I had to shut down my online businesses.
I was upset of course but in doing it there were things that made sense. Honestly I was not making enough online, not that I was making enough in the physical store I had in NY. It was poor planning on my part that got me into trouble. Basically I was barely making enough to pay my bills off each month, which meant no profit. Yea they say the first few years the owner hardly makes a profit but this was a bit extreme.
What had happened took a few years to develop. When I started out I had used personal credit cards to purchase things, unfortunately companies will only work with credit cards so what choice did I have. What I should have had was starting capital. Start with a few hundred to purchase things and with the sales from that then you buy more. I used credit, I started out with one card, Id make a purchase and then pay off the credit card bill over a few months. Of course the time it took to pay these items off depended on sales. Sales in the beginning were dismal. Then I got my hands on another credit card.
More and more purchases were being made, not the best decisions. I had too many items that just did not sell and I took a huge hit in selling them. While I had an eBay store I had to pay for each listing each month so it costs money just sitting there for months with no sale in sight. Don't forget monthly store fees. When I started selling on Amazon they had more tricky requirements, I really couldn't sell the same type of things so here came the third credit card to purchase yet MORE products. Now Amazon feels more cut throat, if you don't have the buy box chances are you didn't have a sale. Unless you created your own listings with no one else selling that particular item, again low chance of having a sale. Amazon is huge but when you have multiple people in the same listing selling the same thing, chances of the buyer selecting you are quite slim. When I did have the buy box my item would always sell out, it was amazing.
It took some time but finally I had consistent sales! Yay! But I also had a ton of bills to pay. So there went my profit. Eventually I got an 'office space' so now I also had rent, internet and phone bills to pay. Thinking about it now I should have waited before moving out of my house, made sure my sales was enough to sustain an office. No, I was too impatient.
Eventually I moved twice more into larger and larger spaces to accommodate my growing inventory. By the time I got to the last place my rent and expenses were well over a thousand bucks a month. I was able to get a loan and paid off my credit cards, but now I had a loan payment to contend with. I had a moment of breathing room, or so I thought. I got into a pinch, I had NO sales in my new store front. So I went back and concentrated on my online sales. Online sales were amazing but once again I started using the credit cards to buy stuff! What was wrong with me? There was only ONE month in the year and a half I was there that was close to 1K in sales. Yea imagine that, I couldn't pay rent for how many months? I had to wait for Amazon deposits and eBay sales to clear to make payments. It was a nightmare. I should have closed up shop and returned home.
I used one of the places that give you an advance based on sales! Oh what a mistake that was. I was able to borrow at lot cause my sales were amazing but remember I had tons of bills to pay. It was a disaster, they would continue to take money out of my paypal account and eventually started taking money directly out of my checking account. It was killing me! But my stubbornness kept me going, I kept a brave face and never told anyone about my issues. Not even my husband, big mistake!
It all caught up with me. Over the past few years I continued to borrow money for credit cards, loans and even one of those places that advance you money based on sales. I was in debt up to my eye balls with no end in sight. When we moved across the country I lost half my inventory and just didn't have the sales to keep up payments. I tried my best to be strong and pull thru it but eventually I had to face the music. It was eating me up inside and well it was a problem I had to take care of. My husband noticed I had to keep buying things to make sales, it didn't make any sense. We had that heart to heart we should have a while ago.
I shut down, everything... never renewed my permits, licensees or online stores. I took a hit on my store, eBay charged me an early closure fee about $50. On Amazon I was just able to close it. Ive tried to sell off my inventory with no luck. My business debt was somewhere close to 70K. It was stupid and crazy. Im slowing selling online again but its harder, unless I open a 'store' on eBay I can only do free auctions or pay a fee for the other type of sale. Ive got sales on Amazon again but the fees are extreme, I have to pay 99 cents per item sold. Unless it becomes worth it to open a 'store' again I have to pay that fee per item. Its expensive to have online stores. I thought about selling on my own website, I mean I used to pay over $700 in fees alone between Amazon, eBay and Paypal, why not? It just doesn't seem worth it to try. I think Id rather try and sell at a flea market.
I haven't purchased any new products in over six months, all the items I have still are 'old' and well Id be lucky if I get cost out of it. Im stuck with it. I am an entrepreneur at heart and one day Ill open a store again but one thing for sure I would never use credit again.
Now I gotta get a real job.
Showing posts with label selling online.. Show all posts
Showing posts with label selling online.. Show all posts
Monday, November 17, 2014
Friday, April 19, 2013
Considering drop shipping?
Half the sellers online use this method to sell products. Why not? Its easy, all you have to do it list the items on your website, sell it, place the order with the company, pay your cost and the rest is yours! Easy no?
When I first started selling online I said I would personally never, ever do that. One of the main reason is because you dont see the product, your looking at it just like anyone else and trusting that the quality is what it says it supposed to be. Your also trusting that the item is in stock for them to ship it. Your trusting that the company is doing everything to ensure that the item arrives undamaged and as it is described on their website! There is a lot of trust behind a computer.
The other reason is that there are many companies promoting to eBay and Amazon other size to sellers to drop ship their item and it turns into everything else... hundreds of sellers selling the same exact item and eventually someone is selling the item at cost and you cant sell it like that since you make nothing. Now you have to research again for items to sell.
