Photo By kalavinka

For example, most newbie webmasters simply use the out of the box shopping cart installation without any modification which results in a sub optimal shopping experience for their customers.

To be successful, you have to take the time to make your store unique and attractive. You have to stand out and the default look just isn’t going to cut it.

Other shop owners think that they can cut corners and skimp out on paying for critical products and services in order to save money. Below is a list of the most common newbie mistakes that will absolutely cripple your store’s chances for success.

No Contact Page

If you aren’t a big name company like Amazon or Walmart, the first thing that a customer will look for when they visit your shop is your contact information. And if they don’t find an address and a phone number, they’ll leave right away 90% of the time.

Why don’t most newbie shop owners include their contact information? It’s because they don’t want to pay for a dedicated phone number to answer calls. They don’t want to give out their home address if they run their business from their house.

I don’t care whether you have anyone available to answer the phone, get a phone number. It doesn’t have to be an 1800 number, just get any number that offers voicemail service. For example, Google Voice offers free phone numbers that you can then forward to any phone that you want for free! There is no excuse for not signing up as it won’t cost you anything.

If you don’t want to use your home address, get a PO Box or a UPS store address for a small fee. I think it costs like 60 dollars a year to sign up for a post office box and double that amount for a UPS store address. The advantage of having a UPS store address is that you get a physical street address which will make it seem as though you have a real store.

Bottom line, if you can’t spare a few dollars to put up a proper contact page and get a free phone number, don’t even bother opening up a store.

No SSL Certificate

Recently, I was asked to critique a store that neglected to purchase an SSL certificate. When you don’t have an SSL certificate, your customer’s information including their credit card info is transmitted over the internet as plain text for anyone to see. Not only is this dangerous, but it also violates the payment industry’s PCI compliance guidelines for credit card transactions.

If you are ever caught sending credit card info without using SSL, you could be fined or penalized and even have your payment processing revoked. Seriously, it doesn’t cost that much to get an SSL certificate. Go Daddy sells them for like 50 bucks a year.

Forcing Customers To Register

Most shopping carts are setup by default to force a customer into registering for an account before completing their purchase. I have no idea why the default is set up this way, but it’s a sure fire way to drive away customers who want to make a purchase.

Why not provide an option for the customer to check out with or without an account? For our online store, about 80% of our customers opt to shop without creating an account. On our checkout page, we clearly outline the advantages of registering for an account and give our customers a choice. Make sure that you override the account option setting in your shopping cart before you launch your store!

Not Taking Credit Cards

Accepting credit cards online will cost you anywhere from 25-50 dollars a month depending on who you go with. Make sure you pay the money and sign up for a real credit card merchant account and gateway. With our store, 97% of our customers pay by credit card and less than 3% pay by Paypal.

I know that Paypal Standard Payments is free but you can’t only accept Paypal and expect to make any real money. The fact is that most online shoppers rely on their credit cards and there’s currently no way around it.

If you want a credit card merchant that is easy to setup and manage, sign up for Paypal Website Payments Pro which will cost you only 30 dollars month. Whatever you do, don’t skimp on your payment processing. After all, the ability for customers to pay you is crucial to your success. It’s pointless if you can’t collect money.

Using A Free Hosted Shopping Cart

I only included this bullet point because I’ve been getting a lot of questions about Miiduu.com lately which is a free hosted shopping cart service. The main problem with Miiduu.com and other free hosted solutions is that they don’t allow you to use your own domain name for your store. What this means is that you will never ever be able to migrate away from these free services because they own your store name.

In other words, you will be wasting your time and doing all of this work to get your store to rank in the search engines for their benefit, not yours. If you are serious about starting an online store, never ever go with a free service….period! If you can’t afford to pay $6.95 a month for shared hosting on a service like Blue Host or $24.95 a month for a fully hosted ecommerce solution like Big Commerce, don’t even bother.

Oversized Photos Or Photos With Incorrect Aspect Ratios

Most people who are new to uploading photos to a website don’t realize that you don’t need high resolution photos for display on a computer screen. I once visited a store that used a bunch of 2MB photos for their products. As a result, it took me almost 2 minutes to load up their site on my 5Mbit broadband connection.

All photos that are displayed on the web should be cropped to the exact dimensions that you are trying to display. In other words, if you want to show a 400 x 300px image online, make sure you resize your photo to that exact size before uploading it to your website. In addition, you should turn the quality settings of your JPEG photos way down as well. Personally, I use a quality setting of 60 in Photoshop when processing my photos for upload but you can probably get away with even lower quality images.

Resizing your photos just right will also prevent your images from coming across as stretched or distorted which is a personal pet peeve of mine. Don’t be lazy and just upload one gigantic picture to address all of your store needs. Most online stores require at least 3 different sizes of the same photo, a thumbnail, a medium sized image and a full size photo for detail. Most modern shopping carts have the facility to resize and cache photos for you on the fly but the aspect ratio still has to be correct for the photo to look right on the screen. Don’t be lazy and process your photos correctly before uploading them to your site.

Horrible Product Descriptions

You can’t physically be there to sell the items in your store. Therefore, you have to rely on product descriptions and product photos to convince customers to make a purchase. So why not spend a little bit of time and write some good product copy? Not only is this good for SEO but the right verbiage might make your product sound more attract to a potential customer.

Here’s an example of a horrible product description I just encountered from a shopowner trying to sell a dress.

*Length 78cm *Shoulder 38cm *Bust 86cm *Lap 65cm *Please check the measurement chart carefully. Because of different producing batches, there may be deviation of 2~3 cm. *CONDITION 100% Brand New / Without any accessories

From the product photo, the dress looks pretty nice but would you want to buy it after reading the product description? It’s no wonder that this shopowner has been complaining to me about poor sales.

No Security Badges

The final mistake that most new shopowners make is not displaying security badges and other reassurances to address customer anxiety during checkout. Most people who shop at a new store are concerned about privacy, security and theft. Therefore, it is your job to make them feel at ease when they are entering in their private information.

Therefore, on every single page in which a customer needs to enter private data, make sure you plaster that page with security badges, SSL certificates, trust logos and testimonials alongside your form fields so that a customer feels comfortable checking out at your store.

When we performed A/B testing with our online store with and without trust logos, we found that conversions went up drastically when we inserted a few security badges alongside of the form fields. Don’t assume that all customers are comfortable making online purchases!

Photo By Daniel Broche

The prospect of making money passively without requiring much work is extremely attractive which is why many readers fall into the latter category.

In other words, they want to be able to make money with as little active effort as possible. They don’t want to have to carry inventory or do product fulfillment which is why I receive many questions having to do with either running a dropshipped online store or becoming an affiliate marketer.

However, there seems to be some confusion about the differences between these two types of online businesses. I got a question from a reader the other day asking…

Why would I ever want to run an online store, even a dropshipped one, when I could do affiliate marketing and not have to worry about anything?

Clearly, this reader isn’t aware of the superior benefits of running an actual online business as opposed to being just an affiliate. While there’s extra effort involved in running a dropshipped online store, the rewards far outweigh the costs, especially if you want to create a business that can last the test of time and establish your own brand.

