I’ve been out sick for the past two weeks so I apologize if I haven’t responded to any of your emails. The fact is that I hate seeing the doctor and it was only after a week of unbearable headache pain that I finally buckled and decided to go to urgent care. It was there that I discovered that I had a bacterial sinus infection that required antibiotics to cure. If only I had known this earlier, I could have saved myself from a full week of illness. UGH!

In any case, I’ve been taking my medication for 3 days now and my head is starting to become lucid enough to resume writing. Here are a few email questions that I thought I’d answer in a blog post.

Question:
I encountered your blog last night when I did a Google search for ‘running an online business and having a baby’, and found myself reading through pages and pages of blogs. Your story struck a real resonance with me!

My husband and I (who live in the UK) are planning on starting a family shortly, and I have been struggling in my mind to think how I get get the business and a baby to mix! This is especially so when I know how hard I work at pushing the business forward on a daily basis! However, your blog has given me a bit more confidence that it can be done, which is a big reassurance.

I launched my website in April this year, which is an online bridal accessories boutique. I’m running the business full-time, having left the comfort of a secure income working for a design agency as a business development manager. My husband works as a project engineer for a construction company, and we’re relying primarily on his income at the moment as I’m only drawing a small wage.

Having got the business of the ground, I am trying to find answers to two key questions:

- How can I mix the demands of having a baby with running the business on a day-to-day (e.g. responding to customer enquiries – esp telephone ones! when baby is crying/wanting attention.)

- How big do I need to grow the business/what’s the best way of scaling the business so that it can afford to buy in help (e.g. employing someone – then, would they be full-time/part-time? Would it be best to employ someone I know or someone that I don’t??)

And, of course, another one that you’re familiar with:-
- As we’re now moving away from wedding season, how quiet will it go???

Friends tell me that ‘it’ll be okay’, but, of course, it’s not so simple as that as I know that you have to always forward plan!

Anyway, I just wanted to get in touch to say thank you for your blog. I will be coming back to visit to read your stories and have subscribed to your e-book.

Many thanks

Answer:
First off I just wanted to say “Congratulations” on launching your business and having a baby! I can only imagine how excited you are to be making these enormous changes to your life. My wife and I had similar questions when we first started out but gradually found ways to get by.

In terms of answering customer inquiries, there are a few things that you should do. For one thing, you should pack as much information as possible in a very obvious place on your website such that customers can answer the majority of their questions online without having to call. I would include a FAQ page that contains all of the questions that you can think of and display a link to this page prominently on every page of your store. Make sure you include vital information like shipping times, shipping costs, delivery times and your return policy very clearly as these are the most common questions that you will receive.

The second thing you should do is to sign up for a virtual phone service like Ring Central. A virtual phone service will allow you to do several things.

• You can place customers on hold automatically
• You can route calls to any phone number anywhere
• You can route commonly asked questions to automated recordings
• Depending on urgency or the category of the call, you can route the customer either to a live person or to voicemail.

In case you are interested, I wrote an entire blog post on this topic on how to handle customer service with little or no staff.

Finally, I would setup several reasonably sound proof workstation zones within your house. That way when a customer calls and it’s urgent, you have a quiet place to answer phone calls without your child screaming in the background.

In terms of hiring employees, I would advise that you hire outside help as soon as your revenue grows enough to support it. My wife and I used to be so concerned with profits that we took our time hiring outside help. And ultimately, this was a horrible decision because we were using the majority of our time on tasks that we could easily have outsourced. Please don’t make that same mistake. Also, make sure that you hire all of your employees by the book and follow all of the necessary rules and regulations that are involved. Unless you can trust your employee implicitly, handling things under the table can lead to lawsuits later on down the line if things don’t work out.

Finally, since the wedding business is very cyclical, I recommend that you find additional products to sell so that your business is not completely dead during the off season. For example, when the wedding season slows down in October/November, we sell linen napkins and towels to event planners for holiday parties. As a result, our business is fairly balanced throughout the year.

Question:
I actually came across your site after having a conversation with my brother about how he didn’t have the time to start anything on the side, but he did want to escape the corporate world. I thought someone must have written a blog post about how you can find the time if you really want it- and I found it on your site!

I’m in the planning stages of starting an online business and I’ve found your site to be a great resource. One of the questions that I have is when starting out, how did you decide how much inventory to carry? I am struggling with that right now. All of my items will be imported, so dropshipping is not an option for me.

