I’ve decided to try to get all the major steps of becoming a merchant into one post. My reasons are simple: My irritation at how “hard” and “expensive” people have made it seem, has overtaken the negative of more possible competition on my list. There is a lot of BS out there, and it’s time for me to get out a shovel.
I will disclaim that: This is not meant to be comprehensive–to do that would take a book rather than a single post! I also disclaim that what works in some categories may bomb in others.
So you want to be a real merchant!
Not a weenie ebook seller. Not a provider of “quotes.” Not a service provider. But a real, honest-to-goodness merchant, who buys stuff wholesale and then ships it out for retail. Good for you and congratulations–you have more guts than what seems to be 99% of the population!
First thing–before you do anything, before you even decide what to sell: Start collecting about $1200. That’s right, just twelve-hundred, also known as “one thousand, two hundred” dollars, USD. This–not $100k, not $1MM–is what it takes to get a basic setup started (assuming you’re not thinking of selling something like diamond jewelry or Rolex watches, of course). The rest of the startup doesn’t cost money. Ongoing operating expenses are another matter. For now, I’m talking about the raw startup fees.
Don’t start spending that dough yet. Read on…
I’m figuring that it’ll take some time to get the money up. While you’re saving up, that’s when you brainstorm up products to sell, and research the markets. Since you’re going to be online, that means you’ll most likely END UP having search engines deliver most of your traffic. At a search engine, if people aren’t searching for what you’re selling–you ain’t gonna sell it. It’ll sit and rot. So, you need to make sure people are searching for what you are considering selling. Use keyword tracking services for this. WordTracker’s the best one that won’t take your arm and leg clean off. If you’re willing to part with the limbs, there’s KeywordDiscovery.
Don’t ever get wedded to a particular idea, product, or category.
Don’t be discouraged if/when it turns out that the searchers are NOT searching for what you are thinking of selling! If there aren’t enough searchers, the solution is simple: Stop thinking of selling that!!! Think up something else to sell. Better to dump an idea, than obstinately try to “make” a market for it. Yah yah some lucky sucker in the 50s managed to sell pet rocks yada yada yada. To heck with that guy. Pretend he never existed. The average merchant will get laughed right outta the arena trying to sell some junk like that. And if you’re reading this, that means YOU, newb.
Keep checking out ideas until you find one that 1) People WANT! and 2) Doesn’t have much competition, or, the competition doesn’t know SEO (search engine optimization), and/or, the only competition is lame free-hosted-looking sites. Basically you want the competition to either not be there, or be so lame that it might as well not be there.
Get your sales tax license and any other legal stuff your local government requires (register your business, etc.).
Get a Business Checking account for the new business. Don’t get your merchant account (for credit-card acceptance) yet.
Set up your shopping cart software. Zen-Cart is FREE but the first setup is a really frustrating experience. Others charge, but some of them are ALSO frustrating! So I say, go with Zen. It’s free, and your pulled-out hairs will grow back.
WEB DESIGN: Throw away whatever you think would look good. Newbs have no taste in ecom. You’re reading this guide? That means you’re a newb.
Take yourself over to Amazon.com. Check out Sears.com. Peer at your own favorite ecommerce sites–ones you’ve bought repeatedly from.
Notice that they all have similarities: WHITE BACKGROUND, nav down one side, a search box, the logo goes at the top. Product-finding nav is separate from links to stuff like “about us” and the FAQ. About-us is on a separate page. Copyright stuff goes in the footer. Fonts are clean, nothing fancy. Border and tab colors are not ugly (what counts as “ugly colors” depends on your target market, NOT your own idea of ugly.) Links to products are underlined! Everything is easy to see and even a moron can work the site.
They have this kind of format for a reason: IT WORKS. Never mind what YOU think is “pretty.” Beauty on a sales site is in the mind of the Bank Account, and only the Bank Account. The Bank Account lives by the KISS Principle (Keep It Simple Stupid). So too, does your site, for they are joined at the hip.
Get and install a Secure Server Certificate (if you have shared hosting, you may have to have your host do this). Don’t pay any arm and leg for the thing. Check out RapidSSL.com.
Find Wholesalers.
This post may be enough, or it may be frustratingly not enough, depending on the product you’ve picked. Sometimes, finding a wholesaler is as easy as typing “Wholesale [product name]” into Google. Other times, it’ll be a wretched pain in the butt and require a load of research along with a couple of months of interminable-seeming waiting while the ones you find get around to responding.
For those research-requiring times: This is what almost always works, but is a PITA anyway. Go to the store that carries The Items. Write down the name of the manufacturer of the item, or the distributor, whichever is listed–it should be right on the pack. Write to them or call. Be prepared to WAIT FOR AGES for responses (if you call, it’ll seem immediate, THEN you wait ages for the catalog and price list to actually show up). Then, if it’s made by some really big place like Proctor & Gamble, expect to have to do more research before you find the distributor that’ll accept you and your little $1,000 order.
Still–do NOT tell them up front that you only intend to order $1K or less of stuff!!! Just ask what the minimum order is. If it’s above your budget, just say “uh huh” or “okay thanks” (without giving away your budget) and keep looking. Don’t burn your bridges by gagging outright, or otherwise branding yourself as a Puny Newblet. Remember, if all goes well, you won’t be puny nor a newblet in a few years. But if you let them pigeonhole you now, because it may interfere with dealing with them later.
