Dec 19, 2008

Empower Your Site - Setting Up Your Own E-Commerce Website Part 6 of 6

in part 5 we looked at three essential components of your website that will determine its success. That was just a taste of the range of elements you can improve to optimise the user's experience on your website, retain visitors, get them to return to your site, and buy from your store again and again.

In the 6th and final installment we look at other elements you need to consider for the successful growth of your website.

Once your storefront is up and running, you are just at the beginning of an exciting ride ahead. You'll need to promote your site online, maintain it and continue to make improvements:

  • Promoting your online store will generate traffic;
  • Maintaining it will increase visitor confidence in your business; and
  • Improving it will help create more interest and ensure your traffic converts to sales.

Promoting Your Website

It will take time before major search engines start displaying your webpages in their free search results, especially if your domain name is new and has no history. There are strategies you can implement to reduce the delay in indexing by search engines:

  • Buy an existing domain name with a previous history and with Google PR. To find domains that are about to expire or that have already expired, visit Deleted Domains. If you have a higher budget you can use Sedo and Afternic, which are both domain name auctions sites and have a very broad choice.

  • Publish press releases (we recommend PR Web). Publish at least one press release per month relating to your website, and repeat the exercise for the first 6-8 months (you can write your own press releases, or have an experienced writer craft one for you from around $120+, while it will cost you $0+ to distribute it via sites like PR Web).

  • Optimise your pages for search engines (without however undermining the usability of your site for the end user, your customer). Using Search Engine Optimised (SEO) copy is helpful. SEO copy utilises specific keywords that are most often used when people are searching for a specific product. You can determine what keywords to incorporate into your copy by using a service such as Wordtracker.

    If you are selling women's clothing, Wordtracker tag, meta description, meta keywords, will help ascertain which keywords or short phrases people use the most when searching for women's clothing on the net. For "women's clothing" a related keyword might be "ladies fashion". You'll then take those results and use the words or related phrases in your webpage's html
    tags (eg


    etc) and within the anchor text of internal links on your site. Generally, keyword density should be about 6% to 8% of your page's total copy; density is calculated as [number of times your keywords appear on the page * number of words each keyword contains, all divided by the total number of words on the page].

  • Build up relevant backlinks to your site's home page and primary subpages. This works very well in improving search engine rankings, especially on Google. The links you build up from other sites should be on pages/websites that are relevant to the page on your site they are linking to. For example, if your site is about shoes, try to obtain links from sites/webpages related to shoes, and ask them to point the link to your home page. You can determine which sites are related to the keyword "shoes" by simply searching "shoes" in the search engine where you are trying to achieve high rankings.

    Additionally, the text that those sites use to link to your page should contain the keyword(s) you are targeting (in our example, shoes). For example, you could ask a shoes related site to link to you using anchor text "Prada shoes at 30% Off Retail, Next Day Delivery", and to href the link to your prada shoes webpage.

  • Start by targeting specific searches: in our previous example, "shoes" is a very broad term. Instead begin with more target keywords; for example if you specialise in fabric shoes then start by obtaining links from fabric shoes sites pointing to your home page or fabric shoes category.

  • List your domain in the Yahoo Directory ($299.00), in other major directories, and try to have it listed in the Dmoz directory (Free, but will take a long time to get accepted, due to the large backlog they have. If you are buying an existing domain, check whether it is already listed on Dmoz, as it would be a plus).

  • Use Google Sitemaps and regularly submit an updated sitemap of your whole website to Google (more information on Google Webmaster Tools is available at this link). A very good (free) software that crawls your site and generates an xml sitemap for you automatically is G Site Crawler.

In general it will take up to 12 months to get your site indexed on major search engines (purchasing an existing domain with some Google PR can reduce this waiting time considerably). However don't despair, invest your time improving your existing site and the user's experience, also try redirecting traffic you are already receiving (for example, from your eBay About Me page), to your new website. Keep on building up links, keep testing (testing is a very important element to succeed online, and Google Analytics is just what you ened to test your site's traffic. Th ebest part is that it's free of charge, for releasing your traffic data to Google). Once your site is fully indexed you will reap the benefits of all the hard work you have invested in the past.

If you have a higher budget, a quicker way to appear on the major search engines is to use pay-per-click (PPC) programs like Google Adwords and Yahoo Search Marketing. With PPC you:

  1. Select keywords that your buyers are most likely to search for to find your products
  2. Decide on a bid price for each keyword. In general terms, when a user searches the keyword you are bidding on, the higher your keyword bid price, the higher up your ad will appear in the ad section of the search engine.
  3. Create the ad text that will be displayed when a user searches your keyword, and specify the destination URL where the user should be redirected to on your site

Each time a user searches a keyword you are bidding on, and they click on your ad, your bid price for that keyword is deducted from your account. Some programs, for example Google Adwords, also account for the click-through rate of your ad; the click-through rate is the number of times your ad is clicked versus the number of times it is displayed; the higher your ad's click through rate, the less you will pay for each click while maintaining the same or higher ad rank. This topic requires its own e-course, therefore do not be discouraged if it is not 100% clear yet. With PPC you only pay for the traffic that is referred to your website; it is then up to you and your website design and navigation flow to convert that traffic into sales.

Please be aware that pay per click advertising is a very competitive environment. If you choose to promote your website this way, start with a small daily budget and with low bid prices. Don't just aim for position 1 as you will simply receive (unless your keywords are tightly targeted) a lot of irrelevant clicks/traffic. Start from the bottom and work your way up by gradually increasing your bid prices.

PPC programs like Google Adwords offer tracking scripts you can integrate on your website to monitor how well your advertising spend is converting into sales. It is imperative you monitor the results of your advertising spend, don't just advertise for the sake of it, each pence and cent you spend should have a return to your business. Tracking scripts allow you to monitor exactly this, and to determine which keywords and ad texts are performing best. Additionally Google offers a free analytics tool called ... Google Analytics. Analytics will monitor all the traffic on your website, as well as the footsteps followed by your visitors to register, complete a purchase, or complete any action you wish to track (including downloads). Never stop tracking your traffic and testing new ideas, that is ultimately how you will spot problems on your website, improve user experience and increase your sales considerably. Price is NOT the only winning factor on the web.

Another popular way to advertise online is to pay per thousand impressions (for example, banner ads work this way), also known as cost per thousand impressions advertising (CPM, M from the latin for thousands).

Finally, don't forget to promote your website on all your literature, on your business cards, on your car. You should include a letterhead with every order you ship (you could even include your latest offers brochure, which works very well in attracting repeat orders. Ever ordered from Amazon? Amazon does exactly that, they even partner with other retailers by including their leaflets with your order. OK they are likely to charge them to do so, but what stops you from setting up a join venture agreement with 5 other related sites, each including the other 4 sites brochures with each order. Can you see the potential?). You should also consider print advertising (with competition from the Internet, nowadays you can obtain advertising on magazines and related periodicals for as little as 20% of their official price; don't be afraid to bargain with them, and always ask towards the end of their printing deadline, which is when they are most likely to have available spaces they want to fill quickly, and therefore at a discount).


You want your site to be as professional as possible 24/7. That means making sure all links are in proper working order, your site loads quickly and all displays are crisp and clear. Doing this instills confidence in buyers, making them more likely to make a purchase.

  1. Visit your online store numerous times a day, making sure it is functioning properly. Place test orders, check your traffic logs or analytics software (for example Google Analytics) to verify which paths your visitors are following, where most visitors are exiting your site, which paths are leading to sales, etc. This topic deserves a separate course, however we cannot stress enough its importance.

  2. Use chat software (a good option is LivePerson) to offer live support to your customers. Live chat will help you add a further level of contact with your buyers, identify problems and bottlenecks within your website much quicker, understand what your visitors are looking for or would like to see on your website, and considerably increase your sales.

