20-Plus Years Later - What has Changed in eCommerce

I started this ecommerce blog in 2009 to document the steps my wife and I used to build a successful ecommerce, an effort that we started early in our marriage and that got our family off to a great start.

We build a sporting goods store, RobbinsSports.com, that (after five years of hard work) was netting us over $1m annually in sales, and producing an annual income that was over $200k.

During the process of building our sporting good store, we added two children to our family, and we learned how to balance our time between raising these kids and continuing to build a business that would provide for them and others to come.

In 2009, we sold RobbinsSports.com. Shortly after that, went to work I spent two years working for the LDS Church doing search engine optimization and helping with other marketing and consulting roles.

Fast forward 20 years from when we started our first successful ecommerce drop-ship business in 2004. Much has changed about the industry.

With our non-compete agreement long since expired, and now with six sports-loving boys in the household, it made sense for us to pick back up on sporting goods and team sports equipment. In 2023, we created RobbinsAthletics.com, a resource for athletes, coaches, and parents to learn and to buy sporting goods. Over the first half of 2024, we decided to start making significant efforts to make RobbinsAthletics our main family income, specializing in, among other (sometimes random) things:

• Custom Sports Uniforms - A couple of our suppliers now offer design tools that allow customers to do custom jersey and other designs to make their uniforms
• Portable Bleachers - These are not so easy to ship, but our supplier has a deal with freight that makes shipping somewhat affordable despite high gas prices and a bit of a breakdown of the overall logistics system in the US.

My Online Store: How Much Will It Cost Me?

Building an online store is one of the less risky ventures in terms of startup capital required to make it operate. Most of what you need to become successful involves time and patience. Especially if you're not planning to buy a bunch of inventory and warehouse it to begin with, you can become profitable building an online store within a matter of months, maybe even less. However, there are some costs involved. Here's what to expect.

Domain Registration - $8/year
Registering a domain costs next to nothing. I register my domains with NetFirms.com. They are the cheapest I've seen. Yes, you could register your domain with GoDaddy, but then you'd be putting money into the pocket of one of the biggest perverts (Bob Parsons, who owns GoDaddy) on the planet. If you have any sense of morality, use NetFirms instead.

Web Hosting - $8/month - $200/month
The reason there is such a wide range here is because there are greatly varying levels of hosting available. For $8/month, you can get an account on a shared server, which means that your website shares resources with likely hundreds of other websites, any and all of which could (and likely will) affect the accessibility of your website. If you're just starting out and on a limited budget, shared hosting is not a bad way to go. However, if you want something much more reliable, you can get a dedicated server, which gives you much more flexibility. A dedicated server (with a dedicated IP address for your store) will cost you close to $200 per month.

Merchant Account - $25/month
Merchant accounts typically charge a monthly fee for their services. I set up my merchant account with Elavon, who has a partnership with Costco. Since I have an Executive Membership with Costco, the monthly fee is waived. I've heard that Sam's has a similar deal for merchant account services, and there are likely other ways to set up a merchant account without incurring a monthly fee.

In addition to the monthly fee charged by merchant accounts, there is also normally a per transaction fee, which is usually in the neighborhood of 25 cents per transaction. If you are incurring transaction fees, it's a good sign for your business because it means you're making sales.

Payment Gateway - $99 setup + $20/month monthly gateway fee
I use Authorize.net for my payment gateway. Their fees are pretty standard, $99 to set up your gateway and $17.95 per month to use your gateway. There is also a $0.10 charge for each transaction you put through your gateway. The good news is that the $17.95 per month gateway fee is waived if you have enough transactions (180) in any given month.

SSL Certificate - $75/year
You'll need an SSL certificate to secure your site and protect your customers' data. I bought my latest SSL certificate through Register.com, and it cost me $54 for two years because I found a coupon. The reason I put $75.00 as the cost of an SSL certificate per year is that number is pretty standard for SSL certificates. There are varying grades of SSL certificates, but you can get by just fine with the cheapest one. The more expensive ones ($200 - $1000 per year) from Thawte or VeriSign are usually used by larger corporations. From my experience, there's not a legitimate reason to spend any more than you have to for an SSL certificate.

