Becoming an Internet Entrepreneur – Supplemental Information Document
Stockmyer - July, 2011
In my opinion, the Internet/Web is the greatest tool ever for the entrepreneur. It allows you to cheaply (and fairly easily) reach new customers, sell things, and make money. It is well within the reach of the average person. Especially a business major. . .
None of the “pieces of the e-commerce puzzle” are especially difficult to understand, it is just that there are many pieces involved, and many different options available. This document makes several assumptions:
1) The aspiring entrepreneur wants the setup to be simple to operate.
2) The business will be small (less than $10,000 in sales per month).
3) The aspiring entrepreneur wants to minimize start-up and fixed costs.
Things needed to become an E-Commerce Entrepreneur
1) A product or service to sell
Real/Tangible Products:
- Physical location for products
- Packing and shipping supplies
- Postage/Postal Scales
Important decisions:
Are you going to be your own retailer (Direct Sales Channel) or will you sell through other retailers (Amazon.com, Barnes and Noble, etc.)
Will you store all of your merchandise in your home and be responsible for shipping and handling, or will you use a a third-party shipment processor? (such as Fulfillment by Amazon)
Will you account for your sales manually, or will you use a service to manage sales reports?
Digital Products:
Important decisions:
Will you store all of your digital files on your local computer and be responsible for sending files manually, or will you use a a third-party download management shipment service? (such as softseller.com)
Will you account for your sales manually, or will you use a service to manage sales reports?
A server to store the digital files
A processing service to automatically manage downloads to paying customers
2) A web site where customers can see and buy your products
3) A Payment Processor to accept credit cards and transfer payments to your bank account
4) A bank account
5) A credit card (or possibly a debit card)
6) A Domain Name (Web address)
Skills/Abilities that are VERY helpful
Basic digital imaging and manipulation (digital photography, scanning, file conversion, etc.)
Basic HTML knowledge
Advanced knowledge of word processing and file formats
Ability to transfer files via FTP
In my own case, with John G. Stockmyer Books, here's a breakdown of the different payments and percents involved when I sell one ebook from my own site:
Selling Price (Gross Revenue): 5.00
Subtract Paypal fee (2.9% of the selling price + .30 transaction fee) .15 + .30 = .45
Subtract Softseller.com fee: (.25 per transaction) .25
Net Revenue: 4.30
When I sell ebooks through a third-party retailer (Barnes, and Noble), the math is much simpler, because they do NOT charge transaction fees. They simply charge a fee of approximately 35% of the selling price:
Selling Price (Gross Revenue): 5.00
Subtract retailer 35% fee: 1.75
Net Revenue: 3.25
I included some screenshots from Paypal and Softseller to give you a look at how these services look.