What Is Dropshipping?

Dropshipping is a way to run an online store where you don’t have to store inventory and you don’t have to ship product. The way it works is that you set up your storefront and collect money just like a regular store. But instead of having to pack and ship the product once you receive an order, you simply place an identical order with the distributor at a wholesale price and the distributor takes care of shipping the product to the end customer for you. The amount of profit you make is your selling price minus the wholesale price.

The main advantage of dropshipping of course is that you don’t have to manage inventory or product fulfillment. However, since you are selling the product under your own store name, you are still responsible for customer support.

What Is Affiliate Marketing?

Affiliate marketing is when you refer a customer to another business and take a commission if the customer makes a purchase. In effect, your website acts like a marketing and referral engine and you don’t actually sell any product. In addition, you don’t directly collect any money either. Once a sale has been made, the affiliate business is responsible for paying you your commission which usually occurs on a monthly basis.

How does the affiliate business know that it was you who referred the customer? A tracking cookie is placed on the customer’s computer whenever they click on a link on your site that takes you to their business. If the customer makes a purchase and has the cookie installed on their computer, then you get credit for the sale.

Advantages Of Affiliate Marketing

The main advantage of affiliate marketing is that the entire sales process is completely hands off. Once you refer a customer to a business and the customer makes a purchase, your job is done. You don’t have to worry about product fulfillment. You don’t have to worry about customer support. You just get paid your commission and that’s it.

With a dropshipped online store, the customer is effectively making a purchase from “your store” even though you are not the one fulfilling the product. As a result, you are responsible if the customer does not get their shipment on time. You are responsible if the product is defective or arrives broken. Therefore, you will have to devote a certain amount of time dealing with customer issues especially if your dropship vendors are not reliable.

In addition, with a dropshipped store you have to setup a complete storefront that accepts credit cards and other forms of payment as opposed to affiliate marketing where all you have to do is throw up an informational site or blog. The amount of work required to start a dropshipped online store is definitely more than the effort required to be an affiliate marketer.

Why Running An Online Store Will Make You More Money

For one thing, the amount of profit that you can make dropshipping will be much higher than if you are just an affiliate. With an online store, you get to set your own prices unlike affiliate marketing, where all commissions are fixed. Whereas you typically can make a 50% gross profit on your dropshipped goods, the commission earned from being an affiliate marketer of physical goods is typically much less.

But even if the profit potential were the same, running your own online store carries one major benefit that outweighs everything else, word of mouth. When you act as an affiliate, you are not a real business. You are just a referrer of business. As a result, when a customer makes a purchase using your affiliate link, you don’t get any long term benefits for the sale.

Where do you think the customer will go if he wants to buy again? Do you think he’ll go through your blog or back to the website where he originally made the purchase? When he tells his friends about his new cool gadget, do you think he’ll refer his friends to your blog or to the store where he made the purchase?

Whenever you make a sale as an affiliate, it’s a one off transaction. That’s pretty much the only sale you are ever going to make from that one customer. Whereas with an online store, you have the opportunity to establish a reputation and a brand to get repeat business.

With an online store, whenever someone raves about your product or service, you’ll get the credit for it. Whenever someone asks for a referral, your store will be the one referred. A quality online store will naturally grow over time with a strong foundation of repeat customers and word of mouth. However as an affiliate, you will constantly have to drum up new business and referrals because there is no customer base. There is no foundation.

Opening an online store takes more effort and is less “passive” but the difference is that you are building a true business, one that will naturally grow as your reputation spreads. So why not put in a little extra effort and build something that has the infinite potential to grow?

Photo By Mild Mannered Photographer

As we spoke on the phone, I became completely engulfed by her enthusiasm and her energy. And after about 5 minutes, she made me genuinely excited about her products which she wants to sell to the baby boomer market.

Oh Steve!! The best part is that I’ve made sooo much progress already these past few months.

And when I asked her about all of the things she’d accomplished so far, this is what she told me.

Friend: Well first and foremost, I registered my LLC. The baby market can be very litigious so I want to protect myself from any liability. Oh and I got business cards. They were only 5 bucks for a thousand. I marked off a portion of my house dedicated to the business so that I can take the home business deduction. I got a new computer and printer. Still debating whether I should get an IPad too. Got a business bank account and a UPS Store address. Finally, I looked up all the rules and regulations involving selling baby products. It’s official, I’m ready to go!

Me: Cool. Have you thought about how you are going to setup your website yet? Which domain and platform you are going to use?

Friend: Um..no. You know me. I’m not tech saavy at all so I’m saving that for later.

Me: Did you figure out how you are going to get your products made?

Friend: Not yet. Not sure where to start with that one so I figured I’d get everything else setup first.

Me: Do you have any idea how you are going to market your products and your online store?

Friend: Well, I don’t have a website up yet so I figure I’d do all that after I launch.

After talking with her on the phone some more, I started shaking my head. Sure, she was taking action on things that would eventually need to get done. But had she done anything yet to help her core business?

Human Tendencies

I can’t really make fun of my friend here because my wife and I fell into the same trap. We started doing all of the mundane and easy business tasks first while leaving the hard stuff for later. The problem that most new and experienced entrepreneurs make is that they tend to stick with the known and what they are comfortable doing.

The business needs liability protection right? May as well pay the $800 dollar LLC fee and get that out of the way. I need a comfortable office and a computer. May as well go shopping. I need to get the word out about my business. May as well get those business cards made ASAP.

However at the end of the day, what have you really accomplished? In the case of my friend, why the heck did she need liability protection right away when she’s not even selling anything yet? In California, forming an LLC costs 800 dollars. Was that really necessary? The only thing that forming an LLC did was to make herself “feel” better that her company was “official” and that she had accomplished something. She acted based on “how she felt” instead of acting based on what was necessary to get her business off the ground. Technically, she made some progress but in reality she was just procrastinating by putting off the hard stuff.

Work On The Hard Stuff First

So it’s easy to say “Do The Hard Stuff First”, but it really is as simple as that. What are the riskiest parts about your execution plan? There’s no point in going any further with your business until you’ve identified your weak points and can formulate a strategy to overcome them.

Using my friend as an example, she should have first focused on how to obtain the products she wants to sell. After all without a product, there is no business. Where is she going to source her merchandise? If she wants to dropship her stuff, she can find many drop ship vendors on Worldwide Brands. If she wants to have her stuff manufactured, she could have joined my wife and I on our trip to the Canton Import Export Fair

After nailing down her product sourcing strategy, she should look for a nice place to host her ecommerce website. Since she doesn’t know a lick about computers and programming, I would recommend her to go with a fully hosted ecommerce solution like Big Commerce.

Finally after getting those big pieces out of the way, she should focus all of her remaining efforts on her marketing strategy. After all, marketing should be her value add. What is special about her company? Why does she sell the products that she does? Why would anyone want to buy them?

