Should You Be an E-commerce Entrepreneur?

E-commerce isn't just the playground of big brands, huge retailers, and mega-websites like Amazon and Alibaba.

If you think that way, you're going to miss out on a huge opportunity.

In 2017, people around the world spent $2.3 trillion buying things online.

That number is expected to almost double during the next three years, according to Statista.com.

Trevor Chapman is someone who didn't miss the ecommerce opportunity.

Before finding success online, he started his career pretty normally, and experienced the same struggles just like everybody else.

During his college years, he helped pay his bills working door-to-door sales for a pest control company.

After college, he started his own business installing solar panels.

His company became successful, operating in multiple states.

But as his business grew, so did the number of hours he worked.

While the money was good, he realized he was spending so much time working (12 hours each day), that he wasn't really able to enjoy his life.

He found himself desperately wanting to spend more time with his children.

Individual brands were now selling their clothes, toys, and electronics directly on their websites.

This was the place to make money, Chapman realized.

Not only could he start a business with a small investment, he knew his online store could generate revenue 24/7.

He'd have to do a little bit of work to fulfill the orders and keep the business running, but his customers would be able complete their purchases by themselves.

He knew he found a way to earn and spend more time enjoying life.

Chapman immediately decided to test the idea, looking into different selling platforms.

At first, the Utah resident decided to create a website called LDSMan, which would sell Mormon art.

It was a bust.

Millions of people around the world are spending money online.

But how many of them are looking to purchase Mormon art?

Chapman quickly pivoted and began selling inexpensive everyday products.

He sold drink bottles, inflatable chairs, and iPhone accessories.

To be competitive, he looked for manufacturers and suppliers in China who were already making the products he knew would be popular, and he put his own logo on them.

The manufacturers not only put his new company's name on their products, but they also handled all of the shipping for LDSMan.com.

Using Facebook ads that he bought for $100 a day, Chapman's business skyrocketed pretty much overnight.

He became profitable on his second day.

Within two weeks, his site was generating $10,000 in sales each day.

In just a little over three months, Chapman had sold $1 million worth of goods.

The success of his business endeavor exceeded all of Chapman's expectations.

A year later, he turned down a $3 million buyout offer.

After waiting another year, he was able to sell the company for $10 million.

It's Hard to Get Rich When You're Working for Someone Else

Most Americans can't live an upscale lifestyle on an employee salary.

If you're unhappy with your current salary, there's lots of ways to find a better job online.

However, even if you can find a job that pays more, working for someone else won't lead to actually getting rich.

That's why starting your own business is the only realistic scenario for most Americans to earn an upper-class income.

Even then, you may need to work many hours and it still might take years to earn your first million.

The most successful small-business owners eventually have people working for them.

Successful landscaping business owners, for example, don't have to mow lawns themselves.

They have multiple crews to do that sort of work.

Successful tennis coaches aren't on the court teaching all day.

They have multiple pros working for them at multiple locations.

This is the lesson Chapman learned as he moved from salesman to small-business owner to internet entrepreneur.

He knew that to make serious money online, he should not involve himself in all the actual administrative work.

For Chapman, this included:

• Processing customer purchases
• Boxing and shipping the orders
• Taking customer phone calls
• Handling returns

He needed others to do that for him. If not, he'd get stuck working 12 or more hours a day again.

Once you see how your strategy is working, you can use the money from your sales to increase your marketing.

Chapman initially invested $200 in his business, but quickly began spending $100 a day on Facebook ads.

Those ads catapulted his sales immediately.

Facebook ads are a great tool for new entrepreneurs on a budget.

The platform is sophisticated enough to target the exact demographic you want to sell to.

For a relatively low price you can reach millions of people who might be interested in—if not actually searching for—your product.

Websites like eBay, Amazon, and Alibaba help customers find you if you put the right keywords into your product descriptions.

But you'll only reach people who are on the sites that way.

To get people to go to those sites, or your e-commerce site, you'll need to spend money on marketing.

