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Article:
How I Shot Myself In the Foot.. No, Wallet! by: Palyn Peterson I need to let you in on some very important information. Not only will this information save you lots money, or possibly the life of your entire business, but it will allow you to increase your profits through multiple businesses. First off, operating an online store is a fabulous and lucrative pastime, so kudos on making that decision. But before getting into the thick of it, heed my warning, you do not want to make this same mistake: only maintain one distributor for each of your online stores. Two if you MUST. I know what you might be thinking right now, 'But the more products I have, the bigger the selection will be and I'll end up selling more -- therefore I'll be making more profit!' And that's exactly what I thought at one point, too. But unless you are charging sky-high prices or maintaining an inventory of your entire stock, then this thought is only half true. It is true that you may end up selling more, but the reality of the situation will quickly appear and you will be losing money with nearly every sale. And this is all centered around one simple, and easily glossed-over factor: shipping. Let me tell you a true story. Many years ago for one of my businesses, I had this grand idea of creating a recreation room super store. So I found four distributors for billiard equipment and recreation room accessories, one for board games, one for pewter products and one for candles and other neat decoration items. It sure seemed like a good idea at the time; I would be able to sell people everything a person would want and need to setup a recreation room with one shopping cart. I could virtually feel my wallet getting fatter. Then reality hit when I sold my very first order. The customer's order consisted of 1 or 2 small products from nearly every distributor I had. Through the online store's software, I had it setup to charge shipping based on the customers final price. When all of the items were tallied up, the customer was charged about $9.00 shipping, which was reasonable for the size of the order. But when I turned around to order the products from my distributors, I needed to pay $5.00 shipping at this one, $3.00 at that one, $4.00 here and there, and $3.50 at a couple others. My shipping costs totalled nearly $20! That amount was way too much to pass on to my customer when they were just ordering a few small items. They would have cancelled their order and moved on to one of my competitors. After that fiasco, I quickly reconsidered the direction of my business. So if you've got great idea that would involve more distributors, try opening a second online store. There isn't any rule that says you can't run '2
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