The Proper Mindset

The reality is that anyone can do the easy stuff. Anyone can set up an office. Anyone can get business cards. Anyone who can read is capable of setting up a corporate structure. After all, all of these rules and regulations are well documented on the government websites.

But what happens when things aren’t documented? What most people can’t do very easily is to tackle the unknown. When you open an online store or any other business, there are no rules. You have to be willing to make and define them yourself.

The key is to discover the hardest aspects of your business first and attack them right away. Ironically, human nature tries its best to hide the hard parts from you so I want to offer you a little trick I always use to identify what I “should” be working on.

If I feel a sick sensation in my stomach when I think of an issue, it’s hard. If I feel nervous, scared and doubtful, it’s hard. If I try and block a particular aspect of my business out of my mind and rationalize to myself that “I’ll figure it out later”, then it’s hard.

Defining the hard parts of your business is half the battle. The other half is pushing through even though you are terrified.

What Volusion And BigCommerce Do Well

As soon as you sign up for either service, you are assigned a personal consultant who will contact you by both email and phone. All I can say is that this is really cool. If you are a clueless new shop owner and you have questions, you are given a direct point of contact with which to obtain help and support.

I ended up chatting with my assigned consultants on the phone for 10-15 minutes each and pretended to be a customer looking to migrate an existing shop. The consultants from both companies could answer basic questions as well as some of the more technical ones.

For example, I asked Volusion if I could issue 301 redirects for products from my old store to my new one. I also asked if I could have SSH access directly to the server instead of having to upload my changes via FTP or use the web interface (The answer was no unfortunately). Turns out that direct access to anything server side is pretty much off limits which is understandable. The only code or scripting that you can perform is HTML/CSS and javascript.

Customizing Your Store

Before I get into the more GUI oriented features, I just thought I’d say a few words about customizing your store with either Volusion or BigCommerce. With both services, there is a learning curve in regards to figuring out where all of the files reside and what they do. But in general, both shopping cart solutions do a great job of separating out the core shopping cart functionality from the aesthetics.

In other words, you will never have to deal with ASP code or php code at all. In fact, all you have to really know is a little HTML/CSS in order to fully customize your store. Both Volusion and BigCommerce have completely abstracted out all of the shopping cart functionality from the files that you have access to. Using simple directives, you can move around menus, rearrange your store and give it a whole new look without worrying about breaking any core functionality. This may not seem appealing to someone like me who wants full control of everything, but to someone who is tech averse, this is awesome! Using their templates and a smidgen of HTML/CSS, you can throw up a decent looking store very quickly.

What BigCommerce Does Better

From a design and usability standpoint, the BigCommerce design interface struck me as more modern and hip compared to Volusion. Not only does BigCommerce offer more templates but they also look better as well.

Whereas Volusion’s templates come across as kind of vanilla, Big Commerce’s templates are more eye catching and attractive. Of course this only really matters if you are going to go with a standard template with your store, but my first impression was that you can create a better looking store out of the box with BigCommerce.

Another feature that makes BigCommerce shine from a design perspective is that they offer a drag and drop interface with which you can reposition key shopping cart elements using just your mouse. For example, let’s say you want to move a menu from the top of the screen to the left hand sidebar. All you have to do is click on the menu bar and drag it to the left and it will snap into place. Having the ability to massage your shopping cart graphically is nice if you want to quickly rearrange things around with your store in order to see what looks best before you freeze your design.

From a feature perspective, BigCommerce and Volusion are both pretty much on par. Bigcommerce has a few additional minor features like social media toolbars and easy YouTube video integration but realistically, adding these things to your cart is as easy as copying over some javascript code. In other words, they aren’t a big deal.

However, BigCommerce does have one nice useful feature that Volusion doesn’t have and that’s an abandoned shopping cart report. If a customer enters their information and then bails, you can generate a nice report that outlines when, where and how often this happens. This information is useful because you can then try to get them back somehow by either contacting them or giving them a coupon.

To sum it all up, BigCommerce is a sleeker entry into the hosted ecommerce arena from a design and graphical perspective. Their out of the box stores just look better.

What Volusion Does Better

The big advantage that Volusion has over BigCommerce is that they’ve been around longer and it shows. Since they’ve been in business for over 10 years and host thousands of shopping carts already, their library of tutorials and videos is pretty vast. Basically, they have years and years of experience answering commonly asked questions and have created tutorials and FAQ pages that cover almost anything you might want to know.

Since they’ve been around for so long and have a large customer base, this gives off the impression that they are a more stable player. Remember, whenever you sign up for a hosted ecommerce solution, you are essentially getting yourself pregnant. You become tied to their service. If your ecommerce platform goes out of business, then so do you. Stability matters and Volusion has definitely been around longer.

The other advantage that Volusion has is with their support. Volusion offers support by phone and email 24 hours a day,7 days a week. Just to test this theory, I contacted them on a sunday afternoon and was able to get someone to answer questions. BigCommerce offers phone support as well, but if you want to be able to contact someone any day at anytime, Volusion is your best bet.

Some other things that Volusion has that BigCommerce doesn’t is a fully PCI compliant store. This shouldn’t really be a major decision making factor as long as you can accept credit cards with your store. In addition, BigCommerce is working on being compliant and will probably be compliant at some point in the near future.

One useful thing that Volusion has that BigCommerce doesn’t have is the ability to send out email newsletters to customers. Email marketing is very important to an online store and is an easy way to get repeat customers for your business. BigCommerce only allows you to export email addresses to a file so you’ll need to sign up with a separate email marketing service in order to send out newsletters.

Some Comments About Pricing

If you go based on price alone, BigCommerce seems to be cheaper than Volusion in terms of what you get. For example for 25 bucks, Volusion allows you to sell 25 products with 1GB worth of bandwidth a month. For the same 25 dollars, BigCommerce allows you to sell 100 products with 2GB of bandwidth. However, don’t be fooled by the low pricing. As your store matures and you require more bandwidth, Volusion actually ends up being cheaper later on. In other words, Volusion’s higher level plans are cheaper.

For example, if we were to use Volusion with our online store today, we would need to sign up for the Gold package which costs 99 dollars a month. With BigCommerce however, we would require the platinum package which costs 150 dollars a month. As your store grows, you will discover that you are limited by bandwidth more than the number of products(for most stores at least). Volusion’s entry level packages are more expensive but get cheaper as time goes on.

Conclusion

Like I said in the introduction, both Volusion and BigCommerce are incredible hosted ecommerce solutions. When making a decision it depends on what you value the most. BigCommerce is definitely flashier, with better design tools and templates. They are also cheaper in the beginning when you are just starting out.

Volusion offers superior 24/7 support with more tutorials and online help. Volusion also becomes less expensive as your bandwidth requirements increase. They have also been around the block longer and come across as the more stable incumbent. The choice is up to you.

Photo By Kevin McShane

But after running this blog for a couple of years now and listening to reader feedback, I’ve come to realize that using an open source ecommerce solution and self-hosting may not be the right solution for everyone.