When selecting a drop shipper be sure you can view their products BEFORE you agree to sell it. Im talking about handling the item. There a tons of companies covering all kinds of products so dont stick with one just because they advertise in a magazine and you think they must be good. No take your time and search around the internet. Look for manufactures that drop ship too.
There are many companies that do not charge a drop fee. I seek these out cause any MORE fees you have to pay come out of your pocket. Request samples or order them if you have to. At least you will get an idea of what you are dealing with. I would rather pay for a sample then try and sell a horrible product that you will have to accept as a return cause the buyer does like it and lose money. Dont tell me you wont accept returns cause its just not possible. Remember these buyers can call their credit cards to dispute a transaction and just like that you are out the money and the product. Accept returns and re-list the item even if you have to do it at a deep discount.
Be sure to review weights of the item in question. Ill give you an example: I had this item listing in my store. It was a sash, it weighed maybe 5 ounces. They purchased the item for say $6. So according to my shipping calculators they only paid $3 to ship it. This is fine if I am sending it myself via USPS. I would pay just about $2 to send it and all is done right? Well for drop shipping this particular company had a drop fee and used UPS so if I submitted this item for drop ship I would be seriously underwater. Lets do math - Total they paid me $9 - the item would cost me $3 plus $2.50 drop ship fee - 5.50 - the shipping fee could be anywhere from $4 to $9! Not counting the fees for that transaction where am I at? At the lowest shipping fee I would be under by 50 cents BEFORE transaction fees! Is that worth it? No way!
Stick with items that are over a pound for drop shipping.
You want to deal with items people are looking for yes but you need to profit at. I have some items listing my store for $50, they cost $25. The weight they tell me is like 3 pounds but I enter them as 6 pounds. Not to charge an excessive amount of shipping but to make sure that I am covered. The buyer paid me $15 in shipping and the drop shipper charged me $13 to ship the item so I made $2 on shipping plus $25 on the item.
Remember most shipping companies are zone specific. A 3 pound package from NY to VA will cost less then a that same package from NY to CA. Many programs are not that complex to be able to tell you in advance what the shipping costs will be. Since we ship across the country its better to have a buffer with the shipping then to end up eating it.
Where do you find drop shippers?? Besides online? Believe it or not many of my current vendors offered drop shipping and I had no idea. Read their terms and ask them to see if they do it and how its offered.
Good Luck in your search.
When I first started selling online I said I would personally never, ever do that. One of the main reason is because you dont see the product, your looking at it just like anyone else and trusting that the quality is what it says it supposed to be. Your also trusting that the item is in stock for them to ship it. Your trusting that the company is doing everything to ensure that the item arrives undamaged and as it is described on their website! There is a lot of trust behind a computer.
The other reason is that there are many companies promoting to eBay and Amazon other size to sellers to drop ship their item and it turns into everything else... hundreds of sellers selling the same exact item and eventually someone is selling the item at cost and you cant sell it like that since you make nothing. Now you have to research again for items to sell.
When selecting a drop shipper be sure you can view their products BEFORE you agree to sell it. Im talking about handling the item. There a tons of companies covering all kinds of products so dont stick with one just because they advertise in a magazine and you think they must be good. No take your time and search around the internet. Look for manufactures that drop ship too.
There are many companies that do not charge a drop fee. I seek these out cause any MORE fees you have to pay come out of your pocket. Request samples or order them if you have to. At least you will get an idea of what you are dealing with. I would rather pay for a sample then try and sell a horrible product that you will have to accept as a return cause the buyer does like it and lose money. Dont tell me you wont accept returns cause its just not possible. Remember these buyers can call their credit cards to dispute a transaction and just like that you are out the money and the product. Accept returns and re-list the item even if you have to do it at a deep discount.
Be sure to review weights of the item in question. Ill give you an example: I had this item listing in my store. It was a sash, it weighed maybe 5 ounces. They purchased the item for say $6. So according to my shipping calculators they only paid $3 to ship it. This is fine if I am sending it myself via USPS. I would pay just about $2 to send it and all is done right? Well for drop shipping this particular company had a drop fee and used UPS so if I submitted this item for drop ship I would be seriously underwater. Lets do math - Total they paid me $9 - the item would cost me $3 plus $2.50 drop ship fee - 5.50 - the shipping fee could be anywhere from $4 to $9! Not counting the fees for that transaction where am I at? At the lowest shipping fee I would be under by 50 cents BEFORE transaction fees! Is that worth it? No way!
Stick with items that are over a pound for drop shipping.
You want to deal with items people are looking for yes but you need to profit at. I have some items listing my store for $50, they cost $25. The weight they tell me is like 3 pounds but I enter them as 6 pounds. Not to charge an excessive amount of shipping but to make sure that I am covered. The buyer paid me $15 in shipping and the drop shipper charged me $13 to ship the item so I made $2 on shipping plus $25 on the item.
Remember most shipping companies are zone specific. A 3 pound package from NY to VA will cost less then a that same package from NY to CA. Many programs are not that complex to be able to tell you in advance what the shipping costs will be. Since we ship across the country its better to have a buffer with the shipping then to end up eating it.
Where do you find drop shippers?? Besides online? Believe it or not many of my current vendors offered drop shipping and I had no idea. Read their terms and ask them to see if they do it and how its offered.
Good Luck in your search.
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