Most Americans have come a long way from getting in a horse and buggy and traveling a few miles to the town hardware store. In fact, most of us have come a long, long ways—to not even leaving our houses to shop. And the recent global crisis of COVID-19 has proven to accelerate this trend. O’Donnell reports, “Consumers around the globe took up digital shopping amidst lockdowns and physical restrictions. Online retail sales accounted for 19% of total retail sales in 2020, up from 16% the year prior, according to a recent UNCTAD report.
These shoppers aren’t looking back, either. Global e-Commerce is expected to reach USD 1 trillion for the first time in 2022, as reported in the Adobe Digital Economy Index.”2. Check out my custom pie graph constructed from data on Digital Commerce 360. 1
Online retail has gone from 14 % in 2018, to 16 % in 2019, to 20 % in 2020. This is a definite constant rise in online sales. With all of this money floating around in the digital world, one starts to think how can I get my hands on some of that free commerce. Well, here are 3 ways that you can begin—no matter how experienced or inexperienced—to utilize the e-commerce marketplace to start bringing in at least a small amount of revenue and start biting on your own piece of e-pie.
Insight #1: Eventhough We Ain’t Got Money,
We Got Something
Sell what you have. We see in history that the amount of extra money in people’s pockets tends to increase consumer spending.3 Though we have increased inflation, wages have been higher than ever (not to mention the recent government stimuli). There certainly is a lot money floating around to bring the uptick of consumer spending. The average amount of possessions that American households possess can also be compared globally. Sanburn notices,
Despite the recession, despite a brief interlude when savings rates shot up and credit-card debt went down, Americans arguably have more stuff now than any society in history. Children in the U.S. make up 3.1% of the world’s kid population, but U.S. families buy more than 40% of the toys purchased globally.4
Here we wince a little to realize that we have a lot of stuff—especially compared to other countries.
So how about finding some simple ROI in what you currently own. A large part of society is the working class raising families. With all of this family raising, the stages of children and family dynamics seems to change almost constantly. With all of those changes, comes the need to go “out with the old and in with the new.” Consider it your little rebate for purchasing the product that just comes after you have either used the item or forgot you even purchased it for some. Much of e-commerce is simple people that are not building a true business, but just want to make a few extra dollars.
Insight #2: Turning In The Goods: From Rags to Riches
Some of the most popular e-commerce marketplaces for new sellers are Ebay, Mercari, Etsy, and Facebook. These go-between platforms have user-friendly set up of photos, descriptions, and shipping options with less requirements expected of the sellers. Many do not know that Walmart actually has a lot of resellers on their platform. As you become more experienced, you can venture into Amazon and the new Target+ that just opened up Target’s gateway by invite to certain sellers and brands without the high competition that will be met on Amazon. With Amazon accounting for more than 40% of all U.S. e-commerce in 2021, the competition is not always a severe deterent.5 Understanding actual demand, advantages over other sellers, and helpful software goes a long way towards keeping up with the Amazon beast.
Do remember that these marketplaces will look out for their reputation as the up-front seller, and you will be under certain stipulations of meeting returns and other policies as deemed necessary by the marketplace. In short, they have their own butts to cover. So, you need to have your own crap together. Starting your own personal marketplace through platforms such as Shopify, WooCommerce, or Magento is also an option down the road.6 Clearly, there are a lot of options in the event that selling progresses.
Insight #3: Pump Up the Jam; Pump It Up
If you think you have the itch to go from your after-the-fact rebate offers to intentional money-making, you will need to step up your reseller game. In most cases this means to register as an official business. This, for most, is the real leap of faith. Each state is different according to the details around registering (usually through their website), fees, and renewals. The real ticker is that by opening up a business, you will need to give an account of your financial transactions and in most cases file for a business tax number. At the least, you will need to keep up with federal taxes. For most states (but not all), this also means keeping up with state taxes.7 The extra work that all of this takes will keep many onlookers away. Software such as Quickbooks can help with the financial elements.
This is all mostly done in the name of becoming a reseller of goods that is allowed tax exemption upon their own purchases (since the tax will come down the line). In Minnesota, this is known as an ST3 form, but goes by many names and forms in different states. 888 Lots has a great breakdown by state of coinciding requirements.8
Insight #4: Got to Start Somewhere; Why Not Here?
The metamorphosis for business models for many starts with what is known as arbitrage. Products coming from physical retail stores are appropriately known as retail arbitrage, and products coming from online stores are known as online arbitrage. The models listed here may also be a cross-over of sorts with other models—instead of pat lanes of progression.
Eventually buying in bulk from liquidators, wholesalers, distributors, manufacturers, or even your own suppliers is a next step for many. Some start out with dropshipping, ordering products after they have been ordered by the final customer. This many times comes with possible problems with the supply and customer reviews. Buying returned or overstock products from big retailers is the heart of liquidation and a route that some pursue. The key thing here is that most wholesalers, distributors, and manufacturers will prefer to work with those maintaining a legitimate business defined by a steady distribution chain. Eventually, you could source for a private label product that is not already patented or design your own product that can go up for its own patent. Backed up by great branding, this can be a great way to mainstream sourcing, though it usually locks up your investment in more limited products.
And not to be overlooked is the e-commerce that is done without any products at all—rather the revenue that is accrued through referral by way of affiliates. As John Hughes reports, “More businesses than ever are using affiliate marketing as a cost-effective way to reach targeted audiences. Annual spending in this industry is projected to reach $8.2 billion by 2022 in the U.S….For context, 2017 saw affiliate marketing sales come in at $5.4 billion. The growth outlook is healthy.”9 Simply recommending and dropping links seems to be a big wave of the future.
Do Not Fear—E-Commerce is Here
No matter where you are in this overarching story of electronic trading, there is room for plenty more. From simply selling what you got through a plethora of exchange mechanisms to pushing the envelope farther, the e-commerce market isn’t going anywhere. Rather, this e-commerce venue is calling—even demanding—for people like you. Clear vision, work ethic mixed with determination, steady faithfulness mingled with responsibility, and sheer passion backed up by industry-specific education trumps the many problems that could spur into real pitfalls. Learning along the way is the name of the game. Don’t worry about making mistakes. While some mistakes are more costly than others, none are too expensive with the right person to cut through the technical jungle and steadily eat the electronic pie.
Footnotes
_________________________