Not sure if you covered that in one of your posts, but if you did please point me in the right direction!

Thanks for the great blog!

Answer:
Sounds like we share something in common with our online stores in that we both import all of our items. In terms of inventory, it takes a while to understand the supply, demand and cyclicality of your business. Therefore, you should carry as little inventory as possible until you see the patterns.

In the beginning, my wife and I carried very little inventory until we figured out what sold well and what didn’t. The 20% rule applies here. 20% percent of your products make up most of your revenue. So once you find out what sells, carry a lot of that item and keep a small amount of the other items to fill out your store. Hope this helps. There’s a lot of situational criteria that comes into play that I can’t describe unless I understand your business better. Just don’t make a huge order of any one item until you are confident it will sell.

Question:
Hi Steve, Is it worth selling anything with only a 10% mark up? Of course if it were a $100,000 sale I would be more than happy to accept 10%. I am looking for $50-$100 price point products and I don’t think it is unreasonable for a keystone mark up. My challenge is finding products where there isn’t so much competition and other sellers are marking it up only 10%. If it is quantity that is giving them a better price, I cant compete with that either because I cant afford to risk buying a container full of products that might not even sell. Any suggestions? Thanks for your time.

Answer:
A 10% markup sounds really low to me. In general, your margins should be between 35-50%. If you import your goods from Asia, the margins can be 2-3X higher. The disadvantage of only a 10% markup is that you won’t have as much room to play around with prices and discounts. If all of your competitors are pricing their products such that you can only make 10%, then I would strongly consider another product category.

However that being said, the lowest price doesn’t always win. Many of our products are priced higher than our competitors but we still get the sale. If you can manage to take the top spot in the search engines, you will make sales even if your prices are higher.

I really hate getting nickel and dimed, especially when I believe that two items should come packaged together at no additional cost. For example, every time I go to McDonalds and order Chicken McNuggets, I get really annoyed. Back in the old days, McDonalds used to offer as many packets of sauce as you wanted for free whenever you ordered their Chicken McNuggets. But sometime within the last several years or so, they started charging you for extra sauce that exceeded their recommended quota.

Photo By Fr1zz

Now if you order 20 nuggets, you are only allocated 3 packages of sauce. For a 10 piece, you get 2 and for a 6 piece, you only get 1. For me when I order a 20 piece nuggets, I need at least 5 packets of sauce. No doubt someone at McDonalds calculated the sauce usage for the average consumer and determined that 3 was the magical number. In any case, sauce packets now cost an additional 30 cents a pop at checkout.

I hate getting charged an extra 60 cents for something that used to be free (I’m cheap), so one day I decided to try a different tactic. Instead of telling the cashier up front that I wanted to order 2 extra packets of sauce with my 20 piece, I simply asked for 3. Then once the cashier had already swiped my credit card, I said “Actually I change my mind, could I get 2 more packets of sweet and sour sauce please?”. Sure enough, the cashier handed over 2 additional packets of sauce for free!

My Experience Shopping For Embroidery Machines

When my wife and I were shopping around for embroidery machines for our business, we were extremely price sensitive. After all, these machines cost anywhere from 5-15 thousand dollars and we wanted to only pay for as much machine as we needed. For such a large purchase, we shopped mostly at physical store locations and a variety of sales tactics were used against us.

Some retailers tried to present us with large package deals. Buy this machine along with an embroidery starter kit a one low price! Buy this package and receive free servicing for life along with all of the accessories you need! Other salespeople tried to sell us the base machine and then nickel and dime us for all of the extra accessories.

But the smarter salesmen read my wife and I like a book. Sensing that we were extremely cost averse, the sales person that we ultimately purchased the machine from didn’t try to sell us anything more than the base machine. He seemed conscious of the fact that we wanted to spend as little as possible and didn’t try to push anything on us at all. However, once we had settled on a price and were all ready to make the purchase, he casually walked us over to the accessories aisle and gave us a brief tutorial on additional items that we might need. And somehow, we ended up spending a good amount of extra money on these accessories and didn’t feel too bad about it either.

The Common Denominator

So what do these 2 stories about chicken nuggets and sewing machines illustrate? It’s that both customers and retailers are much more vulnerable once a commitment has already been made. And as I’ve already illustrated with the stories above, this can be used to your advantage.

