A Visit To The Dark Side Of Online Business…

Happy New Year

A belated Happy New Year and I hope you had a great holiday period.

You haven’t heard from me for a while because I like to take an extended break between the run-up to Christmas and the first week of the new year.

It enables me to fully enjoy the festivities and gives me (what I like to think is) a well-earned break to recharge the batteries before diving back into the business.

Well, at least that was the plan…

Warning: This post is not short and rambles on a bit. However, I hope it offers some useful advice for 2017 and beyond.

If you have been following my emails for the last couple of months, you will know that I have been dipping my toes in the world of ecommerce.

In other words, selling physical products online.

It started as a little experiment.

I had heard of so many success stories from ‘ordinary’ people, that I wanted to see if I could make something of it in just a couple of hours a week, which is all the time I could spare.

(When I say ‘ordinary’ people, I mean people who had not sold anything successfully online before. In other words, not established marketers.)

In the last of my occasional updates, around the middle of November, I was averaging around 3 sales a day.

This was from selling primarily mugs, but also a few T-shirts, on Amazon and Etsy.

The products are ‘dropshipped’ for me, meaning that I have a supplier who makes and ships the items after I have received an order and passed it on to them.

I don’t do any paid advertising, so this is pretty much hands-free income.

(But, as you’ll see in a moment, not quite as ‘hands-free’ as I first thought.)

Anyway, each sale makes me around $8 to $10 in profit, after selling fees, product costs and shipping.

So I was making around $24 to $30 a day.

Not life-changing, but nice extra ‘fun money’, given how little I had to do to ‘earn’ it.

But then things exploded at the tail end of November.

Yes, I expected some increase as part of the Christmas shopping spree.

But I was not prepared for what happened…

Etsy 1611 to 1612

In the month from November 14th to December 14th, I had 733 orders totalling $11,610.39 in revenue from Etsy alone.

(I had another 88 orders and $1,298.35 in revenue on Amazon.)

This caught me totally by surprise and turned out to be both a good thing and a bad thing at the same time.

I cleared around $7,500 in profit, which was (obviously) the ‘good’ thing.

Dark SideThe ‘bad’ thing was a visit to the ‘dark side’ of ecommerce…

I was totally unprepared for the tidal wave of orders and the resulting workload.

First, there was processing the dropship orders.

Even though it only takes maybe 3 minutes to transfer each of the order details from Amazon or Etsy to my dropship dashboard, that rapidly adds up.

I must have spent the equivalent of a full-time working week in man hours just inputting orders.

But that wasn’t the end of it.

Then came the customer queries…

  • People asking how long their order would take to arrive (even though this is clearly stated on the product listings)
  • People asking whether there are expedited delivery options
  • People asking whether I could ‘tweak’ the design on a mug or T-shirt (which can be very lucrative but is also time-consuming)
  • People changing the delivery address after the dropship order has been placed (turns out a lot of people don’t even know their own home address!)
  • People not getting their order, receiving a broken mug or even the wrong mug (all rare and replaced free of charge by the dropshipper, but requiring time to organise)
  • People chasing their order when the US postal service didn’t get it to them on time (more common as Christmas got closer)
  • People messaging to say how much they liked their order (nice, but requires a response)
  • People leaving negative reviews (I have only had 4 reviews that were less than 5 stars, but they can be very time-consuming if you want to try to address them rather than ignore them)

And then there is keeping track of all those dropship orders so you can flag them as shipped on Amazon or Etsy and identify any that are late going out and chase them up with the dropshipper.

Finally, there is accounting for all of those sales so you can report them to the powers that be.

I was using a simple spreadsheet which rapidly became inadequate. After the rush was over, I had to come up with a better system and then spend quite a bit of time applying it retrospectively to the sales I had made.

The bottom line is that I spent a hefty chunk of my planned R&R time handling this unexpected surge in an ecommerce business I didn’t know I had.

Now don’t get me wrong.

I am certainly NOT complaining.

Taking the whole of November and December into account, I have more than $11,000 in my bank account that I wasn’t expecting.