Some people are just completely tech averse and don’t want to deal anything remotely related to computers or technology. While I used to urge these people to learn some of the basics, what would inevitably happen would be that these people would quit before they even got started because they were scared of the technical aspects of running a store.

Of course, some people are just not cut out to be entrepreneurs but I strongly believe that by just giving yourself a chance, you are already half way there. By making it easier to start a business, you are more inclined to take the plunge. Don’t get me wrong, self hosting your shopping cart is still a superior solution in my eyes for the control and flexibility, but I thought that it might be a good time to evaluate some of the leading hosted shopping cart solutions.

What’s Out There?

For the last couple of years, I’ve been recommending Yahoo Merchant Solutions mainly because I had test driven the cart and several of my friends and competitors successfully use Yahoo to run their business.

Yahoo is an excellent hosted shopping cart, but the main thing I always had against Yahoo was that they charge you a percentage of your gross sales. Taking away 1.5% may not seem like a big deal early on, but once your store becomes big, 1.5% can be a huge chunk of change. Also what sucks is that this 1.5% is applied directly to your revenues and not your profit. If you run a store with low margin goods, 1.5% could mean the difference between losing money and being profitable. Now that there are more choices out there that do not take any fees whatsoever, I can no longer recommend Yahoo.

I spent this last weekend test driving hosted shopping carts and I found that both Volusion and BigCommerce offer an awesome hosted shopping cart solution for a low fixed monthly fee. That’s right! Just a low fixed monthly fee and no transaction fees whatsoever! Plans actually start as low as 25 bucks.

Their business model is different than Yahoo in that they charge a flat fee based on the number of products that you offer in your store and they also impose a bandwidth limit as well. But outside of the monthly fee and possible bandwidth overages, your fees will not grow linearly with your revenues like with a Yahoo Store. Volusion and BigCommerce make their money from a fixed monthly subscription model as opposed to taxing their merchants.

The Design Tools Are Better Now

The other thing that I noticed was that the out of the box graphical design tools are now much better with the latest hosted solutions. Normally I could care less about graphical web design tools. After all, you will eventually have to touch html code to make your store look exactly the way you want it to.

However, peering through the eyes of the tech averse entrepreneur, I can see how these tools could be valuable from a psychological perspective. Being able to throw up a decent looking online store without knowing much html/CSS at all reduces uncertainty and postpones the hurdle of having to learn about programming.

Big Commerce for example offers an intuitive drag and drop interface where you can shuffle things around with your store at the click of a button. Both Volusion and Big Commerce also offer a pretty good library of standard templates for you to start out with. All in all, I found that I could throw up a decent looking store within a matter of minutes without knowing a lick of HTML.

Their back end features and tracking are also top notch, but what’s different now is that there’s built in support for popular social media sites like Facebook. Again if you know the basics of web development, adding these things isn’t a big deal but for a tech averse shop owner, it’s pretty convenient.

You Don’t Have To Be A Tech Expert To Start

If you have an ounce of tech in you or you are eager to learn about the web, then I still recommend hosting your own cart. Who knows? BigCommerce or Volusion could go out of business someday and take your store down with it. They could also increase their fees once you are dependent on their services.

But for now, both Volusion and Big Commerce are offering a heck of a deal at only $25/month to start a fully featured online store. If you want to avoid the technical aspects altogether and focus on selling, then going with either of these services is a no brainer.

Up next, I’m going to do a breakdown of Volusion vs BigCommerce while my evaluation is fresh in my mind. Both services offer various pros and cons so tradeoffs need to be made if you are deciding between the two.

Web Hosting

Blue Host – Blue Host is the shared host that my wife and I used for 2 years to run our online store before we switched over to dedicated hosting. BlueHost is inexpensive, reliable and offers a wide array of free services. Highly recommended for new shop owners.

ServInt – ServInt is the dedicated webhost that I use now for every website I own including my blog and online store. Service and uptime are top notch and I’ve never had any problems ever. If you are looking for VPS or dedicated hosting, ServInt is awesome.

Domain Registrar and SSL Certs

Go Daddy – While I don’t recommend their hosting service for an online store, GoDaddy offers an excellent and easy to use interface with which to manage your domain names. In addition, they offer a very inexpensive SSL certificate as well. GoDaddy is the service I use for all of my domain management and SSL needs.

Incorporation, DBA, Business Paperwork

LegalZoom – For everything from registering your DBA or filing for an LLC or corporation, LegalZoom is awesome because they get the job done at a fraction of the price. Highly Recommended.

Product Sourcing

Worldwide Brands – An incredible service that helps you locate and contact wholesale vendors for products that you want to sell. The best part is that there’s only one upfront fee that you have to pay and then you can use the service for life. If you don’t like going to tradeshows or cold calling wholesalers, then Worldwide Brands is the way to go because they will save you time.

Global Sources – If you want to import your goods from Asia, then Global Sources is a good place to start. Going through the massive lists of suppliers can be intimidating on this site, but it’s a good place to learn about various trade shows and get in touch with potential vendors.

Canton Fair – This is the trade show that my wife and I try and make every year. It is enormous and a good way to meet vendors face to face if you don’t mind traveling to China.

Shopping Carts

Magento – Magento is one of the most feature rich shopping carts I’ve evaluated and it’s absolutely free. The only downside is that you need a fairly powerful webhost to run it, otherwise your website might get bogged down.

ZenCart – Zen Cart is an easy to use shopping cart that runs extremely fast on shared hosting environments. In addition, most shared hosts like BlueHost offer a 1 click install. Zen Cart has most of the features you need to run a small-medium sized ecommerce business and it’s free!.

OSCMax – Like ZenCart, OSCMax is an easy to use shopping cart that runs extremely fast on shared hosting environments as well. The main advantage of OSCMax is that it is based off of the OSCommerce code base and as a result, you can take advantage of OSCommerce’s huge plugin library. Also like ZenCart and Magento, OSCMax is completely free.

Volusion Ecommerce – If you are not a technical person, don’t want to deal with a webhost or a server, and want to throw up your online store as fast as possible, then Volusion is a great way to go. What’s nice about Volusion is that unlike other hosted ecommerce solutions, they only charge a monthly fee based on the number of products you are selling and nothing else. Volusion also offers 24/7 technical support.

Big Commerce – Like Volusion, BigCommerce also offers a great self hosted shopping cart solution for a fixed monthly fee. Big Commerce has a really nice drag and drop interface so you can design your shopping cart without knowing any HTML whatsoever. While they haven’t been around as long as Volusion and they don’t offer 24 hour support, they are slightly cheaper and provide you with free credit towards Google Adwords.

Shopping Cart Design

Algozone – Most of us aren’t web designers so the best and quickest way to put up an attractive online store is to purchase a template. Algozone offers a large variety of online store designs that you can tailor for your own store. Trust me, it is much easier to start out with an attractive design and then tweak it rather that start completely from scratch. No longer recommended.

Credit Cart Payment Processors

Merchant Plus – An Authorize.net Provider – Back when I was looking for credit card processors, I couldn’t find a better deal than Merchant Plus. They offer very low rates and their support is excellent. Merchant Plus also integrates seamlessly with all of the open source shopping carts that I recommend.

