What’s the Cost of Starting An Online Business?

The answer to this question ranges from “next to nothing” to a few thousand dollars, depending on what sort of onliene business you’ll be running. Apparently, you can start up as an online retailer for as little as $3,000, and run it during the evening. But if you are going to keep your day job, I’d suggest having a family member or three help out with the operation, maybe on weekends. You also have to decide where to focus your effort for an online business.

I know people who buy bulk quantities of quality items and sell them on eBay for as much as $20-100 profit per unit.  One guy was grossing about a million per year in good years. But in bad years like 2002-3, he was only pulling in $200,000, most of which went to stock, packaging, shipping, and personnel.

Other types of online business require more of an investment of your time rather than capital. An example would be running a website that has article which talk about affiliate products. You might want to at least buy and try some of the products and services you are recommending, else your credibility is gone if the product stinks. But otherwise, you don’t have to invest a lot. You do need to write a lot, but offer content (articles, video tutorials, etc.) that is valuable to the people whom you want as potential customers. And that’s not always easy.

Then there are the websites which sell information. Maybe you’ve written a cookbook and want to sell it online in PDF format. Setting up a Paypal merchant account is free, and they only charge a small transaction free and percentage (depending on whether you want to allow credit card payments). It takes a bit of web savvy, but you can install the payment button on your website and configure things so that your e-book is downloadable to the customer once they’ve paid. You don’t need a commercial online “shopping cart”, but if you plan to add more products later, you might want to use one anyways. (More about shopping carts in the future.)

However, no one is going to visit your website just because you’re selling your cookbook there. In fact, except for your friends and family, people won’t even know your site exists. Not right away. Which is why you’ll need to either do a lot of advertising online, which costs money, or write articles for the site. Regular, quality articles build up your rankings in the search engines, making it easier to be found (eventually). The articles should, in this case, obviously be about food and cooking, maybe even food-related TV shows, health, etc. And they should somehow tie into your book. You might even give away an excerpt e-book of 8-16 pages, which contain a sampling of your recipes. If you’re promoting your recipes, you should also have recipes on the website.

That’s just one example of how you can run an online business. What you actually do should be based on your interests and your time commitment. If you don’t have a lot of capital but have lots of time, try writing to draw web traffic, and hopefully sales and/or advertising revenue. If you have capital but little time, try drop-shipping products, running online ads at other sites using some ad network such as Google AdWords, and hiring someone to write for you (or going to an article bank). Because either way, you’re going to need fresh, regular articles on your website.

If you have both capital and time, well aren’t you lucky!! You have some choice about what you want to do online. Maybe you want to start building your online publishing empire. Start a site, build it up, and once it is pulling in some revenue, move on to another project.

As per usual, instead of getting too verbose in a single article, I’ll expand on concepts in future articles. You are welcome to ask questions via the comments section. I’ll do my best to answer them as soon as possible. And if I don’t know the answer, I’ll at least try to point you in the right direction.

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