2 answers
Derek
Student
1
Question
Asked
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How to start an online business?
Hello I am curious about money and I want to apply the knowledge I already have to start an online business, and even learn more.
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2 answers
david kirk
Retired Computing Manager
478
Answers
Syracuse, New York
Updated
david’s Answer
Hi, Derek,
Selling online can be fun, but you're right; there is a lot of work involved for success. Here are my thoughts, in simple outline form:
- most important, you need a product or products that will attract an audience. Your competitors, such as Amazon, are huge
- a website is needed. for a start, you could create a free one on blogspot dot com, or on wix dot com to advertise.
- a bank account will be needed for proper bookkeeping. Speak to your parents and/or a banker to set one up for a business.
- you will need a means by which people can pay you. Setting up a Paypal account could do that. Use the business bank account. This is a free service.
- you will need to collect taxes and that may apply to sales in more than one state. Talk to a tax specialists to ensure you're on safe ground, as you may need to collect and pay taxes.
- and for that, you may need to register the business. You can probably get some free legal advice on the basics. Do not overlook this.
- you will need a policy for returns, depending on what you sell. Most customers are friendly, but some are not. Work through this carefully.
- you will need to keep good financial records. You can probably do the basics for free with something such as Google Docs, but eventually you will want better records, especially since it will be your records that show profit and loss and taxes. If you use Paypal, it can provide good sales records electronically for you for free.
- If you are selling a product made by someone else, you will benefit by negotiating to purchase at wholesale prices and to get prompt shipments.
- paying for good advertising support can be important, as you need to make people aware of your business. I suggest social media, such as Facebook, and especially Nextdoor dot com, if in your area. That is an excellent media to reach your community for free.
- if your product must be mailed, be very careful in figuring your postal expenses to ensure that postal expenses don't eat your profits. It's not just postal expenses, it's also boxes and other packing material.
- depending on your products, you may need sufficient funds to support your business for at least six months, as initially, you will experience a financial loss in initial months, as you will be incurring expenses, but not realizing sales.
This most assuredly isn't everything, but it may help get the conversation started for you. I wish you the best.
Selling online can be fun, but you're right; there is a lot of work involved for success. Here are my thoughts, in simple outline form:
- most important, you need a product or products that will attract an audience. Your competitors, such as Amazon, are huge
- a website is needed. for a start, you could create a free one on blogspot dot com, or on wix dot com to advertise.
- a bank account will be needed for proper bookkeeping. Speak to your parents and/or a banker to set one up for a business.
- you will need a means by which people can pay you. Setting up a Paypal account could do that. Use the business bank account. This is a free service.
- you will need to collect taxes and that may apply to sales in more than one state. Talk to a tax specialists to ensure you're on safe ground, as you may need to collect and pay taxes.
- and for that, you may need to register the business. You can probably get some free legal advice on the basics. Do not overlook this.
- you will need a policy for returns, depending on what you sell. Most customers are friendly, but some are not. Work through this carefully.
- you will need to keep good financial records. You can probably do the basics for free with something such as Google Docs, but eventually you will want better records, especially since it will be your records that show profit and loss and taxes. If you use Paypal, it can provide good sales records electronically for you for free.
- If you are selling a product made by someone else, you will benefit by negotiating to purchase at wholesale prices and to get prompt shipments.
- paying for good advertising support can be important, as you need to make people aware of your business. I suggest social media, such as Facebook, and especially Nextdoor dot com, if in your area. That is an excellent media to reach your community for free.
- if your product must be mailed, be very careful in figuring your postal expenses to ensure that postal expenses don't eat your profits. It's not just postal expenses, it's also boxes and other packing material.
- depending on your products, you may need sufficient funds to support your business for at least six months, as initially, you will experience a financial loss in initial months, as you will be incurring expenses, but not realizing sales.
This most assuredly isn't everything, but it may help get the conversation started for you. I wish you the best.
Ben Tang
Consulting
17
Answers
Gilbert, Arizona
Updated
Ben’s Answer
Hello Derek,
Expanding on David's insightful response:
- Consider eBay as an excellent launching pad for your online business, particularly if you're dealing with smaller items. Yes, eBay does require a certain percentage from each sale, but the seller protection you receive in return is invaluable. In a world where most people are genuine, there will still be a few dishonest customers or scammers aiming to exploit less experienced small businesses. Thankfully, eBay offers a layer of protection for sellers who can substantiate their claims.
- Keeping a detailed record of all your transactions is crucial, not only for tax obligations but also for your own protection against certain customers. This is another area where a platform like eBay can significantly assist you, as all transaction data is stored and easily accessible in their system.
- If you're selling high-value items, you'll need to put extra security measures in place. This might include charging for insurance (or covering the cost yourself) as items can sometimes get damaged or lost in transit. Even more challenging, you may encounter customers who purchase a high-value item and then return a counterfeit one, leaving you to absorb the loss of the item and refund the customer.
- Devote ample time to understanding the platform you choose for your business and familiarize yourself with any seller rules they have in place. This will be beneficial in the long run as you're likely to encounter situations that are governed by these rules. Keep in mind that rules can change, and you may find yourself unprotected in certain scenarios if you're not up-to-date.
Wishing you great success in your venture!
Expanding on David's insightful response:
- Consider eBay as an excellent launching pad for your online business, particularly if you're dealing with smaller items. Yes, eBay does require a certain percentage from each sale, but the seller protection you receive in return is invaluable. In a world where most people are genuine, there will still be a few dishonest customers or scammers aiming to exploit less experienced small businesses. Thankfully, eBay offers a layer of protection for sellers who can substantiate their claims.
- Keeping a detailed record of all your transactions is crucial, not only for tax obligations but also for your own protection against certain customers. This is another area where a platform like eBay can significantly assist you, as all transaction data is stored and easily accessible in their system.
- If you're selling high-value items, you'll need to put extra security measures in place. This might include charging for insurance (or covering the cost yourself) as items can sometimes get damaged or lost in transit. Even more challenging, you may encounter customers who purchase a high-value item and then return a counterfeit one, leaving you to absorb the loss of the item and refund the customer.
- Devote ample time to understanding the platform you choose for your business and familiarize yourself with any seller rules they have in place. This will be beneficial in the long run as you're likely to encounter situations that are governed by these rules. Keep in mind that rules can change, and you may find yourself unprotected in certain scenarios if you're not up-to-date.
Wishing you great success in your venture!