Advise Please: Online Store

[simoned]

Hi Guys

Im in the starting stages of wanting to set up an online store. What I do want to know is how to buy / ship in a cost effective way. Toys Stores for example how do they buy /sell /ship? I am assuming that the majority do not hold stock? Or do they?

Do you need permission to advertise someone elses good on your website?

All very new soooo many questions and I know they are probably simple questions but any information you can give me would be great.

[John Debrincat]

Originally Posted by simoned

Hi Guys

Im in the starting stages of wanting to set up an online store. What I do want to know is how to buy / ship in a cost effective way. Toys Stores for example how do they buy /sell /ship? I am assuming that the majority do not hold stock? Or do they?

Do you need permission to advertise someone elses good on your website?

All very new soooo many questions and I know they are probably simple questions but any information you can give me would be great.

Hello Simoned,

If you are starting the business from stratch there will be lots of questions. Maybe this blog on starting an online business can help - http://tinyurl.com/ykdv67f.

Online stores do work on different processes. Some will maintain a warehouse with stock and do picking and packing themselves. Or there is a drop ship model where someone else warehouses and you direct the pick/pack/ship advice to them. If the online business is also a bricks and mortar then in general they hold their own stock. Of the rest (pure online only) I'd say 50/50 hold stock vs drop ship or pass on orders to a wholesaler.

The best solution is very product dependant.

There are also services like http://www.temando.com that can be very effective for getting best prices and service.

With respect to the second question it is an issue of both copy right and agent/distributor agreement. Generally is you are a reseller for a companies products they will give you permission to use product images and descriptions etc. If you don't have that permission then it could be breach of copyright to display the product on your website. If you buy products cheap overseas and resell via the web and there is a local authorised distributor in the market then you may very well have legal issues. You need to always be careful around any brands or brand names that are trademarked or copyrighted. Also taking images and content from other websites and just reusing it can be a violation of the copyright provisions.

Hope that helps.

John

[simoned]

Originally Posted by John Debrincat

Hello Simoned,

If you are starting the business from stratch there will be lots of questions. Maybe this blog on starting an online business can help - http://tinyurl.com/ykdv67f.

Online stores do work on different processes. Some will maintain a warehouse with stock and do picking and packing themselves. Or there is a drop ship model where someone else warehouses and you direct the pick/pack/ship advice to them. If the online business is also a bricks and mortar then in general they hold their own stock. Of the rest (pure online only) I'd say 50/50 hold stock vs drop ship or pass on orders to a wholesaler.

The best solution is very product dependant.

There are also services like http://www.temando.com that can be very effective for getting best prices and service.

With respect to the second question it is an issue of both copy right and agent/distributor agreement. Generally is you are a reseller for a companies products they will give you permission to use product images and descriptions etc. If you don't have that permission then it could be breach of copyright to display the product on your website. If you buy products cheap overseas and resell via the web and there is a local authorised distributor in the market then you may very well have legal issues. You need to always be careful around any brands or brand names that are trademarked or copyrighted. Also taking images and content from other websites and just reusing it can be a violation of the copyright provisions.

Hope that helps.

John

Hi John

Thanks for your reply much appreciated and very helpful! I have had a quick research of my competition online and there is only 1 business also Aussie based in the top 3 google search. I have actually looked at this model for my own research and again I keep coming back to the stock question this lady offers 100 /1000's products, again Im assuming she doesnt hold the stock on site. Competition is good right? If there is only one other website doing the same idea that has to be a good thing? and a great learning curve. I can see a lot of the work has been done. Im so ready to have a go at this just need to sort out the ordering / stock issues?

[BrightBiz]

Hi Simoned,

John's post is very helpful and some great advice.

Another way that many people "appear" to have online stores is by being affiliates of products.

This way you build a website and list other people's products, when people click through to those products to buy using the links on your website, you are paid a commission.

That way there is minimal cost involved, and no stock handling, there are many, many, many websites online that operate this way.

Take a look at http://www.clixgalore.com.au or http://www.commissionmonster.com they both offer Australian affiliate programs by some very reputable companies.

Hope that helps some,

Loreena

[Steven Hudson]

Hi Simoned

John makes some great points.... regarding warehousing don’t forget you can outsource this to a 3PL. If you are going to own the stock and the garage is too small this is probably the best option. It will give you a flexible solution and you can concentrate on the marketing of your web site.

Delivery: most transport companies dislike doing home deliveries and if the buyer is not home when they call there is usually a redelivery fee.

All the biggies such Catch of the Day and Crazy Sales use Aust Post, their rates are competitive, service is ok, you can pay extra for track and trace, best of all and this is why the biggies use them, if there is a Not at Home, the local post office is not too far away to collect from.

Cheers

Steven

[Emroy]

I'd say have a look into drop shipping - This way, the supplier / distributor of the product will package and ship the product for you.

You will be paying a slightly higher cost per item, but you won't have to fork out large amounts of money in the early stages for stock.

-Jake