Ebiz 2 – I may call it quits

I’ve been struggling to decide on whether I should or should not launch my Protein Skimmer site. I am leaning towards closing up shop even before it has opened.

My ebiz1 is doing very well.  Now that it has been up and running for 2 months, it is deeply entrenched in the search engines.  Today it reached almost 200 visitors and 900 page views with only 10% being from paid clicks.

I’m continuing to put allot of behind the scenes work into ebiz1 and ebiz2 is being neglected.  But apart from it being the step child ebiz, I’m not too ecstatic about opening it up.

Here are the reasons why:

  1. Product margins and competition with the manufacturers – The margins of the products are fairly high when you compare the wholesale price to the suggested retail prices.  However, nobody ever sells them at MSRP.  For example, there is a product that has an MSRP for $399.  It’s wholesale cost is $200.  I would price this item at $299.  Other comparable stores are priced from $280-$350.  However, the manufacturer themselves are selling it on their home page for $240.  I cannot compete with that.  None of the online stores can.
  2. Price points – Unfortunately, when I first envisioned my store.  I pictured a simple sleek store where buyers knew what they wanted when they showed up.  With protein skimmers, most people have their minds made up by the time they come shopping.  So if I plan to create a simple store with little information content, I needed to offer price and terms.  Well, from point #1, you see I can’t really offer price.  I mean I guess I can, but why should I drop my price down to $230?  Is it worth it?  I’m sure other stores would complain.
  3. Dropshipping – Out of the 6 or so manufacturers, it looks like only 3 offer dropshipping.  I would have to carry inventory for the other 3 and buy in bulk and these things ain’t cheap.  One manufacturer required a $1,000 order to start.
  4. Customer Service – From reading on the reef forums, these skimmers seem to require a certain amount of customer service which I do not want to do.
  5. Not much upside potential – Maybe I’m getting greedy now, but with my experience in ebiz1, I realize that upside is limited in a niche business.  Do I really want to spend the time to develop another business with a target of making $1,200 a month?  Should I go for a slightly larger market with say a $5,000/mo potential?

About Kenric

My blog about living life to the fullest by generating passive income through real estate, business and online investments.
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