But there are some lessons I have learned.

I will share them with you because I think you can benefit from them too…

The first is that ecommerce ‘works’.

I was sceptical when I started playing with it.

The idea of putting simple text quotes on mugs, slapping them on Amazon and Etsy and getting sales without any form of promotion seemed too good to be true.

But, to my genuine surprise, that is exactly what happened.

Which leads onto a related lesson…

Don’t knock it unless you’ve tried it.

The next lesson is that ecommerce – even the simple way I am doing it – is NOT passive income.

I had rather glibly assumed that, with dropshipping, all you have to do is transfer names and addresses from one place to another.

At low volumes, this is true.

However, when you start dealing with a lot of orders, it becomes a real business, with real customers having real (and not so real) issues you have to respond to.

This is something the ecommerce ‘gurus’ out there keep quiet.

So – surprise, surprise – there is no magic money button.

I have been telling you this for years, so I don’t know why I should have been surprised.

I guess the lure of ‘easy money’ is so appealing that it can even get to people who should know better.

Anyway, it’s a lesson worth repeating…

There really is no such thing as a free lunch.

People looking to get something for nothing need to learn to live with constant disappointment.

Next lesson…

With any real business you need systems in place to manage it effectively and efficiently.

I didn’t and that’s why I had to spend far more time than I could have responding to each new issue as it happened.

But that isn’t the real lesson.

The real lesson is that you need to take action and try things as quickly as possible.

If I had spent the time to put all of the systems and procedures in place BEFORE I started making significant sales, I might have made my life easier…

But I also may never have got round to actually selling anything.

Or it may have turned out that I COUDLN’T sell anything, in which case all of that time and effort would have been wasted.

This is REALLY important.

The people who fail to find success with one business opportunity after another fall generally fall into one of two camps…

The first group are the ‘gold-diggers’, who are looking for that mythical magic button I was talking about.

They buy one thing after another full of optimism, only to move onto the next thing as soon as they find that – gasp – actual effort and work is required.

The second group consists of what I call the ‘avoiders’.

They buy into something fully intending to make it work.

They then spend vast amounts of time and effort (and often money) trying to dot every ‘i’ and cross every ‘t’ BEFORE they take any of the action that actually matters.

The sort of action that will get them results.

I used to be like this, so I can relate.

But that just makes it harder to watch in others.

Take the ecommerce Facebook group I am in.

It has lots of people reporting their successes and offering advice to others.

But it has even more ‘avoiders’, making the sort of posts that tell me they aren’t going to find success or that it is going to be a long time coming for them.

Posts like…

  • How should I account for tax on my profits?
  • Where can I get a brand logo professionally made?
  • Where can I find a virtual assistant to help with my business?
  • Which accounting software should I use?
  • How can I claim copyright on my designs?
  • How do I deal with bulk orders?

All before they have made a single sale.

I am most definitely NOT having a go at these people.

They are trying very hard – actually TOO hard – to make something work.

I am by nature the lethal combination of a perfectionist and someone with an eye for detail.

So I suffered from this ‘avoidance’ for years.

Then I met one of my early mentors.

He used to answer every one of this type of question with…

“Have you made any money with it yet?”

“No”.

“Then shut the (swear word) up and get on with it!”

I humbly offer the same advice to you should you ever find yourself ‘avoiding’.

But enough already!

The purpose of this email is NOT to recommend you get into ecommerce.

It is to find something that floats your particular boat and then give it a genuine go.

That means setting aside a few hours a week to work on it and committing to that for a sensible period of time.

I signed up to ecommerce for 2 hours a week for 3 months.

Then use that time to take real action that will get you real results.

If you find yourself ‘avoiding’, tell yourself to “shut the (swear word) up and get on with it”.

EinsteinOne of my favourite quotes is from Einstein who said that the definition of insanity is doing the same things over and over again and expecting different results.

So my best advice for 2017 is to look back at what you did during 2016 and, if it didn’t work, try something different!

I wish you every success in the coming year.

 

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