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Online sales are booming. Those looking for more income should consider jumping into the sales game. To serve today's online shoppers, sellers should offer in-demand and niche products at bargain prices. Examples of currently popular goods include work-from-home (WFH) devices, tools for the Internet, and health, safety and personal care items. But beware of categories with intense competition.
From a macro perspective, lockdowns combined with the surge in e-commerce, social media, online marketplaces, and decentralization create a perfect storm of opportunity. The new economic landscape can benefit unemployed Americans, gig workers, and soccer parents who become home sellers. Use your Wi-Fi connection to make extra cash instead of watching Netflix and wondering what the new normal means for your wallet. Here is how.
Get some extra income
The global health crisis leads to the worst recession since World War II. In 2020, America's gross domestic product (GDP) shrank by an estimated 4 percent with 12.6 million unemployed workers. However, this massive disruption creates retail opportunities for entrepreneurs who can sell online. Online shopping has increased dramatically since the global health crisis began, and many analysts believe we are seeing a permanent trend.
Supply chains are disrupted as people turn to direct-to-consumer models that eliminate middlemen. This simplifies the supply chain, lowers brokerage fees and shortens delivery times. As thousands of physical retailers and distributors go out of business, e-commerce and social business are filling the void.
Related: Can Ecommerce Save Retail?
Help clients stretch their dollars
Home sellers can thrive by offering important products at bargain prices to budget-conscious buyers. Top-selling merchandise last year included work-from-home (WFH) devices, internet tools and accessories, health and safety products, and groceries and groceries.
What items can you easily deliver, store in a closet or garage, and sell on a marketplace like Amazon?
You can also sell through a personal website or through social media platforms like Twitter, YouTube, and Facebook, especially if you have thousands of friends and followers. Consider using analytics tools (Salehoo is an example) that provide data from Amazon, eBay, and similar marketplaces to determine the sales rate, average price, and competition for various products.
Computers and electronics are projected to be number one by 2020, accounting for 22 percent ($ 156.5 billion) of total e-commerce. Apparel and accessories are in second place at 19.1 percent ($ 135.5 billion) according to a study by eMarketer in September 2020.
Think in terms of the new normal in terms of buyer behavior. What exactly do people do every day and what do they need?
According to the research company Glimpse, other popular categories are household items such as blue-light glasses (plus 94 percent), bidetto toilets (plus 300 percent) and online churches (plus 544 percent). Home fitness equipment, fitness clothing, baby care, pet supplies, video conferencing tools, and internet related services and accessories.
Design an efficient process
In terms of fulfillment, drop shipping has become extremely popular over the past decade. In this case, Chinese and international suppliers deliver directly to your customers, which minimizes the logistical effort. However, margins tend to be lower as suppliers charge a drop shipping fee. (Websites like Alibaba and AliExpress list Chinese drop-ship suppliers.)
Sellers can also buy wholesale directly from manufacturers in China, India, Thailand and Vietnam. But have thick skin and sharpen your negotiating skills. Also, keep in mind that suppliers will be inundated with inquiries and spam. They are only looking for serious buyers and long-term cooperation.
Buying in bulk results in higher margins, but usually requires a larger financial commitment. Wholesale can also be more labor intensive for the seller. However, there are a growing number of fulfillment service providers specifically targeting online retailers.
Related: Exploring Ecommerce
If you are shipping to customers abroad, there are international parcel delivery services such as MyUKMailbox.com. The UK-based shipping and logistics company is an example of a growing number of fulfillment providers who can also process payments and help sellers navigate local import rules.
With fulfillment support, sellers can repackage freight and route it directly to end users and even to Amazon fulfillment centers. Packaging and freight forwarding services also ensure that the shipping process meets consumer expectations. According to a 2020 study by Retail TouchPoints, 84 percent of customers are unlikely to return to a brand after a poor delivery experience on the last mile.
Manage cash flow
Finally, it is important that you properly manage cash flow. Revenue – income – doesn't mean having instant cash flow. Some people pay late or never, and there may be delays when depositing money into your bank.
Inventory is an area where most of your working capital is tied up. The advantage of selling at home is that you have minimal overheads. However, it is important to be conservative with initial and subsequent inventory orders until you see sufficient sell-through. Start small and scale slowly; This leaves enough money to cover business and personal expenses.
Respect the learning curve. The key to selling at home lies in setting KPIs such as margins, average order value, break-even point, delivery times, cost per acquisition and customer lifetime. You also need to adjust to seasonal demand to keep up with stocks.
But the essence of this business is conversion. If you can turn web and social traffic into purchases, fulfillment providers can do the rest.
Related: 4 Key Trends for Retail Entrepreneurs in 2021