Starting an Online Business - Initial Thoughts

Selling online is a great way to learn how to run a business. You learn about pricing, writing product copy, shipping product, and other aspects of business. The most important thing that you will learn is that selling is not easy. You can have the greatest product in the world, or what you think to be the greatest product in the world, but you need to convince others that they want it and that they will give you money for that product.

The best way to learn is to start with a service like eBay or Amazon. I have an eBay store at (stores.ebay.com/ARC-Country-Store) and one at Amazon (www.amazon.com/shops/alanrcohen). They provide you a framework to learn from, and most importantly, a marketplace full of customers. Everybody knows about eBay and Amazon. You don't have to worry about customers finding the site, just your particular item.

The real challenge begins when you create your own online store. I am learning this as I just created my own online bookstore Chelsea Book Nook (www.chelseabooknook.com). This and future articles will discuss my learning curve for this endeavor and at the same time, pass this information on to others.

The most important aspect of selling online is to establish trust between the customer and yourself. In a traditional store, you can talk with the sales person. You have visual cues that tell you something about the sales person.

These cues and interactions are not available when purchasing online. Usually, you just have email or maybe instant messaging.

I provide the links to my eBay and Amazon ratings. People can read what every customer I sold to says about doing business with me. It is the modern version of "word of mouth advertising." For me, that is an excellent way to establish trust.

You need to define prices, method of payment, and shipping prices and policies. Chelsea Book Nook sells used books. Most of my books are half price. I keep it simple. Once I'm done reading a book or it is a book I don't need it anymore, I'm happy to sell it for half price.

The one question my friends often ask is "How do you know what to sell the book for?" Or, they criticize that you could get a better price for the book. (Those that criticize don't sell, but they seem to know all the answers.) To both, I offer a simple equation, "What is the book worth if it is sitting on your book case, collecting dust, and you know you will never look at it again?" They reply, "Nothing." I tell them "Half price is better than nothing."

Certainly you may have other criteria in determining a price. If you buy the book specifically for selling, you want to make a fair profit. However, if you are selling items that you have originally bought for other reasons, I like this equation. Also, even if you purchase specifically for resale, if your original price is not turning into a sale, you have to determine is it worth to keep the item and the space it takes, or sell it and use that money for other products or items.

Shipping and handling is easy to determine. The Post Office has a special rate for books, CDs, DVDs, etc. Rates start at about a $1.50 to ship anywhere within the United States (including Alaska and Hawaii). You can also charge for any shipping materials. I just want to break even on shipping (including materials).

The last criteria you need to be concerned about is how you expect to be paid. Some people accept checks, credit cards, money orders, etc. I use PayPal (www.paypal.com) that allows my customers to pay by credit card. I don't see any personal information. It is all handled by PayPal. I pay a small commission to PayPal but I'm happy with this arrangement. My customers can use a credit or debit card or an eCheck. All information is secure and both the customer and seller have a copy of the transaction.

Selling online is a great way to learn how to run a business. If you have your own site, you need to determine your prices, determine shipping and handling, and how you will accept payment. Most importantly, establish trust between your customers and yourself.