If you’re looking for ways to make extra money, you’ve probably considered exploring the world of online selling. Thanks to the rise of online marketplaces like Amazon, eBay, and Alibaba, it’s now much easier to find a way to make money from home. However, while the convenience of having a virtual storefront may be appealing, there are a lot of things you need to consider before you put the cart ahead of the horse.
The Growth Of Online Marketplaces
The e-commerce industry is continually growing, and with it, the number of marketplaces available online. Here are some of the more popular ones.
Ebay
If you’re looking to sell your own stuff, eBay is one of the top online marketplaces to do so. Thanks to the global reach of the platform and the huge array of merchandise available for sale, it’s one of the most popular choices for online sellers. Launched in 1995, eBay offers a versatile range of products, from electronics to clothing and accessories. Even mundane items like greeting cards, stationery, and baby food can be found on the platform.
eBay is a classic example of a well-designed, flexible online marketplace, allowing for the trading of items of all types. This ensures that even if you have something unique to offer, you’ll be able to find a buyer for it. It also means there’s always someone online waiting to make a purchase, so you’ll never be short of business. In 2022, eBay facilitated over 600 million transactions, averaging around 200,000 per day. That’s a whole lot of shopping!
Alibaba
Alibaba is another great online marketplace that just about anyone can get involved in. Launched in China in early 2002, the company’s headquarters are in San Francisco. The marketplace initially focused on trade between Chinese companies, but it soon expanded its services to include retail trade between businesses worldwide. Today, Alibaba operates a marketplaces in all major regions, with the exception of Asia, which has its own specialized marketplace, Alitaba.
Alibaba is a relatively new entrant to the online marketplaces, but it’s quickly gained popularity due to the sheer volume of people it connects with, every day. In September 2022, the platform facilitated over 13 million transactions per day, averaging around 200,000 per hour. That’s a lot of trading! Even if you don’t intend to do a lot of business on the platform, it’s still a great place from which to launch your own store, as you’ll be able to find the products you want, at prices that you can afford.
Amazon
Amazon is, quite simply, the biggest online marketplace running on a dedicated server. Launched in 1994 as a subsidiary of Silicon Valley mega-corporation, Amazon.com, the e-commerce giant is currently valued at over $11 trillion. It is the most popular online marketplace for all kinds of merchandise, including clothing, accessories, household goods, and more. In 2021, Amazon sold more than 55 million Bluetooth speakers, 60 million alarm clock radios, and over 140 million smartphones.
Thanks to its massive size and incredible global interest in its merchandise, Amazon is the classic case of an online marketplace that is well known for being able to find nearly any product, at any time. This makes it a one-stop-shop for buyers, with over 200 million annual active monthly users, shopping with their phones, tablets, or computers. In terms of volume of sales, Amazon’s marketplaces, including its Amazon Marketplace, Amazon UK, and Amazon Italy, ranked #1, #2, and #3 in their respective regions in 2021.
Creating A Store
If you want to get started selling online, the first thing you’ll need to do is to build a store. There are a variety of ways to do this, but perhaps the most straightforward is to use a platform like Shopify, BigCommerce, or WordPress to build and manage your storefront. What’s important to consider is that you must take into account how you intend to sell your goods, as well as how you’ll manage your stock and shipments.
For instance, if you want to sell your own clothes online, you’ll need to consider whether you want to rent a virtual storefront, or whether you want to sell them directly from your own closet. In the first instance, you’ll want to rent a suitable, furnished space with a decent amount of storage, as well as a decent broadband connection. You’ll also need to invest in an inventory management system, so you can keep track of your goods and make sure there are no delays in the shipment of your merchandise. Alternatively, if you want to sell your own clothes directly from your closet, you’ll have to invest in a garment closet, and you’ll need to consider which fabrics to use, as well as the styles and colors you want to feature.
As you can see, there are a lot of moving parts involved in creating an online marketplace store. All of this will depend on your specific needs and goals, as well as your available resources, of course.
The Different Tax Implications
One of the major differences between operating a physical store and selling online is that, traditionally, you’ll have to pay retail sales tax, when you sell in a physical store. However, there are times when this is not the case. For example, if you’re selling an item that’s originally bought in another country, where sales tax does not apply, you won’t have to pay it in your country of residence. This can be quite an easy way to save a lot of money, if you’re planning to do a lot of international shipping.
In terms of international shipping, it’s quite common for online marketplaces to offer discounted rates for foreign deliveries. This is mainly due to the additional expenses and paperwork involved with shipping to another country. However, if you’re living abroad, you may also be eligible for membership of an online marketplace’s affiliate program, which can earn you a commission on every purchase made by a customer, who buys from your affiliate link. This can be a profitable venture if your store is doing well and you have an adequate amount of traffic.
Security & Compliance
No matter what, whether you sell in a physical store or online, you’ll need to ensure the safety of your customers and the integrity of your business. To achieve this, you’ll need to familiarize yourself with how to keep your goods safe during shipment and storage. This involves looking into the different methods of shipping, as well as the security of the storage space, where you’ll keep your inventory. You should also consider investing in a quality alarm system, that can monitor activity in and around your business, as well as your storage lockers.
In addition to this, you’ll need to comply with all the legal requirements and paperwork that come with being an online merchant. To do this, make sure you’re registered with the right governmental bodies, operate within the law, and keep all relevant records.
Global Reach
One of the appealing things about online selling is that, since the industry is still in its infancy, your product can reach millions of people, around the world, in an instant. Thanks to the internet, your product can reach people, regardless of where they are in the world. If your store is set up correctly, and you’re using an established marketplace, this can mean many more potential customers, around the world, than you could ever hope for.
However, this also means you’ll have to be accessible, around the clock, to provide customer support, should they need it. If you’re selling clothes, for example, you’ll need to be available in the event that someone has a problem with their order, or needs help with a style recommendation. This could involve being accessible during prime shopping hours, in order to maximize your sales.
How To Make Money With An Online Store?
Once you’ve built your virtual storefront, it’s time to move onto the next step, which is to figure out how you want to make money from it. There are many ways to do this, and it really depends on your product and how you intend to sell it. For example, if you want to sell your own clothes, you might want to set up a page, on your website, where you can list your own designs, along with some modest text about yourself. Then, you can use a service, like Fiverr, to get the word out about your page, and start attracting potential customers. Once you have that initial group of interested customers, you can take it from there, with a little bit of salesmanship.