As an online store owner, make sure you upsell an existing product or cross sell your customer with additional accessories and/or related items when they are ready to checkout from your store. For example if you sell cellphones you might want to present the customer with a variety of cases or a car kit just before checkout. If you sell shoes, hit them up for some socks or other accessories. If you want to see an extreme example of cross selling, go and try to buy something from GoDaddy.com. While I think that GoDaddy’s tactics are annoying and way over the top, it clearly works otherwise they wouldn’t be doing it.

As a consumer, you can extract every last value of your dollar by asking for additional concessions after a salesperson has already committed to helping you and you’ve both already agreed on a price. This tactic works especially well for larger purchases but ultimately depends on how desperate the shop owner is or how trivial your demands are.

The Secret To Increasing Average Order Size

The hardest part of sales is convincing your customer to choose your store. But once that decision has been made, adding a few extra items isn’t as big of a deal. In other words, they already like your company and your products so it then becomes a question of what to buy and not whether to buy. Therefore, it is crucial to get your customer to commit to making a purchase no matter how small the cost and then try and cross sell them with additional enticing items just before checkout.

As a shop owner, you should always use cross selling in conjunction with a draw in item that is priced very attractively. Customers who commit to buying your inexpensive draw in item will be vulnerable to cross sells because psychologically, they’ll feel inclined to spend what they had already planned on spending. “Wow I just saved 50 bucks! May as well blow this money on something else. After all, it’s practically free money!”

Many larger retail chains use this tactic all the time. Stores like Fry’s Electronics and Best Buy routinely offer ridiculously low priced items to get you in the door and as a result most consumers end up buying additional higher margin goods on their way out.

My wife and I increased our average order size by roughly 29% almost immediately once we started using draw in items and cross selling. We found that the easiest and painless way to do cross sells is to rely on prior sales data by pointing new customers to what others have already purchased along with what is in their shopping cart. It takes a bit of hand tweaking to make sure the recommendations make sense, but it’s well worth the time.

Another tactic that we’ve found useful for increasing average order size is by offering free shipping and discounts when certain purchase amounts are met. For example, customers can save up to 11 dollars on shipping for all orders over 100 dollars at our store. On many occasions, I’ve observed(in real time) customers looking for extra items to add to their shopping carts just to cross the 100 dollar threshold. These tactics work and are an effective way to increase revenues without having to increase foot traffic.

A few people have emailed me lately asking questions about how much time we spend running our store on a day to day basis and I completely understand why. Running a business can be difficult and time consuming so it’s important to understand what one is getting into before taking the plunge. I even received one email from a reader who asked.

Why would I want to open an ecommerce site as opposed to something much more passive like affiliate marketing or blogging?

Passive Income?

First off, I just want to emphasize that no business is truly passive. No matter what, you have to put in a good amount of time and work upfront. In addition, there’s always some amount of effort involved to maintain your income stream once it has been established. The other thing I want to say is that if your purpose is to make money, blogging is a lousy way to do it.

But what about affiliate marketing? The main difference between opening an ecommerce store as opposed to running a niche affiliate site is that an online store has the potential to make a lot more money upfront in a shorter period of time. I don’t think that my wife and I could have made 100K within a year by promoting other peoples’ products. We also wanted to create a business that we could cultivate and grow, a business where we had more control over our own destiny.

The disadvantage of running an ecommerce site is that the income is more active in the beginning but later transitions to passive as you hire employees and put your store on autopilot. The attraction of affiliate marketing is that the income starts out more passive (there are no goods to ship or customer support issues to deal with) and remains passive which is why a lot of people do it.

What Our Schedule Looks Like

With our online store, most of the heavy lifting and late nights were spent getting our business off the ground. Once all of the major kinks were ironed out, everything became much smoother and there is now much less work involved. In any case, here’s what our typical weekday looks like. I’m only going to talk about the weekdays because we close the store on weekends so we can enjoy family time together. The beauty of running an online store is that even though we are closed, our servers continue to take orders 24/7.

The Morning

First off, my wife tries to sleep as late as possible in the morning so she’s well rested enough to take care of the kids for the entire day. I get up at around 7am to write a blog post or answer emails for MyWifeQuitHerJob.com. I like writing in the mornings because the house is completely quiet.

Sometimes I have up to a full hour to write but it all depends on what time my son and daughter decide to wake up. Sometimes my daughter makes it all the way till 9am. Sometimes she gets up at 8am. I basically write or revise my articles until I hear her scream “DADDY! MOMMY!!! DAAAAADDDY!!! MOOOOMMY!”. My son on the other hand is far less demanding. Once he wakes up, I give him his morning bottle which takes about 10 minutes (he’s a fast eater) and then I put him back down to sleep.

