Chugging along - The Little Ebiz Train That Could
November 28th, 2007 by KenricThe Ebiz had a record day in sales today. It must be the Christmas season kicking in. I had 5 orders today totalling $667.00. I decided to take a look at the numbers and see how this business has done over its first 40 days.
- Gross Sales -$2,500.00
- Product Costs - ($1920.00)
- Advertising - ($312.00)
- Startup Costs - ($200.00)
- Monthly Fees - ($105.00)
And the total is…-$37.00.
Remember I got a $200 bonus for opening a business checking account. So maybe I could say that I’m actually up $163.00 for the month. But I think it’s more proper to not include it.
So without it, I am so close to turning a profit this month. Well, there’s 3 days left in November. I expect to be in the black in December since I won’t have the startup costs to contend with.
I’ve bumped up the online advertising in the past week to $20/day. So far, it’s been paying for itself easily, but I may tone that down as it is alot to spend in a month. I’m getting better at this online advertising. In hindsight I wasted some money on ads that didn’t work. I’m getting a good click through percentage now. However, my conversion rate isn’t that great yet. I’m getting 100+ visitors a day, so I think I should be getting 1-2 orders a day, but I’m not.
I’m also working on getting the product costs down by signing up with a few different suppliers. I can probably shave another 10% off the costs. In addition, I’m thinking about stocking a few items. Some items are very popular and if I order them in bulk and ship them out myself I’ll increase my margins.
Also, I’m increasing the prices of some of my products a few bucks because their margins are too low. My lowest margin orders have been $12-$13 and I bumped up my product price a few bucks and the orders are still coming in.
I’m not getting too excited because it could be the Christmas rush. The true test will be what happens in January 2008.
Posted in Ebiz | 
Stumble it!
Wheeee! Isn’t this fun?! I have a variety of product lines so when one isn’t hot, another one is. It’s kind of like juggling.
You do need to have better margins to keep doing this. The costs will eat you alive over time even though they may not seem bad in the beginning.
If you start stocking your own items, you need to get your supplier to come down on his wholesale price. You need to buy the product for 50% or less, seriously. Just like houses, you make your money when you buy. The dropshipper saves money by not having to package and ship individual items, so that is one reason why you should get a bigger discount. If he can’t supply you cheap, you need to look around. If you are buying name brand items, you can sometimes find the same thing without the name brand for 50% less. (I’m not talking about high end designer items here. I’m talking about lower end “brand name” items. Don’t ever think you are going to get “real” Louis Vuitton for 50% off the cost from a manufacturer/wholesaler because it won’t happen.)
By ubu50 on Nov 28, 2007
But is stocking certain items fitting with your model?
You go off biking for two weeks, just when someone orders something, are you comfortable with telling them it’ll take 2 weeks before you can ship their item? Maybe 3 weeks total?
I guess if it were me, I’d hold off stocking items. The supplier may reduce their price if the website is consistently bringing in large numbers of orders. In essence, you achieve the same result but without having to stock items yourself.
By Clifford on Nov 28, 2007
Cliff, I know that stocking doesnt fit my model. If I’m on vacation I will just dropship it. However, right now I’m more worried about my customers getting the product before Christmas. I don’t mind carrying a few items.
Ubu, I realize the margins arent the best. I’ll see how much of a price break I’ll get if I buy in bulk. I am looking into manufacturing these myself (hiring a factory). There are only 2-3 suppliers in the whole U.S. I may end up doing B2B instead.
These are selling very well as many of the products ordered are out of stock. Another reason why I may stock them. My competition is also out of stock (Tried to buy from them to fill an order). I’m going up the food chain only to find that the manufacturer is just behind in supply. They can’t make them any faster.
I’ve had 3 orders come in already today for over $500.
By Kenric on Nov 28, 2007
Wow. That’s great for a first month (in my opinion). It takes a lot of courage and commitment to start a business like that, especially online. I’ll be rooting for you.
By ninja.s on Nov 29, 2007
Yes, it’s Christmas rush… I go through it every year ;)
By Mindi on Nov 30, 2007
Re: My last post, I’ve dug back a little and seen that you are posting profits. So congrats! I still haven’t figured out exactly what the ebizzes do yet… :)
By Monevator on Apr 5, 2008