There are obviously other costs to anticipate such as telephone, internet access, and other costs, many of which you would probably be facing through your normal lifestyle anyway. A good first goal in the development of your online business should be to hit the break even point where the margin you make on your sales exceed your monthly expenses. As you can see, it shouldn't take many sales in a month period to become profitable. There's a surge of morale that comes with knowing that your new business is profitable.

A Quick Overview of How to Establish an Online Store

I began building a new online store while I've been documenting how I built my online sporting goods business. I set up ProHealthcareProducts.com about three weeks ago. I found a supplier who would drop-ship medical products for me, and I've added (so far) 700 of their products to my store. In contrast to my first venture, RandomDeals.cc, it took me less than two weeks after I began building the store to get my first order. I installed a Zen Cart store and shopping cart system, and then began adding products to it on September 9th. My plan was to start getting orders by the middle of October. My three-month goal is to build the site up to the point where it makes $5,000 during the month of December. It was a pleasant surprise to start getting orders before the end of September.

I'm saying these things not to boast, but instead to relay some information to my blog readers about what I did to get my new online store operating and producing sales so quickly. You might evaluate your strategy and gain some insight from what I did.

I originally started my new online store using Magento, but I quickly found that it was a bit more complicated than what I needed. The deal breaker for Magento was that it was just too slow for me, even though my site runs on a high performance dedicated web server that I administrate. It took too long to add products to my store. When you're planning to add thousands of products to a new store, every second makes a difference. Besides the administration part of Magento, there was even a visible difference in the storefront section of my site. I decided to go back to my old standby, Zen Cart.

Here's a strategy that includes what I've done so far on my medical products store, along with what I intend to do to reach my December goal for profit.

• Determine which products you want to sell, and find a supplier or suppliers who will drop-ship for you. If you are planning to keep an inventory of products, the drop-ship aspect of the equation can be omitted.
  
• Set up a web hosting account for your site. I host mine with HostGator. They've proven to be pretty reliable, and their hosting plans are competitive.
  
• Set up a shopping cart system for your new website. I use Zen Cart. I've tried others, including osCommerce, Magento, and VirtueMart (for Joomla), and I think Zen Cart is the best free shopping cart system available.
• Start adding products to your store.
• Customize your shopping cart system so that it looks like something customers would be willing to buy from.
• Regularly submit products feeds from your store to Google Base. I've been adding about 30-50 products to my store each day, so I submit a new feed to Google's product search at the end of each. Zen Cart has a nice add-on that can be installed to facilitate the creation of a product feed for your store with the click of a button. Any shopping cart worth using nowadays should have the ability to create a Google products feed automatically.
  
• Submit a new sitemap through your Google Webmasters account after making updates to your site, whether the updates include adding new products or creating new pages. Especially for new websites, getting your sitemap to Google is a good way to get indexed more quickly than you would otherwise. Again, Zen Cart has a good add-on that can be installed and used to create sitemaps.
  
• Start getting links to your site. There are lots of different methods for doing this. Getting links from a good variety of solid websites is crucial for your new store. I'll be writing more blog entries with some ideas on what I've done to get links. For the intent of this entry, I'll just list a few ideas for getting some quick links: 1) Start off by asking friends or colleagues who have websites to post links to sites they maintain; 2) Write some articles related to your new online store, and submit the articles publishers such as ezinearticles.com; 3) Contribute to online forums or the comments sections of blogs, and include your website's link with your comments; just remember not to act like a spammer by making sure you are actually contributing to the website on which you're commenting; 4) Submit your online store to local business directories and other directories for which your site is relevant.
• Merchant account and payment gateway.
  All the while you're making consistent efforts to build up your store's product offering, increase your site's reputation with the search engines and establish some traffic to your site, there are some administrative things you'll need to do, including setting up a merchant account and a payment gateway. I use Elavon for my merchant account, because they have the best discount rate I've found. The most widely used payment gateway (which provides an interface between your merchant account and your website) is Authorize.net. I've used them for years, and I've found no reason to shop for a different gateway account.
• You'll need to secure your website so that customer's can place an order on your website without having their credit card information intercepted by one of the many hackers out there. Setting up an SSL certificate can be kind of tricky, but your web host should be able to help. In the past I've had the HostGator support people install my SSL certificates for me until recently just because it was convenient. Recently I've figured out how to do it myself, so I install my own now.