  3. Use Google Webmaster Tools reports to identify broken links on your website.


You never want to be out of date on the Internet. This medium is always changing and developing, and once you begin to look out of date, you are going to lose customer confidence and sales.

Always think of your site as the ultimate mode of communication between you and your customers. That means the more you try to utilise its power as a direct, effortless and immediate mode of contacting and communicating with the public, the more likely you'll be to generate sales.

Use your site to generate interest, offer useful articles, and provide customer feedback forms. Use your customer database to e-mail newsletters, promote special sales and offer customer rewards. When you improve your site, let your patrons know. The more they see you as a positive force and a concerned businessperson the more likely they'll be to visit your site again, creating the potential for another sale.

In developing your e-commerce site, you'll have the opportunity to harness the power of the most innovative sales tool ever created. Keep it up-to-date, make it attractive and interesting and ensure that potential customers can easily purchase your products. If you can do that, you'll be well on your way to generating sales and making a solid profit.

We hope you have enjoyed reading this ecourse as much as we have producing it. While we have covered many topics in a concise manner, rest assured this 6 part ecourse contains all the basics you require to avoid 60% of the mistakes made by startup websites. The other 40% involves researching in depth the topics we have covered, testing your site and improving it regularly, intuition and dedication. The fact that you have completed this ecourse is an indication you are seriously motivated about your concept, and are ready to begin a very rewarding path to a successful online business, higher profits, but most importantly a more rewarding human experince with your not-so-virtual customers.

Three Major Components for Quick Sales - Setting Up Your Own E-Commerce Website Part 5 of 6

In creating your online storefront, you want to ensure that people can buy what they want with ease. With that in mind, the fifth part of our e-course looks at three site elements - product database and availability, payment processors and shopping carts. These components can go a long way in generating sales and bringing customers back to your site again and again.

Product Database and Availability

It's important that you are able to display your products, describe them and price them easily and quickly. A dynamic, database driven site (discussed previously in part 4) will allow you to do just that. If you are listing many items, merchandise management is crucial as you change prices, offer specials and re-word displays.

Certain programs, such as off-the-shelf software and some shopping carts, already have databases. If you are offering numerous products, you should invest in a content management system (CMS) that is powerful and easy to use. The best CMSs allow you to input information regarding each product and then automatically create the product page. Using a master control panel, you can then alter prices and product descriptions quickly, ensuring that maintenance can be done promptly and simply.

It's imperative that you have products available and ready to be shipped out as soon as possible. If you prefer not to do the packaging and shipping yourself, you can contract with a reliable drop shipper who will receive the order and send it out in an agreed upon amount of time. Using a drop shipper negates the need for you to store and handle items, which can get expensive and time consuming.

With time you will want to move up the supply chain. The closer you can get to the manufacturer or authorised distributor/wholesaler, the better your margins will be. Additionally, with a dropshipper you don't have control of delivery times and packaging, which means that the realiability of your service is in the hands of the dropshipper.

Payment Processors

Making it effortless for people to pay you is simply good business sense. That means accepting credit and debit cards. In order to take these cards, you have two options:

  1. A merchant account with your bank or credit card processor: you will be charged a joining fee, a monthly service charge fee, and a per transaction fee. In total you will be paying around 4% of each transaction value (this % charge will decrease the higher your monthly sales volume). Good credit card processors include PayPal Merchant Services, your bank (for the UK speak to HSBC, Barclays or Protx - Protx requires that you already hold a merchant account with your bank). Bear in mind that with a merchant account from a bank you will be responsible for fraud protection, unless you integrate systems like Verified by Visa™ and MasterCard SecureCode™ within your credit card payment page on your website. Your credit card processor will be able to better advise you on the options available. PayPal Merchant Services offers integrated fraud protection, although be aware that chargebacks also occur on PayPal. If you have any doubts, do extra checks (you will find the article at very useful)

  2. If you don't possess a merchant account, then setting up and utilizing an online payment system through a service like PayPal or Nochex (UK Only) is a good idea. Both PayPal and Nochex are inexpensive (they cost you only when you receive money), fast, and uncomplicated ways to accept credit cards. Both methods will cost you between 1.9% and 3.9% of each transaction value (depending on your previous month's sales volume) + a fixed amount depending on the type of card used by the buyer at time of payment. While both these options are cheaper than a merchant account, bear in mind that many buyers will not have an account with either PayPal or Nochex. Accepting their card payments through your own credit card processing page will increase your sales.

Shopping Carts

Once you have chosen which payment options to accept on your website, you need to integrate their code onto your shopping cart. A shopping cart is a program that stores a customer's order, redirects the buyer to the payment processor, receives payment confirmation from the payment processor, and finally stores the completed order in your database for future reference. Off-the-shelf software like OS Commerce, Zen Cart and Monster Commerce all have an integrated shopping cart facility that supports all the major online payment processors.

If you plan to hire a web design company to program your site, make sure they have past experience integrating credit card processors like PayPal with your chosen off-the-shelf software or with your custom made website. Providers such as PayPal offer detailed documentation on integrating their system with your shopping cart. In addition to being a payment processor, PayPal also offers their own shopping cart facility, which can even be integrated with a static, brochure type website (their shopping cart is limited in functionality, but ideal for when you are getting started; remember, try to get your site online as quickly as possible, however basic it is, and then work on improving/upgrading it).

The choice of shopping carts is vast; our recommendation is to accept PayPal and, as soon as possible, credit cards using your own merchant account. Both can easily be integrated by an experienced web design company from as little as $500 (you can hire one from either or

Two other options - buying a shopping cart program or getting one through your hosting site - are not for the beginner. These programs are difficult to use unless you are a programmer or are willing to hire a programmer. If you know nothing or little about programming, the other options listed above are the way to go.

When creating your e-commerce site always think about how you can make a consumer's purchasing experience trouble free. After all, if they want to spend their money at your virtual storefront, you should let them do so as quickly as possible.

In Part Six, and final installment of the Setting Up Your Own E-Commerce Website ecourse, we will look at how to continually expand the selling power of your site through promotion, maintenance and improvements.

Constructing Your Website - Setting Up Your Own E-Commerce Website Part 4 of 6

the actual creation of your website may be your most intimidating area. Learning to work with web design software or with a team of web designers takes time and, unless you are particularly familiar with computers, software and design, it can be overwhelming. It is certainly possible.

Static or Dynamic Pages

An e-commerce site can be created using static or dynamic pages.

With a static page site (a brochure type site) you will need to manually create a page for each one of the products you offer (for example,,, etc).

You will also need to transfer each page to your hosting package every time you want to add a new product or page to your website. This brochure type site is easy to setup, and is the perfect starting point to buy you time to create a more complex, dynamic site. However bear in mind a static site is not a professional solution, it is time consuming to maintain, and will limit your growth potential.

Static websites can be programmed using only HTML (HyperText Markup Language). HTML is a very simple language to learn, and is written in the form of labels (known as tags) which define each element on a page. You can find some very good tutorials on html at

With dynamic pages however, you only have to create one page for each main section of your website. Each main page will interact with your database to display, for example, products dynamically (an example of a dynamic product page is The actual file name is product.php (the file product.php?productid=15 is not a file, it's a file + instructions on what to display within that file). The value 15 corresponds to a product in your database. If I want to view product 79 on your site, I would then simply change the url to Product.php is still the file, the only difference now is that it is requesting the details of product 79 from your database.

This type of setup is much more efficient to manage, and will always pay off by reducing your administrative costs and providing enhanced functionalities for your visitors.

