Is eCommerce for an 18 year old?

The problem you have is a very simple one, the cost of entry now is much higher than a couple of year ago. The situation is very simple, everything is progressively being squeezed to the fat tails of commerce - high enterprise and very targeted niche - a move to high value trust.

Now existing businesses are currently running on built-up goodwill and previous customers, however the issues they are having are now starting to accelerate meaning one very simple thing - a drop in revenue. This means that next year the cost of entry for a startup will be higher than it is today - so the simplest is to start bottom-up with very niche (running multiple as you will not make enough revenue) or go big and run enterprise. The problem with the latter is very simple, all open source platforms (under $100K install) do not have the tools and features to do this - international, rapid product onboarding, dynamic pricing, etc.

So, then it comes down to very very specific details such as market, products, national or international sales, sourcing, time available, startup budgets, and a lot more. Previously it was quoted that 95% of all startup online stores fail to make profit when both time and cost are taken in to account, it looks to now be moving towards 99%. Between the two fat-tails (enterprise and targeted niche) it is very grey, the closer you get to the middle the more dynamics working against you.

Can it be done, absolutely, but the best is to just launch something and get moving. Many well researched ideas turn out to not work, primarily because you have emotional and time capital invested so force it to work, which then promptly fails. We know some VCs that along with some consultants who designed a special architecture to launch high-end sites in a matter of weeks, long story but we are starting to use it – the revenue share version anyway.

The key is to balance cost(management), time(business), architecture(technology). To be in top 5% you need two perfectly balanced, to be in the top 1% you need all three. The reason why this is important, the top 5% of stores generate 50% of all online revenue, and the top 1% generate 40%.

Marketplaces are being hit by the trust problem, too many non-authentic goods (eBay & LVMH settlement for example). As there is a move to trust people are starting to shy away from them (sales are dropping off rapidly) and buy from big business – hence why large company profits keep growing. You effectively have three levels, hold inventory, dropship, or affiliate – each with lower margins meaning you have to sell more to make the same profit. The platform we use works at all three levels (the special architecture we mentioned above) which hides all the tech and business process issues for us increasing exposure and reducing workload. That is where most startups have blocking issues.

There are two friends walking in a field and suddenly a bear pops up, the friends start running. One of the friends says to the other, but the bear will catch us. The other friend shouts back as he accelerates away, I just need to run faster than you.

In reality that is what you need to do, how you do it is another matter completely.

Serpyre makes some valid points but don't be discouraged. There are indeed opportunities in eCommerce.

As I think you've already figured out, the most important part of the puzzle is selecting your niche. With limited budget, time and experience, you don't want to compete with the big boys. You want to focus down on a specific niche. Look for a targeted, highly specific niche that has little or weak competition. I like the term micro niche. Check out this blog post I wrote about this very topic.

Here are my answers to the rest of your questions
1. How much time? - As much as you reasonably can. A couple of hours a day will get you a long way.
1a. Should you drop ship? - In my opinion, probably. It's the best way to reduce your risk and keep costs low. If you start out drop shipping, you can literally get started for only the cost of hosting and a domain name.

2. What platform? I would start right off the bat with your own website. Don't mess with eBay...they're undergoing some big transformations now and it's an uncertain time. You don't need to know how to code to start your own full blown eCommerce website. You can go with a hosted service like Shopify or Squarepace, or host your own store with something like WordPress/WooCommerce or OpenCart.

3. This seems to boil down to product/niche selection. To add to what I wrote above, you need a targeted, under served niche. In dropshipping, for those just getting started, the sweet spot is with high ticket, niche products. Since your margins are lower with dropshipping, it makes sense that higher costs items will yield more dollars per sale. For your example of bluetooth items, I would look for bluetooth products that sell for over $200 and are for a very specific niche. So not bluetooth headsets, but rather, bluetooth headsets for left handed astronauts. Something very specific that the big retailers aren't selling or focused on. These aren't easy to find.

