Looking back, one of the biggest challenges of starting our ecommerce store was the lack of support. For example in 2007…
We had no one to talk to.
We had no one to share our experiences with.
We had no one to compare strategies with.
And to make things worse, most people doubted that we would ever be able to replace my wife’s 6 figure income selling handkerchiefs online.
Here’s the funny thing about friendship and support.
If most of your friends work full time day jobs, then most of them will be skeptical of your chances for success. And there will always be a small part of their mind that secretly hopes you’ll fail.
Now your friends are not bad people for thinking this way. It’s just that human nature causes people to doubt any path that they have not chosen for themselves.
Even though I run multiple
6 7 figure businesses, I still consistently get 3-5 emails per week from people who simply do not believe that money can be made in ecommerce let alone 6 figures in profit in a single year!
For example, here’s an email that I received just the other day.
Your figures do not add up. There is no way your wife made $100,000 profit on her first year doing most packing by herself. – Marisa
First of all, making 6 figures within a year is not uncommon. In fact, it’s not even that impressive anymore and I have a hundred podcast guests that have well exceeded this number.
One of the students in my class, Toni Anderson, made 190K in her first 7 months selling jewelry online.
Editor’s Note: If you are interested in learning how to start your own business, click here to take my FREE 6 day mini course on ecommerce.
Breaking Down 6 Figures In Profit
Making 6 figures per year with an ecommerce store may sound insurmountable at first. But let’s break down this number and take a look at it from a different perspective.
A typical online store that sells other peoples’ products makes roughly a 50% margin. So in order to make $100K, you have to generate $200K in revenue.
A typical Amazon seller makes a 33% margin after all of the Amazon fees and product costs. So in order to make $100K profit on Amazon, you need to generate $300K in revenue.
For our online store back in 2007, we imported all of our stuff from Asia and our margins were anywhere from 75-95%. For us to make 100K in profit, we needed to generate between $105,000-$133,000.
For the sake of simplicity, let’s assume $125K in revenue was required for us to make $100K in profit.
Note: Back in the day, we ran everything from our garage and had pretty much zero overhead. We charged really high shipping rates as well so we actually made money on shipping.
$125K divided by 365 days/year = $342 per day
Our average order size was around $50 so that meant we only needed 7 orders per day to make $125K for the year.
Just 7 orders per day!!!
It doesn’t sound like a whole lot when you think about it that way does it?
Fulfilling 6 Figures Worth Of Orders
According to the reader’s email above, it is physically impossible to pack 7 orders per day while working a day job.
What do you think?
Now is it grueling work to have to pack orders for several hours after you’re tired from a long day of work? Absolutely.
Is it impossible? Hardly.
First off, my wife was not alone. We packed orders together and we were a team. I got off work at 6pm, ate dinner and then helped her pack until late at night.
Here’s another little known fact…
I was in charge of doing all of the sewing and embroidery for the first year. Why was this my job? It’s because even though sewing was one of my wife’s favorite hobbies, she hated sewing for money.
So rather than give up a potential cash cow that generated 95% margins, I took the helm and operated the machines.
I would come home from my 50-55 hour per week day job designing microprocessors and then I would sew for several hours until all of our personalized orders were fulfilled.
But realistically speaking, packing and shipping 7 orders per day was not a big deal. If you are determined, you can do it.
Running An Ecommerce Store Has Never Been Easier
Back when my wife and I first started, there was no Amazon. There were very few if any 3PLs.
Note: 3PL stands for 3rd party logistics which is basically a fulfillment house for your goods. For more information, check out my post on Why You Need A Fulfillment Center And My Top 3PL Picks
As a result, my wife and I were forced to pack and ship all of our orders by ourselves. We had to carry inventory which meant that we needed to dedicate space in our house to store our goods.
Today, that is not the case.
Thanks to Amazon’s FBA (Fulfilled By Amazon) program, you can ship all of your goods directly to Amazon’s warehouse and have them do the shipping and handling for you.
They will also handle all of your customer service.
You don’t need to pick up the phone.
You don’t need a physical address for your company.
You don’t need to handle returns.
Thanks to the rising popularity of ecommerce, there are also many 3PL companies that will handle all of your shipping and handling needs if you decide not to go the Amazon route.
Launching A Website Has Never Been Simpler
Back in 2007, I only had a few choices for my website. I could either download an open source shopping cart and run my own server or I could develop my own home grown solution.
There weren’t any good fully hosted shopping cart platforms at the time and you had to invest a significant sum of money to get your website designed if you didn’t have any skills.
If you want a little more control, there are a plethora of open source options like Open Cart, Prestashop or Magento.
Putting up your own website has never been easier and it’s very affordable too.
Getting Traffic And Making Sales
Once you have a product to sell, the next logical step is to drive traffic to your listings and complete the sale.
However, most people struggle with this step.
It’s true. Driving traffic to your own branded website is difficult and requires some amount of skill. This is why that I recommend all beginners dip their toes in the water by selling on Amazon.
Amazon has such an ENORMOUS built in marketplace that any well researched product you throw up will probably sell, especially during the holidays.
When I launched my first few products on Amazon, I made $3000 in the first month doing absolutely nothing.
My products had 0 reviews.
I didn’t do any giveaways.
The products just sold organically by themselves.
And our sales have continued to increase month after month to the point now where Amazon is generating meaningful revenue.
Anyway, here’s my recommended flow if you want to get started in ecommerce.
- Start off by selling on Amazon and take advantage of Amazon’s vast marketplace to test the demand and viability of your products.
- Put up your own branded website after you are generating consistent sales.
- Continue to sell your products on as many marketplaces as possible while focusing your efforts on your own web property
Remember, if 6 figures is your goal, then it helps to break down your problem into smaller pieces. For my wife and I, we knew that we only needed 6-7 orders per day to reach our goal.
But if we thought about it in terms of making $100,000 in profit, we might have gotten discouraged early on when business was slow.
Bottom line, when it comes to selling online you don’t have to swing for the fences and start the next Google, Target or Walmart online.
If all you want to do is to replace your day job income, your goal is well within reach.
Dealing With The Skeptics
Hopefully, I’ve shown you that replacing your day job income is not a huge undertaking when you break things down. And the key to success is not paying attention to the skeptics and the doubters.
- People who can’t relate with what you are doing will not necessarily support you.
- People who don’t understand what you are trying to do are not good sources for advice.
The best way to get real advice and support is from other like minded entrepreneurs. So instead of relying on your friends and family, join an entrepreneurship community or attend a conference and start meeting new people!
- How Much It Costs To Start An Online Store And Should I Dropship Or Carry Inventory
- Breaking Down The 100K A Year Barrier With Your Small Business
- Create A Profitable Online Store In 5 Easy Steps
- Selling On Amazon Vs Ebay Vs Etsy And Why Relying On A Single Platform Is Gambling
- Inventory Management And How To Handle Cash Flow For An Online Store
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