All of the bulleted items mentioned above may sound like a lot of work. In reality it does take some effort to accomplish all of this. However, I hope I've provided you with a sufficient checklist so that you can at least gauge what you need to do to get your online store to the point where you can start having sales come in and your business will be profitable.

Two Approaches for Adding Products to Your Online Store

As I built RobbinsSports.com and consulted with other online store owners, I noticed two distinct schools of thought with regard to how store owners approach adding "inventory" to their online stores. The first approach (I call it the megastore) is to focus on adding as many products as you can from as many suppliers as you can find. The second approach (I call it niche domination) involves adding enough products to your store to have a legitimate selection of inventory, then focusing on getting rankings for the terms related to what's in your store. I'll explain more about these two schools of thought.

The Megastore Approach
During the second year of operating my online business, I was approached by a manufacturers representative for one of the companies whose products we were carrying. Manufacturers reps typically market many different companies in the same product niche. This is especially true in the sporting goods industry. The rep stopped by our home office as part of his regular visit schedule to his clients. He asked me if we'd be interested in carrying any of the other lines he represented, and I told him we would be glad to try them out. One of the suppliers manufactured sports uniforms. We quickly set up an account and began listing their products on our website.

It wasn't long (within one week) before we started getting orders for the new products we added to our site. Especially because our online business was somewhat established, Google and the other search engines picked up our new products quickly. We were obviously happy with the growth, and it gave me an idea.

At the time, we had about 2,500 products listed for sale on our website, and we were on pace to make about $75,000 - $90,000 in profit for the year. My reasoning was this: if we double the number of products in our database, wouldn't that effectively double the amount of profit we make? Well, we tried it, and it did. We added more than 2,500 new products to our online store over the next year and a half, and we saw our profit totals double proportionally.

The Niche Domination Approach
With more than 5,000 products listed on my online store, I had a much larger inventory than any of my brothers'. They chose an alternative approach to growing their businesses. My brother who owns OuterSports.com instead focused on owning search terms related to thermal underwear. Instead of adding more and more products to his site, he focused his attention on getting the links he needed to rank his site for that term and for similar terms. The decision to go that route probably came packaged with his decision to carry a significant inventory of the products he was selling. It makes sense that if you have thousands of dollars invested in products, you want to have those products moved as quickly as possible, so you make that your focus. If all your inventory is on the shelf of one of your suppliers, you're not so concerned about which products you sell.

The niche domination approach has worked well for those I've seen use it. Obviously there is a spectrum involved when you talk about either of these approaches. Most retail stores are somewhere in the middle of, on one end, having one product on a website while dominating the search engines for several terms used to find that product; and, on the other end, having thousands of products in their store, but no major keyword phrase for which their store ranks well. When considering where that spectrum you want your business to fall, you'll be constrained by the market conditions and competitiveness of the products you want to sell, your access to good suppliers, and other factors that may push you to one side or the other.

Comparing the Two Approaches
There are some benefits and drawbacks to both of these approaches. With the megastore approach, consider that each product you add to your store complicates your operation by some amount. For example, you really should have some knowledge about how your products work. Each product you add to your site broadens what is required of you and whoever you might hire to take customer calls. Also, as your list of suppliers grows, there is more complication in your entire fulfillment process. Our list had grown to over 30 suppliers, and it was often a chore to teach new employees how to handle placing orders with each of the suppliers.

A benefit to the megastore approach is that you are typically very well diversified. Sometimes Google tends to do strange and unanticipated things, which means that if you are banking on being at the top for a particular keyword phrase, and you're suddenly dropped, it could drastically reduce your sales. My brother experienced that after he'd purchased a significant inventory of thermal underwear. He had been #1 in the search results for that term all summer long. When the cold season hit, his site was dropped far down the search list, and he took a hit since he wasn't able to sell his inventory.

Evaluating the seach market scenario for the products you're selling and understanding what you'll need to do to capture a popular search term versus smaller long tail search terms will allow you to set up a plan to optimize your efforts.

