This is a huge category. There are so many different types and methods so we’ll stick to the basics on this page, but check out the links below as we’ll cover a few of the methods in more detail for you, and show you how you can get started with e-commerce.
A popular form is drop shipping, where you don’t need much money to start with (just enough for some eBay listing fees due 30 days down the line). You find a product that you can ship directly to a customer that you can sell for more money on eBay.
When the item sells on eBay and you’ve been paid for it, you can then proceed to use the customers money to pay for the item and then pocket the difference after fees have been paid.
There are loads of different tools and training methods on this so be sure to check out our full page for guidance on this if this interests you. It has a very low risk and low entry cost so is definitely worth considering. It can be a real career as many people have found over the last 15 years or so.
It is also important to note that you can set up your own website to sell through instead of just using eBay, but that involves a bit more work and start up costs to do so. See further below for more information on this…
When you’ve built up some profits and have some cashflow, you can start to order wholesale and in bulk to take advantage of discounts. A popular transition for many sellers who start as drop shippers. It is easier to feel confident about your first bulk order when you’ve spent some time in e-commerce with a much less-risky business model.
Sourcing products wholesale is probably the most thought of method when people think of retail. This can be from factories in China or wholesalers in your local country. You would buy stock in bulk quantities to take advantage of discounts, and then sell it on at retail price. You can use this method through pretty much any platform (eBay, Amazon, Shopify, Etc).
If you are doing anything other than Fulfilment by Amazon, then you need space to store your items. The bigger quantity you can buy at one time the larger your profit margin is from the discounts you’ll receive, so having a lot of space will enable you to scale your business upwards.
Wholesale also comes with the task of packaging and shipping out individual items yourself as opposed to drop shipping each order. This can be extremely time consuming and has more smaller costs attached to it such as shipping, packaging materials, printing labels, ink, and petrol costs to the post office if you’re not within a short walk of one.
Bulk purchasing obviously requires cash or credit. Whichever you choose it is imperative that you do strong research into your products. Bulk purchases often means orders of £500+ on one product. You need to make sure there is a market for your product before diving in, it can be incredibly disheartening to lose out on your first go.
This is another reason why some people find it helpful to Drop Ship products, it helps them learn the markets and customers of sites like eBay and Amazon. Knowing what sells and when is a key skill and one that is learnt best by experience. It just makes sense to learn and grow whilst the stakes a lot lower.
Amazon FBA (click here for full information about Amazon FBA) lets you send all your stock in at once to an Amazon warehouse, and they will ship your items out to their customers on Prime. You pay a small fee per item and you’ve pretty much outsourced the entire process. All you have to do is buy more stock and send it in. It solves space and scalability issues, but you’ll still need some start up funds for stock.
A starting point for many Amazon FBA sellers is retail arbitrage, where you buy low from local or online clearance sales and sell for retail price on Amazon. Less commonly, you can also pick up goods at retail cost locally and sell on Amazon for much higher than retail – If there’s a gap in the market where the price can be taken advantage of.
You can even go into private label. 50% of Amazon sellers sell private label products now and for very good reason.
Private label is where you have a product made by another company, and have your stickers and packaging on it. A very common one you may have seen is health and diet pills. A more commercially popular example would be how supermarkets have their own basics or value range on a variety of things from kitchen tools to baked beans.
Another growing trend within e-commerce has been subscription boxes (See article on Subscription Boxes). Originally, I had purchased LootCrate myself, which basically sends me a box of geeky goodies every month. T-shirts, mugs, comic books, etc all to do with my favourite TV shows and games. A pretty cool idea which I’d been aware of for quite sometime. Lately however, I’ve seen pet subscription boxes, shaving and toddler boxes.
As you can imagine though, the possibilities are endless with e-commerce as a starting point.
Your OWN E-Commerce Website
Going even more complex you could sell via drop shipping or wholesale via your own website. You would need to know how to find a profitable niche and know how to get traffic, which is the reason sellers often use sites like eBay and Amazon, but you’ll be cutting out their fees and could also be earning from AdSense adverts at the same time.