A Glimpse Inside a Teenage Web Success

[bholus10]

Curious about eCommerce back when I was in high school, I decided the best way to learn was to create an eCommerce website of my own. I had no clue where to start, so my first step was NOT coming up with a product to sell, but HOW to start an eCommerce business.

I voraciously read every article, how-to and software review I could find about eCommerce, mainly hitting upon the topic of eCommerce software, merchant accounts and marketing techniques.

I was already pretty computer savvy and knew the ins and outs of building regular .html web pages, but the 'Add to Cart’, Shopping Cart and credit card transaction functions were well beyond my knowledge. I decided if I was to launch an eCommerce store soon, I would have to use pre-made shopping cart software.

I started downloading evaluation versions (and illegal downloaded copies if I could find) of different shopping cart software. I started creating sample stores, changing templates, adding sample products, placing test orders and playing with every possible facet of each shopping cart software. I now knew the in’s and out’s of creating and managing an eCommerce store.

Time to Find Something to Sell



I was a senior in high school, age 17, living with my parents, about to leave for college in a few short months and had very little cash. I wasn’t prepared to buy any inventory and ship out orders each day, so I had to get a little more creative if I wanted to sell physical products. I decided to find someone who sold what I wanted, then ask them to send the products out for me (aka Drop Shipping). First I had to find something to sell.

This was a bit hard. I took a sheet of paper, and in my tiny handwriting I listed about 300 products. EVERYTHING I COULD THINK OF. Lamps, mugs, pens, speakers, couches, guitars, software, beds, mini-blinds. Whatever popped into my head, I wrote it down.

I then started narrowing the list down. The first items scratched off the list were the items with either way too much competition or things out of range for my $200 budget. Couches, computers, ceiling fans etc. were scratched out. I then started to search the competition for other products by doing search engine tests for the products.

Keep in mind, this was my first eCommerce project, so I wanted to enter a very small niche where I had a chance of survival.

I ran my final list of 10 things over with some friends and family….but still nothing was looking fantastic to me. My 12 year old brother helped me brainstorm a bit, and it was actually one of HIS ideas that stuck. Rave, club and party stuff. I did a quick search for

that genre of product, and there were about 10 websites that sold them. Two of the websites were good, and the eight others were total ****. I KNEW I could make more professional and easier to use sites than 80% of the competition, so I set my sights on the rave/club/party genre of products.

Finding A Supplier



Nowadays drop shipping is a normal thing, but over 5 years ago it was obviously less common. I was also 17, had no prior experience and no capital as collateral. The first thing I did was compile a list of websites and suppliers of the products. I started calling. It took talking to at least 10 people before I found someone

who was willing to work with me and didn’t require up-front payment (and didn’t ask how old I was). This was a very narrow genre of products, so if you’re looking for a more common product, expect to make A LOT MORE calls.
Word of advice: Calling is more powerful than sending an email.

The supplier in California I was working with imported all these products themselves, and even had their own website selling the stuff. I had an agreement to use their images and descriptions on my website, and get wholesale pricing on individual orders. I would pay them my balance at the end of each month.

Finding a Domain Name



I knew I was going into the rave/club/party genre, so I searched and searched for a domain name. It was pretty agonizing to find, but I finally stumbled upon HouseOfRave by once again writing out a long list of desired domains on a sheet of paper, then canceling out the taken names. I was going with HouseOfRave.


Starting the Business


So my first eBusiness was called HouseOfRave.com. I had a supplier in California who I would forward orders to, then they would send out the order. So I now needed to accept payment. I had JUST got my first Bank of America account a few months ago

(Co-signed by my dad because I was too young), and I had $500 in the bank. I signed up for a payment gateway and merchant account from Cardservice International who charged me a $200 initial setup fee….by far the cheapest thing I could find anywhere.

Now I started building the site. I began the process of adding descriptions, pictures, color options, size options etc. I also began modifying the template for the eCommerce store. I would stay after school almost everyday and work on it using the

school computers. My computer at home wasn’t the fastest thing around, and couldn’t handle some of the software. All my friends thought it was a rather stupid idea. No one necessarily ridiculed me for it, but no one gave any support.

