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  1. #1
    Non-Member .Simplicity's Avatar
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    eCommerce... For me? or not for me?

    Well, basically I have a budget of $5000, I was going to use osCommerce, get a designer for around $350, get a coder for around $200 and then use the rest of the cash on advertising.

    I thought this would be ample for my first business, but I have been told that it's not.

    Also I was going to just use numerous dropshippers, but I have been told that it's silly, and you lose alot of cash because of that.

    Also, I was going to create a site focused on Electronics, 'Mobiles, MP3s, DVDs, CDs, etc' but I have been told that I should just focus on one topic.

    Can you please direct me

  2. #2
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    Quote Originally Posted by .Simplicity
    Well, basically I have a budget of $5000, I was going to use osCommerce, get a designer for around $350, get a coder for around $200 and then use the rest of the cash on advertising.

    I thought this would be ample for my first business, but I have been told that it's not.
    IMO, your $5000 budget isn't even enough to cover design and development, let alone advertising.

    There's more to ecommerce than just using off the shelf solutions and cheap labour. We regularly consult and develop ecom sites and the time you need to set up the site correctly is outrageous - consultations, market research, careful planning of site features, developing specific navigations from specific landing pages, understanding target audience, setting up the correct web analytics, marketing plans, continued analysis, customer support systems, correct hosting, payment service costs, etc etc.

    If you skimp, you greatly reduce the chances of your site being a success. There's no point in spending $1000s on advertising if the site itself was built on a paultry $500 budget - if the site doesn't convert, it really doesn't matter how much you spend on advertising. Better to spend more on development, get the site set up correctly and reap the rewards of a high conversion rate.

  3. #3
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    Quote Originally Posted by shadowbox
    IMO, your $5000 budget isn't even enough to cover design and development, let alone advertising.
    What do you do for a living? Are you a webdesigner? Of course you would say that.. LOL

    There's more to ecommerce than just using off the shelf solutions and cheap labour. We regularly consult and develop ecom sites and the time you need to set up the site correctly is outrageous - consultations, market research, careful planning of site features, developing specific navigations from specific landing pages, understanding target audience, setting up the correct web analytics, marketing plans, continued analysis, customer support systems, correct hosting, payment service costs, etc etc.
    That is all well and good. But, some people just don't have the budget to go big. Are you saying that it can't be done without all this? Of course it would be nice, but a lot of succesful websites have discovered these things through trial and error. It takes longer, sure. But, some people have more time than money to throw at a website.

  4. #4
    SitePoint Zealot csi95's Avatar
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    Quote Originally Posted by BeenThere
    What do you do for a living? Are you a webdesigner? Of course you would say that.. LOL
    So you're discounting this advice because it comes from an "expert" in the industry? Better to take the advice from someone who doesn't do it for a living????
    Quote Originally Posted by BeenThere
    That is all well and good. But, some people just don't have the budget to go big. Are you saying that it can't be done without all this? Of course it would be nice, but a lot of succesful websites have discovered these things through trial and error. It takes longer, sure. But, some people have more time than money to throw at a website.
    Of course it can be done for less, but for everyone one of your successful websites that got rich through trial and error there are thousands that crashed and burned -- wasting the money they did invest.

    Can a successful ecommerce business be created out of $5,000 -- of course.

    It is likely -- no.

    I've helped many ecommerce business start from scratch over the past ten years, and in my experience, $5,000 isn't enough seed money to ensure success. It takes a long time and/or a lot of cash to get the site off the ground. It could be months after the site launches before a single sale is made, and you need to have the time and money to survive that drought.

    Even after that first sale (and the second, third, tenth, etc.) it may be many months before the business becomes profitable. You've got thousands of dollars of up-front cost that needs to be recouped before you become profitable, and then monthly costs on top of that (hosting, advertising, marketing, accounting, taxes, bank fees, credit card fees, salary?), not to mention your cost for the merchandise being sold. These aren't luxuries -- every ecommerce business has these costs.

    The niche you pick has a huge influence on this as well. I have one customer who spends thousands of dollars a day on PPC advertising and brings in millions of dollars in sales. To be competitive, however, their margins have to be very low. So even though they have millions of dollars of sales per year, their profit isn't much more than what an average office secretary makes. It's a lot of work for very little profit.

    So, my point is this. A smart, determined, lucky person can take $5,000 and turn it into a successful business. They are more likely to burn it away, however. That's true in all lines of business -- ecommerce, restaurants, plumbers, accountants, tailors, whatever. It's just a fact. More new businesses fail than succeed. Statistics show, however, that having more up-front money tends to produce more success.

    Having enough cash to hire a professional to build your web site is one way to tilt the odds in your favor -- and you'll be hard pressed to get a professional to build you a decent ecommerce site for under $5,000.

