If you don’t want to read it, you can watch this video.
There is a lot of talk about ecommerce business. Anytime you talk about ecommerce, Amazon creeps into the conversation or dominates the conversation. I think that is a little misguided and dangerous but not for the reasons that you think.
The last few days I’ve been diving into numbers. I’ve been looking at ecommerce sites and programs. Ninety percent of the stuff out there is Amazon or Facebook related. As of this blog or video, only 8.4% of transactions are ecommerce purchases. What does this mean? There is a ton of growth coming. It’s going to be insane.
We know where the trend is going. Poor performing brick and mortar stores are disappearing at a rapid clip. I think that is due more to technology than the internet. What I mean is you don’t have to follow the old business model. The old business model said if you wanted to sell X amount of stuff, you needed X amount of square feet, right? That no longer holds true because everybody is having some of their sales come from online portals.
I’ll tell you my ecommerce story. It explains why I am so bullish on ecommerce. You can build your own site and your own traffic. When we had Upscale Garage Sale, we needed to sale everything and some things sold better on Amazon and some sold better on eBay.
But for items priced at over $300, Craigslist was the leader. Now I consider that ecommerce because we posted on the website and someone saw it. This is another reason I became comfortable selling very expensive stuff. I had brand new Baker furniture still on the box. I sold it for $5K on Craigslist.
Now many people are totally against selling bigger stuff online. A lot of people have been told that the perfect ecommerce item was something you could throw against the wall that doesn’t weight much. A lot of stuff we buy does not fit that model. So, if you’re going to limit yourself to that, you’re going to limit yourself to small stuff. You’re also going to have a lot of competition, because that is where everybody is.
The problem with that kind of thinking is you’re going to lock yourself into certain products. While there are a lot of problems selling things like furniture online, my average profit on a furniture set was like $1200 to $2400. Do not limit your mindset.
Many ecommerce companies being formed are not scalable outside of the Amazon ecosystem and they aren’t saleable period. You have to consider why somebody buys a business. They buy it because it’s an asset or it’s going to add something to their business or provide something they don’t have. The minute Amazon says, you’re gone, you can’t sell it or scale it.
If you’re going to do Amazon or eBay, you should have your own website. What happens is Amazon and eBay are so easy that people become lazy about building their own websites. They become lazy with marketing. They become lazy with branding. So, when Amazon says “Get out of our sandbox,” they’re toast. It happens.
This is the thing. There is no such thing as infinite on the internet. There are only so many sellers that can occupy a category and sell well. There are only so many customers that want that. Even when there are millions of customers that want that product, there is still a limit.
I’m going to jump around some. If you want to sell big ticket items, you have to asked yourself, who buys big ticket items. One of the reasons people don’t become big ticket items sellers is because they don’t become big ticket item buyers. If you want to sell high-value items, you have to appeal to people where they are. Where do these people hang out?
Usually traditional marketing strategies will not reach them. Often, these people are really busy, so their spare time is precious. A lot of people who sell high-end items sponsor a lot of events where they will have 30 or 40 exotic car owners and they will drive up to the mountains. A lot of these guys know each other. On many occasions, they will go in their forum and post them.
When you sell a really expensive item, you always include shipping. This is how I sold all my furniture on eBay. I never charged them additional fees. Say an item costs $750. I would charge $3K to $4K and include the shipping. I would have it dropped to the house and make sure the directions were really specific. You have to include the price of shipping in the goods so they don’t see it. Shipping is so huge. In ecommerce, free shipping is going to be the norm. That’s just the cost of doing business.
I moved six months ago, right. I did not have a garage sale. I sold everything on Nextdoor.com, Facebook, Craigslist, and a few things on OfferUp. I did it all online.
Trends tell people to buy a product that is hard to damage and ships easily. That is what a large percentage of people are doing. This is good business. With that said, everyone that does not work on that narrative is going to have way less competition.
You don’t have to sell exclusively high-end stuff. I had a matrix. Four thousand square feet of my warehouse was dollar items. Why? It was based on my supply chain. I got stuff at storage units. I got things every week. I would just put it in there and blow it out like a flea market. There was a higher-priced section too. Then I would sell some stuff on Amazon and eBay. You can segment your stuff. You don’t have to be exclusively one thing or another.
If you’re getting into ecommerce and you don’t have a lot of money, your wallet is going to dictate what you can buy. I’m going to give you some predictions, stores are never going to go out of business.
As the population ages and the kids that grew up with the internet buy more, I think you’re going to see a big increase in ecommerce then. A lot of people that are older with the money still shop at stores. We are always going to have grocery stores, restaurants, car dealerships and clothing stores for practical reasons. That’s not going to change.
While ecommerce is going to grow dramatically, there are some physical stores that will always be around.
If you like this, be sure to get on my email list for updates to live streams and special offers. Subscribe today!