My daughter requires more attention so once she’s up, I grab her, play with her for a little bit and give her a glass of milk and breakfast. By this time my wife wakes up as well and starts getting ready for her day. By 9-9:15am, I’m usually out the door and off to my day job as an electrical engineer.

During The Day

My wife gets to spend time with the kids all day. Most of the correspondence that we receive in regards to the business is via email and she responds to them at her leisure. We also have some hired help come in to pack and process orders so my wife can focus on the kids.

But in general, the days are more or less free for my wife. She might take our kids to the park which is 2 blocks away. Sometimes she takes them out to the mall or reads to them outside. The day is very pleasant for her as long as the kids aren’t in a bad mood:)

I come home for lunch 3-4 days out of the week to eat with the family and to take care of any miscellaneous business correspondence that my wife couldn’t get to in the morning. This may include rush deliveries, returning phone calls or sending out some emails. Depending on the season, the number of last minute rush orders varies. Typically, it’s not too bad. On some occasions, I have to make a quick trip to the Post Office or Fed Ex.

At Night

We always make it a rule that we all have to eat dinner together. Dinner usually begins between 6-6:30pm. After dinner, my wife and I play with the kids for an hour or so and then send them up to my office.

Why the office? It’s because at 7:45pm, we use Skype so the kids can speak to their Grandma. We all talk in front of the webcam until about 8pm which is around the time when both kids get tired and need to go to sleep.

At this point in the night is when things get a little busier. After putting the kids to bed around 8pm is when we take care of the remaining business related tasks. This sometimes includes packing miscellaneous orders that arrived after hours, printing shipping labels, adding content to the website and/or general business development. The first thing that my wife does is to go through the days orders and prepares them for shipment. Everything is pretty much automated and each package is weighed and shipping labels are printed. During peak periods, the amount of shipments can be very large but generally the workload is not too bad. We plan on outsourcing this task to our helpers as soon as we can decouple the shipping operations from our Paypal account.

During this time, I work on ways to expand the business, revise articles on my blog or do miscellaneous tasks that my wife needs me to do. On most nights, we are done by 9:30-10pm and get to bed no later than 11pm.

It’s Not Too Bad

Originally when we had our second child, I thought that we were going to die. But we now have a pretty good system in place that is manageable. As soon as my daughter starts preschool full time, we will look to continue outsourcing more and more of the business either by hiring more help or finding additional contractors.

The idea is to free up some more time so that we can pursue some of our other business ideas. As I’ve mentioned in a previous post, I plan on launching my course on how to start an online business sometime in the latter half of the year and I’m pretty excited. This course will include a full blown lesson plan that teaches all of the ins and outs of starting and running an online store with very little initial cash outlay. In addition to all of this, my wife has been itching to pursue some other business ideas which I’ll be documenting in the future.

Is Running Our Store Passive?

I would definitely say no…but it’s getting there. The good thing is that my wife is able to spend time with both kids from when they wake up until they go to bed. Although we still have to do some amount of work every night, it’s only for a few hours and the amount of money our online store brings in is more than enough to sustain a comfortable lifestyle.

A few weekends ago, my wife and I had the pleasure of attending the annual San Francisco Gift Fair held at the Moscone center. My mom was in town so we left the kids with her and took off to check out the latest gift wholesalers from across the US.

The SF wholesale gift show had the usual requirements to keep out casual shoppers. You needed to show at least 2 forms of id which could consist of any of the following: your business license, LLC or corporation paperwork, EIN number, business credit cards etc…

Young kids were not allowed in and you had to pay a hefty fee to bring in guests that did not have their own business. These rules were in place to make sure that only true buyers and business owners were allowed on the show floor.

Tradeshows Are A Great Place To Find Products To Sell

Tradeshows like the SF Gift Fair are a great place to meet vendors because hundreds of companies congregate under the same roof for several days. And in that span, you can talk to many vendors and discover new products to sell without having to travel more than 500 ft.

Most vendors that attend these trade shows bring along a large collection of products. As a result, instead of having to go back and forth requesting product samples by mail, you can touch and feel all of the products first hand at their booth. This saves a ton of time with product sourcing and you can get a good idea of product quality as well.

Are You Getting The Best Price?

However, the big problem with vendors at these trade shows is distinguishing the real wholesalers from the middle men. Now there are many vendors out there who call themselves wholesalers but the term wholesale can be very misleading. My definition of a “real wholesaler” is a distributor that is one step removed from the manufacturer.

