What happens when you succeed?

Not everyone succeeds with online selling, but there are still countless stories of those whose humble beginnings lead them to incredible success; Etsy.com boasts many of these stories. But for each of these stories, Etsy shop owners have had to make difficult choices about the future of their businesses. Because Etsy is restricted to only handmade items, when the demand becomes greater than one person can handle, shop owners must decide if they want to reduce their business to a more manageable size or if they are willing move away from Etsy in order to mass produce their items. Learning these things, I've really realized that online business owners need to be prepared to make this decision if and when the time comes.

One Etsy success story comes from Mackswell Sherman and Sarah Jones, a pair who now operates a actual clothing store called Ruffeo Heart Lil Snotty in Brooklyn. In just four years, these two were transformed from “dumpster diving college students” to “comers on New York’s indie fashion scene.” They credit their success to their humble beginnings on Etsy.

Su Stella and Stacy Gibs were featured in Louisiana's oldest, continuously operating newspaper, April 27 Etsy article, she was in the spotlight for being as the “owner, operator and entire staff of Opelle Creative,” her shop selling handmade leather bags.

Etsy’s founder Rob Kalin hopes success stories like these “become more rule than exception.” However, there is a problem inherent in Etsy’s framework that makes success difficult for store owners.

In an April 1st article in Inc., a small business resource magazine, Max Chafkin explains:

If [an Etsy store] gets substantial orders…they will probably want to use a factory [to produce the items], which will effectively disqualify them from selling on Etsy, given that the company’s rules require that Etsy members personally make what they sell.

So then, successful Etsy sellers, face the choice of whether or not to stay on Etsy. And if they move on, where do they go? Sherman and Jones chose the route of many successful sellers—they left the Etsy community and opened a physical shop where they mass produce their products.

But other sellers have chosen to scale down their businesses to stay in the Etsy community and to keep their production manageable. Chafkin interviewed Ryan McAbery, the founder of the Etsy shop Littleput Books. Mrs. McAbery’s shop was a huge success, but she was forced to work nearly 100 hours a week to keep up with the demand. Because she decided that she wanted to keep Etsy selling as more of a hobby, she sold her highly successful Etsy business and started a new one with new ideas that aren't as time consuming.

I think the bottom line is that if you become successful selling on an online platform, you have to be prepared to make tough decisions involving the nature of your work and what you truly want to gain from it. You may have to weigh profits against your personal sanity, or come up with creative alternatives to accommodate both.

I wish you the best!



Photo Credit
Etsy Logo: Scraps
Buy Handmade Image: Her Outdoors

Spreading the Word: Online Marketing

You have a solid business plan, you have your products, you have an awesome web site and everything is up and running. But there’s one big problem...you have no customers.

There are two of the primary advertising methods that online businesses can use to attract customers. The first method is to buy ads on Facebook that are customized to users based on profile information. This method of advertising is difficult to monitor and has a relatively narrower scope, but it has the huge advantage of being noticed by people who have interests in the same area. Another advertising method you could is search-based pay-per-click ads which can be hosted by large or small advertising networks, each offering slightly different options and benefits. This type of advertising has a far reach, is easy to monitor, and has a clear return rate. I believe a combination of these two methods is an ideal approach to online advertising.

With Facebook gaining popularity daily, Facebook advertising is becoming more and more profitable. . Using public information on people's profiles, Facebook displays advertisements on topics that relate to each particular person's interests. A drawback to Facebook advertisements is that people do not always click on them (because they are reluctant to leave Facebook), but this type of advertising is extremely effective for promoting awareness of your business. In my experience, after I have seen a certain advertisement a few times I become more interested and will eventually click on it.

While Facebook advertising is a relatively new development, pay-per-click advertising has traditionally been the most used method of online advertisement. There are many varieties to this kind of adverting. In this April 20 Practical E-Commerce article, Mett Ferner provides an up-to-date and extensive list of 25 different advertising options for online businesses, including both large and small networks.

One large search engine affiliated network that Ferner describes is Google AdSense, which he calls:

One of the most widely used and popular ad platform for online publishers to earn revenue by displaying relevant ads on a wide variety of content that is suited to an audiences specific interests. Participation in AdSense is free and advertisers pay Google for clicks or impressions of ads displayed on participating sites.

Ferner describes the features of a smaller, alternative advertising network called PocketCents in the following way:

Create and display text, image or video ads directly to the kind of users who are interested in your product or service on the PocketCents Network. Set up a fixed monthly budget per ad, eliminate competitive placement based on bidding and much more with PocketCents. PocketCents features a flat rate of $.25 per click on text or image ad or per play of video ad.

How does this type of advertising compare with Facebook ads? This video gives a good comparison of the two advertising methods.