If choosing a dynamic pages setup, the most popular programming languages available to you will be:

  1. PHP (which requires Linux hosting as discussed in part 3). You can find some useful tutorials on learning PHP at

  2. ASP (which requires Windows hosting as discussed in part 3). You can find some useful tutorials on learning ASP at

How to Create Your Website

Once you have decided whether to opt for a static design or a dynamic design, and you have chosen which programming language to use, there are three ways you can begin building your ecommerce webstore:

  1. Do-it-yourself using web design software.

  2. Use off the shelf content management software that you can fill in with appropriate images and copy.

  3. Hire a web design company to customise an off the shelf package or build your website from scratch.

The first choice involves the most time, while the third one will usually cost the most. Before deciding what to do, consider the following:

  • How much time realistically will it take you to create the site on your own? Do you have the knowledge required to complete the task on your own?

  • How much money is your time worth?

  • How much money will you have to spend on design software? (A basic editor costs around $35.00, Frontpage is often included free with your hosting package, whereas a more advanced editor like DreamWeaver can cost up to £400.00).

  • How much will it cost to have my ecommerce site designed by a web design company? (A rough estimate is around $1,500 for a customised version of an off the shelf website, and between $2,000 to $4,500 for the first version of a website customised to your exact specifications).

Once you know these answers, and considering your skill level, other time commitments and how much your time is worth, decide if you should actually design your site on your own.

Whichever option you choose, start by creating a simple storefront that you can expand once it's up and running.


There are various choices of editing software you can use. Your provider may also offer tools to create your site. Editing Software is available in two basic versions - text editors (like Notepad, MS Word and Editplus) and "What You See Is What You Get" (WYSIWYG) editors like DreamWeaver. Prices for both kinds range from free to several hundred pounds/dollars.

Text editors require knowledge of the programming language you choose to use. If you don't know HTML, PHP or ASP, there will be a learning curve to familiarise yourself with the languages.

WYSIWYG editors are easier to use because they create the code for you based on drag and drop actions. However the final code will be bulkier than normal, unless you have knolwedge of the language you are coding in and know how to clean it up afterwards.

Another option to consider is using tools available through your hosting provider. Many providers offer web design tools that are easy to use and inexpensive. One of the most popular programs is Microsoft Frontpage, which has a wealth of online support, including forums( and tutorials( It's not the easiest program to use, but it's also not the most difficult.

If you are going with web building software, look for one that will allow you to get a basic site up and running in about 10 hours, that is flexible, and that has its own publishing feature, which means you won't have to learn about how to transfer files to your web space. Frontpage offers all of these features.

Going the do-it-yourself route involves time, but it is also the most economical option. Once your site is designed, you will need to transfer the files to your server space. You usually do this using File Transfer Protocol (FTP). FTP software costs around £20. A program like Frontpage does not require FTP.

Pre-designed Templates and Off The Shelf Software

Using pre-designed templates and "point and click" software will lessen your choices and make your site look like other websites, but it's probably the fastest way to get a dynamic pages ecommerce store online.

This is actually a good choice if you are interested in creating your e-commerce site yourself. Popular options include (eSources has partnered with to bring you an exclusive offer: A totally free PayPal enabled ecommerce store with up to 50 free product slots; have an ecommerce site ready in minutes, already designed for you, transfer an existing domain name free of charge, and accept PayPal, Google Checkout, and credit/debit cards directly from your site), OS Commerce( and Zen Cart( (which are both free!), and Monster Commerce( for a more managed solution (at a price).

Be aware that the main problem with off the shelf templates and software packages is that your website will most probably look like many other websites. Hosting providers usually offer another option - a storefront builder program. With this type of program, you will create a site that looks less like all the others. There's an additional cost for using a storefront builder program.

You can also find free website templates at this link( (you can use the free design you find or use them to provide you with the inspiration to create your own design). Or you can hire a designer from,, or the Sitepoint Marketplace to design your very own website's look and feel (this will cost around $400 to $1000 depending on the designer).

Contracting a Web Designer

The third option is to contract a professional web designer. This can be expensive, but it can also yield great results while allowing you to focus on your business. You could quickly self-design your site using pre-designed templates, get it up and running as a static stie, and then use a web designer to create the dynamic storefront of your dreams.

You have various choices when it comes to hiring a designer:

  1. Go local, which allows you to meet face-to-face with the designer. This option can be the most expensive.

  2. Find a designer using an outsourcing site such as or These sites have freelancers from around the world and can be cheaper than going with a local company. Providers from Pakistan, India and Russia tend to cost the least. Providers are rated by past clients and bid competitively.

  3. Do an online search for web designers. This will also connect you with companies around the world, but it offers less control than a site like or

Before contracting with a designer always:

  • View their design portfolio.
  • Have them describe their process.
  • Find out how they will communicate with you.
  • Produce a very detailed specifications document containing all the work you require, site look and feel, functionalities. Take the time to compile this file, as it will help you identify key features you would like to make available to your buyers + it will legally bind the design company to complete all the features mentioned within the document.
  • Determine if they can meet your timeline.
  • Find out if they will outsource your job.
  • Finalise a total cost for the full completion of the project.

Don't let price alone determine which company you choose. Cheap may be appealing, however make sure that the company you hire in the end is capable of meeting your expectations.

In our next installment on creating your own e-commerce site, we'll look at three simple factors that can help determine the success of your ebusiness: product availability, payment options and shopping carts.

Dec 18, 2008

Selecting a Hosting Company - Setting Up Your Own E-Commerce Website Part 3 of 6

in the previous section of this e-course on setting up your own e-commerce website we offered guidelines for selecting and registering your domain name. Part Three of our e-course focuses on web hosting and what you should look for in a hosting provider.

A web host provides space on a server (a server is simply a high performance computer), located in a hi-tech data center, directly connected to the Internet through very high bandwidth connections. With this setup, web hosts allow individuals and businesses to make their website accessible via the world wide web.

Through an online search, you will find thousands of hosting companies from which you can choose. There is however one important element to consider: always try to select the provider closest to your buyers. If you forecast that your buyers will be mainly from the US, select a US hosting company.

Most domain registrars offer to be your web host. For around £132.00 per year (that is £10.50/month) you can purchase a shared hosting package from 1&1 UK with: no minimum contract; 4 gigabytes of web space; 40 gigabytes (GB) of monthly transfer; 1 free domain; 2 databases (very important for ecommerce sites); telephone, email and online support and more. Large companies often have the most competitive rates and innumerable services, 1&1 and GoDaddy are two such companies we strongly recommend for startups. Rackspace should be considered by UK businesses with a larger traffic and sales volume (Rackspace's cheapest option is around £300/month, but the service is impeccable).

When selecting a hosting package, be aware that you will need to choose either Linux hosting or Windows hosting. Linux hosting is generally cheaper, and is used for PHP (an open source programming language) based sites, whereas Windows hosting is used for ASP and .NET (both Microsoft® proprietary programming languages) based sites. We recommend you opt for Linux hosting (because PHP programmers are generally less expensive). More advanced users will be aware that both PHP and .NET are equally powerful programming languages, and that neither will leave you short of options when thinking of expanding the functionalities of your e-commerce store.

What You Need

One thing to be aware of is the tendency of all of these providers to offer much more than you require. Companies will charge additional fees that can add up quickly as you add options.

Here are the basics that you'll require:

  • 100 MB of disk space.
  • 2- 3 GB of transfer per month.
  • At least 1 e-mail account.
  • E-mail forwarding accounts.
  • E-Mail autoresponders.
  • E-Mail aliases.
  • At least 1 database.
  • 24/7 support.
  • Frontpage support (if you're using Frontpage to build your site).
  • Daily backup.
  • 24/7 File Transfer Protocol (FTP) access. FTP is used to transfer data from one computer to another over the Net.
  • No minimum contract period (this will allow you to expand later on as you grow).

For the first few months, there is no need to purchase an expensive plan. You can always upgrade when you need more space and more services. Don't waste your money on features that you won't utilize. When you find that you need something, you can always purchase it later.

