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Case Study #1 : E-Commerce #2 with a $500 investment

Brief Intro Summary

I plan on creating a new E-Commerce Site #2 which I thought of in the past but happen to notice the subject once again. I thought about this idea about 1 year ago. It’s not an original idea which I created but it’s a copy off of an existing idea.

I decided that the initial investment cost to get this E-Commerce Store up and running would be less than a $500 investment.

Case Study #1 – Related Articles

  1. 01-16-2016 – Case Study #1 : E-Commerce #2 with a $500 investment

Lessons Learned from 2015

  • Create more proven and tested systems. I can learn more from actual tested and proven techniques to increase revenue and profits for my websites turn around and mimic those techniques on my other websites.
  • Run more case studies, test studies and experiments. I need to read other entrepreneur’s tactics and techniques and test them myself to create official case studies, techniques. I also need
  • Automate your business processes, especially daily operations. Hire a main guy to focus on customer support, emails and sales on a daily basis. Focus with automated order fulfillment in mind.

The Game Plan

The Goal

The goal is to invest the $400-$500 into the actual product and turn this E-Commerce Site #2 to a business which generates $1 to $15,000 per month. It should be about 90-95% automated and I shouldn’t have to focus much time on it.

The General Plan

I plan on starting a simple e-commerce site with Shopify for a 2nd website. The concept is simple and I plan on starting with one product first.

The Product

This product isn’t currently being wholesaled and I can’t private label it. The current competitors seem to have to make the product. Although, it doesn’t take a long time to create. Really simple.

The Investment

The starting investment will be for the product materials which are low cost. I should only spend about $400-500 for about 100-150 units for a test. It should take about 2-3 hours to make/create the product with the materials. I’ll do this once a month.

The Profit Margins

The product cost will be about $3-4. If I outsource shipping costs that will come out to $3 bucks + shipping. I will most likely charge the customer for shipping depending on the cost itself. The selling price is $9.99 to $24.99 or around that price range. I don’t plan on working at the lower price range. I’ll be selling at $22.99 or $24.99. With $22.99 as the example sell price and the cost price at $4. That will come out to about $18.99 profit per sale. These are estimated and the price can change due to not knowing the correct information at the time of writing this article.

  • 10 orders a day * $18.99 = $189.90 profit per day -> 30 days $5,697
  • 20 orders a day * $18.99 = $379.80 profit per day -> 30 days $11,394
  • 30 orders a day * $18.99 = $569.70 profit per day -> 30 days $17,091
  • 40 orders a day * $18.99 = $759.60 profit per day -> 30 days $22,788

How To Create The Product

The product itself requires a few products which vary in material, size or what not. Instead of trying to design it and re-create the concept.

I’ll be purchasing the product from (3) competitors and testing and checking what each competitor does for their product. I’ll then reverse engineer what components and parts which they use. This isn’t an electrical product so it’s fairly easy since I’m not an Electrical Engineer.

How To Create The E-Commerce Website

My first E-Commerce website, I created with WooCommerce which is a WordPress Plugin. However, with how successful Shopify has become within the recent years. Shopify now has much more apps which can increase conversion rates or help with e-commerce metrics. You also don’t need to worry about any web development since Shopify is pretty simple through their interface.

I’d actually like to convert my E-Commerce #1 to Shopify but I’d end up losing my current pages on my website.

So, for these reasons I’m switching to Shopify. For most of all my new e-commerce websites.

You can simply sign up with Shopify and start creating your website.

How To Market The Website – SEO

SEO is by far the slower option for driving traffic to your website. You’ll need to choose your keywords, preferably buying/purchasing keywords or the main general keywords for your niche.

There are different types of ways to do SEO for your e-commerce store such as White Hat SEO, Black Hat SEO and Gray Hat SEO. There is also something called On-Page SEO.