To summarize, Scott Smigler wrote a Practical Ecommerce article on March 2, "Comparing Facebook Ads to Search-Based Advertising." He pointed out the following benefits of each:

Paid Search Ads:

1.Targets Direct Intent.
2.Easy to Calculate Return on Investment.
3.More Control.
4.Reach Most of the Internet.

Facebook Ads:

1.Targets Human Beings Based on Volunteered Data.
2.Increases Trust.
3.Calculate Your Ad’s Reach in Real Time.
4.Build Awareness.

Smigler's overall recommendation is that business owners should try out both types of advertising. I agree and think that the most important thing is to be open to trying different approaches until you find a combination that works for you. I would also encourage you to take Smigler’s advice and “look at your social marketing as a longer-term investment in your business.”

What do you get when you cross a stay at home mom with a great business idea?

A Mompreneur.

It’s a term and career path gaining popularity across the country. Search “mompreneur” online and you’ll find countless examples and listings of entrepreneural moms making a living right from her home—very likely with babies crying or little kids running around.

Mompreneurs Online is a resource and community for these ambitious women. The website features discussion boards, groups, and even a live chatroom! The website is currently trying to promote local groups for mompreneurs to get connected with others in similar geographic areas.

The Mompreneur is another resource—this site provides page after page of information and resources pertaining not only to doing business online, but also to parenting! There is a Mompreneur magazine sponsored by this website that regularly provides subscribers with resources, tips, the latest news, and builds the mompreneur network.

Skaskatoon CTV reported on March 30 about "Mom's Marketplace," which is a gathering of mompreneurs hosted by Mompreneur’s Magazine happening right now, with a contest for “Saskatoon's finest Mom-preneur.” The contest winner was just announced to be Celeste Bodnar who started a chocolate cake ball company called Sphere-liscious.

Another event of similar nature will be happening soon in Ontario-- The Spring 2011 Vaughan Mompreneur Showcase is designed give mother/businessowners exposure to the public—over 2,000 people are anticipated to attend. Because many of these are startup businesses without a lot of financial assets, this event also an affordable opportunity for mompreneurs. In a March 28 York Region article, the Showcase was featured. The article explained that “booths at bigger shows can come with price tags around $1,000 or $1,500, the organizers of the Vaughan event are aiming to keep it affordable so spots at the local show cost either $185 or $250 depending on the package you choose.”

Canada seems to be the place for budding mompreneurs—“Calling All Mompreneurs,” a March 21st BCNews article, reported about workshops for mompreneurs being held on April 5 and 6 in British Columbia.

One of these workshops, called “Passionately You-Create the Life you Dream About” helps prospective mompreneurs determine if they have what it takes to succeed in business by looking at personality types, passions, abilities, careers goals and dreams. There will also be help on writing a mission statement and how to make their dreams a reality.

In another workshop, “Succeeding as a Mompreneur,” participants will learn some of the more technical sides of the business—such as technicalities of becoming a CEO and a full rundown of what it takes to run a business from home.

These are just some of the many opportunities and assistance available for mompreneurs! If you take the time to seek it out, there is a whole community of others with similar interests who are perfectly willing and happy to help you out!

One more thing, for my male audience—“Dad-preneurs” exist out there too! And all of these resources I've talked about are just as applicable to you!

Sources:

Mompreneur Cartoon: Feisty, Frugal, and Fabulous

Mom's Marketplace Photo: CTV News

Magazine Image: Ordinary God Blog

E-Fairness?

In the past, Amazon.com and affiliates have enjoyed the benefits of operating tax-free—but this may no longer be the case. In the last several weeks, several state legislatures have adopted laws requiring online businesses to charge consumers state tax on products sold. This act is intended to level the playing field between physical businesses and online businesses.

The legislation has been recently passed in Arkansas, Rhode Island and North Carolina. Illinois was the fourth state to adopt the law and it is currently being debated in Vermont and California.

An March 10 article in BusinessWeek explains:

The bill would require out-of-state online retailers to collect Arkansas sales taxes if their annual sales in the state exceed $10,000. The measure would apply to retailers that have online affiliates in Arkansas, who directly or indirectly refer customers for a commission or some other consideration.

(online affiliates are blogs or websites that advertise an online business and get paid when people click on the ads)

As it currently is, physical stores (even ones that also sell items online) are required to charge taxes, but online-only businesses use a loophole to avoid collecting taxes for the state—resulting in a price difference that favors online retailers.

ABC News reported on March 11 that supporters of the bill claim that “being able to avoid charging the sales tax also gives online retailers an unfair competitive edge over the traditional businesses that keep…downtowns vibrant.”

