Orkiv Retail Solutions

$0 to $2M eCommerce business in 11 months and how it happened

12-09-2016 - 507

How can you rapidly grow your own eCommerce sales? Read through this to find out


This is an original exerpt from a Reddit user. You can see the full post here. Begin post:

I thought I'd jot down a few notes for anyone who is interested in eCommerce. Over the past year my business partner has racked up over $2 Million in sales without ever buying a product from China or using a dropshipping company.

I've seen a lot of eCommerce threads here where people recommend using Alibaba and Aliexpress.

This throws up a few issues not least lead times and tax liabilities.

Lead times can be long which can lead to buyers getting impatient and the tax issues over epacket deliveries aren'€™t clear. ( You are selling an imported product where does the tax liability lie and what happens if your customer refuses to pay the tax due ??) I am not a tax lawyer (perish the thought!) so you need to get clear on your tax position.

When starting out we wanted to avoid all the hassle of dealing with China. We also didn't want to be holding stock and dealing with postage and shipping as that sounds too much like hard work. So we looked closer to home.

In particular Etsy.

On Etsy, you find lots of small businesses that have the capacity to expand but not the knowledge. They also rarely have minimum order levels and are sympathetic to other small businesses.

THE PROCESS

We’d find a niche that wasn’t being inundated with ads on facebook then go to Etsy and find people creating products that were ideal for that niche.

We’d email them and asked them if they did wholesale deals? If they replied yes we’d take it further and ask if they were happy to despatch the orders for us.

If they were happy to do this we'd work out a deal with them set up a Shopify store and then run test adverts on facebook. these guys are passionate about their products and we were surprised at how many were happy to work with us.

If the products sold and were profitable we scaled up if they didn’t we move on to the next product.

After a while you have several products that you know will sell and buyers list, it’s then a simple matter of finding similar products and creating regular offers.

We find that up to $20 seems to be a no brainer purchase for most people. The big money comes on the backend with offers to the buyers list.

I hope you can see the power of this business model, We don't need to pay for stock, we don'€™t need to deal with shipping, we don’t need a big advertising budget as we get paid before we pay facebook.

We call this our "€œStarter Ecommerce Business Model"€ it allows us to get into a niche, test it out and get established.

The only downside is that you can sometimes out grow your suppliers. In that case, you then need to find more mainstream manufacturers and white label your own product or even set up your own facility. This isnâ€'t usually an issue as you’ll have a strong cashflow.

However, thatâ€'s for another post

THE RESULTS

The results in 11 months: Store 1 earned $1m from 30K sales, Store 2 earned $685K from 16.7K sales Store 3 earned $269K from 7.5K sales (6 months)

(shameless plug: If you want to see the proof of income and the process in a bit more depth I wrote an article a month or so ago You can see it at: http://thelifestylemarketer.co/simple-ecommerce-business-can-start-today/)

I am happy to answer any questions you may have.

UPDATE

Facebook ad spend was in the region of $400K over the 11 months .. keep in mind the money comes in before you pay facebook so we were able to scale quickly. The ad spend is generally around 1/5th of the income which is pretty good and as a result of lots of testing.

Average Cost of Conversion: depends on the product but customer acquisition runs at $5-$6 for a $20-$25 product. I've added 2 more screenshots at the bottom of the blog post for 2 stores from July 1st to July 11th. One is for $23,301 the other for 19,912 .. so over $40K in 11 days from just 2 stores, we have several more. I must also point out the post above is how the eCommerce business started last year, it has scaled considerably to the point where product owners and wholesalers often approach us, it's pretty unrecognisable from the early days, but it hopefully gives you an idea of just what is possible if you put your mind to it.

UPDATE II

One question seems to come up all the time: How do we deal with returns and customer support. Returns are handled by the supplier who sent out the products. The return address is on the packing slip. Customer support is handled by us via a help desk. Neither of these is a big issue a good FAQ's answers most customer support issues.

Oh, and for the skeptic no we don't have a high price course we'll be selling!

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