Hello and Help LOL

[stephanj54]

Hello Everyone,

My name is Stephan. I recently started a new business (got my business license and everything) and built my website using Prestashop and integrated it to allow new sellers to sell their items as well. Here is how I plan to make it work and would like some input on this area as well:

1. The seller lists their item on my website
2. The item sells and Payment is made to me (Much like Amazon)
3. The seller ships the item.
4. The buyer gets the item.
5. I release the money to the seller (minus a 5% fee) to their PayPal account on a weekly basis compared to twice a month.

I do believe that if I target the right people to sell on my site, this can work. Do you have any ideas that I can do to my site or for my business to help market it on a very limited budget. I am not looking to compete with Amazon or Ebay, but I would like to run an alternative to their high fees.

[Harold Mansfield]

Steps 4 & 5 bother me a little. It seems as if you are responsible for delivery of the item. Also many sellers won't send a product without the money. That's just how pretty much all ecommerce works.

Maybe a better plan is to be a hands on go between between the buyer and seller and handle any delivery issues, rather than holding the money. Let the seller be responsible for their own logistic responsibilities. Of course that means you'll have to vet your sellers a little more carefully and have some kind of standards for their delivery system.

Also, you don't have to hold money. You can set up deductive payments that automatically take out your fee, and deposits the rest to the seller. I think that will be easier to manage, and for your taxes.

I'm just spit balling here without knowing any details or even what kind of products you'd be selling.

[stephanj54]

I honestly don't sell the products... its just a platform for sellers to list their items and sell them. I only added 4 and 5 for a sense of security for the buyers. I guess I could rethink the process a little and find a way to take the fee out automatically.

[Harold Mansfield]

I honestly don't sell the products... its just a platform for sellers to list their items and sell them. I only added 4 and 5 for a sense of security for the buyers. I guess I could rethink the process a little and find a way to take the fee out automatically.

I think if you insist that all sellers use tracking, and be available as a go between to contact the seller in case there are delayed deliveries that mitigates your risk. After all you're a go between, not the seller nor are you setting up logistics. It's actually out of your hands to do anything since you aren't the one sending the product, other than find out what's going on.

Again, I'm just spit balling.

[stephanj54]

I think if you insist that all sellers use tracking, and be available as a go between to contact the seller in case there are delayed deliveries that mitigates your risk. After all you're a go between, not the seller nor are you setting up logistics. It's actually out of your hands to do anything since you aren't the one sending the product, other than find out what's going on.

Again, I'm just spit balling.

This is an issue I am taking into my hands. I have setup FEDEX, UPS, and USPS tracking into my website. This is something I have put a lot of time and effort, not to mention a lot of money, into. So far I have listed a few products just to make the site look a little better. I am thinking about this now:

Option A) Free but charge a 5% commission on sales

or

Option B) Charge a $5 Yearly membership fee

Which would be best?

[Frenchy]

Hello StephanJ54,

you also have two other solutions:

you can charge each sale a fixed amount.

Or even charge a fixed amount for each product listed


You will have to manage a client who orders several products from different sellers (payment problem, confirmation of order, several mails?? and multiple delivery fees)

Another challenge may be to get customers feels confident in ordering from your site.

Maybe you can create a quality chart that sellers shall abide before being authorized to list products on your site. Promotion of this quality chart to customers may handle some resistance from customers.

These comments are done from my viewpoint, not knowing US market, so...

Loic

[Harold Mansfield]

This is an issue I am taking into my hands. I have setup FEDEX, UPS, and USPS tracking into my website. This is something I have put a lot of time and effort, not to mention a lot of money, into. So far I have listed a few products just to make the site look a little better. I am thinking about this now:

Option A) Free but charge a 5% commission on sales
This is generally how it's done. I actually think the percentage is a little higher. Of course your site has to produce results.