This law is being called the “E-Fairness Act” because it will make it fair between small local businesses and online businesses in terms of tax they have to collect for the state. Stephen Di Benedetto’s article in The Chicago Sun Times on March 9 explains it’s instrumental in protecting and creating jobs. The Chicago Sun also reported that “The Illinois Department of Revenue estimates the tax could generate as much as $170 million annually for the state.”

Amazon.com affiliates are one of the largest groups affected by this legislation—and Amazon isn’t happy about it. On March 11, The Seattle Times reported about the legislation stated that “Amazon called the law unconstitutional and counterproductive.” The article continues to explainthat a 1992 Supreme Court decision currently prevents a state from “requiring Internet retailers to charge sales tax on its behalf unless they have a physical presence there.”

In response to the law passed in Illinois this week, Amazon actually is planning to end work with Illinois affiliates by April 15, it has already cut ties in Rhode Island and North Carolina and threatens to do so in other states that adopt the law.

This legislation, as well as Amazon’s actions, will affect the 9,000 online affiliates in Illinois alone. Many of these affiliates will lose money because of the law—or move to another state. There is a possibility that the Amazon.com affiliates may began working with other companies like Sears, Wal-Mart, or Barnes & Noble.

It’s yet to see how it may affect online businesses in these states in the long term, and how it will affect how people conduct online business in the future.

Time to Pay Up!

When it comes down to it, there’s one thing that all businesses have in common—they make money. So, how does someone get paid for the products they sell online? Is it difficult, expensive, and confusing to manage online payments? I’ve got good news for you! It’s simpler than you probably think!

Most websites, whether you’re setting up your own or selling products through an online marketplace, will use an outside website to handle transactions. The primary reason for this is security. The secondary reason is that it’s much simpler to let people who know how to handle transactions to do their job! PayPal is one of the most widely used payment platforms and adding a PayPal button to a website is a relatively easy process.

In a February 25 article in the New York Times, Riva Richmond reported last week that Internet fraud declined 10% in 2010. According to her article, Internet users are more aware than ever about fraud that may exist online. It’s even more important that you as a business person are aware of security issues surrounding online transactions.

Richmond also reported that “financial institutions and payment processors have gotten more aggressive in their use of antifraud technologies.” This is good news for online business owners who rely on these secure services to guarantee safe transactions for their customers.

There are countless online payment systems in existence, but one of the most well known is PayPal. On February 10, the New York Times published an article about a successful partnership PayPal has made with Ebay which has helped PayPal become widely used by small and large businesses alike. PayPal is especially attractive because it accepts all major credit cards and doesn’t charge any setup or monthly fees.

How PayPal works is quite simple; from my experience, these are the basic steps involved in a PayPal transaction:

1. Customers select the items they wish to buy on the seller’s website and click the checkout button
2. Customers are prompted to sign in to PayPal or to enter their payment information if they do not have a PayPal account
3. PayPal makes the transaction without either party having access to the other’s financial information
4. Both the customer and the buyer receive receipts from the transaction

If you are selling products through an online marketplace, they will probably provide you with a payment system to use; it could be PayPal or any one of the numerous other online payment systems that function in a similar manner.

If you are hosting your own website, adding a PayPal button to your page is simple. PayPal walks you through a form where you can enter information such as the type of button you need, your payment preferences, product cost, and other special feature. After you submit the form, PayPal generates the HTML for you to copy and paste into your own webpage’s code. That’s all there is to it!

Check out this video to learn more about setting up PayPal for your website, as well as the additional features that PayPal offers.

Multimedia Sources:

Secure HTTPS Image: Making Payments Online

Paypal Image: Business Pundit

PayPal Video: YouTube

Getting Started the Easy Way--Online Marketplaces

Building your own website from scratch is great, but what if you don't have quite that much ambition or what if you don't really want to put in that much time and money right away? I've got good news for you--there is an easier way! You can set up shop with any number of already established online marketplaces.

An online marketplace offers several advantages including ease of starting out, simple payments systems, raising awareness, and ability to collect customer ratings. Some disadvantages include fees that online marketplaces charge, difficulty in gaining customer loyalty, and lack of personalization options for online "storefronts."

An online marketplace is a website where numerous sellers can post their individual items for sale by setting up their own “store” within the website. There are numerous online marketplaces out there—some are created for specific types of businesses, while others are open to anyone. They also vary in the amount of personalization each “store” can have. For example, Amazon.com is not for people with original items, it is primarily a “reselling” website. The store pages do not have customization features for users. Half.Ebay.com is a very similar site, though they have an emphasis on media such as books, music, and media. On the other end of the spectrum are websites like Etsy.com which is limited to only handmade or vintage items. On Etsy, sellers can customize their store page with a personal banner, avatar, and even a blog. Other sites, such as Asos Marketplace, are solely clothing and apparel vendors.
Online marketplaces offer numerous advantages to start-up online businesses. These are just a few that I came up with:

1.Ease: Sellers don’t need to worry about how to actually set up a website.