4. This is not too much for an 18 year old. What better time to take a risk and go for it. Just don't lose focus of your education. That will provide you with options and options are invaluable.

5. Do you need to learn how to make a website? Sort of, but not in the traditional sense. You don't need to learn how to write php or asp.net code. You just need to learn how to set up a site. If you choose a hosted platform, you'll simply be pointing and clicking, choosing a template and adding content. If you go the self hosted route, you'll have to install the website platform(s) like WordPress, or OpenCart, for example. In this case most hosting providers offer VERY easy set up of these platforms. There's a small learning curve, but you'll be fine.

And as for that $1000. Save as much as you can for what really matters...traffic. One way or another you're going to need traffic to your website. You'll have to get targeted traffic to your site, then convert it to leads (email list) or purchases. Paid traffic is typically the fastest way to achieve this. So I'd probably save as much of that $1000 as I could for buying targeted traffic.

Our pleasure. One thing we forgot to mention was fraud, it is now many times easier to take than to make. We just had some plugins bought but something didn't add up so rejected the payments via PayPal, they kept trying 4 times with different accounts. You need to have the discipline to reject payments if it doesn't look correct, most find that hard to do. Credit card processing companies have a very low tolerance to fraud and charge backs, PayPal are also known to just freeze accounts, so best to have multiple payment methods. Some consultants we know are working on a solution to minimise the fraud, but it will mean lower sales, risk equals reward, the problem these days is that it is virtually impossible to differentiate between real and fake. It only takes one fraud sale to wipe out a lot of profit meaning you are working for free. The smaller the business the bigger the effect it has, multiple times worse if you sell internationally.

Have been thinking about this a bit more, basically a WooCommerce/Prestashop/ZenCart site averages out at $50,000 revenue per year, Magento CE around $120,000 revenue per year. If you are happy at revenue levels below this then you can, more or less, ignore a lot of what we said and just go for it, however if you want above these it is completely different. There is a concentration at the top which completely skews the results, basically the top few percent control 50% of the market. With Magento they quote 200,000 installs, so 10,000 sites will be above the average and 190,000 at or below it. Most of those above will be existing businesses with multiple employees, not a one person site with limited experience and limited investment capital.

Most will think let's start on the average site and then upgrade, the problem is it doesn't work that way. In a few years you would have to throw away most of what you learnt and start again, very very few can do that - if you can you are on to something. There are some who fight through it and over 7-10yrs break through the barrier, and then there are the very few who are just lucky and get it all right. Pick where you want to realistically be, and just fight through the pain barrier to get there, but, everything moves so what you thought was a target could have moved by the time you get there and it had nothing to do with you (rainbow effect).

For us, we just cannot bring ourselves to build an average site, it would drive us completely nuts, there is no problem with hard work, the problem is the reward that comes with it. Watch the tv show Arrow or the film Hitman, pretty much sums up how it all works, more discipline more reward - but at a cost. The VC company that funds the platform we use told us that another recession is coming between Last Quarter (Q4) 2013 & 2014, what is average today will be below average in 1yr – over 70% of online sales are concentrated in Q4 and it is getting worse.

So when you come to your conclusions always remember, are the people given the information backwards looking (80-95%) – looking at today (5%) or forwards looking (1%) – we are somewhere between the latter two. None of them are right or wrong – they just have different dynamics – different levels of discipline – different amounts of effort – different extremes of highs & lows. Someone backwards looking short term has the advantage as they will generate revenue immediately, someone forwards looking will have the advantage long term - but they have to wait earning zero revenue while time moves to where they projected themselves - that last part is stupidly painful.

Ultimately there are three things you need: cost(management); time(business); architecture(technology). The top 5% of sites have two perfectly balanced, the top 1% have all three perfectly balanced – but the closer you get to the 5% & 1% the more discipline and patience you need. For the backwards looking the problems haven’t yet caught up, it takes a few years for a trend to form. Just look at all the posts these days, ‘rankings dropped’ ‘how to increase traffic’ ‘maximising ppc’ '1mil product site' – it is starting - so find your niche and build it up or just go big.