...or Option B) Charge a $5 Yearly membership fee


Seems a little low if the site is actually busy. If the site isn't busy, then it's not worth anything.
What you charge your sellers depends on how well you build and manage the website, and how much traffic it gets and sales it makes.

[stephanj54]

Here is what I am working with:

I am basing my site on Prestashop. I have a multi-seller module which allows users to sell their items as well. I have a backup module which will allow multiple sellers to receive their money immediately via PayPal and my 5% fee is deducted upon payment and automatically deposited to my Paypal account. My problem is honestly finding people to sell on my website. Where do I even begin?

[Harold Mansfield]

My problem is honestly finding people to sell on my website. Where do I even begin?

Do you have your own tools to sell? Are there communities? How had you envisioned getting sellers when you came up with the idea to do this?

[stephanj54]

Honestly, again not trying to compete with the main competitors, but I envisioned a cheaper shopping platform than Amazon or Ebay. Their fees are outrageous and I just want to make my fair share. I do not look to get rich on it, I just want to make a few bucks at it. I am currently testing out different forum software for the website and was thinking about doing contests for the sellers... like $1000 to the person who has the highest sales volume every month.

[Harold Mansfield]

You can certainly open your own online store. But sales gimmicks won't make it popular. Getting traffic to the site and getting people to buy things from it is your job. No sense in offering the suppliers sales bonuses. They aren't going to promote the site for you. Any supplier that knows that they are doing is going to have their own sales funnel to promote...namely their own website. Why would they spend to promote yours, when they make better margins on their own?

I appreciate the way you are thinking...a site that takes less in commissions than Amazon and Ebay, but those sites have traffic, and credibility. It's worth it for people to be listed there. Buyers don't care what the commission structure is. That's back end stuff. They care about what's in it for them.

I've been down the road your own at one time or another and changes to both technology and the marketing and advertising needed to even have a chance made me come to a few simple truths...

You aren't going to make any money selling items that people can get anywhere online, get it cheaper, a better selection, and on a site that they already know.

There's no money in games or game systems because you can't compete with the price from the actual companies or Amazon, Walmart of Game Stop who deals in bulk. Also, you download games to your system now. Very few people physically order disks anymore.

There's no money in DVD's because you can stream almost anything now. Why would I pay $75 for the complete series of "The Wire", when I can order HBO and get everything they have on demand for about the same amount for the year? $45 for Season 7 of "True Blood"? I can get all seasons on Amazon Prime for no additional cost.

There's no money in selling other people's electronics unless you can do volume, or maybe are selling discontinued or over stock items that you get in bulk at a discount.

There is no money in selling phones. Carriers make their money on the contracts, bloatware, and service subscriptions. (There may be a market in selling refurbished phones, but of course you'd need to know how to run that operation and again carriers are already doing this, as well as everyone else).

There's no money in selling music. Period. There never was. Not even CD's when people still purchased CD's. You can download anything online, or stream via a service. Why would I order a CD anymore?

You need to find a niche of products or services that isn't available on 1 million other sites. As a consumer why would I shop on your site when I can get the same things you offer and more on Amazon? Even if you are $5 cheaper, $5 isn't enough to make me take a risk. I'm buying luxury and entertainment items, not necessities.

You're trying to tap into the market controlled by behemoths and tech advances and you aren't offering the consumer anything different or better in any way. In some cases you're actually offering considerably less. You're trying to offer a little bit of everything, and not all of anything. Who is your target market for that?

You're thinking about this from what YOU want. You're playing "If I can get a small percentage of that market ( or some fantasy made up number) I can make money". Not trying to help solve a problem or offer some kind of convenience to the customer.

The fact that you can download half of the things that you're selling, or can get them as part of a larger service for less money than your cost per item is a real issue that you need to accept. 10 years ago a store like this may have been a good idea in a regional market that Ebay and Amazon and other online retailers didn't serve, but today it's kind of outdated.

If you're going to continue down this road, you need to be able to answer 1 question, "Why would I buy from your site over all of the others?".