Creating a blog on your website that contains posts related to your target customers' interests can help you get found in Google searches.

However, that can be a difficult and expensive strategy.

With Facebook ads, you can track their effectiveness daily and tweak them as needed in case they aren't delivering the expected results.

Test Your Products

How you sell doesn't matter if people don't want what you sell.

Even after switching from Mormon art to more mass-appeal products, Chapman still had to test different products to see which appealed to buyers the most.

Some products you choose might sell well but have small profit margins.

They might also have higher return rates.

Other products might not sell as many units, but will produce large profit margins.

With trial and error, Chapman found products he could buy for $4.99 and sell for $59.99.

In his early days, one of his manufacturer partners started to undercut his business by shipping a cheaper version of his product without his permission.

Chapman's return rates for that item soared.

This kind of problem is something you'll have to learn to deal with as you learn the e-commerce game.

One way Amazon sellers find the best products for their businesses is to use research tools that Amazon offers.

These tools can help you find which products are selling well that don't have too much competition and still allows for a good profit margin.

This is incredibly helpful when you consider the fact that Amazon alone accounts for almost half of all online sales.

Decide on Shipping Options

You can have your private-label products shipped to your home, then box them and take them to the post office yourself.

This will save you considerable expenses and increase your profits by cutting out the middleman.

However, as your sales rise, you might be working long hours to handle your fulfillment.

You might even find that by the time you let a company like Amazon handle your order-taking, shipping, customer service calls and returns, it's worth it to pay the extra money.

Would you rather make $200,000 a year working 40 or more hours a week, or make $150,000 a year working only a few hours each week?

Chapman initially worked with manufacturers who could also ship his products.

After he started making huge sales, he eventually bought a warehouse and hired five staff members to handle his own shipping.

He had a big investment for the 9,000-square-foot facility and employees, but he saved enough on fulfillment to pay for the investment.

What it Takes

Becoming a millionaire isn't that difficult these days; but do you have what it takes?

As odd as it may seem, the most successful people have the most failures.

Legend has it that it took Thomas Edison 1,000 tries to make the light bulb.

The inventor supposedly quipped that he never failed, he simply learned 999 ways how not to make a light bulb.

That's more than just a cute story.

You need to learn how not to be afraid to fail. Each time you make a mistake, you'll learn not to make that mistake again.

If you're afraid to fail, you won't take risks, test and learn.

Of course, you don't want to fail if your house is at stake, but it's okay to fail in the beginning of an e-commerce business as you learn the game.

You'll need a few more personality traits to make it as an entrepreneur, but I would say the main one is probably the willingness to work extra hours each week as you start your new business.

This means putting in hours after you come home from work in the evening and on the weekends.

Once your business starts creating passive income, your working hours will scale back dramatically.

Is E-commerce Right for You?

You might instead ask, "Am I right for e-commerce selling?"

It won't require quitting your job or investing large amounts of money to be successful.

Ask yourself if you have the following needs, skills, and abilities to try starting an e-commerce business:

A few hours each week to start researching the e-commerce market.

A willingness to work more than a few hours a week, if necessary.

Several hundred dollars (or more) to get started.

An ability to use technology, such as do-it-yourself websites you set up using someone else's template.

A willingness to make mistakes and try again.

A need for more financial security than you currently have.

Most people change jobs more than five times during their career.

The reason you change jobs so often during your career is that you aren't happy.

Think about the last time you changed jobs, or if you've been thinking about leaving your current job.

Do you think people usually leave jobs because the company went under or moved to another state or country?

Ask yourself, "If I had to work until age 65, would I rather work for a company or for myself?"

Before you ask yourself if you're right for an e-commerce venture, ask yourself if you're right for an entrepreneurial career in general.

Some people aren't risk takers.

Many people prefer job security over work freedom.

They get their satisfaction from friends, family, and hobbies.

These people focus more on improving their career skills than developing entrepreneurial skills.

If you think you're ready to test the waters of being your own boss, e-commerce might be the opportunity you've been looking for.