Additional features might include:

  • Protection of e-mail from spam and viruses.
  • Secure certificates that let clients know that you are protecting their information (known as SSL certificates: a good inexpensive SSL certificates provider is Comodo).
  • MySQL, which is an advanced database management system using Structured Query Language (SQL).
  • Authenticated Simple Mail Transfer Protocol (SMTP), allowing you to access your e-mail anywhere in the world.

Before selecting a web host be sure to:

  • Tour the web, comparing various providers.
  • Ask friends and colleagues about their providers and what they like and don't like about the company and service.
  • Be sure to purchase a package that will cover your business needs. You can always add more space and services later.

When you first start considering providers, you may be overwhelmed by how much is out there. Use this part of our e-course as a guide, take some time to consider what you need (don't purchase services impulsively) and select a provider with which you are comfortable.

The next installment of our e-course takes you through the process of creating your site. Part Four also offers advice concerning contracting a company to create your online store.

Choosing and Registering Your Domain Name - Setting Up Your Own E-Commerce Website Part 2 of 6

welcome to the second installment of this 6-part ecourse on setting up your own e-commerce website.

In this second installment on creating your own online store, we are going to give you some tips on selecting your domain name and let you know how to register it.

What's in a Domain Name?

The main thing that should be in a domain name is simplicity. Choose a domain name that is easy for people to remember. Do not include hyphens or numbers in your domain; both are tough to recall. Also, people are most familiar with .com and (for a UK audience). So try to use either of those suffixes.

The name should not be overly clever. If you create a domain name that's a great inside joke to you and your friends but no one else can retain it, you will not be well served. It's not a good sign if you have to tell people how to spell the name.

Domain names should be:

  • Short - one word or a quick phrase.
  • Understood when heard once.
  • Able to be spelled when heard.

Using the name of your company is best. If that name has already been taken, then try creating a domain that describes what you sell. Perhaps you sell bakeware; then try or (where keyword is any word that is, in the mind of the buyer, closely related to your business). To find out what buyers search for, you can use keyword research tools like the one found at

Hint: if you are creating a new online company come up with the company name, and before finalizing it, see if it is available as a domain. If it's taken, then try to come up with another company name and search that as a domain. It's best if your company name and domain name are the same.

Registering Your Domain

Registering your domain name is relatively easy, fast and inexpensive. You use a registrar that has been granted a license to register domains. Depending upon which registration service you choose, prices vary. Some will argue that registering your domain name for a period longer than 1 year will be beneficial to your future search engine rankings. This is in part true, however as a start up business we realise your budget may be limited. For the best value for money for UK domains we strongly recommend 1&1, which offers both domain registration and hosting (more on hosting in part 3). They charge only £4.99 for 2 years for domains, and £8.99 for .com domains for 1 year. For a US host a very good option is GoDaddy.

If you decide to choose a different registrar, bear in mind the following criteria:

  1. Find one that's relatively inexpensive.
  2. Use a service that has a site that's easy to use.
  3. Make sure that once your domain is registered, you can easily access it, change your account information and sell or transfer the domain.
  4. Choose a provider that offers over the phone support 24/7.
  5. Do not decide to pay less if you must sacrifice ease of use, access to your domain or 24/7 support.

If you put "uk domains" or "domain registration" into a search engine, you'll find many companies offering these services. Always take time to carefully research these providers, making your choice based on the criteria above.

Part of a registration company's service is a free instantaneous search to make sure no one else is using that domain. Within seconds of putting in your preferred domain and clicking search, you'll be told if it is available and given the opportunity to register it. Or you can use for more in-depth information on any domain.

Creating a domain name that is short and easy to recall is essential. This will help people remember your company, making it easy for them to return to your site without needing to first find you on search engines or marketing material. A return visit is priceless because it often implies an intent to buy. Creating your domain using the name of your company is preferable.

In Part Three of our series on setting up your own e-commerce site, we'll determine what services you should expect to get from your hosting company.

Dec 17, 2008

Introduction and Five Essential Elements - Setting Up Your Own E-Commerce Website Part 1 of 6

welcome to the first part of this 6-part e-course on building your own e-commerce website. Establishing a solid e-commerce website can grow your business or be a great way to create a new retail establishment. In this six-part e-course, we will take you through the steps of creating a virtual storefront.

Below is the schedule for this e-course:

  • Part One: A look at the five elements that go into a successful site - navigation, displays, readability, informative copy and ease in purchasing.

  • Part Two: How to decide upon a domain name and register it.

  • Part Three: What to look for in a hosting company, which will serve as your web host.

  • Part Four: Should you construct your own site or hire a company specialising in web design? We examine how to create your retail site.

  • Part Five: The three major components that generate quick sales and return customers - product database and availability, payment options and shopping carts.

  • Part Six: A consideration of the continuing development of your site, including promotion, maintenance and improvements.

The Essential Elements

There are five key aspects that you must pay close attention to when constructing your site. In order to give your business optimum sales potential be sure to carefully consider and plan the following elements.


You want your potential customers to be able to easily get around your site and find what they want. Your online store needs to show numerous items at once, while giving visitors the option to simply "click" and get more in-depth information on a product in which they are interested. Allow your customers the chance to browse and enjoy your products.

You should visit as many different sites as possible, including those run by your competitors. Analyse what makes each site attractive, and what aspects can be improved. Plan your site accordingly by designing mockups in MS Paint, Photoshop or on paper.


People want to see what they are buying. Depending upon what you are selling, offering various viewing angles of a product can be enticing. Items such as jewelry, furniture and antiques are much more appealing when seen from various angles.

Set up your displays so that related products are included. If you're selling candles, include appropriate holders. Winter coats might include coordinated gloves and scarves. Layout is important.


Like display, this is also a function of design. With readability, you're considering how easy it is to actually see your descriptions and instructions and how crisp and clear your images are. If a visitor can't read about your product because the typeface or photos are too small or faint, they will get frustrated and leave without purchasing anything.

Written Information

Product descriptions should be well written and interesting. Along with providing basic information about your products (the features), it's effective to let the visitor know what an item will do for them (the benefits). Use words to connect your products with your customers.

Directions on ordering merchandise, return and exchange policies and customer service should be easy to read and understand. A telephone number for customer service can help create confidence in your site and generate more sales.

Ease in Purchasing

Make the process of buying something as easy as possible. One of the major selling points for any Internet business is the fact that shopping online makes life simpler. If a customer has to go through five or six web pages before a sale is complete, they may just give up. It should take no more than three clicks from one page to another to make a purchase. The software you choose for the purchasing process will determine how long it takes to buy something. Carefully research your options, making sure that you choose software that's simple to use but that still has sound security features (more on checkout options in part 5).

Paying attention to these five elements will aid in the success of your online store. Take time to research sites that are consumer friendly and then weigh your choices. Making your virtual storefront fun and easy to use is a great way to begin your planning and will be handsomly repaid by higher sales once your site is live.

In Part Two of this e-course, we will consider how to choose your domain name and the process of registering it.

Customer Relations and Problem Resolution - Drop Ship Your Way To Success Part 5 of 5

welcome to the fifth and final part of this 5-part e-course on dropshipping and how to use it to your advantage. Step 5 involves building a positive relationship with your client.

Drop shipping is a wonderful, relatively simple way to make money on the Internet. However, you can only make money if you can sell the merchandise you are offering. In Section IV we talked a bit about the special issues of product promotion with drop shipped goods. Now let's look at how to work with your customer and, in particular, how to be sure that your customer is satisfied even when you do not control the supply chain.

Customer experience on your website

This is your expertise. Be sure that your site is designed to catch people's interest, the text speaks to their needs in ways that make sense to your target market and the pages are easy to navigate.

Product Information

As we discussed in Section IV, your pictures should be crisp, detailed and, if possible, depict your product in the right setting.

