Ebiz 1 strategy change
February 19th, 2008 by KenricFree Shipping On All Orders
This represents a big change in my ebiz strategy as I had intially made the goal of making one sale per day with a profit of $50-$60 per sale. This would equate to between $1500-$1800/mo in profits minus the $200-$300 a month in expenses. If the site reached $12,000/yr I would call it a success. But I really wanted to push it for $15,000-$18,000 a year.
During my first 3 months, the site made $610, $903 and $810. Total number of sales were 28, 49 and 26. For those wondering why December had 49 sales and only made $903, it’s because I spent $500 on inventory that wasn’t all sold. Basically, I am falling short of my 30 sales a month goal and my conversion rate wasn’t even at 1%. I was getting customers to my site but they were just browsing around. During the past week, they weren’t even putting stuff into the shopping cart. When I have 100 visitors and only 5 people added to the cart, there’s a problem.
I had to make my store more appealing to the visitors, so I changed my shipping policy to free shipping and let it be known everywhere on the site and on my Google Ads. What I am hoping to do is to generate many more sales and that my end of the day profit will have increased. I am turning my store into a high volume, lower profit per sale store.
It’s been 3 days since I implemented the change and I’ve had 6 orders so I can sort of say that there has been an increase in sales.
Carrying Inventory
I have also decided to carry inventory instead of 100% dropshipping.
One reason is because the dropshipper charges me a $3.00 fee per order. Since I have 3 months of business data, I know which items are my big sellers. I can order them without the fear that I will get stuck with 50 of them. My dropshipper is in the next state and shipping to my home takes one day and cheap. If I order 50 products, they are shipped to my house for $40 shipping vs. $150 dropshipping fee that I would pay for each order. I have ordered boxes from Uline which cost me $0.75 per box. Monetarily wise, I do end up saving money. Time wise, I know I have to spend time printing out labels and bringing the packages to the UPS store. But even if I am getting many orders a day, I won’t mind doing this.
The second reason for carrying inventory is for quick order fulfillment. I like being able to service my customer and ship the same day if required. If there is a weak link in this product, it is the manufacturer (not the dropshipper). They are very poor communicators and cannot seem to manage their inventory. To eliminate this, I will carry inventory as a backup only. This means that I will always have a few in stock of my popular products.
If I get an order of a popular product, I will try to fulfill the order through the dropshipper (unless I have 50 in stock). If the product is not in stock, I will ship from my inventory. Once my inventory gets low, I will add to it.
The Future
I’ve found a second product that I think fits my ebiz store criteria. However, it’s a winter seasonal product so I have missed the boat for this year. I’ll have to start working on that site in August 2008.
I don’t want to wait until then to start another ebiz so I’ll have to find something sooner. In fact I have a short term goal for this year that will hopefully jumpstart it. I’ll write about that in a few days.
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