Getting My First Order



I had successfully created a fully functioning eCommerce store capable of accepting credit cards. I was selling over 100 products which I had never seen, and I thought it was the coolest thing ever. However I still had no customers.

While still tweaking the site here and there, I got my first order. I had NO CLUE what to do. This scared me into finally creating a system for sending orders. The first thing I did was call my supplier and ask them how I should send them the order. I simply

forwarded my very first order via email, but was told I needed a different way of sending them. So I eventually created an Excel document where I copied/pasted certain pieces of information then sent the document to the supplier via email. I was in business!

Increasing Business



I was starting to get a few orders here and there, but I had to differentiate my business to get more. I started adding rave/party videos and pictures. My theory behind this was to give these videos away for free, and garner more traffic to the site. This was in hopes people would also spark some interest in the products I had to offer. I would simply scour the net for videos and post them, and also post user submitted videos. THIS WORKED! I was the largest provider of free rave videos anywhere on the net. I was also selling a lot more. You GIVE, you GET.

Till This Day…



Today, I still maintain this website myself, and it has consistently brought in between $700 and $2,000 profit per month for the last 5 years. Only until recently have I started to expand it, but it has always prevented me from being a broke college student. It has also allowed me to have a steady income stream with doing much, and not being tied down to a bulky inventory. I can take care of the work from anywhere with an internet connection.

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[bholus10]

How It Works



I will show what happens from the time I get an order, till the customer receives their order. Everything is done in 5 steps. I can accept, process, account for and send off 2 orders in around 2 minutes with this system. 10 orders will take me about 10 minutes with this system:

1.) Check, View and Review Orders.
I login to the backend of my Shopsite software to see how many new orders I have waiting. I click to view all the orders and do a quick skim of the order information. I am looking for any subtle signs of fraud at this point. After 5 years, I've become pretty good.



I can view individual orders or all the orders at the same time:



2.) Charge Orders.
This is the most inefficient step, as I choose to process cards manually to become more familiar with the customer names, locations and spot fraud. I login to my merchant account digital gateway and copy/paste from Shopsite the needed customer information. This step goes quicker than imagined because I use my tablet PC pen.



Here I find out if each order is legit. If the order is declined, I make a note of it and move on. If the order was paid for using PayPal, I login there to find if payment was made. If the order looks suspicious or comes back with negative address verification, I will often call the person on the spot to verify the order.

Manually charging orders seems a waste since I can simply press a "Charge" ****on instead. However, over time I have noticed that I start to remember customer names,

locations and ordered items. Since this step exposes me to the orders, it helps me identify order patterns and it drastically reduces my fraudulent orders (Although this isn't as much of a problem compared to a few years ago).

3.) Enter Into Accounting System.
This step is very quick and allows me to see my estimated current profit, my expenses, what I owe etc.. I've used some pre-made accounting modules for Shopsite in the past, but I like my Excel sheet better. Over the years I have honed it to help predict my profit at the end of each month. I don't know my exact profit until I get the monthly bill from my supplier, but this Excel sheet gets me damn close.



4.) Create with Word & Send.
This step is the way THIS particular business of mine works. Once an order is ready to go, I copy/paste the information into a Word document and send it via email to my supplier. From there, they print it as an invoice and send the order. This is the way my particular supplier chooses to do business, others may have different methods.



5.)Followup.
My supplier will send me a tracking number once the order is sent. These go into my tracking system where customers can check the status of their order. The tracking module also sends customers their tracking numbers via email automatically.



How I make Money
I pay wholesale price for the products I send out from my supplier. They send me a bill for the products & shipping each month. I charge retail price on the website and bring in all the money myself.

At the end of the month, I cut a check to my supplier and the difference is my income after product expenses. I then subtract my server costs, merchant account costs, PayPal costs and phone bill costs to get my total profit amount.

I've made about $700 - $1,000 every month for 5 years doing this. I've recently made additions to the site which have doubled my profit to about $2,000 a month. I plan to make this side income generate about $5,000/month by the end of 2006.

I've had other online businesses which operate differently, but this process works best for HoR. There is still a lot of room for improving the efficiency of this system, and in 2006 I'll have time to concentrate on it.