What I’ve Learned By Starting an Online Business

Hello everyone! This is a guest post from Glen who is the owner of howtosavemoney.guru a website created to help people better understand how to save money, learn how to make more money, and also teach others how to better manage the money they already have.

Let me know if you would like to guest post on MMYW!

If you are anything like me, then you’ve had plenty of dreams of becoming the next big internet entrepreneur. Unfortunately, the chances of becoming the next internet affiliate marketing superstar is actually fairly slim, now i’m not saying it’s can’t be done, I just feel that it’s a lot more difficult than it used to be, as more and more people are trying their hand at making money online.

So late last year I decided to take a slightly different approach, so I created a web store that sold physical products. I realised that I wasn’t quite ready to abandon my goal of making side income online, but I also didn’t really want to turn into one of those shady affiliate marketers that would push anything – so an online shop seemed like the perfect solution.

So today I am going to talk about my experience creating an online store and how it is going so far. Note: I won’t be giving specifics on the product I am selling.

 

Getting Started – It Costs Money

Probably the biggest thing that I realised when I started out with this web store, was that getting started was hard. Having an idea is one thing, but actually putting things into action is quite another.

Not only is it very time consuming, but it can be very expensive as well, and as someone who is big on saving money, I really wanted to be sure that I wasn’t going to be flushing my money down the toilet. After all, you have to buy stock, organise supply chain management, promote your website and most importantly of all – you need a product that people want to buy.

Overall my wife and I have spent close to $20K on our business so far, and to date we have only returned about 20%-25% of that. But considering that we only started in January, and that our sales have started to become nice and steady (see screen capture below), I am confident that in the long run we will end up turning the business into something that is very profitable.

Now many of you are probably thinking that I’m crazy spending that kind of money on a new internet business, but I did do a lot of initial testing to ensure that there was a market for this product.

In order to test the market, I created a website that sold similar products (the products were through Amazon) and I ranked the site to the 1st spot in Google for one of the keywords I was targeting. What I discovered was that people not only liked the product, but that I was getting between 3 and 4 sales per day.

Now unfortunately the way I tested the website was not sustainable, and eventually the site got hit by a Google penalty. I suspect this was because I purchased black hat links to rank the site – I was a little annoyed, but it served its purpose and it did tell me that I could easily make money in the niche I had selected. This gave me enough confidence to spend a fairly large sum of money setting up my own product line ready for sale.

 

Patience

The next big thing I learned was patience. During the first month I was pretty upset that we weren’t getting any sales, and even the second month where we had just a couple of sales I was still pretty concerned. You see doing things the right way takes time, and I am in this for the long haul, which means that I am not interested in ranking my website the same way that I did the test one with shady links.

Anyway, after a while things have started to settle down and now we are starting to make around 7/8 sales per month, which works out to be about $700 per month. Obviously this is a lot less than the 3 to 4 sales per day I could be getting if I was at the top of the search results, but it’s enough to keep me satisfied that eventually we will have a good steady side income stream on our hands.

 

Marketing & Diversify Traffic Sources

Marketing is probably the hardest part of any business, whether it be a traditional bricks and mortar business, or an online one. This is something that took me a while to learn when I first started building websites online, but in short – no one is going to buy your product if they can’t find it. It sounds so simple now, but back then I just didn’t have a clue about internet marketing.

I also used to think that targeting search engines was the answer to getting people to your website, but in reality I think this is a mistake. It’s so easy to get caught up in the massive amount of traffic search engines like Google can provide, that people often forget about some other really great traffic generating websites that exist.

One of the big ones for me is social sharing websites like Pinterest or shopping websites like Wanelo. They are both great at sending quality traffic to my site, and the best part is that it converts far better than Google.

My analytics stats for the last 6 months showing Google & Wanelo

I honestly feel that these types of sites are too often overlooked, and that they can provide a great way for online businesses to generate sales.

I would love to hear about any of your own experiences with starting a business online. What did you learn and what can you share with others before they start out.