Module 1: Choose Your Store Model
What we'll cover in this module:
- Intro: Welcome & What to Expect
- 1.1 Some Important Definitions
- 1.2 Choose Your Store Model
- 1.3 Understanding Your Future Store's Catalog
In this free online store building course we will go into every detail of exactly what we do to build highly successful niche web stores, just like the ones selling for 5-to-7 figures in our Website Marketplace!
Let's just say we have the "blueprint" for building successful niche stores, and every bit of it is right here in our free training program! If you're serious about building your own successful web store, this is the program for you!
In the training that follows you will learn precisely how to...
- choose what product to sell based on important factors
- source products at true wholesale prices
- launch your online store & optimize it for conversions
- get visitors & maximize your store's profits
There's no time like the present, so let's get started!
Just a few quick notes to help you get the most out of this training:
1) Each step contains a 'Learn' section (indicated by the icon) that teaches you why the step is necessary, then an 'Execute' section (indicated by the icon) that indicates how to actually complete the step!
2) The 'Learn' sections will sometimes be text, sometimes be video, and sometimes they'll be a combo of both. If you feel like you already have a good understanding of the topic being discussed you can jump straight to that section's 'Execute' step, but never skip an 'Execute' step or you'll break the process!
3) You will often see links to guides throughout the training and these are standalone tutorials that supplement and support our core training. They can be vital in helping you understand a concept, but if you already have a good understanding of the topic in hand you can bypass that particular external guide.
1.1 Some Important Definitions
In order to give you the best chance of success possible, it's important that you know a handful of important words or phrases and what they mean. Do your best to learn the following words/phrases and what they mean before you jump into the steps to build your own store.
- eCommerce Store: When we say 'eCommerce store' or 'online store' we are referring to a digital store that's located on a standalone domain (i.e. BlueWidgetsDirect.com). Much like a specialty store in the real world, and eCommerce store is a virtual storefront where customers can come to purchase products.
- Domain name: When we say 'domain' or 'domain name' we are referring to the website address of your online store (i.e. BlueWidgetsDirect.com).
- Shopping cart: A 'shopping cart' refers to the software (aka platform) that your web store runs on. Typically we use a "hosted" shopping cart, which means web hosting (aka the server (computer) that holds your website's files) is included with the service.
- Merchant: A 'merchant' or 'retailer' is the individual or company owns & runs a store, in this case this is YOU.
- Customer: A 'customer' is the person (or company) who purchases products (at full retail prices) from an eCommerce store.
- Niche: A 'niche' is simply a product type (i.e. dog houses).
- Brand: A 'brand' or 'brand name' is simply the name used to market a manufactured product line (i.e. Sony).
- Supplier: A 'supplier' is the source you buy products from at wholesale, discounted off retail prices. Suppliers can come in many shapes or forms, but any that can get you product for less than you can sell it for are viable.
- Manufacturer: A 'manufacturer' is the company who makes the products for any particular brand name of product. If any trademarks or copyrights are held on a product it's almost always the manufacturer who owns those.
- Distributor: A 'distributor' is a company that buys products in bulk from a manufacturer and then "wholesales" them to retailers (merchants) like yourself. Typically distributors will wholesale many brands of product within a given niche.
- Private Label: To 'private label' is to take a generic "shell" product and put your own branding (labels) on it. Typically this is how most manufacturers start the process of creating their own brand of products.
- Merchant account: A 'merchant account' is the payment processing solution that's tied to your shopping cart that allows customers to pay you via credit or debit card. Typically a merchant account is tied to a personal or business checking account and funds collected from customers (minus processing fees) are deposited into that account a few days later.
Make sure you understand these definitions and have memorized them (or at least know where they are if you need to reference them later on!).
1.2 Choose Your Store Model
The two store models we use are:
- model 1: High-Ticket Drop-Ship Stores
- model 2: Low-Ticket Impulse Buy Stores
A quick summary w/ PROs (versus the other) of each model:
High-Ticket Drop-Ship Stores (model 1)
model 1 stores generally sell brand name products that are drop-shipped direct from a manufacturer or a distributor of the manufacturer's goods - so you are selling someone else's brand of products.
We like to target $50+ profit per order, which generally requires the average product in your catalog to retail for $250+. This amount of margin-per-order allows us to use paid advertising to drive more traffic direct to our store.
PROs of this model over the other:
- Startup costs are almost nothing because you don't have to prepay for product, it's "drop-shipped" direct to your customer after they've paid you
- The profit-per-order is excellent ($50+), warranting any time spent to fulfill the order and allowing for more spend on paid advertising
- It takes far less orders per month to turn a serious monthly profit with this type of store
Low-Ticket Impulse Buy Stores (model 2)
model 2 stores generally sell generic 'base' products that we can sell as our own brand (aka "private label"), and typically we bring light bulk into our own fulfillment center (or we use a print-on-demand (POD) service for manufacturing and direct-to-customer shipping).
The margins are usually solid (percentage wise) but there's not a ton of profit-per-order, so selling in volume is necessary to make serious monthly income.
So what is private labeling, exactly?
In the simplest of terms, a private label product is a "generic" product that a company makes slight tweaks to - often times just changing the product's label - to make it appear to be made by them (aka "their" brand name).
The easiest example of this is Costco's Kirkland brand name. Costco doesn't actually manufacture any of the Kirkland brand products, they simply take a 'base product' that some other manufacturer has made and they slap their label on it.
PROs of this model over the other:
- No official business entity is required to get products at wholesale, so this saves a bunch of time & effort up front
- Generally we "private label" generic 'base' products when we take this route, and that allows us to retail as a unique brand name (eliminating competition & price wars)
- These stores are generally worth a higher multiple when you go to sell
Decide whether you want a model 1 or a model 2 store (you may want to read through section 1.2 before making that decision).
1.3 Understanding Your Future Store's Catalog
It's important that you understand what your opening (and eventual) catalog will look like, and how this is completely dependent on which store model you select.
model 1 stores typically feature every product available to you via the manufacturer or distributor you set up with. Typically for model 1 stores you will source products one brand at a time, and when you secure a source for a specific brand you will offer all products within that brand's product line.
It's also important to note that for a "starting catalog" you can start with offering just a single brand on your store, as long as that's a reputable brand that's recognized within that niche. Later on you will want to expand your catalog one brand at a time as you source additional brands.
model 2 stores are a different beast, and you need to think about your opening and eventual catalog for that store model in a different way. Since model 2 stores are typically focused on generic 'base' products that you "private label", you generally want to start off with a very tight catalog that you can test out with a small amount of pay-per-click ads to assure you've got at least one winner product.
With model 2 stores, any given product in your catalog can be a winner or a loser, and that's really not the case with model 1 stores. With model 2 stores you'll want to start with no more than 5-10 products that are all within the same niche grouping, and when you find a winner, you'll want to create "spin-offs" of that product, or extremely similar products, to expand your catalog.
For example, when we launched Beloved Life Jewelry we started off with ~10 necklaces that we thought might appeal to "hip moms", but the only "winner" in our initial ad tests was the Mom & Daughter Tree of Life Necklace. So we wisely overhauled the store to feature multiple necklaces with that specific design and alterations of it (Mom & 2 Kids, Mom & 3 Kids, etc.).
See the thought process here? If not, don't worry because it should become much clearer as we choose & source products, and then build out our store's catalog.
Decide whether you want a model 1 or a model 2 store (if you didn't already previously).
|Next: Module 2: Choose Your Store's Niche|