Product descriptions should give all the necessary information to make a decision about buying the product. For example:

  • If you are selling clothes, be sure that you have a size guide. Clothing sizes should be fairly standard but they are not. You may want to add a screen that matches measurements to sizes. Or, amend descriptions to say, "generously sized" or "made for a smaller frame; if in doubt, order the next size larger."

  • Provide dimensions, weight, material used (is that figurine resin or ceramic?) and any other defining characteristics.

  • If your product is a consumable, made for children, needs to be used with caution, etc, be sure those issues are addressed, For example, "no peanut products involved in the preparation of this product" or "Small parts - not suitable for children under the age of three."

  • If you are importing goods, be absolutely positive that the merchandise meets all relevant safety standards in the customer's location.


Your ordering process should be easy to use. Be sure that your customer can move in and out of their "shopping basket" to look for more goods, decide on shipping options and so on. Many resellers lose customers at this point, just when they're ready to buy, because the ordering process is cumbersome. Remember, you are probably not the only vendor selling these products. Customers who place a high value on ease of use will pay a higher price elsewhere rather than wrestle with a bad ordering system.

Shipping Options

Explain the shipping options clearly. If you are using a variety of distributors, there may be several separate shipping charges that add up to more than your customer is willing to pay for shipping. You should either negotiate the same rate with all your suppliers or create an ordering system that accommodates S&H calculations using a variety of different structures. It's a sticky problem that you will have to solve the best way you can, given your particular circumstances. As we emphasized in Section III, keep your suppliers to the minimum needed to conduct your business.

Shipment Tracking

Be sure that both you and your customer receive tracking information as part of the supplier order confirmation process. Even if the customer can do the tracking, you want to be able to answer the phone and speak authoritatively about the status of the package, just as if you shipped it yourself.

Complaint Resolution

Some drop shippers also handle complaint resolution directly so you are truly out of the loop. Yes, that means no hassles for you but it also means that you don't really know if your customer is satisfied with the transaction. If you plan to build your business on repeat customers, you need to be absolutely sure that your customer is satisfied. One way to do that is to handle customer complaint resolution yourself. Another is to monitor supplier performance on a regular basis.

  1. Become a "mystery shopper" on your own retail site. Order a product to be sent to a cooperative friend. Track the order to monitor delivery time. Inspect the packaging to make sure it matches your agreement with the supplier. Inspect the merchandise to be sure that you and your customers are getting exactly what you have sold them.

  2. Pose as a customer and call with a problem. Evaluate how well you are handled.

Out of Stock, Back Orders

One of the most frequent problems with drop shippers is a delay in shipping because they are out of stock on an item. Unless your drop shipper offers real time inventory reporting, i.e., when the customer selects an item to purchase through your site, their electronic inventory is searched to assure that the item is available, there will be a delay in feedback about stock outs. If real time inventory reporting is not available, your customer will place an order with you and make electronic payment. The out-of-stock notice will come after you place the order with the supplier. To make this unpleasant situation easier, use the following approach:

  1. Be sure your supplier sends an immediate confirmation to you and the customer.

  2. Communicate with your customer immediately upon discovering an out of stock or shipping delay situation. Offer options such as money back or substitute item.

Delays and out of stocks happen, even with large suppliers. Your job is to manage the situation with your customer to make a difficult situation bearable.

What have you learned?

By the end of this section, you should know:

  • Effective communication is the key to good customer service; communicate about products, about policies, about concerns.

  • Make sure your website is easy to use.

  • Don't let the supplier substitute their relationship with your customer for yours; that relationship is the lifeblood of your business.

You are now in a great position to take full advantage of dropshipping. To gain access to the internet's largest directories of UK dropshippers and international dropshippers visit our website at

Dec 15, 2008

Logistics of Drop Shipping - Drop Ship Your Way To Success Part 4 of 5

welcome to the fourth part of this 5-part e-course on dropshipping and how to use it to your advantage. In Step 4 you need to set up your supplier relationship and work together to incorporate the products into your business. You have now selected your suppliers. It's time to put the relationship to work.

Set Up Logistics

Set up an account with the drop shipper.

Supplier requirements vary but most drop shippers will ask you to fill out an online or paper seller application. Be prepared to give your company or business ID number (for the UK you can use dropshipping without having a company, whereas most US states and provinces require some sort of business identification number), your formal business name and, possibly, a reseller's certificate or evidence of VAT or VST registration. The need for the reseller's certificate or VAT/VST registration is essentially to prove to the supplier that you are a legitimate retailer who should not be charged sales tax or whose VAT or VST tax can be reclaimed, so it is advantageous to be registered for VAT. (Do you know enough about sales or consumption taxes? If not, brush up on these important responsibilities by taking our country specific company formation ecourses.)

Authorised Dealer Agreement

Your supplier may ask you to enter into an authorised dealer agreement (ADA). This type of agreement spells out the products involved, pricing and any other charges, supplier or manufacturer requirements for how you handle the product, dispute resolution, etc. Most of these issues are the typical components of a contract. The special area in an ADA involves product handling requirements. Examples of these special requirements include:

  • Only approved product descriptions are published on your site to ensure that there are no false product claims.

  • You may not sell for less than the purchase price to be sure that you do not undercut other resellers.

  • You may not sell to overseas buyers in order to avoid customs issues.

  • The supplier may not contact your customers except regarding the status of a particular order, e.g., no "special offer" advertising.

A proper agreement should offer protections to both parties.

Establish the payment method

As we explained earlier, the shipper may bill you as each item is ordered or may agree to bill you monthly.

Establish the mechanism for transmitting order information

Many drop shippers offer the ability for a direct link to their site to place order information. With many dropshippers you can build your site to incorporate the link into your own ordering page.

Establish a payment collection method for your business

Your website will need to include a method for accepting payments from your customer. Please review our setting up your own ecommerce website for useful information on available options.

Incorporate the drop shipper's transaction procedures into your site

Be sure that you have carefully identified shipping options, return policies, shipment tracking availability, complaint resolution procedures. If you are buying from a number of suppliers, you may run into the problem of differing policies. If possible, negotiate a set of standard practices across all suppliers.Your ability to achieve that level of standardization will depend on the size of the supplier, the volume of product you sell on their behalf, etc. If you find yourself needing to accommodate differing policies, be sure you communicate those policies to your customers on an item by item basis.

The final logistical step involves incorporating product information onto your site. This step is so key to selling success that we will discuss that process separately.

Product Incorporation

In almost every case, you will be placing pictures and descriptions of products onto your site. That information will come from your supplier. Unfortunately, not every supplier is as good at product promotion as we want you to be so you may have to take some additional steps to be sure that the products you intend to sell are presented in the most appealing way. Here are some tips.

  1. Evaluate the product picture quality. Resolution should be at least 300 dpi to be usable. If images are fuzzy or not high quality enough, spend the time and money to order samples of all the products and have your own pictures taken. After all, your customer can't visit a store and touch the product - the only way they can evaluate your product is by looking at the picture. Don't shoot yourself in the foot with poor quality photography.

  2. Look beyond technical quality to the setting of the product. Yes, you may want a close up, detailed image of those handmade African beads against a plain white background. But, you should also place those beads in a setting that allows the customer to envision how they could be used, in a beautiful hand-crafted necklace or making a striking statement as the edging on a tablecloth with colors that bring out the richness of the beads.

  3. If you are selling a product where dimensions are important, such as a lamp, use a photo of the lamp in a proper living room or bedroom setting so your customer can see how the scale of the lamp fits with a standard sofa or bed.

  4. If you can't afford professional photography and/or photo styling, you may be able to improve the selling value of a photo by using a photo editing program. For example, you might superimpose pet accessories on a photo (that you own the rights to) of a comfortable family home with Fido frolicking or waiting expectantly for dinner with that hand painted ceramic bowl prominently inserted in front of him.