If you’ve never been to a wholesale tradeshow before, almost every company that you meet will give you a price list which consists of both a wholesale and a retail price. The retail price is the “suggested retail price” and is usually around the ball park of 2X the wholesale price. The problem is that unless you have some context for the pricing of the goods you are buying, you will have no idea whether the wholesale prices you are getting are the absolute lowest. After all, the “retail price” is usually just a bogus number that you can’t really expect to charge.

For example, there were several vendors at this show that sold the same or similar products that we offer in our online store. However, the wholesale pricing that they were offering was a good 2-3X higher than what we could get directly from our vendors in Asia. In some extreme cases, the markup was upwards of 8-10X. But if you looked at their retail pricing, it didn’t appear to be a bad deal. That is why you have to be extra careful and do your homework before making a bulk purchase.

Finding Real Distributors

Distinguishing the middle men from the real distributors takes a lot of time which is why I always recommend using a service like WorldWide Brands in addition to attending tradeshows. Companies like Worldwide Brands help you screen out the little guys and provide useful search facilities for real distributors. You can think of them like a “Google” for true wholesalers of goods.

A good strategy for sourcing product is to attend wholesale tradeshows to obtain ideas for what you want to sell and then use Worldwide Brands to track down a true distributor for that product. While my wife and I didn’t find any new vendors for our online store at the SF Gift Fair, we did come away with a ton of new product ideas.

Some Other Observations

This may only be true with my particular niche, but I found it extremely odd that many of the vendors on the show floor did not have their own websites. And those that did had really crappy ones.

We even met one company that not only didn’t have a website but didn’t accept credit cards and didn’t have an email address either! All business was conducted via phone or fax and you had to manually request samples of new product before ordering. But despite still living in the stone ages, this company had been around since 1927!

The key takeaway here is that even though there are a ton of ecommerce companies out there, I strongly believe that technology has still not caught on with the majority of shop owners. While this trade show only represents a small sampling of the US, the fact that we saw many vendors completely neglect their online presence indicates to me that those with web skills or web initiatives have a clear opportunity here.

Start an online business online now! As my wife and I walked the show floor, we saw many companies doing business the old way that could easily be done better online. Do your research when sourcing your products, avoid the middlemen, throw up a web store and I guarantee that you’ll rock these dinosaurs over time.

One of the pieces of entrepreneurial advice that I hear the most often is to start a business based on something you are passionate about. Pick a niche based on something you enjoy doing and turn it into a business.

Whenever I hear this advice, I start to roll my eyes because it’s not that simple. Sure, passion is important, but passion comes with the territory once you starting kicking butt. Passion comes naturally once you start seeing some traction and progress. The problem with picking a business idea based on what you enjoy doing during your leisure time is that you may not enjoy doing it anymore once you start charging for it.

Something fundamentally changes when you get paid and you have to cater to customers. All of a sudden, you are not acting on your own terms anymore. You must listen to what your customer has to say. You must change the way you do things based on what your customers want and are willing to pay for.

Separating Business From Pleasure

The main problem associated with starting a business based on what you enjoy doing is that you have to abstract out the fun part with what actually makes money. And more often than not, the two don’t fully coincide. Sure, you can run your business based on just the fun parts but more than half of the time, the fun part has this way of interfering with profits.

And if you have personal biases towards the way your business should be run with respect to your hobby, it makes it that much more difficult to achieve profitability. Even worse, if you go too far just for the money, your business could turn into just another job.

A Personal Story

My wife and I started the personalized linens portion of our online store because my wife was passionate about embroidery. We owned an embroidery machine (a birthday gift from me to her) and she loved stitching our initials on practically everything we owned, towels, pillowcases, bibs…you name it.

Some of her embroidery designs were extremely intricate as they used many different thread colors and fancy stitching patterns. And because of this, producing a single personalized item would often take over an hour. But the end result was always beautiful so we thought it would be a good idea to sell some of these designs embroidered on our own products. After all, people would definitely pay extra to have their products personalized.

What ended up happening was a complete disaster. Once we started offering personalization and custom embroidery, customers wanted designs that were all over the place. Some customers had really tacky taste and wanted my wife to create some truly heinous designs and some customers were extremely anal and picky.

