Thread: Making a Web Income in 2013

Originally Posted by iowadawg

If you have a product no one else has.
A product not carried by amazon, wally world, etc.
Then quite possibly you could make money selling it on the net.

This is exactly what I was going to say. If you are going to sell physical goods, you have to have a unique offering that sells well in order to make any money. Most web users know how to price shop and some sites, such as Amazon and eBay are the first places they go.

I ran an e-commerce site for several years that was doing very well until one of my main suppliers cut a deal with Amazon. Due to Amazon's purchasing volume, they could sell the products with free shipping for less than my cost. The manufacturer would not listen to anything their smaller retailers had to say.

I was also one of the first sites that offered a hot tool gadget that became one of the Top 20 Cool Tools selected by Chris Grundy of the DIY Network. I was selling everything I could get for several months until the supplier cut an exclusive deal with a marketing firm who set up a Billy Mays infomercial. As soon as the infomercials hit the TV, the Chinese started making cheap, extremely crappy counterfeits and even sold them using the company's trademark and image of Billy Mays. Both the marketing company and the legitimate supplier went bust. The counterfeits currently sell on eBay for $2 to $3. I was selling the tool for $20 with a landed cost of $8.

A good friend was one of the first sellers of digital scales on eBay. He did $1.5 million in sales the first year and by the second year there were so many competitors that he almost went bust. He no longer sells products on eBay because it raises too many flags for competitors.

The moral of the story is that if you are going to sell a physical product through a small online business, you need a unique product that you have complete control over. If anyone thinks you are making money, you will have 50+ competitors with knock-off products within a few months. Today, I don't know what that product would be.

I have not done any drop shipping, but did investigate that several times. The problem is that it is hard to make any money when thousands of others are selling the same products with the same costs. The drop shipping costs will take most of your margin and too many competitors think they can make money by marking products up 10%. Plus, drop shipping suppliers are notoriously unreliable and poor communicators.

I have an ecommerce business, started it in 2005 - out of love for what I do and, honestly, hoping that I could make $$$ at it. I have done poorly. However, I have crafty online 'friends' who are doing very well - with products, as iowadawg says: no one else has.

I'm realizing, FWIW, that I have several strikes against me:
1. I don't have a product that no one else has, technically. There are a ton of handmade-crochet-product sites on the web these days. Nothing I've created, to date, is jump-out-and-grab-your-attention unique.
2. Actually was approached by Amazon to sell on their site, but I don't have ready-to-ship afghans - the only item they were interested in offering. The cost, for me, of buying materials, guessing what colors might be popular, and investing possibly 20+ hours per afghan for a maybe-sale, just isn't feasible.
3. My prices, apparently, are too high. If I were to drop them to cover ONLY the materials and the free shipping, essentially not pay myself, I'd be hugely competitive and go broke. I imagine there's a balance in there, somewhere; am currently working to find it.
4. Wondering if, and this really hurts, my products simply aren't good enough to generate a reliable income.
5. Offer my products in more than one location. Quite probably diluting my brand.

So, thanks to this thread, I am going to take a really hard look at what I make, what I charge, and how I market. In theory, 2013 could be a really good year - if I devise a much better business plan. Or ... it could see my store closing, permanently.

Really appreciate the opportunity to 'think out loud' and for the kick in the pants. Even though you weren't aiming a boot at me.

Check out etsy some time.
A lot of sellers there selling their mostly crap handmades.
But a lot of them just are not making money.

Did that myself some years back, along with others in the family, selling all kinds of stuff on ebay.
It was okay and we did okay.
But then, like it was pointed out, more and more sellers jumped in, including some big companies, selling what we sold but at a lower price.
Especially on digital goods like ebooks, scripts, etc.
Good market and sold a lot.
Then came the cheapos who sold the same ebook for like 99 cents.
Hard to compete when people in other countries jump in and sell digital products for 99 cents.

So I and the rest of the family, and a lot of other people I knew, moved away from ebay and have not looked back.
Some in the family do good selling their crafts, but at local markets, not online.

Some say selling information is the way to go.
But watch...
You try to sell information and someone will either undercut you or give it away.
And of course, too many people really believe that information on the net should be free.

Then look at newspapers and magazines going to some sort of paid content.
Why?
Search for the story and you will find it elsewhere and at no cost.

I saw an article a few years back that detailed what happened to eBay's original Top 10 Power Sellers. They were high fliers making $millions until tons of people tried to mimic their success. All of the power sellers went bankrupt--and that was when the economy was still going strong. If anyone else can to it, everyone else will do it and will destroy your market share.

