I want to build an online business from scratch for several reasons, including:
- It is possible to buy and sell most products and services on the internet
- It is now a mature environment with lots of customers, sites, software, etc.
- I have experience of building websites and come from an IT background
- I want to build a business quickly with a small amount of capital investment (more later)
- Other businesses are moving their business online, so it will only grow
- I want to build an income generating business and possibly sell it ( or keep it forever as an income stream) in the future
After looking around at different online and ecommerce models, including EBay shop, Amazon author, niche reseller, etc. I have decided (after a lot of thought) to set up an affiliate marketing ecommerce website. Why?
- I have skills in website design and support, so as this is major cost I can reduce this risk / cost
- There is no need to hold large quantities of stock. In the future I may want to do this, so the online business will not be exclusive to a single supplier, even myself
- It is a very mature model (good and bad) so the model can work, and hints, tips and support (some paid for) is available.
- Yes it is hard work, but it can be totally managed from my laptop, wherever I am (no physical constraints).
- The start-up costs are relatively low and I am aware that as the business grows the costs can mount up if not managed (and measured) properly – not a problem for me.
This affiliate marketing business model has lots of variants so I did research (a lot) on the different types of suppliers and products and took on board the advice from a lot of forums. I do not want to initially use spam type marketing techniques to sell low value ‘information products’. There are lots of suppliers with affiliate programmes and lots of businesses that bring suppliers and publishers (that is what an affiliate marketing site is called), sharing the commission, etc.
So that is 1 decision made, brilliant. If it does not work out, the knowledge and experience gained can be re used. The money start-up costs are minimised and I think my time will be well spent going down this route.
Next decision, which products and services will I offer. On an affiliate marketing site you could offer every product and service across a wide range of sectors and markets. The advice I took on board (as the experienced people repeat it daily), is to initially work within a niche. This niche can be defined geographically (specific countries and currencies), specific sectors (leisure, travel, financial advice etc.) with a limited range of products. Whilst any website can be designed to hold tens of thousands of products, the design can be complicated and requires a lot of work to maintain and update. Not something I want to do initially.
Within this niche I have made another decision, I want to market physical products delivered to customers. The collection of money and delivery to customers via online sites is very well understood and happens daily. In fact in the UK (where I live) it looks like online shopping is bigger than high street shopping and delivery to your door is normal. So the business model works, and I can build up customers.
As it is initially an affiliate site, the purpose of my ecommerce site is to draw potential customers to the site (lots of internet marketing, SEO, etc.), and pass the buyer over to the actual supplier quickly and ready to purchase. So this helps me decide on the design of the website
The investigation of the type of affiliate product and suppliers continues (and will be constantly reviewed going forward. But the basic have been decided.
Ok if I am to build an online business or ecommerce website, I need to make some more decisions, this I plan to cover in my next blog, so read on.