    Sorry if this comes across as a bummer, but it's the truth. If you don't go into this with realistic expectations, you're better off taking that $5,000 and having a nice vacation in Hawaii. That has a high chance of enjoyment!

    If you do choose to go ahead with the business, however, I wish you great success!
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  5. #5
    SitePoint Addict Corobori's Avatar
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    Quote Originally Posted by shadowbox
    IMO, your $5000 budget isn't even enough to cover design and development, let alone advertising.
    It all depends on your market.
    In my area this kind of money is what a few big companies would be willing to spend; local medium and small size businesses couldn't afford that much.
    Jean-Luc
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  6. #6
    SitePoint Member python66's Avatar
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    Quote Originally Posted by shadowbox
    IMO, your $5000 budget isn't even enough to cover design and development, let alone advertising.

    There's more to ecommerce than just using off the shelf solutions and cheap labour. We regularly consult and develop ecom sites and the time you need to set up the site correctly is outrageous - consultations, market research, careful planning of site features, developing specific navigations from specific landing pages, understanding target audience, setting up the correct web analytics, marketing plans, continued analysis, customer support systems, correct hosting, payment service costs, etc etc.

    If you skimp, you greatly reduce the chances of your site being a success. There's no point in spending $1000s on advertising if the site itself was built on a paultry $500 budget - if the site doesn't convert, it really doesn't matter how much you spend on advertising. Better to spend more on development, get the site set up correctly and reap the rewards of a high conversion rate.
    It doesnt cost $5000 for a design!!!

    you could get a fully dynamic script like osCommerce with a full design for less than that...

    $500 imo, is aple spending for a osCommerce theme. Plus, if the product is there many people wouldnt care about design. If you offer products at the correct price...

  7. #7
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    Quote Originally Posted by python66
    It doesnt cost $5000 for a design!!!
    Have you actually read anything I've posted in this thread?

    I'm not talking about just 'design' - design is one of thousands of the ingredients that go into making a successful ecommerce site. We're talking about more than just customising an oscommerce template - lol, if only it were that easy.

    Web designers 'design' sites. Great. Trouble is, there's not that many web designers who know anything about the intricacies of ecommerce development (see previous posts for examples). Hence you go to an ecommerce consultant who may either be able to handle much of the work for you, or will advise you on possible suppliers to consider. Do you think your average $100 OSCommerce template designer knows the first thing about how to increase a conversion rate by 2 points? Probably not. Do you think he has years of experience developing highly effective marketing plans? Unlikely. Do you reckon he knows the first thing about writing persuasive web copy? Really doubt it.

    Building a successful online business requires skill in many disciplines, especially the skill to know when you are in too deep and need an external expert in a particular field to come in and take over. And if you think a web 'designer' on his own is going to be the answer to your problems, you're in for a rude awakening (i.e. join the other millions of half-baked, underperforming web sites out there who thought they knew it all and refused to bring in expert help).

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    Quote Originally Posted by python66
    Plus, if the product is there many people wouldnt care about design. If you offer products at the correct price...
    Yes, because price is the only criteria for purchasing That's why we all drive around in Skodas....

    This is exactly one of the attitudes that you should leave at the door when setting up any business, let alone an ecommerce site. There's so many factors that affect purchasing decisions, and price is only one of them, and rarely the top criteria. Do you think Amazon has such a high conversion rate because they are the cheapest, or do you think it's because they spend their money on customer research, expert consulting, because they ensure that every word, every link, every image, every pixel is placed on that site with a specific, justifyable and measurable reason by a team of experts (and probably not a web desinger in sight except at the very end of the chain, receiving his 'to-do' list).

  9. #9
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    Quote Originally Posted by .Simplicity
    Also, I was going to create a site focused on Electronics, 'Mobiles, MP3s, DVDs, CDs, etc' but I have been told that I should just focus on one topic.
    if you don't have the budget for a large inventory focus on a specific niche
    better to have a variety of small genre so you can cover it fully
    instead of a variety of large genre and random stocking certain things

  10. #10
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    A $550 eCommerce site is possible, but it needs to be a really really special eCommerce site. As in, you probably spent the other $4450 in market research to find a niche that will let you sell goods with any degree of success from a crappy $550 website.

    The ecommerce site you're trying to build over on this forum goes by the name of "A $200 Amazon.com clone", and it's something we constantly make fun of.

  11. #11
    SitePoint Guru wii's Avatar
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    IMO the backend is not that important, if the site is easy to use and offer something that is not available anywhere else / or few places (which I setup for one of my customers), it can be very successful.