  5. Be sure that product descriptions are accurate, do not contain any typos, etc. If you feel that the descriptions can be made better, work with the supplier to make changes. Be sure your supplier agrees with any new wording.

Product Promotion

Remember, when you use drop shipping, your selling advantage is not only in the pricing deal you've achieved but also in your ability to reach your market and convince them to buy. This e-course doesn't cover the enormous area of Internet marketing. However, you may want to check out our other ecourses at this link.

What You Have Learned

By the end of this section, you will know:

  • The step-by-step process for setting up a drop shipping relationship with special attention to the issues that should be discussed and agreed to between you and your suppliers.

  • The issues you need to address on your site with special emphasis on communicating policies clearly.

  • The value and importance of well-staged and produced photographs of your product.

In Section V we move our focus from your relationship with the drop shipper to your relationship with your customer.

Selecting a Supplier - Drop Ship Your Way To Success Part 3 of 5

welcome to the third part of this 5-part e-course on dropshipping and how to use it to your advantage. In Step 3, you need to select a supplier or suppliers for your products.

As we illustrated in the Basics discussion, the best supplier may be the manufacturer because you will not need to pay the markups of wholesalers and distributors. However, manufacturers may be focused on production and not interested in or capable of taking on the fulfillment function. The wholesaler or distributor may be considered a "middle man" but they play an important and useful role in connecting manufacturers to buyers. If the manufacturer of your product does not work with individual buyers, ask which of their wholesalers or distributors offer drop shipping.

Locate possible suppliers

There are many ways to locate possible suppliers for your products. We'll describe a variety of options then give you our recommendation for the most effective method of finding suppliers.

  1. If you know the products you want to sell, find out the name of the company that manufactures the product and inquire about their willingness to sell to you on a drop ship basis. If the company does not operate that way, ask if they have a wholesaler or distributor who might strike this type of relationship with you.

  2. If you know the type of product you want to sell, but do not have a specific manufacturer in mind, you can try Googling the "product + drop shipping". This method should yield some possible candidates for a drop shipping relationship. However, it's a real challenge to make individual contacts and evaluate all of those suppliers, plus you are much more likely to run into middlemen.

  3. You can buy drop ship distributor lists, sometimes very inexpensively. However, in our experience, you get what you pay for when it comes to cheap lists. These lists are often not updated regularly so you may find that contact or other information is not accurate. Our advice - simple lists and directories aren'y usually worth the money or the effort to use them.

  4. Go to trade shows or scan trade publications. Drop shippers want your business. They are looking for you through matching services, directories, ads in trade publications and exhibits at trade shows. You'll never find each other if you're not looking in the right places.

  5. You can use a matching services such as eSources offers buyers an opportunity to announce their need for a drop shipped product and for sellers to describe their products and their terms of sale.

Our advice is to use matching services such as ours (there are also good alternatives available, however watch out for cheap wholesale lists, they are not worth much at all). Here's why you should choose a matching service such as

  1. Suppliers are vetted, information is constantly updated and monitored.

  2. You will find suppliers who may not be savvy enough to get their websites noticed by search engines but who have indicated they are looking for new business.

  3. You can view dropshippers by accessing specific categories, such as our UK dropshippers and International Dropshippers categories. This way you can deal directly with those suppliers that are prepared to deal with you on a dropship basis.

  4. You can announce your needs so that suppliers who can meet your needs will solicit you, creating a highly targeted group of supplier candidates to explore.

Once you have created a short list of candidates, begin the evaluation process.

Supplier Selection

Explore these issues as you go through your selection process.

Supplier Location

Although it would make sense to say that it should make no difference where the shipper is located, there are some issues to consider.

If your target market is in Canada, you may want to locate your suppliers in Canada since many shippers do not want to deal with the hassle of customs processing. (If your goods are low cost, they won't meet the threshold for customs declaration so this may not be an issue. However, it pays to sort out international delivery issues upfront.)

If you are having products shipped into the U.S. or any European Union country (and many others countries as well), those products must meet stringent standards for safety, etc. Be sure you know the rules that apply to your product. (You can learn all about importing by selecting one of our country-specific importing courses or our course on importing strategies.)

Company History, Reputation and Service

Ask about the history of the company. How long have they been in business? Google the business name plus complaints or reviews and see if there are any negative reports about them floating around on the Internet. If so, either move or at least ask the company to explain their side of the story.

Consider the professionalism of this staff. Are your questions answered in an informed and straightforward way?

Product quality

This is absolutely critical! Do you know that there are many ecommerce resellers who have never seen the product they sell? Don't rely on a picture or a description. Order a sample and be sure that the quality is up to your standards.


What price will you pay for the item? Are there other charges that apply? Beware of suppliers that ask for a monthly "membership" or "participation" fee. These are often scammers. Legitimate drop shippers make their money on a per piece basis. There are a few exceptions to this rule, however generally you should stay away from dropshippers that charge a fee to join their dropshipping service.


Drop shippers work in one of two ways. Either they will bill your company credit card for each individual purchase or, in some cases, they will bill you on a monthly basis. If you can arrange monthly billing, you may be required to supply a letter of credit. In general, payment should not be an issue because you will collect payment from your customer before you place the order with the shipper.


Ask your supplier if they require a minimum volume of monthly sales to maintain an account. The minimum monthly quota should be a nominal amount; it should cover the administrative cost of carrying your account; nothing more. Be sure that you will be able to meet the quota.


Ask about inventory levels and arrange for real-time inventory reporting so you can quickly advise your customers of any stock-outs or back order situations.


Be sure that:

  • The supplier uses a reputable transport firm such as UPS, FedEx or the postal service.

  • Your shipments to your customers will always have a tracking number so they can be traced.

  • The shipper will include the tracking number in their order confirmation.

Ask about the option of placing your name on merchandise or at least on the shipping package. There's great value in keeping the source of your products a secret from consumers; you don't want them to bypass you and go directly to the source (if that's possible). One of the hazards of tracking numbers is that the tracking number reveals the source of the product. You can handle this problem by referring to the shipping origin address as your remote warehouse location.


Be sure you understand and can live with the dropshipper's refund policy. You will need to make this policy clear to your customers. If you don't and there's a problem, you may find yourself underwriting refunds.

Avoid Scammers

We've touched on several of the red flags that may indicate a situation to avoid. They are worth repeating along with a few other cautions.

  1. Avoid companies that want to sell you a list or directory of distributors at a low price; they're usually not worth it. Plus, everyone else will be buying those lists and accessing the same deals.

  2. There are a number of legitimate, large scale drop ship companies that advertise a huge inventory of items to choose from. However, some of these maga dealers may simply represents products, essentially the same way you do. When you transmit your drop ship order, this middle man company transmits the order to the true supplier. The result? One more fee to increase the final selling price of your product. Ask your supplier candidate if they actually stock the products you will be purchasing in their own warehouses;

  3. Beware of companies that offer you package deals with web presence, payment system, distributor lists, etc. These deals can be so costly that you will be hampered in making a profit.

How many distributors are too many?

The fewer suppliers you use, the better. More suppliers means more differences in shipping charges and return policies as well as more management responsibilities for you. Every business is different. Try to use the fewest suppliers possible to support your business needs.

What have you learned?

By the end of this section, you should know:

  • How to locate possible suppliers for your products with the recommendation to use a matching service.

  • How to evaluate suppliers.

  • How to recognize red flags that can mean a problem supplier.

  • That your best strategy is to work with fewer suppliers, if possible.

Terrific! In part 4 we will look at how to establish a relationship with the drop shipper and incorporate their products into your business.

To our success working together,

Dec 14, 2008

Google Search-based Keyword Tool Review

Keyword research is one of the most time-consuming and often frustrating parts of using an ad campaign on Goggle AdWords. Putting together all of the data – from rates to search density to everything else – can be daunting. To further complicate things, once you’ve found a good keyword it can be challenging to find other relevant keywords to accompany it.