The key to a successful competitive advantage is to be able to do something better than anyone else can do it--or be the only one who can do it.

Google's Vision of the Future for Search might hold some useful clues as to where the web might be moving. They see it a driven by mobile devices and voice recognition software. Those technologies could be applied to web sites. I could see voice-driven menus and in-site voice recognition searches within a few years.

What killed a lot of the power sellers on ebay was one simple thing...
Ebay started letting in the companies that sold the goods to the power sellers.
One day, selling tons of padded envelopes, the next day my supplies now has a store on ebay and selling at the price I paid.
Boom...out of the office supply business.

I see the day coming when no more keyboards or mouse....all done by touch and/or voice.
See it now with all the tablets and smartphones.
Heck, my wife moves on her tablet with just her stylus.
And our son, his bank gave them little notebook types with no more keyboard or mouse.
Strictly via touch.

Originally Posted by jmarkafghans

Really appreciate the opportunity to 'think out loud' and for the kick in the pants. Even though you weren't aiming a boot at me.

Hi Jules - Actually the boot is pointed at ME. I'm here for ideas, and a little brainstorming might help us all. Thanks to you and Kat for diving in.

Hi,

I could write an e- book on how to fail with a website. LOL

Virtually everyone is familiar with the saying, “Those who can’t do, teach.” This suggests that someone who have bombed or would be unsuccessful in the world end up as teachers.

I was also told when I was very young, "If you want to earn money in any business, sell the crap to the people who think they can make a living in that business."

It was Rod Steiger an Academy Award-winning actor who said "I've earned more money in the acting field, when I quit trying to make a living in the acting field."

So I have decided to just have fun instead of worrying about how to get someone to click buy it now or click on an ad. What I am going to be doing from now on is have fun.

Watch this!!!



So have fun.

Sami

It comes down to the fact that you cannot make money doing something for very long when there are no barriers to entry. If others can easily do the same thing that you are doing, your visible success spawns competitors that will eventually destroy your business.

I do understand the power of quality and exclusivity. For 20 years I worked for a company that started out selling replacement parts for office equipment out of the owner's garage. Over those 20 years we grew into the largest international aftermarket parts supplier in our industry. We ended up selling products in 160+ countries. The company was phenomenally profitable. I was one of the Marketing VPs. I left the company shortly after it was sold to an investment group that began dismantling and destroying a very profitable business model. We grew our success through selling exclusive, high quality, branded replacement parts that our competitors could not obtain. The new owners did not believe in that philosophy and thought the way to grow the company was to bring in the same junk products sold by our competitors. Today, the company is worth less than 10% of what it was when I left, and it may not survive 2013.

Originally Posted by Sami4u

Virtually everyone is familiar with the saying, “Those who can’t do, teach.” This suggests that someone who have bombed or would be unsuccessful in the world end up as teachers.

The version that I heard is, "Those who can, do. Those who can't, teach."

Originally Posted by Sami4u

I was also told when I was very young, "If you want to earn money in any business, sell the crap to the people who think they can make a living in that business."

Hehe. This is the basic business model for most "work at home and get rich" schemes. I get a kick out of all of the people still pitching this nonsense on infomercials. Most are also the suppliers of products that they claim you can make millions with by selling them on eBay. The model failed many years ago, but people still make scads of money pitching a failed business model.

Originally Posted by iowadawg

On namepros, one person made this valid statement:
In his years of creating content, web design, and more....not once has he been contacted by anyone outside of the USA to outsource their work to him.

In short, like rob says, overseas one does not have to make much money to be rich.

And yes, more and more so called content creators, designers, and more here in the USA are outsourcing more and more.
Pay someone overseas pennies, charge the customer dollars.
Everyone is happy.
Until the customer finds out what actually happened.

Security audit finds dev OUTSOURCED his JOB to China to goof off at work
That's exactly what happened to this guy!

And yeah, I kind had the notion that these website where you see a guy holding a $50,000 check for one month of AdSense were completely bogus. If you want to sell success, you have to project success.

For years I was in the semiconductor business. Fun, competitive, great money. But for the past ten years it's been more and more a commodity business and salaries are down. When everyone has the same technology, the only differentiator is price.

Interesting article. The part, "He was paying them a fifth of his six-figure salary to do the work and spent the rest of his time on other activities." kinda says it all. The guy making 20% was probably making a bloody fortune by Chinese standards.

You have to give the guy credit for coming up with an ingenious scheme--and he was the company's star programmer. Next stop: politics.