PayPal Website Payments Pro – Since my wife and I use Paypal for many purposes already, we decided on Paypal Website Payments Pro to process credit cards for our online store today. Paypal is nice because it you can ship your packages directly from their interface which saves you from having to use a service like Stamps.com. However, their rates are higher so you have to weigh the pros/cons compared to using a service like Merchant Plus.

Communication, Internet Telephony

Google Voice – It’s free and it’s versatile. Google voice allows you to forward a call from one number to any phone line that you want. My wife and I use Google voice all the time and this service is completely free.

Skype – Skype is great for making international calls. If we have to contact our overseas vendors, we always use Skype because the rates are incredibly low.

Ring Central – Ring Central is an excellent service that is like Google Voice on steroids. With Ring Central, you can get a 1800 number with which you can send/receive calls or faxes at any time. In addition, you can create an auto-receptionist and a custom greeting that lets callers wait for an available employee. And like Google Voice, you can forward a call to any phone line of your choice or make calls from any phone using your office phone number. This service is awesome especially if you are short staffed in your customer support department.

Organizing and Manipulating Photos

Picasa – When you have thousands of product photos to go through, Picasa offers an easy way to breeze through your photo list and make minor edits. Best of all, it’s free.

Adobe Photoshop – I don’t want to say that Photoshop is a must have but it sure does save a ton of time. Sometimes when my wife and I take our photos, they aren’t perfect and we need to make minor edits. For example, if there are wrinkles in our product, we can remove them using Photoshop which saves us a ton of time. Not required but highly highly recommended.

Smug Mug – This service offers an excellent means to backup your product photos online. They store and replicate their photos across multiple datacenters located in different parts of the world so the chances of you losing your photos is extremely low. A must have service to backup your product photos and photos of your family.

Bookkeeping and Finances

Quickbooks – Quickbooks has become the defacto standard for small business bookkeeping. It’s inexpensive and it’s easy to use once you get the hang of it.

Quicken – Quicken allows you to manage your personal finances so you can get a clear picture of your overall financial situation. Wouldn’t be able to save money or build wealth as effectively without it.

Turbo Tax – I’ve already shown that Turbo Tax can perform as well or better than an accountant in my article on the Outcome Of Hiring An Accountant To Do Our Taxes Vs Using Turbo Tax Or Tax Cut. Seriously, TurboTax is awesome even if you run a business and will help you maximize your tax return.

Intuit Online Payroll – Intuit Online Payroll is an excellent payroll service that is priced really well. If you have employees, then it makes sense to outsource the payroll paperwork to someone else. Since Intuit Online Payroll is so inexpensive, it’s a no brainer.

Handling Shipping and Returns – Where To Get A Physical Address

UPS Store – The UPS store is awesome because you can sign up for a mailbox that has a real physical address. If you don’t want to use your own address (if you run your business out of your home) or if you just want to use a separate address, then opening a UPS store mailbox is ideal. Best of all, they will email you whenever you have mail.

USPS PO Box – A PO Box is a poor mans UPS Store mailbox. However, they are also about 10X cheaper than UPS. The disadvantage is that everyone knows that a PO Box is not a real physical address. In addition, PO Boxes can only receive mail from USPS. FedEx and UPS do not deliver to PO Boxes.

Packing Supplies

ULine – ULine is awesome! We get most if not all of our packing supplies from here and they are all reasonably priced.

Unique Packing – Uniquepacking carries some of the harder to find packing supplies. We purchase our cello bags and our anti rip bags from here.

Shipping Carriers

United States Postal Service – Since they are the cheapest shipping carrier and most of our items are lightweight, we use USPS for the majority of our orders. They aren’t the most reliable but are by far the cheapest if your package weighs less than 2 lbs.

FedEx – If the package exceeds 2 lbs, FedEx is our carrier of choice. As soon as you open an account, you get 15% off shipping which makes it cheaper than UPS out of the box. If you ship high volumes, then you can negotiate for better pricing.

DHL – We use DHL for all international shipments because they handle customs and everything for you. All you have to do is sit back, relax and pay the customs bill.

Website Maintenance And Backups

Site Uptime – I use Site Uptime to monitor the downtime for all of our websites. Basically, Site Uptime pings your websites at specified intervals and then sends you an email if your site is down. For all mission critical websites, I highly recommend this service.

Ready NAS – For onsite backups, I use a Ready NAS network storage appliance running RAID 1. This device sits on your network, mirrors your data on 2 drives and sends you an email if one of your drives is about to fail. If a drive is bad, you can simply hot swap it with a new one and the box will make your data redundant again. A must have for backups at home.

Marketing Tools

Google Adwords – Adwords is an incredible tool. Use it to drive very targeted traffic to your online store so you can gain new customers and improve your conversion rate. Even though most of our customers arrive at our website organically today, we still run Adwords to drive traffic because the ROI is excellent.

Aweber – We use Aweber to manage all of our email campaigns. With easy to use templates and awesome email tracking, this service is a must have if you run a newsletter. Read my review here on MailChimp Vs Aweber

ScreenFlow – Screencast videos are videos in which you display slides or whatever is on your computer screen while you narrate in the background. If you want to create screencast videos for your website, then screenflow is an excellent and well priced tool to get the job done.

Staffing And Hiring Help

ODesk – A great place to find virtual assistants and programmers at really attractive rates. We use ODesk to find writers for content writing and article marketing.

Please note that some of the links above are affiliate links to products that will earn me a commission. These are all things that I have experience with that I am recommending because they are helpful and are companies that I trust, not because of the commissions that I may earn from you using these products.

Photo By Soller

I received an excellent email in my inbox a few weeks ago that pretty much summarizes where a lot of people are getting stuck so I’ve decided to dedicate a blog entry to the topic.

I just came across your site and it seems like an awesome resource. I have a question for you, that might make a nice blog post. I did a search of your site, but could not find the answer to my question, so here it is:

My wife has an idea for an ecommerce store. It seems to us that she’s found a pretty good niche. The niche seems to be emerging and trendy, but not a fad.

It seems to me that there are two aspects to identifying a profitable opportunity: market demand and market competition.

In order to assess demand, I’ve looked at the google keyword tool and there does seem to be plenty of searches. Are there any other good ways of determining market demand for an ecommerce store?

In order to assess competition, we’ve been googling to find competitors and there are a bunch. Then I’ve been using alexa/compete.com (flawed, I know) to see what kind of traffic these sites get. It appears that with a few notable exceptions, most of our competitors do pretty low traffic. Of course, I’m under no illusions that we’ve found all of our competitors either. I would also note that the google keyword tool indicates a high level of competition for most of the keyword terms.

Does you have any other suggestions for determining the level of competition?

The third remaining problem, is that I don’t know how to compare the market demand to the market competition. We’re just not sure if the demand / competition ratio is high enough to pursue this further. I just can’t think of a good quantitative way of measuring the demand / competition ratio.