2.A "Transactional Template:" A February 21 article in the New York Times describes the “transactional template” that online marketplaces have set in place to walk sellers through how to post your items, complete payments, and even shipping items.

3.Promotion: By being part of a known online marketplace, sellers automatically have a step above others in getting their name out there. Built in social media features also help this--the previously mentioned New York Times article reports that “sellers [on Asos Marketplace] may never be able to expose themselves to the traffic that we can put in front of them” through blogs, twitter, and facebook integratation on the site.

4.Customer Ratings: On nearly all online marketplaces, customers can “rate” buyers on how smoothly transactions went. This helps sellers to prove themselves as reliable and trustworthy online.

But of course, there are disadvantages to online marketplaces as well. These are some of the drawbacks that I've encountered through my own experience with online marketplaces:

1.Fees: Sellers have to pay the marketplace operator fees for using its services; it could be a set cost or percentage per item or per month. Etsy.com charges $0.20 per listing and a 3.5% sales fee, while Asos Marketplace does not have listing fees, but claims a 10-15% commission on all sales.

2.Customer Loyalty: It is more difficult to distinguish yourself from others; buyers often develop loyalty to the marketplace, not individual sellers.

3.Freedom/Personalization: Online marketplaces offer varying amounts of personalization on seller’s pages. Participating in online marketplaces also means that you must adhere to the “rules” of the marketplace.

For many people, online marketplaces just make sense. In a February 22 article, The New York Times recently reported the success story of a shop called Madam Popoff Vintage, run by Deborah Ellis. Deborah owned an actual vintage clothing shop in England and joined Asos Marketplace to boost her sales. She reported that many unsold items in her shop sold immediately upon posting on Asos. She claims that “joining the Marketplace saved me from going under."

I personally feel that the pros for online marketplaces outweigh the cons; online marketplaces offer an easy way for online businesses to start out with out quite as much pressure as building everything from scratch

Starting From Scratch

You’ve seen the benefits and you’ve heard the drawbacks, assuming you have a product to sell and solid business plan, you’re ready for the next step!! So here it is— getting your online business, well, online!

First and foremost, you have to know what you want to accomplish with your site. Think about how you want to present your products, the information you’ll need to include, and how to organize your site. Looking around at other similar websites is a great way to gather ideas. Peggy McCollan internationally recognized expert in the field of Internet marketing, wrote an article about web design for the Huffington Post, a news website run by AOL. In the article, McColl suggests making a list of website names, what you like about them, and what you don’t like about them, then using your list to create an outline of your ideal website. Once you know how you want your site to be, it’s time to find the best option for creating it.

To begin with, you have to decide if you’re willing to pay money for this website to become a reality or if you want to go the free route. There are many perfectly satisfactory web design services that you can take advantage of for free, such as Intuit’s Homestead or BabyGigs. These sites are template based, which means that while you add your own content, it makes use of ready-made layouts and designs. If you’re beginner, this may be helpful to you. But if you want your site to look a very specific way, you may have to pay a bit more to hire an actual web developer, whether locally or online on sites like Core Interactive. A web developer can take care of all the logistics of creating a website and you can work with them to get exactly the site you imagined!

Using Intuit's Homestead to create a website

There is, of course, the do-it-yourself option as well—instead of piggy backing on other websites, you can manage the whole process from the beginning. This includes going out and finding an Internet Service Provider (ISP) that suits your needs and registering for a domain name and URL. According to an archived entry on Reuters, world's largest international multimedia news agency, your ISP will charge a monthly fee, but will provide you with the necessary server space for your Web site. After securing server space, you will need to register for a domain name. Network Solutions, Inc. is one website that offers registration services and instructions on how to do this.

It’s important to note that with any of the above options you can do as little or as much as you would like to do on your own. For example, you could pay someone to secure a good ISP and domain name for you, and then do the web designing yourself. Or, you could do the domain name yourself, and hire a professional for the designing. The choices you make will need to depend on your level of expertise and the amount of time and money you are willing to invest.

Beyond the creation of your site, the previously mentioned Reuters article also suggests registering your site with search engines, informing others about your site, and of course, maintaining your site so that it’s always up to date.

In a "March 19 Huffington Post article called "Your 10 Point Website Checkup," Penny C. Sansevieri, CEO and founder of Author Marketing Experts, Inc., offers more great advice on fine-tuning websites including content, design, and marketing.

Starting a website can be a complicated process. The purpose of this entry has been to provide online entrepreneurs with only a very brief overview of the available methods of starting a website.