What to Look for in Product Suppliers

A lot of people who are new to building online stores experience difficulty finding suppliers for the products they want to sell. For that reason, many would-be internet entrepreneurs tend to settle for using suppliers who aren't very easy to work with. For instance, I have found suppliers who add unreasonable drop-ship fees, who place restrictions on ordering terms (such as requiring that your first few orders be shipped directly to your main office instead of to your customers), and who generally make it apparent that, although you can ultimately sell their products, they're not interested in making it simple for you to sell their products without buying a large inventory. On the other hand, I have also found suppliers who have online ordering systems, complete with the ability to have orders shipped directly to customers. Most of the time, those kinds of suppliers are familiar with what's happening in the online retail industry, and they are very interested in having their product line in whatever stores (brick and mortar or internet-based) they can.

So what should you look for in a supplier to make your relationship work? First of all, you should find out whether the supplier charges a drop-ship fee to ship individual orders to your customers. If they do charge a drop-ship fee, how much is it? A supplier's policy of charging a reasonable drop-ship fee is not a deal-breaker, but it does say something about their attitude towards your business setup. It also determines whether it's practical for you to spend your time and energy promoting their products. If you are selling items for which your average profit margin on a single order is $10 and your supplier is charging you an eight-dollar drop-ship fee, it's not worth your time to even list that supplier's products on your site. If you are selling items that typically net $50 to $100 in profit per order, you can live with a $5.00 handling charge.

Here are some things to look for when searching for suppliers for your new online store:

• Profit margin: The best way to get higher profit margin products is purchasing direct from the manufacturer. Nobody (in most cases) sells a finished product for a cheaper price than the actual manufacturer. If you can get a useful drop-ship account with the manufacturer of a product, then you can be assured that the pricing you get is at least somewhat comparable to that of your competitors.
  Manufacturers typically distribute their products through distributors. Distributors are typically set up better than manufacturers (who tend to always sell their product in bulk to distributors) to do fulfillment one a per order basis, drop-shipping directly to your customers. If you want to find a distributor, you can normally contact a manufacturer and ask them who distributes their products.
  Often you'll find distributors that resale products made by other companies in addition to ones they've manufactured themselves. In all cases such as these, I have found that it is a lot easier to make decent profit margins on the items that a particular distributor manufactures rather than on item that it resells. This makes sense, since a distributor has to add its markup onto products it doesn't manufacture.
• Ease of Ordering/Tracking: Our suppliers' ordering structures include the following:
  
  1. Easy online ordering systems that allowed us to login to our account and easily place orders.
     
  2. Emailing order information to the supplier.
  3. Faxing order information to the supplier.
  4. Calling a supplier to place an order.
  
  
  These ordering methods are listed in order of convenience. The order also represents how much the suppliers focus on using modern technology for convenience. It's strange that even in the 21st century there are companies who don't use information technology to facilitate order placement and tracking, but that's the case many times.
  Most large clothing distributors give access for their customers to online ordering, tracking, and other pertinent information. Your customers will want tracking information, expedited shipping, and other perks. Unless you're shipping products from your own warehouse, you're limited in being able to meet your customers' needs by the customer service your suppliers provide to you.
  
• Return Policies: Returns are one of the worst parts of selling products online, but they are almost inevitable in most businesses. Selling digital products (downloads) is one of the only ways to avoid returns. Something you need to consider is your return policy and whether it will be supported by your supplier. Sometimes you can end up with a bunch of stuff you'll never be able to resell (like 3XL gold jackets), and you have to take a loss on it or find some other use for it if your supplier makes it difficult or impossible to return it to them.

Taking the time to apply these and other tests to sort out which suppliers you will use and which you will bypass will save you a lot of time. We occasionally found ourselves canceling accounts with suppliers and removing their products from our site after having spent hours and hours adding their products to our catalog. For those cases, it would have been nice to have sorted out those suppliers from the beginning.

Our Process for Finding Products to Sell

After my wife and I settled on sporting goods and team sports equipment for our new online store, we scheduled a few meetings at the white board in a spare room we had in our $460/month apartment. We brainstormed what products we wanted to sell: football, baseball, basketball, volleyball, (our four most favorite sports), soccer, tennis, and a few others. We tried to brainstorm as best we could what selection of products we would sell. We drew up how the categories would be laid out. We tried to anticipate the ordering patterns our customers would have. For instance, would there be a good percentage of customers who would combine in their orders products from different suppliers of ours who were spread across the country? If so, we were bound to lose money on shipping costs, since our shopping cart (osCommerce) would only allow us to input one zip code indicating the location from which our products shipped. What if many of those customers ordered expedited shipping from two different warehouses and our site only calculated it as coming from one location? Then we'd really lose money on the order.