Any tips on analyzing market demand / market competition ratio for an ecommerce store?

I guess it all boils down to: We believe there to be significant demand, how do we know whether or not there is TOO much competition to be successful? (we would define success in this venture as allowing her to quit her job, like your wife!)

Eric

Before jumping into anything, it is indeed extremely important to estimate the supply and demand for the niche that you are selling into. Here are some of the ways that my wife and I assessed the strength of our business idea before we got started.

We Used Keyword Analysis

Eric mentioned using keyword analysis as one of the ways he checked on the demand for his idea. With keyword data and the number of searches performed per month, you can also make some decent back of the envelope calculations to see if your niche is large enough for you to make a decent living.

For example based on your idea, you should be able to easily determine what your approximate profit per sale is by looking at your competitors’ prices and your wholesale cost. Then, by making a conservative estimate of your click through rate and conversion rate, you can obtain a range of profit numbers for your business idea. In fact, I go through this analysis in more depth in my article on How To Determine If Your Business Is Viable. While these calculations are crude, it is a good way to eliminate poor ideas with little demand right off the bat.

We Used Ebay

While Ebay is a horrible place to host your full blown business, it is very useful for determining demand and pricing for your products. Look for similar products in your niche and take a quick glance at the completed listings for relevant auctions. Based on the ratio of completed auctions and the ending price, would this be enough profit for your business to survive?

If you there are very few completed listings available, throw up a few auctions of your own and see how much people are willing to pay. As you are performing your experiments, it’s important to keep a few things open in the back of your mind. One, Ebay items tend to sell for much cheaper than normal online shops. This is because the majority of Ebay shoppers are looking for bargains and the seller’s brand is much less of a factor. Just to give you an idea, similar products to some of the ones we carry can be found on Ebay for up 20% less. However, the quality is hit or miss and most of our larger customers prefer dealing with an actual company as opposed to individual Ebay sellers.

Two, the item you are trying to sell may not be a good fit for Ebay. If you are selling unique hand crafted products or something with a completely new concept, it might be hard for shoppers on Ebay to find your stuff. The main reason is that shoppers on Ebay do searches for products rather than searches for solutions like people do on Google. In any case, if you are seeing a good amount of completed auctions, that’s a pretty good sign that the demand is there.

We Used The Forums

The forums are especially helpful for coming up with ideas for products to sell and for getting an idea of what people are looking for. Simply go to a popular forum in your niche and do a search for any of the following terms.

• “trying to find”
• “advice about”
• “I hate it when”
• “I need help with”
• “I’m looking for”
• “can’t find”
• “have no clue”
• “question about”

Obviously, there are other terms you can search for but you get the idea. People use the forums to ask questions and based on these questions you can come up with solutions to sell for their problems. If you already have a product idea, do a search. Are people looking for or talking about it?

The forums are extremely powerful. Early on with our wedding linens store, we used The Knot and The Wedding Channel forums to communicate with would be brides about what products to populate our store with. People on the forums are very responsive, especially if they believe you can help them out.

We Used Adwords

These days, throwing up a store is quick and easy, so why not just put something up and drive some targeted traffic to it as a test? In the beginning, it’s not about making a profit. Go to a store and buy the product if you have to and then see if you can sell it.

Adwords is extremely powerful in this respect because you have full control over what types of traffic you want to drive based on your keywords and your ad copy. Starting an online store is not risky from a monetary standpoint, so it’s in your best interests to stop guessing and get some real hard data to work with. After all, you can speculate all you want and analyze your competitors to death but you’ll never truly be able to tell until you try….which brings me to the last and most important thing I have to say.

Don’t Worry About The Competition Too Much

If I were to do it all again, I would care less about the amount of competition as opposed to the quality of the competition. If you have a unique spin on the products you want to sell and you are confident that you can stand out among your competitors, then go for it!

If you find that your store is getting lost in the crowd, pick a narrower niche to pursue and specialize! When my wife and I first started out, we were considering selling generic wedding favors. But the main problem was that there 4 or 5 huge players already in the market. As a result, we decided to go much more narrow and focus on wedding handkerchiefs. The end result was that we were able to rank much higher in search than our competition because our website was so targeted to a single topic. It’s counter intuitive, but focusing on selling less variety is to your advantage.

Once you’ve found your niche, find out who your top competitors are for your keywords and then do a search for all of their backlinks. Basically, you are trying to determine what it takes to become #1 in Google for your products. Because the number of backlinks largely determines your search ranking, you can assess how much work you are going to need to do to overtake your competitors. Again, if your keywords are too competitive, you may want to consider focusing your business more.

Conclusion

The key thing to realize is that opening an online store is not like opening a brick and mortar store. And sometimes it takes more work and time to do analysis and speculation than it does to actually throw your store up. Of course you have to do some amount of due diligence, but if you truly believe that you are unique and can stand out among the crowd, then I say pull the trigger! What’s the worse that could happen?

Photo By Suzanna

In theory, dropshipping sounds like a great idea because it’s inherently scalable without you having to do a lot of work up front. But when you dig down a bit further, it becomes obvious why dropshipping isn’t so great. Most people try to open up a dropshipped shop expecting it to be easy, but in reality it’s much harder to operate a dropshipped shop than a traditional online store and I will explain the reasons why below.

You Won’t Be Getting The Lowest Price

Most people open up a dropshipped online store with the misconception that they will be receiving the same wholesale pricing as everyone else for their products. In reality however, dropship distributors often charge extra fees and/or tack these fees onto the quoted wholesale price.

Put yourself in your distributor’s shoes for a moment. Would you prefer to sell a large bulk quantity of products all at once to a store or would you rather sell onesy, twosy amounts to individual customers and be forced to individually ship and pack each item? The distributor is doing all of the work here and this will be certainly be reflected in your wholesale price.

Because your wholesale prices are higher than a traditional store, you will not be able to compete as effectively on price unless you take a good sized profit hit. All of the convenience of not having to do any of the fulfillment work comes at a cost.

You Will Need To Charge Higher Shipping Costs

Often times, you will require the use of several dropship distributors to fully flesh out the product selection for your store. Using 2 or more different dropshippers means that 2 or more companies will be making separate shipments to your customers, which means that 2 or more companies will be charging you their own separate shipping costs.

If I’m a customer and I buy products from you across 3 different distributors, you will have to charge me a much higher shipping cost just so you can break even. The only way around this is to only use one dropship distributor which may not carry the breadth of products that you need. The result is that you will have to pass these extra costs onto the consumer which reduces your price competitiveness.

Dropshipping Can Be A Logistical Nightmare

You might think that since the dropship distributor is doing all the work that you can sit back and relax. Unfortunately, you have to deal with your customer base. You have to be the one that answers all of the questions. You have to be the one to apologize when an order doesn’t arrive on time.

The main problem is that when you use several different dropship distributors, getting the entire order to the end customer can be a logistical nightmare. All distributors will have different shipping times and will be shipping from completely different locations. If a customer orders products across 3 different distributors, they will end up receiving 3 different packages at varying times. If an order is particularly time sensitive and needs to be rushed, you will have to make sure that all of your distributors can deliver the product on time.

