Before you start an online business, you need to do some thinking or planning, research and data gathering. You need to have a good planning if you want to involve in ecommerce, able to survive long term, and most importantly making money. A good planning will also ensure you will not get a lot of surprises in later stages, such as hidden cost in shipping overseas, payment cycle too long from certain marketplaces thus affecting your cash flow, shipping time is too long from your supplier etc.
Assuming you going to start from zero, here are some important things for your consideration. All these questions are interrelated.
1. What product you want to sell?
There are many products sellable on Internet today; micro SD card, fashion accessories, electronics products, health and beauty products, toys, baby products, groceries, pet products etc.
You need to consider:
a. Is there a good market for your products?
You need to find out is your product highly sorted by consumers. You can do the research from Google keywords, reviews from various marketplaces, forums etc. This will help you avoid buying too many stocks and later affecting your cash flow. On the other hand, you need to have enough ready stock because marketplaces like Lazada, Amazon expect you to ship out item(2) within two or three days upon order confirmation.
b. What is the uniqueness of your products?
Avoid price war with other sellers. You might have to face it eventually but to start a new online business, try to sell something unique and difficult to find in current market. Handmade products are unique with higher profit but they are not fast moving items.
c. What is the cost for logistic?
It is very important to consider logistic at this point of time, even before you purchase the stocks and sign up any marketplaces.
- Find out the durations and total shipping costs, clearance costs, transportation costs, taxes and duties involved for importing the products.
- Find out the durations and total shipping cost to send to buyers. High value (jewellery etc.) and bulky products (furniture etc) could incurred higher shipping cost.
Both can be significant in your operational cost.
2. Where you can get the products?
Most people get their products from China, which is no secret today. China is still a world factory since 90's. There are many places to get products in China. Nearest to Malaysia are Shenzhen and Guangzhou but they are not cheap anymore. Yiwu is a great place I think, it has almost everything so much so that there is a "little Arab" town where middle east buyers coordinate export activities to their countries every day. Wenzhou is also another great place to explore, and there are many more.
Searching from internet might not give you a full and updated picture. In fact, when I started long ago, I just went there without much research from Internet (not many info I could get at that time). I asked taxi driver and hotel front desk, they told me where were the largest wholesale malls in the area for the product I was looking for.
3. Where you want to sell the products?
You will find no customer come to your new website to buy products. It is better to sell at popular platforms to start your online business. There are a lot of platforms you can sell your products such as Lazada, Shopee, Lelong, Zalora, 11 Street etc. You can also sign up Amazon or eBay to sell to overseas. Each and every one of them are different and definitely will impact your operations (product information requirements, batch product upload, product images requirements) and profitability (subscription fees, commission, shipping fees, transaction fees).
Ultimately, you should have customers buy from your own website. This is to build reputation and trust of customers which eventually leads to higher profitability. In order to do that, we need to find way to link up with customers from marketplaces, provide good services, introduce them your website and probably offer a good discount. Whatsapp is a great tool just for that because you will have customers' mobile phone numbers from marketplaces.
4. What are the tools and equipment you need?
The best thing about doing business online is you can do it from home. What you need is good internet connection, a PC/laptop, a digital camera and a printer (multifunction printer if possible). You should also have a place to store your stocks as well as shipping packages. Be organise to create your product database so that you can reuse the information to upload to multiple marketplaces.
5. What will be the estimated profit?
After doing all the above research, you should try to estimate can you make profit from this business. If you can't, then better don't do it or replan your strategy until you think you can make a good profit from the business.