Is this for an 18 year old?

Some companies you may have heard of were started by college students / teenagers (Facebook, Google, Microsoft, UPS).

If you are dedicated then you are old enough.

Thanks guys, really appreciate it. I have taken all of your advice and i'm in the process of starting very niche. I have found my product I want to sell and I'm building up my website with Shopify. I think I have no choice but to drop ship as I have low capital which I want to spend on PPC. However, I will order a short-stock of items to avoid broken and refunded goods. Is it possible to do drop shipping and hold inventory and ship as two options to the consumer? Where drop shipping is free shipping, and inventory shipped has a flat rate?

Well, the earlier you start with business, the better I guess.
As long as you know how to balance your time.
Good luck!

Just to add more into the topic.

I founded my first small business (online) on Amazon when I was 17. The good thing about the Internet is that it hides transparency.

It is better to start a business young and vivid, then when you get old.

Jeff Bezos once said that he would regret if had not started Amazon, even though if it fails. He did not want to do it when he gets 80.

Source: Jeff Bezos Interview -- page 3 / 6 -- Academy of Achievement

Serpyre makes some good points. Particularly this:

If you're pure-play, i.e run a web-only store, you particularly need to focus on getting the technology right. You need to select the right platform, which in your case starting out would most likely be a hosted solution like Shopify or BigCommerce.

You might want to ask them for permission due to copyright concerns.

If it was from a dropshipper, probably yes.

1. How much time will I need to commit to my business? Should I drop ship?
- As much time as you can spare without affecting your study. Once set up, the only regular stuff to keep on top of is orders, customer service and traffic management (as well as any problems!). All other work is generally improvements, adding stock, making changes all with the aim of improving and increasing sales. Once up and running it can be set up to run with minimal time input. Dropship will afford you the minimum investment initially but also the smallest returns, but it's a good starting point and you can diversify later into stocking or producing your own products if you so wish. Dropshipping often helps identify your preferred routes of sale.

2. What platform should I start at with $1000? Should I start selling on Ebay? or go straight for a website? Should I start off drop shipping to accumulate some capital?
Look at Magento for Multichannel eCommerce eBay, Amazon & M2E Pro - build your own and sell multi-channel on eBay and Amazon from the off. These vids will teach you how to build cheaply and then you can save your money for a stock purchase or for traffic. Some will say it's not worth it as they're so competitive and it's certainly harder to make money when dropshipping but if your software lists it for you then what's the harm in tripling your sales channels and having two massive companies market your products for you. Just make sure you mark up products to include their fees, you'll still end up making sales if your more expensive by having good looking listings and a strong profile.

3. I had thought of doing a bluetooth items website, however I think that it's going to be hard to compete with people on Ebay. I've looked into my domestic competition, which is mostly big name stores which sell electronics (including bluetooth products), and I don't know if it's possible to differentiate my website enough so that people have a reason to purchase from it.
- Don't do electronics, way too much competition and the market changes so often. Go very niche, google picking a dropship niche and there is loads of info out there. Look for something $100-500, targeting upper middle class, not too large to have special shipping rates, something that you can write about or know about already, etc. You don't have to tick all of the boxes but it makes it easier if you do.

4. Is this too much for an 18 year old? I feel a normal day job is not for me, I want to build my wealth early and help my family. I don't want to stand and flip burgers, I have ADHD. I want to utilize my creativity and impatience, and be in control of my own success. I feel like I have nothing to lose, the learning curve is beneficial itself.
- No, not at all, don't spend too much time thinking about it or investing any money at first. Just get set up and learn on the job, you might make a few mistakes but it's the best way to learn and you can always just build better or bigger next time.

