OCT 04 2011
Ecommerce - Your Key To Future Wealth
The last 24 months have seen us investing a lot of time and resources in the Ecommerce space, and what I mean by that, is selling stuff (a lot of stuff) online.
Ecommerce is vastly different to any other business model, but as an affiliate marketer, and specifically anyone who's following the Consumer Wealth System process, needs to be aware of it.
It's my opinion, that for a few people, Ecommerce is going to hold the key to not just making a full time living online, but to building wealth, something that will make you in excess of $100,000 a month, something that you can sell for hundreds of thousands, if not millions of dollars, in 3-5 years.
Why do you need to be aware of it if you're an affiliate marketer?
Because if you're promoting physical products as an affiliate marketer, through a review style website (like the Consumer Wealth System teaches), it's very easy to take that site, and convert it into an Ecommerce store, and dramatically boost what you are making.
But let's take a step back for a minute, and look at the Ecommerce model.
Why Ecommerce?
Well, in the second quarter of 2011, Ecommerce (in the US) accounted for $47.5 Billion, a 3% increase over the previous quarter (reference - census.gov)
And it isn't slowing down, since 2002, it's gone from around 1.3% to the now, 4.6% of total money spent in retail.
Those numbers may seem small, but remember, that 4.6% means $47,500,000,000 transacted in 3 months.
"Them thar are a lot of zeros!!!"
You're damn right it is, and taking a slice of the pie, is actually easier than you think.
It used to be that getting an Ecommerce store that was WELL BUILT (notice the emphasis on well built) was costly.
If you had contacts, and knew what you were doing, you could get away with it being built for $3,000-$5,000, if you didn't, and you wanted something custom built, you could pay as much as, if not more than $2,000,000. Yes, $2 Million (I know this because a friend of mine who does a lot on Ecommerce, paid slightly over this to have his system built).
But even with those high costs, if you could get traffic, it was worth it.
Why?
Because of the value of the visitor for Ecommerce stores.
A few weeks back I posted on the topic of Affiliate Marketing Metrics.
In this, I went through an example scenario of an affiliate site that was doing 10,000 uniques per month, that was making $660 in sales.
Not bad (but not great) for an affiliate site.
So here's the thing, with an Ecommerce store, that is doing 10,000 uniques a month, let me show you what the numbers look like.
Now, these numbers are close (actually a little lower) to one of our ecommerce stores that we have running.
The effort to setup the site is slightly more difficult, don't get me wrong, but for the same traffic, here is a site that is making almost 8 TIMES the amount of money.
But here's the thing, Ecommerce isn't for everyone.
Going from a successful affiliate marketer, to a success ecommerce store owner, is a big shift in mindset.
You see, affiliate sites can be run, nearly on autopilot.
You get traffic, you recommend products, you make sales, job done right?
Well with Ecommerce, while you can have most of it run on autopilot, it requires a far higher degree of responsibility.
You are accountable, and responsible for people's money.
They purchase something through you, you better be well prepared to take care of them, they are your customer, and they will very quickly tell you if you have let them down.
It's part of the game.
But if you can handle that, if you can bear that responsibility with pride, then Ecommerce will likely be a viable avenue for you to make, not just a full time income online, but a serious business that will create wealth for you and your family.
Sincerely,
Daniel Turner
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Comments (32)
Thanks for this post.
What do you think would be the best strategy, simply do drop shipping, or actually get the products created for you in China or somewhere like that? I understand the margins are probably higher with creating your own products, but so are the risks. So how do you look at the risk vs reward when dealing with physical products?
It depends on what you have available for you to start.
I'm not a fan of sourcing from China until you have an established business and near guaranteed sales funnel (or if you're able to source it from China and or get it shipped straight from Hong Kong or similar).
I always recommend people start by drop shipping, keep it simple, learn the ropes first, and grow from there.
Daniel
Daniel,
This is a great post and I believe you are right on target with your thoughts and opinions about Google and what they are doing. Your words are simply reinforcement for the large majority of us who are simply trying to do the right thing with business that we enjoy, (or at least I know I do), and still be able to make a living at it.