  • White Hat SEO – White Hat SEO is ethical SEO and the SEO methods which you focus on are legitimate SEO which would be naturally other websites choose to link to you.
  • Black Hat SEO – Black Hat SEO is unethically growing your own backlinks through Black Hat Methods. These methods are faking natural link backs, buying links and gaming the search engine to rank your website above others.
  • Gray Hat SEO – Gray Hat SEO is a mix of both White Hat and Black Hat SEO. You work on both.
  • On-Page SEO – On-Page SEO is altering your web pages to be more relevant to your topic or niche. It’s when the Google spiders crawl your website they can know exactly what your web page is relevant too.

The basic idea is to drive more links to your website. The more “strong” links to your website “strong being defined as popular websites” linking to you. Increases your rank for certain keywords.

For the most part, if you have all your rankings for your keywords. They will stay within it’s current rank unless you have competitors who are working on building more backlinks to their own website to beat you off of the first page of your keywords.

Google’s ultimate goal is to have the most relevant search engine. Your website or articles should provide massive value to the readers. Make sure, your pages and websites solve the issue which they are typing into Google itself.

The cost for SEO can vary depending on your niche or keyword. Once you have rank, you may not need to maintain it and the cost is very low. Unless it’s a highly competitive niche and many people want to rank on the top 5.

SEO will typically get you higher profit margins but you are limited to the amount of reach compared to paid advertising.

How To Market The Website – Paid Advertising

The quicker and faster way to market your website is to focus on paid advertising. You can pay to be placed on websites around the world. You can pay to target an audience on Facebook to whom you think your customer will be.

I will try and test this with my e-commerce site and hopefully find different audiences whom I can sell my product too.

This will be the far most interesting part of this project IMO.

How To Market The Website – Social Media

Social Media is a big deal for SEO and is highly included within Google’s algorithm’s for ranking your website. If it is a low competition niche, it’s fine.

However, with that said you don’t want to limit yourself to SEO exclusively since Social Media itself is growing hugely.

I would recommend you create, publish and post frequently to your main social media channels to bring in customers who are searching for your product in these social media networks.

The main ones to focus on would be the following: Facebook, Instagram and Pinterest.

You can also add in the other ones such as Google+, Twitter and others.

How To Market The Website – Creative Thinking

You’ll most definitely set yourself apart by focusing on creative methods of getting more traffic. A simple email to a relevant niche will seal the deal with a product shout out, product review or similar.

It’s added traffic to your e-commerce site that you may have not gotten otherwise.

How To Market The Website – Viral Success

Viral Success is definitely creative thinking…

For you to catapult, your success you should focus on how to create viral successes to “create” viral videos or viral ideas which will result in thousands if not millions of views for your product.

Daily Operations & Automation

Automate – Customer Support and Sales.

The goal at least my goal and what I want to focus on more in the future as actually utilizing more tactics and techniques and less daily operations. For my E-commerce Site #1, I spend a ton of time on Daily Operations which includes Shipping, Returns, Customer Support and Sales.

I want to start focusing on answering most of all these questions already on the website. Eventually, hire a virtual assistant to focus on running the daily operations which would include Customer Support and Sales. Possibly, looking into future growth and opportunities as well.

Automate – Order Fulfillment

The next important process is to automate your order fulfillment process and to outsource this task to companies designed to ship out orders for your company.

There are websites like www.ShipWire.com as well as many more which would be happy to ship your products.

Work the added labor cost into your price. You’ll also be capable of handle more sales to offset the added expenses.

Tweak, Scale, Grow

Once everything is working smoothly and you still want to grow this website even more.

You want to start focusing on tweaking, scaling and growing.

  • Tweak – Try and pull more conversions from your current traffic numbers.
  • Scale – Try and add more traffic to your site.
  • Grow – Try and add more products to your site.

Make sure everything is being tested such as newsletters, up sells and much more.

Repeat The Process

Keep repeating the process to pull more money out of the niche. If you like, start a new e-commerce site and repeat the process again.

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