In effect, you are staking the reputation of your online store and linking yourself to all of your dropship distributors in a single chain. If even a single distributor is unreliable, then it will reflect negatively on your online store.

Your Customer Service Will Be Out Of Your Hands

These days, customer service and reputation are extremely important. With the world wide web, social media and Twitter, news of a botched transaction can spread extremely fast so it is absolutely crucial that you maintain a great image for your online store.

Whenever I receive a call for our online wedding linens store, I always take the time to ask how they found us. And the majority of the time, the people who find us do so because they were referred to us by one of their friends. Word travels fast. Our customer service is one of the main reasons why we have grown over 3x in the past 3 years.

With dropshipping, you unfortunately have very little control over your customer service. Since you are not in charge of product fulfillment, you can’t control when a customer will receive their product. If a customer wants to make a return, it’s a major pain because you have to make sure that you get your money back before you can provide a refund.

Sure, there are always ways to mitigate these problems but the solution inevitably involves either raising prices or taking a profit hit at the expense of customer satisfaction. Dealing with credit card chargebacks is also much more common with dropshipped stores as well.

Is It Really Less Work?

It really depends. Arguably, the time that you save in not having to deal with inventory and fulfillment will be spent dealing with customers unless you have a reliable core of dropship distributors.

One thing that I forgot to mention is that many drop shippers don’t have up to date automated supply chain technology with a real time API. What this means is that you may not be alerted in real time whether a particular product is available for sale or not. Therefore if an item is out of stock, you will have to interface with the customer to let them know when they can have their items. Unless your shopping cart is closely tied with your dropshipper’s database, it will be difficult to maintain an accurate inventory count.

With dropshipping, you are in effect trading off not having to deal with fulfillment logistics with having to deal with more customer headaches. And depending on your personality, this may or may not be a wise tradeoff.

While the tone of this article has been anti-dropshipping in general, don’t get me wrong. Many people have been successful with dropshipping as it works very well with small niche stores but my personal opinion is to avoid it if you can. If you are considering opening a store composed solely of dropshipped products, you might want to consider affiliate marketing instead. With affiliate marketing, you simply have to refer a customer to a store and you make money whenever your referral makes a purchase. There is no customer support, no product fulfillment….nada. The only drawback is that the profits aren’t as high but at least you don’t have to deal with customer headaches that you can’t control.

Photo By Better Than Bacon

But the funny thing is that most of the successful entrepreneurs I know are very conservative and don’t like taking risks at all. Ironically, my entrepreneur friends are some of most risk averse people I know! I happen to fall into this same camp as well. Sure, I would risk a good amount of money to start my own business but would I ever bet the entire bank or stake my livelihood on a business idea? Hell no!

Managing Risk

One of key aspects of entrepreneurship is knowing how to mitigate risk. The media portrays entrepreneurs as these daredevils who dropped out of college and risked everything to start their own companies when the real story was that many had safety nets in place in case things didn’t work out.

Bill Gates didn’t initially drop out of college, he took a leave of absence. Plus, he came from a wealthy family that would have supported him if Microsoft failed. Sergey Brin and Larry Page had their degrees and could have easily found a job if the whole Google thing didn’t work out.

The point is that entrepreneurship is not about gambling so much as it’s about investing intelligently. Here are some tips on how I would mitigate risk when starting an online store.

Keep A Nest Egg

First and foremost, don’t risk all of your money on a business venture ever! Make sure you keep a hidden stash lying around somewhere that can bail you out in case things don’t go as planned. Starting a business is difficult as it is and you don’t need the additional burden of worrying about not being able to pay your bills. This may sound like common sense to most of you, but you’d be surprised by how many people are willing to invest most of their entire net worth on a marginal idea.

Keep Your Full Time Job

If you can pull it off, keep the day job. This takes discipline and it can’t always be done depending on the nature of your business, but it is easily the best, no pressure way of starting a business. My wife and I worked on our wedding linens business on the side knowing that if anything ever went wrong, we were still banking two incomes. Don’t think you have the time? If you analyze your day, you’d be surprised at how much time you can salvage in a typical day.

Pick A Narrow Niche

The narrower your niche, the greater your chances are for success. This may seem counterintuitive at first and many entrepreneurs often fall into the same trap of tackling too much at once.

But when you pick a very specific niche to pursue, your business will be focused. Your business will stand out because you will be perceived as an expert in your field. Your search engine rankings will improve because Google can more effectively categorize your website under a specific topic. In fact, your online business should target no more than 2 or 3 topics or keywords. Any more and you risk diluting your search juice.

For example if you want to sell clothing, I would focus my store on a specific type of clothing first and then target no more than 2 or 3 different clothing types total. If you ever decide to expand beyond this, it might be better to start an entirely new website.

Screw Hope! Test The Market

Since I started this blog, I’ve been corresponding with many newbie shop owners. And one of the biggest mistakes I’ve noticed is that most new store owners have already decided what they want to sell without any testing at all.

“I want to sell widget A! People are going to love it”
“No one’s ever heard of widget B! They’ll sell like hotcakes!”

Every shop owner should have an idea of what they want to offer but leave it up to the market to decide what to actually sell. Test the demand for your products! Use Ebay to see if people will buy your product. Use keyword tools to find out how many people are searching for the products you want to sell. Do a competitive analysis of your niche. Are there any competitors? If not, there probably aren’t any buyers either. The ideal market to pursue is one in which there are only a handful of players.

I remember a long time ago when I heard Bill Gross speak about his company Cars Direct back when ecommerce was in its infancy. Turns out that he initially tested the online car buying market by trying to sell cars that he didn’t even have! He just threw up a website and whenever a car was sold, he had someone go out and buy the car from a local dealer. He didn’t invest much money at all until he discovered that selling cars online was a viable strategy. Make sure you assess the demand for your product before you decide to add it to your portfolio of products! In other words, make sure you have buyers before you decide to sell.

Don’t Buy In Bulk With Your First Order

Along the same lines of testing the market, don’t buy in bulk for your first order if you can help it. Take a loss if necessary but don’t risk a large outlay of cash for goods that you may never get rid of. One of the problems I see with most people is that they don’t want to lose any money even in the interests of experimentation. They’d rather buy a crapload of widget A with the potential of making a huge profit rather than buying a few and breaking even or taking a loss.

Don’t be one of these people and don’t be greedy! Most vendors will provide you with samples or will sell you small quantities at much higher prices. Try to sell in small quantities before you commit to a larger purchase. Don’t worry about losing money!

Find A Partner

It can be emotionally taxing to run a business on your own. Looking back, I could never have done it if I didn’t have my wife. There’s more at stake with your business than monetary risk. There’s also mental risk to consider. Having a partner will keep you motivated and will give you someone to bounce ideas off of. Plus, it will make things much more fun.

