Is it marketable?
E-commerce sales are growing each year. In fact, e-commerce sales as a percentage of total retail sales grew from 7.4% in Q3 2015, to 8.4% in Q3 2016 (Business Insider article). Due to this growth, large companies such as Walmart and Best Buy are making huge investments in their online presence.
However, not all product categories have their own online stores. For example, if you search for car accessories, you won’t find many websites that are dedicated only to accessories for sports vehicles, or luxury vehicles. Usually, many websites focus on a lot of different products. In this case, you might find car accessories on a site that also sells tires, performance parts, oil, and more. While this is a good idea to diversify product offerings, it might not be easy to talk about online since you’ll have a lot of competition. Imagine focusing on economy car accessories like smartphone chargers and rear view cameras. It might be easier to share on social media that you’re the go-to for car accessories. This is very different from car part stores that have to send different messages all the time.
Regardless of the product or service you plan on selling, try to focus on those you can talk about easily. Anything works but focus on what you’re interested in because it’ll help you create content to share and engage with potential customers. The knowledge you have therefore, is also what your customers will be using to base their purchase decision on.
How do I make money?
Sales, sales, sales. Since you’ll be selling a product or service, you’ll need to determine what the industry profit margin is in order to set that goal for yourself. This way you’ll be able to cover your cost of goods, as well as your marketing, sales, operations, and other functions. Furthermore, if you set up a website dedicated to a particular product category, you might be able to sell advertising space on your site. For example, if you sell gym t-shirts only, you might be able to convince companies that sell running shoes to pay you to display product banners that direct visitors to their site.
What’s competition like?
It depends on what you’re going to sell and who you target. If you engage in very broad categories then you’ll likely face tough competition (e.g. selling gym t-shirts to anyone online). However, if you narrow your product and target focus then it might be easier to grow (e.g. selling weightlifting t-shirts to weightlifters between 25 and 30 years of age).
When drafting a marketing strategy, keep in mind the new advertising opportunities that social media platforms are providing. For example, Facebook ads are a great way to reach a specific group of people based on demographics and interests. Also try to think ahead in terms of what the next high traffic app might be. Adopting a platform as it’s growing might help you gain an advantage over larger brands on that platform as they might take longer to get onboard.
Estimated monthly bootstrap expenses?
Since you’ll need an online store and online advertising, you’ll spend at least $100 a month. If you include purchasing inventory, then that could increase your spending a lot more, depending on what you plan to sell. Underestimate the sales you might be able to do at the beginning so that you don’t end up with a lot of unsold products. Start off with a few and increase orders when they start selling. An alternative I read somewhere was that you can purchase products, try to sell them within 2 weeks, and return them if they don’t sell (if the return policy is 30 days long). Obviously, this won’t work for everyone but may help those find good deals when they start off selling on their own site or through e-commerce platforms such as eBay.