Once you find a suitable distributor/manufacturer, get their price list. This should be a just-ask proposition once you find the right place. But, they may take ages to actually send the thing. That’s how the dinos are. Just vent on your blog 
Make sure you can resell the item at a price the market will bear–and still make a profit doing it. Don’t forget to calculate for overhead, and the cost of them shipping the stuff TO you.
If it passes the demand-vs-competition test, and you can make a profit selling it, MAKE YOUR FIRST ORDER.
It takes about $900-$1000 worth of goods to get going, and not run out 2 seconds after the buyers find you. Don’t buy lots of the same exact item, rather, spread it out over 15 or so variants so you have an impressive selection (buy a few of each variant though). Customers don’t like empty shelves, and the web equivalent of that is a site that’s got about 3 different items.
Get the stock in and put at least some of it up on your site. DON’T ADVERTISE YET! You still need to be able to accept credit cards! Don’t worry, nobody’s going to find a site that’s not yet in the search engines, and isn’t advertised either. But don’t dawdle on the next steps–when the engines do rank your site in a findable position, you want to be ready. Get it into your mind that you will CONTINUE with the next steps right away, once you’ve put the stock onto your site! Don’t get so hurried that you do something stupid!!! But, don’t go on vacation or something, either, because eventually, the engines will list you, and you want to be ready by then. This isn’t the time for days off–at least, not until you’ve put in your merchant-account app (they will probably take a few days to do their end).
Go to your bank and get hooked up with a merchant account, to accept those magically wonderful plastic cards. It may cost you about $300 for setup fees (some or even all of this may be called an “application fee.” Important part is, you end up paying out money!). Yeah, there’s “free” offers on the net, but they have catches. For instance, Wells-Fargo has a free-app no-setup one, but their monthly fees are so much higher that you end up missing your shirt after about a year or 2. Other “free” offers are often more fly-by-night, doing things like renaming “setup” fees as “application” fees, or bait-and-switching you on the transaction fees (those “1%” fees are only if you–yes, YOU–have great credit, are in physical possession of the card [like at a brick-n-mortar], and other such baloney. Baloney, because if you’re an ONLINE merchant, you are doing “card not present” transactions–which are charged at the high rate. Etc. etc. etc.).
Monthly fees for merchant accounts come under various baffling names. Cut through the red tape by adding the whole wad of them up.
Make sure your merch acc’t uses Authorize.Net for its online processing. Auth.net’s one of the biggest online card processors, they know what they’re doing, and don’t F it up. All others I’ve checked out have been cussed for various things, some of those things being major.
When you get your merchant acc’t info, hook it into your shopping cart. The “how” varies with the cart. Check the cart’s manual/FAQs/forum/docs for the specifics that pertain to your cart.
Put the rest of the stuff up on the site, if you haven’t already done it.
Advertise. This is an ongoing expense. Some methods of advertising are obvious, while some are proprietary information even though they should be obvious to those with good eyes. Pay-Per-Click (PPC) at Overture is a fast way to start bringing in traffic. It’d take a whole other post to talk about its nuances. But the basic thing to remember is: Don’t pay more per click than you can afford.
How to do PPC and not lose your shirt at it is beyond the scope of this post, which is already very long. But it’s definitely worth more research if you don’t already have the skill (have=you have actually done it successfully). PPC does have a risk factor that is higher than something like a newspaper ad. That’s the tradeoff for it actually having the potential to be profitable–unlike a newspaper ad, which is usually a waste of money for a site. With PPC, you can get an INTERESTED viewer for as low as 10c/click…while with hardcopy advertising, your ad gets slapped at thousands of people who COULDN’T CARE LESS, yet the overall cost is higher! Sometimes much higher!
Look around online for other methods of advertising. There are a couple of good ones…good enough that I’m not going to explicitly state them, but I will admit to the fact that they exist.
I will also mention that some things online are JUNK: Foremost among pure junk are “guaranteed traffic” sellers. These money-eaters do things like show your site as a popup, or send robots to it, or show your ad in click-fraud-ridden foreign countries that you can’t ship to even if they did order. Some traffic-sellers even “show” your site in a frame on other sites, a frame so small that it’s invisible! This fools your logs into seeing lots of different IPs, but no humans are actually seeing you! So SAVE YOUR MONEY, nobody can legitimately guarantee nonjunk traffic!
Congratulations, you now have your merchant site up and traffic will start coming once you advertise it! The search engines will *find* you fairly quickly, but won’t LIST you in a user-findable spot for quite some time. Check out some SEO forums or blogs for how to get around that. Once you get your site to rank well in search engines, your business can expand exponentially!
Will you be able to sell anything? A resounding “maybe.” It’s a gamble. Some people have a good eye for what types of things they can sell, while others have some really abysmal product-picking skills! If a particular product is a go, expect to have to make some tweaks to get the best conversion ratio. And, if you have a good conversion ratio already–don’t mess with it!
An acceptable conversion ratio (visitors-to-buyers ratio) is 1/100. Higher than that is good.
Oh, one other thing: Make sure your TRANSACTION LIMIT from your merchant account can handle a spike of at least TEN TIMES the initial volume–and maybe more. A #1 Google listing for the relevant keywords can happen literally overnight. It’s not guaranteed by any means–but IF it does happen, you need to be sure your merchant account won’t put a “hold” on the funds due to the unexpected spikeage.
Good luck–unless you’re trying to sell the same stuff I am…
credit cards merchant sites wholesalers
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