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    SitePoint Zealot talash's Avatar
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    Post i think it is possible

    Hello,

    I think this is very much possible.

    If you plan to sell a category of product and can focus on the niche and bootstrap the project, I think it is not difficult to build up an e-commerce business.

    But you must "know" how to promote a website and do things right the first time since you might not get a second opportunity if you make a major mistake.

    Try to use an innovative marketing method, which can get great conversion. Work on targetted traffic and referral network to build.

    Best of luck.


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  13. #13
    SitePoint Evangelist
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    Good luck in finding a coder that will install/configure osCommerce for you for that little money. Let alone finding contributions, testing,... I once made an oscommerce, and asked way more than that, at least 5 times. Like shadowbox said, there is much more to do for the coder/desinger than 'simply' install the system.

    M

  14. #14
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    Don't start with electronics, find something that only certain groups of people want, think off-the-wall different and find a drop ship wholesaler that will do drop shipping for you. Electronics is a seriously competitive market online and I doubt you will have any initial success with that type of budget.
    Full-time student dropshipper
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    Firstly, as others have suggested, forget about electronics. It is too competitive. If you want to compete on price, you are going to have to deal with grey market goods. These are authentic products, but were not made for sale in the US. So, they will have no warranty.. etc... etc.

    Secondly, yes I think it is possible to do an ecommerce site for that much. I haven't done it myself, but there are others on here who have knocked up a site for a few hundred bucks and are doing quite well with their sites. You can at least get it going for that much and then as revenue starts coming in you can work on improving the site.

    There was a guy on here not too long ago who was offering Oscommerce templates for under $100 and they looked really good. Do a search on the site for oscommerce and you should find him.

    Focus on your efforts on two things..
    1) Finding the right product. and
    2) Getting traffic to your site.

    Based on my research those are the two key things.

  16. #16
    Non-Member .Simplicity's Avatar
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    Thanks for the advice, I'm really grateful.

    Keep it coming, so I can hear more opinions.

    Also, any recommended dropshippers? (UK) and any recommended products?

    Thanks all.

    p.s. Highlighted discussion of the day!

  17. #17
    SitePoint Enthusiast willow1872's Avatar
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    It is most certainly possible. I used to use oscommerce but have changed over to CubeCart because of its simplicity and excellent support. Ive also had a fair amount of success using dropshipping, one of my main suppliers is The Select. Their prices are competitive and they will be happy to give you some sample prices if you email them as their prices on site are retail prices.

    You will find it very hard (in the UK atleast) to find wholesalers that will dropship for you and unless you have 10-20.000 to spare you will find it hard to go down any route other than dropshipping. You could also take a look at http://www.thewholesaleforums.co.uk/forum/ for more advice.

    osCommerce is a nightmare for anyone to re-design and very expensive because its sooo difficult, take a look at www.cubecart.com , its not opensource but only costs $69 for a licence or can be used for free if you keep their copyright info in the footer. Also take a look at www.cubecartskins.net (my site) for some different skins.

    Good luck
    Quote Originally Posted by .Simplicity
    Thanks for the advice, I'm really grateful.

    Keep it coming, so I can hear more opinions.

    Also, any recommended dropshippers? (UK) and any recommended products?

    Thanks all.

    p.s. Highlighted discussion of the day!

  18. #18
    SitePoint Wizard bronze trophy
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    Quote Originally Posted by .Simplicity
    Also, any recommended dropshippers? (UK) and any recommended products?
    I looked into UK dropshipping a couple of years ago and basically, it had not really taken off in the same way it has in the US. All I could find, for want of a better word, was 'tat', like novelty gifts.

    Perhaps things have improved - I'd be interested to hear if anyone has recommendations.

  19. #19
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    I have to agree with most, as a web developer and programmer I charge a fair amount of money for making a ecommerce site. I have a site called www.visionXchange.co.uk, dont worry its not trying to attract comsumers, Im busy enough as it is, but if you only want to pay about $500 for the site, you either need to employ an out of work student who isnt experienced in this field (advertise at your local Uni, never know students always desperate for cash), or someone who will do a very dodgy job. There is alot to consider when making a good solid ecommerce site and I wont build one for less than $5000, but then I can pick and choose. Good luck though, sometimes you can find gem programmers and designers at universities who are willing to do it for little
    thats the advice i would offer.

  20. #20
    SitePoint Addict n0other's Avatar
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    I don't know about the design for $350, but you want a backend coded for $200? What a joke, multiply it by 10 and maybe you'll have luck finding a good programmer. You'd probably find someone to accept your offer on freelance sites, but honestly, these are full of people who post their default template as a bid, without reading the description. In the end, I think $5k would be enought to launch an e-commerce site, but as others have said, forget about the electronics niche, way too saturated.