Most orders required several iterations of back and forth correspondence and all of this customer interaction took a toll on my wife’s psyche. What was once fun for her became a chore. She wasn’t creating designs for herself anymore. Instead, she was catering to customers for a couple of extra bucks. While she did get pleasant customers every now and then, during this short period my wife was constantly complaining about the picky and unreasonable demands her customers were making.

What was worse was that nobody could help her out in this department because she had all of the expertise. Her skill set was not easily transferable in a short period of time. And because her time was so valuable, the money wasn’t worth it and there was no way the business could grow in this way.

Ultimately, we decided to cut out as much customer interaction as possible and started offering canned embroidery designs that customers could configure themselves online on our website. While this wasn’t as fun for my wife and didn’t take advantage of her creative skills, it was a heck of a lot easier and far more scalable as a business. Essentially, we were offering a dumbed down version of her hobby, a compromise in order to cater to the masses.

Unfortunately however, we made these changes too late and my wife had already become jaded with her once relaxing hobby. Today, she doesn’t deal with our personalized linen offerings at all and we now contract out our large orders to local embroiderists or have someone else fulfill the orders.

Don’t Make A Business Out Of Something You Do For Fun

I’m sure you can probably come up with many examples of entrepreneurs who make money doing things they enjoy, but keep in mind that there are many tradeoffs involved as soon as you start accepting your first dollar. Because customers are paying for something, they will feel entitled to give you their opinion. And acting on their feedback may lead to greater profits for your business at the expense of your free will.

Everyone needs a hobby and a relaxing activity to unwind. Do you really want to sacrifice your enjoyment by turning it into business? If so, be prepared to make some concessions because your hobby may not scale with your business. A better way to approach finding a good niche for your business is to research what is profitable, easy to sell and go on from there.

My wife and I have been busy training additional help for our business lately so things have been a little more hectic than usual. In addition to writing this blog, I’ve also been compiling a little handbook of all of the little day to day things we do to run our business in order to efficiently pass on the knowledge. I’ve also been placing more focus on my online store course and making slow but steady progress. In any case, it’s been a while since I’ve done a mailbag so here are a few questions from last week.


Question

I have just begun to read your blog and have found myself addicted to the content. I have read your e-book and have been thinking of doing an online store for years now…. well actually I was stuck for a while, it seemed as though I understood what I needed to do but I got so caught up on little stuff that I gave up, I also think what attributed to my giving up at the time is that I was on information overload. I have recently been laid off and I am not interested in the corporate lifestyle. I want to pursue my own business…

finding my niche is where I got stuck in the past because I am interested in so many things. I feel as though I have grown and learned a lot more in the time that i have been dedicated to a job I truly dislike.

I am in the process of talking to manufacturers and would like your advice I have multiple questions. I want to set up an online store, however if i purchase a min. order from every supplier i am looking at then I will have spent thousands… do you have an recommendations on setting up shop for testing and marketing purposes before starting to order large min. orders?

Answer:
It really depends on what you are selling, but you can proceed in any of the following ways.

1. Stock some sample amounts of your product by paying a much higher price for them for testing purposes. Some distributors will sell you smaller quantities if you ask, but if they don’t? Just go ahead and pay full retail price for a few products and see if they’ll sell. If you want, you can even sell items you don’t have and then go out and buy the products as orders arrive.

2. Make some tradeoffs and sell less items. In the beginning, it helps to be focused with your product selection. Once you gain some traction with a particular product category (from both an SEO and customer standpoint), you can gradually expand your product line.

3. Drop ship your items. You can drop ship all of your goods first and if things work out, you can choose to stock them later at lower wholesale prices.

My wife and I did a combination of 1+2 when we first started out. We negotiated with our vendors to obtain sample quantities of everything at higher pricing.

Question:

I’m trying to figure out why Google is not indexing my site. And Yahoo is only indexing one page. My pages have unique title tags, keywords, and meta descriptions. There are keywords in products URLs, and I use a sitemap. One thing I know is that I have very few links from other sites. Could this be the problem? How do I change that?

Answer:
Is your site domain fairly new? If so, you may be stuck in what is called the Google sandbox. Before your site is let loose in the search engines, Google sometimes imposes a waiting period on your site.

To get out of the sandbox, you can either wait or get some quality backlinks pointing to your site. There are variety of ways to get backlinks through guest posting on blogs, writing for article directories, content sites etc…

Question:

Hi, I wanted to know your feelings about using “prostores” ? Thanks!