Despite those concerns, we moved forward looking for suppliers to fill our virtual warehouse. While we're on the topic, that does bring up a point. Over the course of our owning the business, we were able to find many suppliers who would drop-ship their products to our customers. Some of the suppliers were smaller sports clothing manufacturers who carried an assortment as small as around fifty different styles. Others that we found and used held millions of dollars worth various sports related products in their warehouses. Each end of that spectrum has its advantages, but if you can find a good solid supplier with a wide selection of the type of products you want to sell, that will get you off to a good start.

Our strategy for finding companies that we could partner with initially focused on finding an association that covered sports equipment. We quickly came across the National Sporting Goods Association (NSGA), and we signed up for a membership. Their directory had all the contacts we would ever need: manufacturers, distributors, sales representatives who covered multiple lines. Because we were members of the NSGA (which costs less than $100 per year), we had some credibility with suppliers we contacted.

Another resource we relied on was Dunn & Bradstreet (www.dnb.com). They have a handy tool that allows you to search for companies using keyword phrases to find what you need. I would typically do searches for terms such as "basketball distributor" or "sporting goods wholesale". You can search nationally or by limit the search to a particular state if you want to deal with someone locally.

Finding suppliers for the products you want to sell can be a stumbling block for someone who wants to break into the online retail world. Just like everything else I've emphasized, this process can take some time. You may have to be more patient than you anticipated, but if you're persistent and use some creativity, you'll find you've ultimately taken another big step forward in your quest to own a successful online business

uSight.com Scam

A few years ago I was taking an entrepreneur lecture series class at BYU. The class was held once a week. Local guests from successful (and sometimes "potentially" successful) companies were invited to come teach the eager young minds of Brigham Young University about achieving success in the secular world. On one particular day, we were blessed with the privilege of a condescension from Brandt Anderson, the founder of uSight and uSight.com. Brandt started his discussion by explaining how he'd risen to such great heights since his first entrepreneurial venture, which involved stenciling basketball court markings on the driveways of people in his neighborhood for something like $20 a piece. He mentioned that back in his stenciling days, he drove a beater Volkswagen Rabbit. At the conclusion of the lecture, a student (obviously impressed at Brandt Anderson's business success) asked him, "What kind of car do you drive now?" Brandt's answer, "Which day?" Wow! If there was a contest for business owners whose ego's kept pace with their earnings, I would have definitely entered this guy.

At least Brandt was a decent lecturer (smooth talking is a gift a lot of entrepreneurs have), and it seemed like he had some good ideas. At the time, I was just building my first online store, OuterSports.com. I figured it wouldn't hurt to ask Brandt some questions, so I got in line after the lecture. He told me to stop by his office where he'd metaphorically toss me some crumbs.

When I went down to the uSight office in Orem, Utah, I came in and introduced myself to Brandt, who sent me to see someone else in the office. At that time, OuterSports.com was hosted on a shared BizHosting.com server, and I was interested in finding out if I could build my own shopping cart setup using JSP and Servlets, and host it with uSight.com. A marketing guy at the company jumped the gun and told me they'd host it for free for me since I was one of Brandt's fellow "Zoobies" (BYU student). I was pretty excited about the prospect of using one of their servers and being given preferential treatment.

In the end, access to my own personal web server at uSight.com never became a reality. Either they never intended to make good on the favor they'd offered, or their tech guys decided it was an unreasonable request. During this process of trying to get my account set up on a uSight server, I was asked to do a testimonial for them. They took me to a photographer and asked me to make some favorable statements about them. The end result was my picture on the uSight.com customer testimonials page. I've since asked them to remove it, but apparently testimonials are hard to come by for uSight.com. They still have my picture and testimonial up there. I'm the goofy bald guy wearing the OuterSports.com shirt. The funny thing about it is that the testimonial is on a page entitled "Real Stories".