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    SitePoint Evangelist Will Kelly's Avatar
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    just somebody mentioning osCommerce sends me into a fit..

    ..one fit later...

    Definately avoid. If you don't want to develop one from scratch buy a half decent one (sorry can't give any advice on that, I've always gone the custom route).

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    SitePoint Zealot dereko's Avatar
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    Quote Originally Posted by Will Kelly
    just somebody mentioning osCommerce sends me into a fit..

    ..one fit later...

    Definately avoid. If you don't want to develop one from scratch buy a half decent one (sorry can't give any advice on that, I've always gone the custom route).
    JShop : http://www.jshop.co.uk

  23. #23
    SitePoint Zealot dereko's Avatar
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    Arrow

    First off, building a website and thinking a your most of the way there is crazy.. like building a shop in the middle of the Sahara desert... it can be the best shop in the world but no one will find it. ecommerce is about marketing first and foremost... not the traditional marketing but pay-per-click and seo etc. (this may be obvious but i think it needs to be said.)

    50% of time and money should be allocated to marketing at least.

    Also, while dropshipping is a great option really you should buy stock if you have any confidence in selling your products.

    Some possible steps to consider when building a online store with jshop for example (substitute oscommerce if you like)
    1. Hosting & Domain Name Registration
    2. JShop license and installation
    3. Merchant account & Payment Gateway Setup
    4. Training on how to use the administration area
    5. Product and data entry
    6. Design Website look and Feel
    a. Logo Design
    b. Site Look and feel
    7. JShop Customisation and extras
    a. URL Rewriting (SEO friendly urls)
    b. Landing Pages
    c. Banners
    d. Payment gateway integration
    e. Statistics and tracking
    f. Blog Software
    8. Add store to Price Comparison Directories (e.g. Froogle, Kelkoo, Pricerunner, etc)
    9. Pay per click marketing campaign
    10. SEO
    a. Keyword Analysis
    b. Competitor Analysis
    c. On site keyword insertion
    11. Link building
    12. Maintenance.

    This doesn't include,
    Accounting, purchasing stock and shipping products and more i haven't thought of.

    Time is a real cost as mentioned earlier.. while you may buy stock, build a website and market it for 5k you won't do it without sacrificing a large proportion of your time...How much is your time worth?.. value it on an hour basis... lets assume you don't value yourself very highly and you think your time is worth $20 an hour.

    A store like this built right for 5k could take 3 months of your time almost completely. That's 10k worth of your time. So in reality it cost you 15k. If you pay a consultant and they do half the work for you then isn't it worth 5k to you? I'd imagine you could do other things in the mean time.

    Its all about ROI(Return on Investment) and understanding time really is money no matter how you slice it.

    The money & time required to market a store is directly proportionate to the competitiveness of the market. So if your trying to sell ipods then you'll have to pay a hell of allot to attract attention. The demand then determines your potential revenue.

    Naturally there are smarter ways of doing things which give you the advantage. The question you have to ask is do you have an advantage over anyone doing well in the market currently?

  24. #24
    SitePoint Wizard bronze trophy
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    Quote Originally Posted by dereko
    ecommerce is about marketing first and foremost...
    Not sure I agree. I believe, first and foremost, ecommerce should be about setting up the site to have a high conversion rate. Unlike marketing which tends to involve ongoing expenditure and resources, ensuring your site has been developed to enhance conversion rate is something that works for itself over the long term. There's no point chunking money into marketing if the site itself cannot convert effectively. Make the most of your existing traffic and watch your income increase dramatically.

    Let's say your average punter sets up an ecomm site and gets a 0.5% conversion rate and 100 visitors a day, which represents 20,000 a year to him. What's better - spend 1000s on trying to get a 600 visitors a day, or instead have ensured that your site had a more reasonable conversion rate in the first place. Just having a 3% conversion rate will increase income 6-fold. And that's a change they should stay there while you then start worrying about increasing traffic. Even a small change like adding a 'checkout trail' can boost conversion dramatically. But even before that, I would first suggest you look into web analytics and make sure you are ready to measure and collect the right statistical information so that the right ongoing changes can be made.

    If I were to prioritise things, I'd say

    1. Set up site for good conversion
    2. Set up site to encourage large order sizes, upselling etc
    3. Install correct web analytics
    4. Start targeted marketing campaigns
    5. Begin analysis and tweaking to ensure you make the most of your existing traffic

    BTW - good call on JShop Server It amazes me how that software just gets completely overlooked around here.

  25. #25
    Grr. Arrgh. Mr. B's Avatar
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    You should spend some of that sweet cash on content. There are people out there that can set you up with some great unique content for a decent price. I'd keep it in mind.


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