Google’s new Search-Based Keyword tool ( attempts to deal with that problem. The purpose of the tool is to look specifically at your site and offer new keywords ideas relevant to your site. It offers these keywords based on searches from Google over the last 12 months, so we’re talking about a solid history of data from which to work.

This tool helps site owners by giving them search query data that’s specifically relevant to the content on their site. In short, it provides site owners a way to take advantage of many advertising opportunities that otherwise have been missed.

Google’s Search-based Keyword tool is also useful if you’re not yet advertising on AdWords. You can use the tool to do research to find relevant keywords. An online pet supply store might use the tool to discover what sorts of pet amenities and accessories people are searching for online. If you run an MP3 player review blog, you can use the tool to identify what brands and models of MP3 players people are searching for, and focus your reviews in that direction.

One of the more exciting features of this new tool is the suggested bid data. What the tool does for you is to, for every search you make, make suggestions on specific landing pages on your site that seem to be related to that search. The tool then also offers a suggested bid amount that should be sufficient to get your ad into the top three spots of a search page for that keyword.

Like so many of the best Google tools, the Search-based Keyword Tool is currently in Beta. The good news about that is Google is still open to suggestions at this point. If you’ve ever struggled with keyword research, give the new tool a try and see how it does for you, then let Google know what they can improve.

PS - You can also check out the Google Blog for more info on this tool

From: Review of Google’s Search-based Keyword Tool

Developing a Product Strategy - Drop Ship Your Way To Success Part 2 of 5

welcome to the second part of this 5-part e-course on dropshipping and how to use it to your advantage. In Step 2, we discuss how you need to analyse your market and select products that you can successfully sell.

If you are already in the retail business, you may be thinking, "My product selection is done. I can skip this section." Well, you are right that you have already made your decisions but, every business owner should, on a regular basis, step back and look at how well they are doing, how they can improve or expand and how well their overall business strategy is working. This section is all about matching products to market and pursuing a successful business strategy.

Let's focus first on those who are just starting out and trying to figure out how to get into business or how to expand their Internet business.

Product Selection

The task of figuring out which products to sell on a drop ship basis is difficult to separate from the task of selecting a drop ship supplier; the two tasks operate together. For the moment, however, we'll focus on the product side of the equation.

Narrow the choices

If you truly do not know what you want to sell, you have a big universe of products to select from. It is, of course, possible, to search for any available product at the right price that you can resell. There are certainly plenty of people on the Internet using that strategy right now, but it's not a very good strategy for success. Here's why.

Some wholesalers, distributors and scammers advise you to select items from their enormous catalogs, advertise the items at a marked up price on your website, take orders and payment then transmit to them for fulfillment. (You'll find some of these operators lurking in the "Make $20,000 a month working from home..." ads found throughout the internet.)

And ... there are many, many get-rich-quick wanna be entrepreneurs doing just that. If you follow that strategy, you will be competing with hundreds or thousands of others being supplied with the same products at the same wholesale price. That's an uphill battle. Plus, if you are choosing products based only on the possible markup available, you may not know enough about your marketplace to sell that product effectively.

If you are just entering ecommerce, take the smarter approach and narrow your choices a bit more. For example, you may prefer to focus on medical products because you have a medical background or you have an excellent on-line market niche through your participation in disease-specific chat rooms. Or you may want to sell sporting equipment because you're a former athlete and now a coach and you can write terrific articles on sports that will draw people to your site to buy products.

Think about your market

Think about a market niche that you believe you can sell to (because you understand the market, you have access to the market, etc.), e.g., soccer moms, the elderly, people who travel internationally, high income pet owners, people with arthritis. Then think about that market's needs and how you might be able to meet those needs with a product or products. For example, high income pet owners tend to treat their pets like substitute children by purchasing clothing, accessories, toys, gourmet foods, etc. You understand what these consumers want to buy because you used to work for an exclusive pet boutique.

Speaking of markets, it is usually wisest to begin your business by appealing to a defined market niche. It can be difficult to put up the resources to appeal to the general public in the beginning.

Now you know something about the products you want to sell. Next, you need to find those products, available through drop shipping, at a wholesale price that can be marked up and sold successfully at a profit.

Determine wholesale price opportunities

Get a feel for how much you will pay for the product you wish to sell. You will have to contact suppliers and negotiate price. We'll talk more about developing that relationship in Section II.

Do the competitive analysis!!!

This is where the rubber hits the road. In order to perform a competitive analysis, you need to figure out:

  • How much it will cost you to sell the product

  • How you will need to price the product to cover costs and enjoy a profit

  • How your price compares with others selling the same or similar products

  • Who else is selling and how they are doing

  • How you are going to sell this product more effectively than your competitors

If, at the end of your analysis, you believe you can sell this product to your targeted market at the right price and the right quantity to meet your business goals, you're ready to establish a relationship with a supplier!

What have you learned?

By the end of this section, you should know:

  • How to decide which products to sell with the recommendation that you select products for a market you know how to access

  • How to analyze the business case for your product.

In part 3 we will look at the supplier side of drop shipping.

From Esources

Dec 13, 2008

Introduction to Drop Shipping - Drop Ship Your Way To Success Part 1 of 5

welcome to the first part of this 5-part e-course on dropshipping and how to use it to your advantage. Drop shipping, the shipping of merchandise from your supplier's inventory directly to your customer, is one of the fastest growing ways for entrepreneurs to enter the world of ecommerce quickly, without a lot of upfront investment. Drop shipping itself is not a new concept; it is a well-tested approach that mail order companies have used for years to streamline order filling. And, it's perfectly designed to work in the ecommerce environment.

If you are interested in starting or expanding your business by using drop shipping, help yourself to be more successful by taking this course to learn drop shipping basics and get experts' tips on how to use this tried and true technique in your web, mail order or sample shop business.

Steps to Drop Shipping Successe

  1. Determine whether or not drop shipping can work for your business.

  2. Select a product or products that you can successfully sell.

  3. Locate and select a drop shipper for your product(s).

  4. Organize the logistics and incorporate the products into your business.

  5. Establish policies that keep you in charge of the customer relationship; anticipate and avoid problems.

E-Course Organisation

This e-course is designed to help you launch the drop ship aspect of your business.

Section I explains the business of drop shipping and discusses the pros and cons to help you make the best decision for your business.

Section II explains how to select products that will sell successfully. Section III discusses how to select the best drop shipper for your business. Section IV explains how to set up the logistics of drop shipping. Section V explains how to maintain control of your customer relationship.

By the end of this e-course, you will have the information you need to build or expand your business through the use of drop shipping.

Section I - Introduction to Drop Shipping

Step 1 involves understanding drop shipping as a business strategy and determining if it will work for you. Let's begin by quickly reviewing the distribution chain as a way to understand how drop shipping fits into the model.

Traditional Distribution Chain

In a traditional distribution chain, you as the seller (sometimes known as the reseller) purchase an inventory of products from manufacturers, wholesalers or distributors.

  • Manufacturer - the creator of the product

  • Wholesaler - usually provides products to distributors; may sell directly to retail buyers

  • Distributor - works to distribute products to as widely as possible. Purchases from manufacturers and wholesalers

If you purchase from the manufacturer, you pay the manufacturer's wholesale price (MWP). If you purchase from a wholesaler or distributor, you pay the MWP plus the mark-up charged by anyone else in the distribution chain. For example, let's say you purchase from a distributor who purchases from a wholesaler, and that the original manufacturer's wholesale price (MWP) was £10.00 per unit. Below is what you would pay in this example:

£10.00 (MWP) + the wholesaler's markup of 10% (£1.00) + distributor markup of 10% (£1.10) + handling/shipping (£.50/unit) = £12.60/unit.