Here is what's real about uSight.com's story. They promise a lot, and they deliver next to nothing. From what I've observed of companies like uSight.com (see my Simplx.com article), they are intentionally set up that way. I don't know if Brandt Anderson ever intended to sell a legitimate product, but ultimately he persisted in peddling a product that was definitely not what he said it was, right up until the time he sold the company to an organization called National Marketing Resources.

Shortly after I gave my "Real Story" testimonial about uSight.com, the deal they promised me ended up being nothing more than hype. Over the next few months, I found out that I wasn't unique in experiencing a letdown after getting involved with uSight. At least mine didn't cost me any money.

At least a few times each week I got calls from uSight.com customers who either claimed that they were afraid they had been scammed by uSight, they were considering using uSight's services and were nervous that the deal was too good to be true, or they were frustrated about not getting what uSight promised them. Many of uSight.com's customers who were still in the denial stage about what they had just purchased contacted me to find out how I managed to have such a different experience (judging from my testimonial) than they had had. These people had seen my company listed on uSight's "Real Stories" page, and they called the OuterSports.com customer service line to get some answers on how to get uSight to live up to the promises that had been sold. There were a few times I tried to use uSight's toll free number and their direct line to contact one of the guys I'd worked with while doing the testimonial. I never once was able to get a person to answer the phone. Instead, I was routed to a few different departments until I was tired of waiting for someone to answer. For me it wasn't a big deal, because I had the guy's cell phone number available. However, for someone who paid thousands of dollars to have access to a "coach" supposedly available at the other end of the line, the lack of availability much have been frustrating to say the least. I apologize to anyone who based any part of their decision to get tangled up with uSight.om on my goofy picture and concocted praise of the company.

Among the calls I received because my testimonial appeared on uSight's website was one from the Utah Division of Consumer Protection, who'd received so many complaints about the company that they were doing an investigation. The person who called asked me whether I knew that my picture was on uSight's website as part of a testimonial. I explained how that happened, telling them that after I did the testimonial, I never even got to the point where I used their service because they had backed out of what they originally offered.

My advice to anyone else who may be considering using uSight.com is to find a different source for your drop-shipping needs, your shopping cart and hosting, and whatever coaching you will need to help you market your site. There are sources available that are much more cost efficient, including manufacturers who'd be glad to have you help them turn over their inventory, free shopping carts like Zen Cart and Magento, decent hosting plans for as little as $5.00 per month, and a world of free information about promoting your site using search engine optimization and other marketing strategies.

One last interesting note about uSight.com: It looks like they do know a little something about manipulating search results. While I was writing this article, I googled 'usight', and I came up with some pages they've put out on the web to try to squeeze the negative search results off the first page of the search engines. For instance, here is an About Us page that showed up #16 on my Google search: http://usight-hosting.com/about-usight.html . You'll notice that this page includes the terms scams, frauds, fakes, and rip-offs. Those links point right back to the page they appear on. This technique is a well-know search optimization strategy to make that page show up high in the search engines for those keyword terms. The hope by uSight is that if someone does a search for "usight scam" or "usight fraud", uSight's "About Us" page and other planted pages will show up at the top of the search results, making is so that people who attend their seminars don't see the negative commentaries about them. Here is a list of pages uSight has created specifically to push negative reviews down the list of search results.

usight-hosting.com/usight-fraud-rip-off-scam-fake.html
www.usight-design-templates.com/usight-fraud-rip-off-scam-fake.html
www.usight-ecommerce.com/about-usight.html
ubuilder-design.com/about-usight.html
usight-merchant-account.com/usight-fraud-rip-off-scam-fake.html
www.usight-marketing.com/privacy-policy.html
www.usight-business-solutions.com/10reasons.html
ubuilder-software.com/about-usight.html

If you'd rather have this post show up at the top of a Google search for any of those search terms, feel free to add a link from your website to this post, and include something like this for the HTML code to create the link: <a href="http://ecommercesuccessstory.blogspot.com/2009/09/usightcom-scam.html">usight scam</a>. As I discuss in my posts on search engine optimization, linking to this post using those keywords as the anchor text will cause this post to rise to the top of Google when someone does a search for that term.