Once you have the big picture as to what is needed to start your ecommerce store, what type of of shopping cart system you might want to use, one of the next things you want to do is to decide what you want to sell.

So how does one decide what to sell? The conventional internet wisdom says to choose something you are passionate about. Well, that makes sense to some extent, and it would be nice if we really have something we are passionate about and would like to promote. In a perfect world, our area of interest would have good market demand, and have little competition.

The reality is, you will rarely have all three factors going for you (if you do, it’s a no brainer!). So perhaps we should put it like this…pick a niche you are at least somewhat interested in, and do research to make sure that there is decent demand, while staying away from the products that are only profitable if you are a big player such as computers, memory, etc.

Drop Shipping

If you have decided to not stock anything, then you probably want to drop-ship products where you have an established warehouse/factory ship the products on your behalf. You would basically pick the products in their catalog(online/offline) you want to sell, and create those items in your site’s database. In a nutshell, when your customer makes the purchase on your site, you receive payment directly from them, and once you’ve verified payment, you then place an order with your drop-shipper (online or offline), and have them ship the order to your customer. You would basically pay the warehouse/factory your cost plus the shipping charges. The difference between your net sales amount minus what you have to pay them and what you charge your customer is your profit.

Now there are many drop-shippers you can work with. Just google “drop-shipper” and you’ll find plenty of websites and directories listing drop-shippers in all kinds of industries. Some sites will even charge you for their “secret list”. It’s up to you to decide if the information they provide is something you cannot find yourself. I would suggest to start contacting drop-shippers in your chosen industry you can find for free, get a price list, and see if you like the profit margin or not.

Stocking Your Own Products

Drop-shipping is convenient, but you’ll never have a really good margin doing so. Remember, the warehouse/wholesaler that drop-ships on your behalf has to take a cut too for stocking, packaging, and shipping the product for you.

To have a higher margin, it’s a good idea to but directly from the factory and stock products yourself. Now, before you think you get excited and think you can buy name brand items at the same price as big retailers and compete with them, think again. Basically, you would want to stay away from traditional products you can get anywhere. If you want to have a healthy margin, and still give good value to your customers, then your best bet is to import products from overseas, namely China.

Visit Alibaba.com and browse around. You’ll be amazed at the sheer number of factories that are ready to do business with you. Just make sure you research enough and work with the factories that have good ratings. You should even try to look for small items so you can even stock them in your garage to get things started.

Well, there you have it, some ideas to get you started in your product research. The bottom line is, there are more suppliers out there than you can even imagine…you just have to look. So start looking, and narrow down some ideas you’re comfortable with, so you can start building your website, and start selling!