Thanks again,
Jolene
They main thing Jolene, and this is what I hope everyone takes away from this.
Is start thinking about diversity.
Not just diversity in link building. But also diversity of traffic types. Diversity of business models.
We have traditionally relied heavily on organic traffic. This year, it's not the case.
I learned a valuable lesson recently. We spoke to an online investment buying group, they do not count ANY organic traffic, as part of their valuation when considering buying. It's the cream on the top. But you can't rely on that cream always being there.
Daniel
Ok. I am struggling and I do not know how to fix it. Take a look at my sites and tell me what is wrong. I worked really hard at it. Generated a few comments. Over 250. Yet to acquire a sale! Curses! Just started another www.babystrollerjunction.com. Check that one out too. What am I missing. Lend a hand will you mate?
I think e commerce is the way to go. Amazon was up 40% last year even in the middle of a recession. More people will be buying on line as they try to save money. The only downside I see to e commerce for me personally at least is drop shipping. I can't afford to eat the returns and after being disabled my credit is shot and I dont have credit card to pay the drop shippers.
Hi Daniel, Thanks agin for this post, its great to see what is possibly in store for the future if we can get the hang of it. Ecommerce could maybe the way forwards for us, still trying with the few sights we've already set up and need to keep at it, as always. thanks again for all the info, invaluable stuff.
Hi Daniel
Hope you and your family are fine
Yes can definitely confirm that e commerce can work very quickly.
Having started, as you know by following your plr pro stuff and became full time at this IM thingy some time ago
We decided to build our first e commerce site at the end of last year, and so far this year it has grossed 200,000 €. (only using SEO) It certainly true that outside of the US its harder to find people who understand the concept "drop shipping" so for us was a little bit harder at first to find someone willing to do it. and we even managed to convince them to accept returns hehehe. Which in out case has been less than 1%.
we now have plans to launch 3 new sites and will expand the first site to 2 other countries for next year.
seeya
Ian
Heya Ian, family are fantastic (my wife is due on the 11/11/11 :D for our third boy!), and likewise to you
Glad to hear things are going well mate, and congrats on the success of the ecom store!
Yeah, US have it lucky to be honest (in some respects), makes it a little harder for us in non-US countries, but, higher barrier to entry, less competition in my opinion :D
Thanks for sharing your success too mate, its always good to have others posting in here that are doing well
Daniel
Nice article I have been running e-commerce stores for a while. What is nice about e-commerce is it old and trusted. I like this business model of internet marketing the best for multiple reasons including the most control and people value physical products over digital products.
Hi James, I couldn't agree more, the only downside to Ecommerce is the responsibility of taking care of the customer, though to me that isn't a downside, some people just enjoy the lifestyle of an affiliate marketer I guess :D
Daniel
Nice update on the affiliate/e-commerce state of affairs. Seems the online sales still keep climbing in popularity as we walk right into the holiday season, the timing couldn't be better. Hope to hear more detail on this. Becoming self employed has never been more attainable in recent history!
Yep, while the world is on the decline, online sales continue to increase, it kind of defies reality really
Ecommerce is a good initiative i would like to make income through it
and also get more enlighten on it..best regard
You forgot to mention that with ecommerce you end up with a list of people to sell to over and over again. ;)
So true!
You're building a solid customer base that are super hungry to purchase in that industry, repeat sales are just amazing in Ecommerce (and require little to no extra effort other than just doing the right thing by people)
so Dan do you teach or have a product on an e commerce store or do you know of any good products that teach e commerce an not your basic affiliate model.
Hi James, I'm bringing out an Ecommerce Master Class, it's a "by application only" thing in a few days, since the majority of my clients are into affiliate marketing, I honestly don't know what to expect, but there are not a lot of decent Ecommerce courses that I've seen that are driven by people who actually do it if you know what I mean
Daniel
Hey Daniel,
Ecommerce sure sounds good but how does someone learn how to take our affiliate sites into a full out ecommerce store? Are you thinking of creating a course or do you know of a good course that will show us how to make a successful store?