Answer:
I would shy away from any service that charges any sort of transaction fee. Pro Stores charges .5% which may not seem like much when you just start out. But hypothetically if your store were to make 100K in sales, that would amount to $500. I like Volusion or BigCommerce because they only charge a flat monthly fee.

The decision really depends on your store and you should calculate what makes the most economic sense for you. For example, if you run a low margin business, I would shy away from any platform that imposes a transaction fee. However, if you are just starting out and you carry thousands of products, prostores might be cheaper because their lowest plan allows you to sell more products than Volusion or BigCommerce.

Looking at the big picture, even if a service that imposes no transaction fees is slightly more expensive early on, I’d still pay the extra money. After all, it’s hard to switch platforms and once your business grows, you don’t want your fees to scale with revenues.

In any case, I know several shops that run on Prostores and the platform seems to be solid. Run the numbers to see what you are comfortable with.

In my previous article on My Latest Take On Hosted vs Non-Hosted Ecommerce Solutions, I recommended two hosted shopping cart solutions, Volusion and BigCommerce, that do not charge any transaction fees for using their service. Not being charged a percentage of your sales is nice because you can run your store at more or less a flat monthly rate(not taking into account credit card fees) that does not scale proportionally to your revenues.

A few weeks ago, I signed up for trial accounts with both Volusion and BigCommerce and decided to compare the two services. Before I get into the guts of the review, I’ll just tell you up front that you can’t really go wrong with either service and choosing between the two really depends on which features and factors you value more.

I also wanted to mention that I’m not going to really go into that much depth in terms of the backend features of either solution as both Volusion and BigCommerce offer more than enough features to manage a big time store. Instead, I’m going to focus on the differences between the two from a price/usability/support standpoint.

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.

As long as I’ve been writing tutorials on how to open an online store, I’ve always advocated going with a free open source shopping cart and hosting it yourself as opposed to signing up for an all-in-one hosted ecommerce solution. After all, if you host your shopping cart yourself, you’re in charge of your own destiny. You have full control over the source and no one can suddenly raise prices on you. Plus, there are many cool things that you can do on your own that the big hosted solutions won’t allow you to do.

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.

My wife just closed the books on our mid year numbers (January – June) and I’m proud to say that year over year profits are up in the double digits yet again. Running the store these last 6 months was much harder for a variety of reasons which I’ll outline below. But what’s remarkable about this year’s gains is that my wife and I have barely touched the business. Essentially, the business has grown all by itself through word of mouth and without our intervention.

Normally, I wouldn’t be proud to say that we did “nothing”, but this past year was all about survival. Late last year, our second child was born and we also had this crazy notion that moving to a bigger house at the same time was a good idea.

In fact, there was this short period last December in which our timeline was absolutely insane. In the span of just one week, I went to my brother’s wedding, had my second child, went to a funeral, closed on our new house and then had to pack for the move.

Did I mention that we moved the business as well? Basically, the first half of the year was just about getting by. Now that my son is sleeping through the night and we’ve moved him out of our bedroom, we’re ready to kick some butt yet again.

The Numbers

Below are some highlights of the year.

• Year over year revenue grew 24%
• Year over year profit grew 26%
• We had 4 consecutive months with higher revenues and profit than last year’s highest month.
• Our margins grew 2%
• Our average order size increased by $2 per order
• Website traffic increased by about 22%

Overall, the numbers weren’t too shabby. One other thing to note is that we started contracting out the embroidery portion of our business which reduced our margins a little bit but we still managed to eek out a 2% gain over last year. Not bad.

What Are The Plans For This Year?

For our online store, this year is going to be about scaling. We are going to put in place processes and document our day to day activities so we can find someone to manage the place in our absence. I want to be able to go on vacation without stressing out about our customer service or worrying about our quality control.

Since this means adding more people, I wouldn’t be surprised if our profits go down the latter half of this year and into the beginning of next year. But that’s okay. Not being involved in the day to day activities would allow my wife and I to do other things….perhaps we might start something else on the side.

We’re Going To Go For The Top Spot In Google

We basically rank among the top 5 spots in Google for our main keyword phrases but the number one spot gets an order magnitude more clicks and I want that extra traffic! So the latter half of the year will be about getting to the top.

We’re going to pull out all the stops and perhaps even hire some freelance writers on the side. The top competitor in our niche has a lot of backlinks but their numbers have been stagnant for some time. If they stay complacent, I think we can overtake them within 6-8 months.

