Hey ladies and gents, we're back this week with Sandy Smith to talk about a great way to get profitable…building a product business online! Last week, we caught up with Sandy on what she's been up to since episode 51 (the last time she was here!). She became a parent and transitioned into working for herself online, full-time! One part of her business is selling products online, and she's here to give us some great gems on running this kind of business.
What We’re Chatting About This Week
Sandy Smith is no stranger to online product businesses. She started out with her first product business in college selling Beanie Babies. For those of you old enough to remember, Beanie Babies were the RAGE back in the day. Sandy would frequent a nearby Hallmark after work, buy up the hard-to-find Beanie Babies, and sell them online for a profit.
Sandy's certainly learned a few things about starting a product business since then. Here are her top 5 tips for building a profitable product business online!
Pick the Right Product
Pick a product that appeals to other people, not just yourself. You might think a product is the coolest thing, but make sure at least a few other people think it's cool too. Otherwise you might not be able to sell it.
Check Out Competitors
Market research is very important. You need to find out if your products are overpriced or underpriced. You also need to find out if your product is unpopular and no one is buying, or if it's super popular and there are too many competitors selling the same thing. Don't copy your competitors, but use them as inspiration to come up with something different.
Source Your Product
This depends heavily upon what type of product you have. If you are sourcing a product that is very pro-American (ie political mugs and T-shirts), the last thing you want is something that says “Made in China”. People are paying attention more than ever to where a product is made. There are also many barriers of entry to importing a product from another country. The time difference, language barriers, and low product quality are just some of the potential issues. Try finding a distributor in the U.S. first before you look for a lower acquisition price elsewhere.
Find a Place to Sell It
Generally you want to go where you can get the most eyes on your product. However, big marketplaces like Amazon have a lot of competitors. So you want a good balance between the two. Sometimes you just need to test it out and try multiple sites like eBay, Amazon, Etsy, etc. What works on one site may not work on the other. Here's another secret: the same product may sell for super cheap on one site, and a lot more on another site.
Also consider where your target audience is hanging out. If it's Facebook, consider using the Facebook marketplace, etc.
One more thing- don't forget to diversify your income streams and don't rely only on one platform. If you sell all of your products on Amazon and Amazon decides you can't sell your stuff there anymore, there goes your income!
The Four Ps of Marketing: Product, Place, Price, Promotion
You must incoporate all four things into your business strategy. Keep in mind that the four Ps are something you need to constantly adjust. None of these things are set in stone.
You may not be able to sell your product in a certain marketplace. For example, if you sell political commentary T-shirts, you may not want to sell something potentially offensive like that on Amazon, but rather on your own website.
Selling too many of your products can be a bad thing- it might mean your product price is too low and you need to raise it. You can still end up making more by selling fewer products. If you sell on your own website, you can lower your price because you won't be losing a percentage of your profit to the marketplace you were selling at.
Another benefit of having your own website is you can run a promotion whenever you want to, and don't have to rely on the marketplace.
And that's it for this time! If you want to see what Sandy's been up to lately, check out her gear at If You Stand for Nothing (linked below). Next week Sandy and I will be back with frugal money saving tips to boost your savings (try saying that 3 times). See you then!
This Week's Guest
Hi, I'm Sandy.
Way back when the dinosaurs roamed at the end of 2008, I started paying a little bit more attention to my debt. As the year faded into 2009, the idea to build a website to keep myself accountable to eliminating my debt burst into my mind. I hopped onto Blogger.com and created a blog that I named My Cheapass Blog. I really didn't begin my blog for anyone else to see; it was just a way for me to have the total amount that I owed at my fingertips. Here we are years later and have learned enough to help others with their own debt.
I started this blog with well over $105,665.31 in debt after a failed business and some massive student loans…at least, that's what I said that I owed. In actuality I owed a friend another $5,000 and I would receive a notice in the mail that I owed $10,000 in back taxes and penalties. This blog has been a chronicle of my journey of getting out of it without filing bankruptcy.
My $120,665.31 debt represented everything that I had done wrong. Now, I am here to help YOU get your finances together.