19 Nov 2008

Making Money Online is Easy

Image by Knightrider

As of March, 2009, Afghan Scarves has been taken offline. You can read the details here. Although the site was shut down prematurely, it was very profitable for a business started while being deployed.

Approximately 1 month ago, I wrote a post about how to start a tangible online business and mentioned that I would keep you updated on my progress. Well, here we are about 1 month later and I’ve been so busy I barely have time to write this post.

Originally I was split testing two sites, one which was based on an Amazon Storefront, while the other was a simple Wordpress site with a Paypal enabled shopping cart. Initially, I expected that the Amazon store would start out slow but eventually outpace the Wordpress site. Boy was I wrong! It turns out that the SEO capabilities of the Wordpress site blew the Amazon store out of the water when it came to indexing and search engine traffic. Also, the colorful theme of the Wordpress store was preferred much more than the simple and easy to use Amazon store.

I expected that the store that was most user friendly and easiest to navigate would win out, but it turns out that the look and feel of the site was more important than usability. Both sites got equal prep, setup, SEO, bookmarking, and AdWords time and while the Wordpress site started selling immediately, the Amazon store never made one sale!

So, I have ditched the Amazon store (not worth the 60 bucks a month) and now focus all my effort on the Wordpress site. Aside from an early issue with a Paypal button, I have not had any issues with my shopping cart or the order process. Also, I’ve had orders in the range of $15-$200, with the average being approximately $50. I don’t want to get specific in terms of profit margin and ROI because this site is public, but I will say that the venture is working well enough to become my sole effort at the moment, with everything else taking a back seat.

Some things I’ve learned are that pictures are important, put up as many as you can. Also, try to capture the feel of your product in the website theme you choose. Also, as usual, organic traffic is the best converter. AdWords ROI was ok, but my organic and direct traffic was by far the most productive. With my strategy, I was able to get the site indexed in 2 days and started receiving 50 hits per day within a week. Lastly, you need to have a plan for customer service, keeping inventory, and managing shipping. Although I never had any massive problems, I did have to overcome some hurdles since customer service of utmost importance for me. Just make sure you are ready for orders to start coming in and to be able to handle any issues that may arise due to heavy traffic.

One additional strategy that pays off is to take your best selling items and offer them on Ebay as well. This gives you a chance to link back to your site and also get sales you might not have otherwise. With every Ebay order, I offer them a chance to order more from my webstore in order to save on shipping costs. I’d say that 50% of the time, people place another order.

I got part of this idea from an extensive course offered by my friend Chris Guillebeau, entitled The Unconventional Guide to Working for Yourself. During part of the course, there is a great audio session that gives you 24 immediate ways to make money online. He mentioned a simple way to make money that I hadn’t thought of, and instantly the light bulb in my head went off. After that, I was off and running with my idea. I talk about Chris often because of his persistence and dedication to changing the world, but if you haven’t heard about him or read his blog, you can check it out here: The Art of Non-Conformity.

Honestly, although I expected the business to pay off long-term, I did not expect it to take off so quickly. I am almost reminded of how Tim Ferris (of 4 Hour Workweek Fame) got his business started selling Brain Quicken. Now, if I could only find a cheap way to outsource the order prep and shipping, I would have something ready to scale. As it stands now, inventory, order prep, and shipping are the 3 greatest concerns of mine when it comes to scalability. I’ve got a few ideas in mind and I will keep you informed on the progress of that part of the project. In the meantime, get out there and make something happen, I am living proof that it can be done.