly, I’ll say this. When I opened a store on eBay, I set two goals for myself: I wanted to make $300-$400 extra spending/bill paying money per month as a short-term goal. Long-term, I wanted to become a PowerSeller. Pretty modest goals, but I made them both (though I wasn’t a PowerSeller very long). A reasonable goal, then, would to make some extra “gravy” money for fun, to pay a few bills, or to keep afloat rather than sinking into debt.

Dean Pettit, whom I have written about elsewhere in this blog as the owner of Space Coast Outdoors, is doing pretty well with his site. But he told me the following when I asked how he is doing financially:

“For the time it is helping with expenses, I hope it will grow to be a primary income with time and with what I have learned I think it will.”

There is a reasonable goal: start out wanting to make enough money to help with your day to day bills. Dean wants to make this his full-time business, to be sure. But he also started his company because he loves the outdoors in his part of Florida, he knows a lot about it, and he sees that there aren’t other sites around marketing tourism on the space coast.

On NPR recently, I heard another story about the young author Amanda Hocking. She started out selling e-books of her novels and marketing them herself because no agents or publishers would accept them. She turned out to be a marketing genius, selling through her blog, through online interviews, and by doing anything she could to make connections, to spread the word about her books. Building a platform and making connections with customers and readers leads to sales–remember? Eventually, a publisher came to Amanda, hat in hand, offering to publish her book. The story said she is now a multimillionaire. There’s a success story for you. Here’s another, about a woman named Cynthia Lizana who started a one-woman business on eBay, expanded to Amazon.com, and has hired two employees.

There are lots of inspiring success stories out there. Don’t depend on them to get you going. Look inside yourself, at what you love to do, and let the desire to connect and build up a fan base or customer base drive you. Set modest, realistic goals that you can meet, and you’ll be way more likely to meet with success than imitating someone else.

Prove Your Identity Online

January 9th, 2012

miiCard, the identity service I wrote about in a recent ECommerceBytes article, is now allowing users who signed up for the service to actually obtain their virtual identity card. In their system, identity is proven by linking to the individual’s bank account information. The idea is that a bank has already taken steps to prove you are you who say you are, so your miiCard piggybacks onto this.

Dean Pettit, the proprietor of Space Coast Outdoors, was able to explore his passion only after having been laid off from his aerospace industry job. One of his top tips for people who want to do business online is one everyone (including me) can benefit from: Embrace Rejection. Here’s what he says.

“You have no choice its going to happen, a lot. Rejection is like that brother in law you can’t stand but always hangs around. People don’t like being sold to unless they are in a store. In fact your ‘best friends’ are the ones that tell you ‘no thank you’ right up front. That way you don’t waste any additional time on them and can move on. Very Important! Be cordial and accept it with grace. Their tone may change with time, especially if they happen to later go to the site for some reason other than doing business with you and see their competition advertising on it. I got an account from a local golf resort ONLY after another one signed up.”

When you reach out, you’re bound to be rejected. Learn from the experience and move on: I know, it’s easier said than done. But rejections can be flipped around into positives.

The Rise of Volusion

January 5th, 2012

Has anyone else noticed how Volusion is popping up in ads and on Google? By coincidence (I think) someone I reviewed for an e-book I am working on talked up Volusion as their e-commerce host. The site does have a good e-commerce blog that points to the strong growth in e-commerce and mobile commerce in 2011.

In a recent interview with Igor Faletsky, CEO of Mobify, he pointed out the following trend:

“The big additional behavior we see on mobile is cross-device shopping– consumers researching and shopping on their mobile then completing the transaction later on their desktop. This is a key pattern, especially for any purchase that requires consultation like travel, electronics and gifts.”

What does this mean for those with online storefronts? Don’t skimp on your mobile presence. Make a new year’s resolution to upgrade the mobile version of your site. Expand your product catalog: include a single image called a “hero shot,” a call to action (a Buy button), and product details. And have your shopping cart ready for when shoppers complete transactions on their laptop or desktop computers.

Coffee and E-Commerce

January 2nd, 2012

Over the holidays, I did some obsessive shopping for an espresso machine. Back in the day, I could find used machines on eBay. No more. Where have all the bargains gone? Craigslist, Bonanza, eCrater–couldn’t find anything. But it turns out there is a specialty site for nearly every niche market. In this case I trolled the forums on CoffeeGeek.com and found a good one. Niche sites are the place to buy and sell specialty items, not general marketplaces, in my opinion.

A “platform” is a devoted following of people who know you and want to find out more about you. You build a platform through email, your website, by handing out your business card, social media, blogging–anything that gets you before the eyes of potential readers or customers.

Here’s a recent example. Popular comedian Louis C.K. makes his own comedy video, sells it on his website (only his website) for $5, and makes his $200,000 investment back quickly, then turns a profit. How did he do it? He already had a platform through his television show and his comedy performances. It’s true, not everyone has the “platform” to be able to go completely independent, avoiding publishers or producers or even conventional distribution channels like Amazon or retail stores. But with a modest platform you, too, can have success selling online. Read about it here.

Fulfillment By Amazon

July 19th, 2011

Fulfillment By Amazon (FBA) is a bigger program than I ever expected. In this program, a seller ships his or her inventory to Amazon.com’s warehouse. You pay a UPS shipping fee, and a storage fee. But when you sell something, you notify Amazon, and they do the shipping for you. You don’t have to box, label, or haul to the post office. And shipping takes place 24/7. These are not the best things about the program. The biggest benefits are:

1. Items stored in the FBA program are eligible for Free Super Saver Shipping, Amazon Prime, or other discounted shipping rates. Thus, people are more likely to choose them. And, items with discounted shipping go to the top in search results when they are tied with competing products that aren’t FBA.

2. Because of the free shipping, you can raise your price to match your competition. Even if you have the same price as someone who is not using FBA, you get at the top of the search results. And when you sell, your profit is dramatically higher.

3. You can use FBA with marketplaces other than Amazon.com. It’s a multi-channel selling tool.

E-commerce is about margin, not volume. If you make $3 on 10 sales you’re doing better than someone who makes $1 margin on 25 sales. FBA not only has a big convenience factor but it raises sellers’ margin considerably.

I just wrote an article for ECommerceBytes about FBA and talked to Chris Green about FBAPower, his FBA software site. The next few posts will be about this subject.

My article for AuctionBytes on Business Implications of Google+ has just gone online. Now I can mention it on my blog, I can tweet about it, I can post on Facebook, and of course, I could mention Google+. Wow, I need something like HootSuite to help me do all this at once.

Google has a lot of cards in its hand, if it decides to put them altogether, the company’s social networking service Google+ can make substantial inroads in Facebook’s market share. Suppose Google+ enables businesses to set up profile pages. Suppose content posted on Google+ is included in the algorithms and data used to present search results. Suppose Picasa can be turned into a sort of visual sales catalog linked to Google Checkout and Google Product Search. (A PC World article speculates that many of these services could be interlinked in the near future.) Suddenly, all those SMBs knocking themselves out to get into Google’s search results have an inside track. And it’s all free. If Google can seize this opportunity, they can provide serious competition for Facebook, which is a seriously good thing.