I’ve seen so many posts around the internet asking about how to start an ecommerce company.
eCommerce and most business for that matter isn’t a matter of creating something – it’s a matter of distributing that thing to a relevant audience that is willing to pay for it.
That’s in bold for a reason.
The basic principles of business rely on supply and demand (emphasis on demand). So you can start a brand, build a product, likely a commoditized good (something that lots of people make something similar to) or you can decide that there is enough crap in the world and the real money is in cultivating a community to share cool stuff with instead and take a cut. (Spoiler Alert: you’ll have to do this for your own store anyway, might as well get a head start – it’s called market research)
Let me help you out on this one – one requires no (or minimal) upfront cost and teaches you everything you need to know about brokering partnerships and marketing – the majority of skills you need to run a successful company at least the hardest bits. The other requires you to do everything by yourself and has an upfront cost for goods, platform, apps, and STILL HAS TO DRIVE TRAFFIC.
DID YOU KNOW: The best eCommerce stores hit 30% profit margin – the best services have more than 70% margin – go be a service – then and only then if you REALLY feel compelled create a brand.
Easy Math breakdown – a company doing $10 million in revenue might make $3 million max after all expenses. The same company doing services only needs to make $5.1 million in revenue at 70% margins to make the same profit.
But what about drop shipping?
Drop shipping prevents you from developing a true brand.
For the majority of drop shipping, it works to test a market but doesn’t work long term and is completely reliant on trends.
A true brand is what sets you apart from your competitors. We’re not going to get into this now, but most every eCommerce business that is really successful in the DTC (Direct to Consumer) space gets products made for them – the really successful ones are vertically integrated (they handle the manufacturing, shipping, and selling). Hell even Amazon white labels their products under different brands. Marketplaces that sell multiple brands are different stories but their profit margins are often lower than 30% – these are usually brick and mortar businesses that also operate online.
So let’s make this newsletter –
Niche down to an activity that you really enjoy doing or have an interest in – odds are you’ll be connected to others like you and you’ll be authentic. There is a 100% chance there are a plethora (a lot) of companies that are small and are making products specifically for that community.
EVERY SINGLE ONE OF THOSE BRANDS WOULD WELCOME THE OPPORTUNITY TO BE FEATURED TO A GROUP OF PEOPLE THAT WILL VISIT THEIR WEBSITE. (REMEMBER ABOVE – EVERYONE CAN CREATE, FEW CAN DISTRIBUTE)
Your goal isn’t to cause people to purchase but to drive people to website where you hand over the customer journey to the brands to figure out how to convert them. All you’re job is to do is to provide them traffic. (This is a topic for another day – most companies struggle with this – don’t believe me they think that 4% conversion is God-like.)
Someone said to me the other day – this is super hard to do. It’s not, and you know what, it’s 10x easier than creating a product line from scratch. It just requires you to focus extensively on what you’re trying to do, find the right groups and forums that are actively talking about these things, the people that are asking questions, and drop some legit knowledge or value on the community to help them out.
THIS IS MARKETING! YOU’D HAVE TO DO THIS STUFF IF YOU LAUNCHED AN ECOMMERCE STORE ANYWAY.
Fitness is not a niche.
People that like trail running 5 plus miles with their dog in the desert is a niche.
I’ll even go a step further.
You don’t need permission to pick products – WHAT?!? YOU SERIOUS?!?
Serious as a heart attack, you see something you like, bookmark it and put it in your newsletter, write up some super fresh reason you’re sharing it with the community (what can I say I’m an 80s kid that love the 90s), because that’s what you do, you find iceberg lettuce still connected to the roots fresh stuff for this super cool community. Right click and save them photos, write up your own descriptions and sprinkle the good news about awesome things like you’re the tooth fairy for grownups.
Of course put a link to their website in the post along with actually writing out where to find the product. NO AMAZON LINKS PEOPLE!
Repeat the process 2 times a month with 3-5 products per email – wait only like 6-10 products a month? YES – take time to make the most of the space – in n out menu baby simple choices.
This will allow you to split your time between growing the list and creating great content that you can deliver with success every time.
You’ll diversify this as you expand on your niche but be something great with high quality content for your very niche group. Then work your way backwards…
People that like trail running with their dog.
then…
People that like trail running or hiking with their dog.
then…
People that like trail running or hiking.
then…
You should get the point by now you just open up the niche until you can grab a larger portion by doing crossover gear highlights.
The hardest part of running any brand is having an owned audience you can rely on to market to with permission. Do this right and you’ll avoid the $15k plus that you’d have to spend on building a website, working out all the bits and pieces, sourcing a product, and running ads for 3 months to figure out what works. (not to mention saving yourself weeks of work)
If you really want to crush it, you can run ads for people to join your community and your newsletter. But there’s a good chance you can just hit up the brands you’re sharing and ask them for a shoutout. Do the math my people 6-10 companies sharing out social links to sign up for your newsletter because you were featured that they can post on their blog as a snippet just makes the world go round.
They are buying in for your unique voice, be different, stand out, drop an f bomb in your descriptions who cares, viral is standing out amongst a sea of space junk content.
Then scale, small brands become medium brands, the work up to a sprinkle of large brands doing collabs. Large brands won’t share your stuff they are too big, small and medium though will share your stuff all day long.
Then get big hit 50k subscribers now larger brands will share your stuff, make your newsletter a cult classic, treat it like a cult, your subscribers are your disciples, they’ve all bought into the Kool-Aid that you’re sharing.
I’m actually not joking this is super common among startups where people “drink the Kool-Aid” about how big and successful and awesome a product is, happens all the time. Create a community and culture of awesome while using the word “awesome” then bring back “fresh” because well, the 90s are in again.
I wish I could pin this to the top of this thread because the amount of times this question gets asked over and over makes me question the value of this whole subreddit.
Side note – when people are signing up – get their likes go the extra effort to make sure that you’re appealing to what they want to see. Also provide a preview of your newsletter or a past version.
This is really how you stand out, giving people what they want and are interested in. If you’re not sure ASK!
Business is a grind, build trust, build an audience, be authentic, and lean on people in your shared hobby network to help you grow.