You maintain an inventory of the product, market and sell it to your customers at a marked up price that will cover your costs of marketing, inventory and so on, for example, £20.00/unit. (£5.00 to cover your costs and £2.40 profit/unit).

You package and ship the product to your customer, charging your retail price plus the cost of shipping and handling. £20.00 + £3.00 shipping/handling. Your profit is £2.40/unit.

Drop Shipping Model

In the drop ship model, you arrange to sell products offered by selected manufacturers, wholesalers and/or distributors.

You do not purchase inventory. Instead, you promote the products through photos and information provided by the supplier and/or by showing sample products.

When the customer orders the product, you collect payment then transfer the order and payment to the supplier who then packages and ships the product directly to the customer, often with your shipping label or other branding.

In this model:

  • You transfer shipping costs to the customer. (You will save £.50/unit; your customer will pay more for single order shipping.)

  • You may be able to reduce your £5.00 overhead costs because you don't need to purchase in bulk, store and handle the merchandise. Say that saves you £1.00/unit.

Now you have two choices. You can either:

  1. Sell the product for $20.00/unit and increase your profit to $3.90/unit ($2.40 profit + $1.00 saved on overhead + $.50 saved on shipping) or
  2. Pass on some of the savings to your customers in order to be more competitive and sell a greater volume of products.

Sounds perfect, doesn't it? Well, you're absolutely right; drop shipping can be a wonderful way to build or expand a business for many reasons. Of course, there are some drawbacks as well. Let's take a look at the advantages and disadvantages of drop shipping next.

Advantages of Drop Shipping

Drop shipping truly offers exciting opportunities, especially for new and small businesses (though many major retailers use drop shipping as well).

  1. You don't need to purchase and manage inventory. In a traditional retail or reseller setting, you purchase enough inventory to be able to fill customer orders as they come in, most of the time. If you are just starting out in business, the inventory costs can be huge. Even if you are established, it may be difficult to afford expansion into a new line or stocking up in anticipation of the holiday buying season or the spring growing season.

  2. You don't need to store inventory. Unless your inventory is paper clips, tacks and staples, you will need to have some sort of storage capability. (Even small items can be difficult because they need to be stored so that they are accessible for the "picking and packing" process.) Storage is one more overhead cost that needs to be considered in your pricing.

  3. You don't have to deal with unsold stock. Most companies try to have enough stock on hand to meet demand. If demand falls short, you have product sitting on your shelves that you need to move in order to either get some return or simply free up cash for the business. Companies often resort to "inventory" or "warehouse" sales, selling at very low prices, sometimes under cost, to move inventory remainders.

  4. You don't need to handle the product. Shipping product requires manpower to do the picking and packing.

  5. You don't need to manage relationships with shipping firms (UPS, US postal, etc.)

  6. You can try out new products with almost no investment. If you are a web retailer, you just put up the new products on your website and if they sell, you make money. If not, you only lose the time you spent putting up new information.

  7. Your customers never have to know that there is a third party involved. Most drop shippers will place your shipping label on the merchandise.

Disadvantages of Drop Shipping

Okay, so what's the catch?

  1. Sometimes your supplier will mark up your products to cover their costs of drop shipping so the MWP price may be higher than the price for a bulk shipment. Usually the savings in your overhead costs more than covers the mark up.

  2. You are not in complete charge of the customer relationship. If your drop shipper makes a mistake, the error will reflect poorly on your company.

  3. You can become more vulnerable to rationing. For example, if you resell gaming electronics and ABC's newest version is selling like hotcakes, your orders may not be filled and you can't do anything about it.

  4. You won't know about quality problems until you hear about them from your customer. When you handle and ship product yourself, you can be certain that the ceramic piece is not chipped or the model includes all of the accessories.

  5. You could lose your customers to the manufacturer who decides to go retail. For example, if a manufacturer who drop ships cosmetics for you decides that, now that it has the name and address of your customers, it can send a reminder to replenish supplies by reordering on their website, you have been cut out of the loop. However, in reality, if a manufacturer chose to do that, they would quickly lose their distribution network and could be in breach of contract with their resellers. So, while customer encroachment is a possibility, it's not likely to happen. And, you will place restrictions in your agreement with the supplier to prevent this problem. (See Section III on Authorized Dealer Agreements.)

Is drop shipping a good strategy for you?

Every business situation is different but there are some general considerations that apply.

  1. Drop shipping is an excellent approach to get into business. This approach allows you to start up with very little capital investment and very little risk. If you are starting out, this may be a great way to test the market.

  2. If your company offers or intends to offer a wide variety of products, wholesalers or distributors are in a much better position to manage many different products; that's their expertise.

  3. If your product demand is highly variable or apt to change quickly with fast-moving trends, you may be better off letting the supplier manage the ups and downs of the marketplace by keeping the inventory on his shelves, not yours.

  4. Is your strength marketing and customer relations? It needs to be; you have essentially outsourced the fulfillment function and your business now depends on your ability to promote products and manage a relationship through third parties.

  5. Does your industry offer drop ship opportunities? More and more industries do.

What have you learned?

By the end of this section, you should know that:

  • Drop shipping differs from the traditional supply chain.

  • Drop shipping offers many advantages such as low costs of entry, reduction of risk and elimination of many overhead costs and elimination of inventory management.

  • There are some risks associated with drop shipping such as loss of control of the complete customer relationship.

  • You should analyse your business situation to be sure drop shipping is the right solution for you.

Now that you understand the business of drop shipping and, if you believe it's a workable solution for you, let's talk about overall business strategy.

From Esources

Guide to dropship marketing

What is dropship?

Drop shipment or drop shipping is a type of retailing where the retailer does not keep goods in stock, but instead passes the customer's order and shipment details to the wholesaler, who then dispatches the goods to the customer directly. The retailer makes their profit on the difference between the wholesale and retail price.

Advantages of dropshipping

Drop shipping can be a very simple and effective way to get started in ecommerce. Many online merchants find dropshipping strategies are good way of minimizing stock holding, decreasing overall shipping costs and cutting down on delivery times to customers.

No need to hold stock

Drop shipping allows web site owners to send single or low quantity unit orders gathered on their web sites to manufacturers, or wholesale warehouses, who in turn ship the items directly to the customers of the web site owner. Typically you take care of the promotion and collect the payment, and the drop shipper looks after order fulfillment.

You buy at a low wholesale price

Drop shippers can buy in huge volumes this means they will be able to offer you the best prices on products and shipping, usually wholesale.

No money up front to buy stock

There's no capital investment, no need to invest in stock and no danger of you suddenly having large stocks you are unable to sell.

You can sell a wider product range without buying stock

Using drop shipping allows you great flexibility in terms of product range. Promote as much or as little as you wish.

No need to worry about inventory and delivery

You can focus on listening to the market and discovering the products your visitors want to buy.

Disadvantages of dropshipping


Don't accept that the first drop shipper you come across will give you the best deal you should shop around.

Drop ship fees and charges

It's important to know all the costs involved so you can calculate your profit margins accurately. Any wholesale company that wants to charge you a regular "participation" fee should be avoided - the only time you should have to pay a dropship company anything is in connection with a specific order.


Is the drop shipper using a reputable shipping company o deliver the goods? Where will they ship to?


Will the drop shipping company automatically debit your credit card on each order you submit, or can you get monthly payment terms?

Support, returns and refunds

The last thing you'll want is to be caught up in a nasty situation where you have a number of returns - and have to foot the bill. Ask the dropshipping company about their returns policy, what kind of support they'll offer you for their products and about any guarantees associated with their products - and get it in writing.


How long have the drop shippers been around for? Do they respond to your requests for information rapidly and professionally? Young dropship companies and wholesalers have the habit of going bust quickly, or growing too rapidly and as a consequence basic good customer service suffers.

Dec 11, 2008

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