There is a common assumption that seller commission is the only thing that affects an online seller’s revenue. As compared to offline selling. Which eventually is nullified as the overhead cost is less when we talk about eCommerce businesses. When you sit back and analyze the working of seller commission; it is not the only thing that gets deducted from an online seller’s income. Operational costs such as rent and utility bills, employee salaries, logistics costs, and marketing expenses also need to be deducted. So, does selling products online profit?
Here are few ways to determine if selling products online profit?
Determine the type of seller that you are!
There is a major difference between those who are selling online and sellers who are passionate about selling their products online. The first type of seller refers to sellers who are interested in selling online, irrespective of the product category. The decision to sell online comes first and the product comes second. This category typically involves drop-shippers, resellers, etc.
On the other hand, the second category consists of online sellers that are passionate about selling their product. Here the decision revolving around the product comes first, and then the decision to sell online happens as their business progresses.
How does this contribute to profitability?
This factor affects a realistic profit figure, how much you can range the pricing around, the extent that one can reach to achieve profitability, and the level of competition a seller will face.
Do you want to take it up as a hobby or a side business?
eCommerce is a rapidly growing competitive space, one can expect to build a sustainable and profitable online business especially if it’s a part-time business or a hobby. Online businesses need commitment and constant regulation. During the peak holiday seasons, sellers may have to work for more than 18-20 hours. It is impossible for people who have other professional, academic, and personal commitments.
Own stores or marketplaces
A seller can easily eliminate the marketplace fees by selling directly through their store. This means that you would have complete control over the operations of order fulfillment and payments. But that also means that you would struggle to match the volume a marketplace can provide.
Is your niche too common?
No one would be interested in buying products that still don’t have a niche or products that are already sold by 1000a of people. To avoid a decline in profits the key is to find a product with a reasonable profit margin with less return possibility. a simple example- if you want to sell sneakers or shoes, you can use your creativity by customizing the designs on them. It a fast-selling product without being too mainstream or odd.
So, the final say is that it is profitable to be an online seller. It’s just like any other business or industry, you won’t learn unless you take risks. Educating yourself about the online selling medium and set specific goals and limits for your business. Find the type of selling that works best for you and don’t be afraid to explore it until you find the right formula.
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