5. Do I need to learn how to make a website?
- I would say bearing in mind your budget that you will have to learn to make one. It's not too hard to make them these days as long as you about it the right way and if you get stuck, you can always find a freelancer on People Per Hour or Elance to help you. The free videos above will help lots. Just make sure you agree job costs up front and don't go onto any hourly rates until you know your freelancers well

Also, I wouldn't worry too much about lifting images at first, you're only starting out. The wholesalers you work with usually provide an image bank to use images from but if you need to find them elsewhere then I don't think you'll get in trouble at your size. If someone messages you to take them down then you can do so easily. Failing that, learn how to take your own, watermark them and give your customers a view of the product that they can't get elsewhere.

Hope that helps!

If you are using shopify, aren't they taking the payments and determining if a purchase is possibly fraudulent or not?

No, it is your responsibility the same as a merchant processor. Too many and they will kick you off the platform.

Fraud Prevention & Chargebacks - Shopify Payments - Shopify Manual

I started my e-commerce business when I was 19 and ran it for 10 years. The only reason I left the business was because my partners were married and ended up getting divorced which left the business in shambles.

Anyway, send me a PM. I'm writing an ebook on the subject now and would be happy to share some of the details with you in advance.

I can also help answer some of your other questions.

I started ecommerce at a young age years ago, I am slowly trying to divest out of the niche because the carrying costs are very high. Dropshipping has pitiful margins. Unless you are going to develop and market a unique product I don't think E-commerce is the most efficient way to earn money online.

Something I'd keep in mind when you're thinking about what kind of niche you want to sell in -- don't forget that, since you'll be basically running this business on your own -- you're going to be in charge of marketing it.

This means that it might be a smart idea to try and come up with a selling niche that caters to an audience you can readily connect with. This will make it a LOT easier to make sure that your store converts and you're able to convince people to click that "buy" button. Even if it's just about the product descriptions and what kind of copy you have on your site or selling platform. The ability to really connect with your audience and potential customers goes a LONG way when it comes to ecommerce.

I would suggest ebay first, just to learn the basics of ecommerce. Packing and shipping, returns, questions, problems, supplier issues, inventory.

after a few years on ebay im just now looking to expand to my own site, and the things ive learned there will help alot as im expanding. I wouldnt want to build a whole site and realize the market is small for my niche and/or make an error that I could have learned to handle while selling on ebay. just my .2

1. The more the better
2. Ebay + Amazon is recommended + Website don't have to be expensive
3. Technology isn't recommended, low profit, plus loses in value very fast, because of innovation. Look for products that maintain similar value to reduce risk at the start
4. It's not to much. You can do it, if you believe and can motivate yourself to put in the work
5. Website are very simple these days.

Hope this helps you. Enjoy

1. How much time will I need to commit to my business? Should I drop ship?

I would start drop shipping, personally.

2. What platform should I start at with $1000? Should I start selling on Ebay? or go straight for a website? Should I start off drop shipping to accumulate some capital?

There are numerous different platforms with different monthly fees. I use Wordpress with Woocommerce because once you have the extensions that you need, the only monthly cost is hosting.

3. I had thought of doing a bluetooth items website, however I think that it's going to be hard to compete with people on Ebay. I've looked into my domestic competition, which is mostly big name stores which sell electronics (including bluetooth products), and I don't know if it's possible to differentiate my website enough so that people have a reason to purchase from it.

Personally, I would stay out of electronics altogether. It is highly competitive and beating the big boys would be very hard.

4. Is this too much for an 18 year old? I feel a normal day job is not for me, I want to build my wealth early and help my family. I don't want to stand and flip burgers, I have ADHD. I want to utilize my creativity and impatience, and be in control of my own success. I feel like I have nothing to lose, the learning curve is beneficial itself.

I don't think your age has much to do with it. It'll come down to researching the niche you want to get into, building and promoting the site and consistently spending whatever time necessary to make the site successful. Building a site is always a learning experience that is beneficial.

5. Do I need to learn how to make a website?

Depends on the shopping software you choose. Woocommerce is based on a Wordpress blog, which is pretty easy to use.