Talk Is Cheap

In any case, I’ll do another recap at the end of the year to follow up on our progress. Now that I’m getting 8 hours of sleep again, I feel like I’m ready to take on anything. In other news, I’ve also been quietly working on my course on how to start and run an online store. Looking forward to launching this baby sometime later this year or early next year.

I’ve been writing this blog and helping would be entrepreneurs for nearly two years now and one thing I’ve discovered is that you can’t really push someone to take the entrepreneurial plunge. Either you have the desire to start your own business or you don’t and most people can’t get over the uncertainty that’s involved with being your own boss.

Photo By Anirudh Koul

Recently, I went through each and every email that I’ve ever received on MyWifeQuitHerJob.com and found that the majority of people get stuck on 2 main things when starting their business. One, they can’t come up with a good business idea and two, they aren’t confident that they can succeed.

I Can’t Come Up With An Idea

I’ve found that most people who have problems coming up with good business ideas are self-deprecating.

If you fall into this category, then I suggest you go and read Seth Godin’s book “The Purple Cow” for some inspiration. As long as there is demand in your niche and customers with money to spend, what you ultimately decide to sell doesn’t really matter as long as you make your business “remarkable” in some way. Choose products that you are interested in and put your own unique spin on it. I’ve personally sold many different things in the past and the one thing that I’ve found is that you can sell almost anything if you do it right. Even if your niche is already crowded, the amount of competition doesn’t matter as long as you can stand out.

If you take a closer look at our wedding linens business, my wife and I essentially sell wedding favors on our online store which is a saturated and competitive market. But even still, we have managed to carve out a healthy six figure profit and it’s been experiencing double and triple digit growth every single year.

I also want to emphasize that everyone is creative. Maybe you’ve gotten too used to working a day job where your boss simply tells you what to do and you don’t have to think that much. Maybe you are simply out of practice. Set aside some time to brainstorm and exercise those muscles instead of complaining about it.

I’m Not Sure That I Can Succeed

Overcoming doubt is huge part of the entrepreneurial process but doing research will only take you so far. Having confidence in your business idea is largely based on knowledge but at some point you need to just take a chance and go for it.

The good thing about running a business online is that it doesn’t cost very much money at all to begin. So why not just throw something up and see what happens? This isn’t like the old days when you had to take out a business loan to start a brick and mortar store. We’re talking hundreds of dollars, not tens of thousands. There really is no excuse. If you don’t succeed, tweak your idea or start something else.

The Key To Behavorial Change

Early on when my wife and I were brainstorming business ideas, that’s essentially all we did for a very long time….we talked about it. We got stuck in an endless loop of research and couldn’t push ourselves to take the plunge for the same reasons outlined above.

But then something miraculous happened. For starters, my wife became pregnant which put us under time pressure and gave us a sense of urgency. But the real key to our behavorial change occurred when we started talking to other entrepreneurs and shop owners.

In fact, I remember having a very specific conversation with a former college classmate of mine from Stanford about some of my ingenious business ideas. Looking back everything I came up with was kind of silly, the kind of business ideas that would never make more than some weekend spending cash.

When it was my friend’s turn to talk about what he was up to, he casually told me that his side business was on track to make over 500K in profit this year. And I was completely flabbergasted. This whole time, I had thought that his online business was just a pet project that made no money but here he was spouting out numbers that seemed way beyond what I believed that I could ever make. In fact, his business success made me uncomfortable and I didn’t know what to say because he seemed like he was in another league.

What particularly resonated with me was that my friend was a classmate, a peer of mine, and someone who I considered an equal. If he could start a website on the side while working a full time job, then I could as well. Once I realized this, I got a huge boost of confidence and started asking my friend a flood of questions about his business. And after hanging out with him some more, I came to the conclusion that I needed to think about my future business on a much grander scale.

Your Environment Is Important

What’s interesting to point out here is that your perception of business success and money are all based on your current context. Your goals and your potential are largely determined by the people you spend the most time with and how you were brought up. If I hadn’t spoken with my friend that day, I might still be wasting time on ideas that would only make me a few hundred bucks a month.

In fact, the secret to behavioral change is to hang out with the right people, people who will inspire you to try new things and who will push you harder. Your mindset and your limits are all relative to your environment. If all of your friends work in dead end day jobs, then chances are you will too.

Instead of making excuses and self-deprecating comments, start talking to people who start businesses all the time. I guarantee you that you will get inspired and start believing that what was once an impossible task will now be within your grasp. Initially, you might feel inferior or uncomfortable but getting over these feelings is the only way to grow.