On choosing a partner, working with my wife has been fantastic but I’m not 100% sure that I would necessarily recommend working with your spouse on a business. Sure, the amount of mental risk is mitigated but the amount of marital risk drastically increases but that’s a topic for a different post:)

Sell High Mental Value Items

The ideal product to sell is one that evokes some sort of sentimental or emotional value outside of the item’s actual cost. And that is one of the main reasons why my wife and I decided to sell keepsakes as part of our product line. If you can get into your customer’s head, you can command higher prices.

If you sell commodity items, getting customers hooked mentally can still be accomplished through effective branding, but in general it is much easier if you start out with the right product. Avoid commodity items and focus on products that are unique or that you can add value to.

Sell Timeless Items

If you carry inventory, there’s always the risk that your products will sit on your shelves never to be sold. That is why it is important to carry timeless items or products that will rarely go obsolete.

That is why I always stress that it’s much more difficult to sell electronics or technology related products. Pick an industry that moves extremely slowly or avoid selling physical products altogether.

The ideal products to sell in my opinion are informational products because everything is virtual. If you have the means and knowledge to create a book or a course, then that is the way to go.

Keep Spending Low

My wife and I spent about 600 bucks to start our business. We used a beat up old desktop computer that we bought from Craigslist, an old digital camera and launched with a small selection of products. We spent pretty much zero on software, zero on furniture and ran everything out of our living room.

The best part of having an online store is that no one can see the backend of your store. All they get to see is the website storefront so why waste any money initially on your office? Keep spending to an absolute minimum and only buy stuff that is a must have.

One thing that my wife and I focused on was reducing the recurring costs associated with our business. We avoided signing up for too many monthly services unless absolutely necessary. If sales suddenly became slow for any reason, we could keep our online store up and running indefinitely. Even today, it only costs us about 100 bucks a month to maintain our website.

Don’t Buy Your Equipment. Lease Instead!

It is often a big misconception that buying your own equipment is cheaper than renting it. But what most business owners neglect to consider are the maintenance costs and the large initial cash outlay that is required to buy. Why risk the extra money when you have no idea whether your business is going to work out?

If your business requires expensive equipment to run, consider leasing your equipment for at least a few years prior to making the commitment to buy. Don’t feel as though you are throwing your money away with renting. After all, if things don’t work out, you don’t want to be stuck having to liquidate a bunch of heavy machinery that you no longer need.

Have A Backup Plan

The number one way of mitigating risk is to have an escape route or a backup plan. When running any business, it’s important to keep the stress level at an absolute minimum. You want to avoid making decisions under duress or making decisions based on avoiding a drastic outcome. Some entrepreneurship sites recommend going all out without a safety net to add an element of desperation to your startup. The idea is that by placing yourself in a sink or swim situation, you will be forced to learn how to swim.

I personally think that’s a bad idea and I would never intentionally place myself or recommend that you place yourself in any dire situation. That’s called gambling. If you have problems motivating yourself to succeed, then you’ve got other issues that you need to deal with.

Everyone needs a backup plan because things will probably not go as planned with your business. As a result, you will need sufficient runway to make the necessary changes. The obvious backup plan for my wife and I was that we would keep our full time jobs and hire a nanny. Make sure you have something in place and it will make running a successful business that much easier.

Photo by Morbuto

Believe it or not, even with all of these items on my plate, I still feel I have time to take on even more. The secret is being more efficient with your time and managing your day a little bit better. I know. It’s easier said than done. But I’m going to describe in this article how my wife and I organize our time to run our online business and and how we manage to cram a ton of activities into a single day. The reality is that there’s plenty of free time lying around. You just have to learn how to extract every last minute.

The Time Granularity Problem

One of the biggest hurdles to the launch of our online business was that there were too many gargantuan tasks to accomplish. We had to launch our website. We had to write product descriptions. We had to market our store. We had to establish relationships with vendors. We had to establish internal processes.

What ended up happening early on was that we became overwhelmed by these large tasks because each one of them took too many man hours to complete in a single sitting. As a result, even if we had a 1 hour block free, we put off working on our online store because we didn’t think that we could get any meaningful work done in such a small amount of time. We kept telling ourselves that we would start when a large enough time slot was available but it never ever materialized.

The reality is that most of us don’t have huge blocks of time to devote to any given project. Especially if you have a full time job or children running around the house, you often only have small .5-1 hour chunks of free time available. And more often than not, these valuable time slots are wasted away with the belief that nothing can get accomplished in such a brief moment of time.

Breaking The Problem Down

Looking back, much of our success was the result of making efficient use of these small time slots. In order to manage our time more effectively, my wife and I broke our large tasks down into small pieces that could be completed in a single sitting. We ended up dividing our business tasks into half hour time slots. So if we had a spare 30 minutes, we could easily switch gears and cross one of these tasks off the list.

While some tasks took longer than a half hour, no single task exceeded more than a couple hours long. For example, for our website, one of our tasks was to enter in 10 product descriptions into the shopping cart database. Another task was to take 10 product photos. On the product sourcing side, an example task was to contact a short list of vendors or locate a small subset of products that we wanted to sell. Each and every line item was something that we could do quickly and efficiently even in the shortest of time slots.

By crossing these things off the list, we felt like we were always making progress which fueled us to work even faster because we saw light at the end of the tunnel. What also ended up happening was that we worked more often on the business because the tiny size of each task lured us into working longer and harder. Each task seemed so small and easy that we always felt as though we could hammer out another one in no time flat.

Find A Pace You Are Comfortable And Maintain It

Early on, my wife and I also made time for the business by making sacrifices. Not only did we stop watching television but we also drastically cut down on our sleeping time as well. On some days, I would arrive at my day job a walking zombie.

Making healthy sacrifices is fine, but I gradually learned to never make sacrifices at the expense of my health. My main problem is that I like to tackle everything in a single sitting. When I’m excited about something, I’m all too eager to try and get things done in a timely manner even if it means pulling all nighters. But with a business, I discovered that the list of tasks is endless and it’s impossible to just cram through it. You might be able to get through a week of little sleep, but things will eventually catch up to you and you may well burn yourself out.

The strategy I ended up finding far more effective was picking a comfortable, maintainable pace and sticking with it even if the slow pace felt like torture. To find out what pace is right for you, simply ask yourself the following questions. How many hours can you comfortably devote to the business per day for months or even years on end? Can you maintain this frequency easily without impacting your mental well being? It might take a short adjustment period but eventually you’ll discover your sweet spot.

Set A Schedule

Once you’ve made some progress on your business, it’s important to maintain your momentum. And the best way to do so is to establish a routine. Set aside a specific time or day that you can devote solely to the business.

For example, my wife reserve and still set aside Sunday afternoons for business related activities. Not only does this prevent our business from stagnating but it also makes working on our online store involuntary. It’s almost like we’re on autopilot!

Don’t Lie To Yourself

The moral of the story is that time is always available so stop making excuses! No matter what, you can always squeeze out a small block of time even if your schedule seems packed from day to day. By creating tasks that can be accomplished in small chunks, you can make better use of random time slots and consistently make progress. Good luck!