To buy something at one price and sell it at a bit higher price is one of the oldest methods we humans use to make a living. Between buying and selling we add some sort of value. In its simplest form, the value is in location and availability, for example, a store where you can buy milk instead of walking all the way to the local farmer. The value can also be to refine goods into a new product or put your brand on someone else’s product. In this post, you will learn how to find inspiration to what you should be selling and which value you should contribute with.
Someone else's product
Perhaps the first thoughts that comes to mind when thinking about e-commerce is an online store that sells a collection of products made by someone else. The keys here are collection and the brand of your store. You will have to consider why your potential customer would find their way to specifically your store instead of going directly to the product manufacturer or to bigger and more established stores.
You will also have to think about inventory management and costs related to managing your collection of products. If you build up an attractive assortment you have a good opportunity to create a sustainable business that expands beyond upselling to existing customers. You will also automatically have something to talk to your customers about, both in terms of recurring news about new products coming in and in terms of how existing customers use the products.
When you set up your collection of products, you need to make sure there is a consistency throughout the assortment and that the number of products is both appealing and manageable. It will be easier to build trust and credibility with your customers if you have good knowledge about all your products, compared to if you launch with a collection of thousands of widely spread products.
The value you add when you sell someone else products must also be thought about carefully before you launch. In a global world, your competitors are all just a click away and your credibility is directly measured against big players such as Amazon, Wall Mart and H&M. Your strength as a small player and digital nomad is that you can contribute with more positive knowledge than the big players, and build a personal following around your branding that the generalist competitors will have difficulties keeping up with. Your value does not have to come only from the brand of your store, it can also come from the business model you use. Imagine a subscription service where you get a new pair of underwear in the mailbox every month, or perhaps a subscription of ecological candy on Saturdays – a new bag conveniently arriving in the mailbox every Friday.
Use your following
If you already have built up a following within your niche, using content on Instagram or YouTube, the value you add is automatically the credibility of yourself as the supplier of the e-commerce site.
Three points to think about when you plan your assortment:
- Product, is it a product I can talk about with confidence?
- Product mix, does the product fit into the assortment, do I create a mix of products that make up an attractive offering?
- Profitability, can I really sell this product at a higher price than what I bought it for?
There is an infinite number of ways to find products to sell. Everything from physically visiting a factory and check out what they’ve got, to reading paper catalogues or attend trade exhibitions to find the latest products. Luckily even this part of life is being digitalised and nowadays there are really good services online where you can find suppliers of everything from socks to mobiles to dishwashers. The largest service of that kind is Alibaba, a Chinese marketplace for suppliers and factories both from China and from the rest of the world. Use Alibaba to find inspiration for your product mix and to get a feeling of the price you have to pay for your products. Most suppliers you find in Alibaba will only sell to stores and resellers and usually, they have a minimum order quantity of 100 – 1000 units. AliExpress is the little brother of Alibaba and over there, you can find an almost equally large collection of suppliers and products, but priced so you can find single units to buy as a consumer.
If your products are available geographically closer, try to visit the supplier or distributor physically and learn as much as you can about the products, as well as what the supplier can offer outside of the specific product you are looking for. To manage fewer suppliers will make your life easier than if every product you sell has to be bought from different suppliers.