Thanks,
Jim Conyers
Heya Jim, yeah, I'll be doing a course soon, and part of that will cover how to roll an affiliate site, into an ecommerce store because to me, it's the natural progression
I agree e-commerce is getting bigger than ever as more and more people buy goods online. Goods are cheaper online so with the tight economy more people than ever will be buying there.
I have switched from digital to physical products and my sites are actually laid out much like e-commerce sites and could easily be converted.
The one thing that stops me is drop shipping. Although it looks great on paper I am scared of dealing with returns because the drop shippers I checked do not take anything but defective items back. I really don't want to own 10 Fijit Friends. Is there away around this?
Heya Steve, hehe, yep, that's one of the issues with Drop Shipping, returns in the ecommerce space are significantly lower than that of the digital space and there is two ways to look at it:
1) build it into your margins, i.e. as a part of your business you account for 2% returns (anything more than 3-5% and there is probably something wrong with the products you're selling, or the manufacturer that you're using)
2) if it's not an issue with the product, make sure it's not an issue with the process, meaning, are delivery dates being met? is the product arriving properly? this can all be accounted for through a post sale checking system
The biggest thing, is that because your earnings per visitor are so much higher (usually), you can account for some returns, and still come out well and truly in front (so long as its a legitimate product range and people aren't being ripped off).
Hope that helps
Daniel
Hi Daniel
I own your Consumer Wealth System and, although a late starter, aim to put up my first physical product affiliate site soon. Have been an affiliate for digital products for a few years.
I have thought of e-commerce, but wonder about the opportunity for those of us in Australia. Do you believe there are enough suppliers to make this viable?
Appreciate your feedback
Wendy
Heya Wendy,
Well, since I'm in Australia, I can tell you we are probably at an advantage because of the pathetically low competition here
BUT, also because we're in Australia, we're also backward :D Meaning, suppliers here very rarely have heard of "drop shipping" and it can be a serious pain in the behind to educate them on the process.
The thing with ecommerce here, is you usually have to find someone to partner with as most suppliers have a "bricks and mortar" policy (how I HATE that!!!)
Daniel
Thank you for your Blog. Ecommerce this should help a lot of us
Affiliate Marketers I am a newbie to all of this and all the
Blogs I read really help.
Hiya Roy, you're most welcome, if you're just starting out, its just something you want to be aware of, something that you should know you need to do in the future as your sites start performing well, and/or as you want to expand what you do
Daniel
Great post Daniel. Got the link of this article from the consumer wealth system email. I have been part of that email list for a long time now. And everything from that are legit.
Thanks mate :D
I just do my best to lay out what works for me, if something works, I tell/teach it, if it doesn't, I leave it the hell alone :D
Daniel
Thanks Daniel
It's intresting that you are discussing ecommerce sites. I was wondering about SEO with an e-commerce site.Do the same rules apply. Or are there variations? Is it harder to get a page with lots of different products ranked? Or is it best to have one product per page? Lots of questions unless you have a site which has high brand awareness such as Amazon etc.
Great article, thanks again.
Hiya Geoff,
The fundamentals behind SEO remain the same
The great thing about Ecommerce stores is they usually have a lot of pages, and with that comes a semblence of authority
Remember, websites don't rank, pages do, so you can (relatively) easily outrank Amazon for products because your page has more value
Hope that helps ;)
Daniel
As Daniel said SEO is basically the same as for any other site.
But with an ecommerce site you can very easily have many products the same, so the product descriptions are basically the same, when this happens in our stores we make sure that every products description is written by ourselves (and not just copied from the manufacturers) and then the descriptions that are the same we spin them so that although they say the same they are all using different words so each page of our website has totally unique content (and we add as many different keywords as possible to each description.
By doing this Google seems to love our site and we not only rank no 1 for all our main keywords but receive visits so far from well over 2000 keyphrases.
hope that helps
Ian