Mike Carroll is a weightlifting buddy who lost his job last fall. He was an insurance salesman for 25 years and is now considering a new career. I asked him, “Have you thought about e-commerce?”
He had not.
Starting an e-commerce business intrigued him, but he didn’t know where to start. Knowing many potential entrepreneurs with similar concerns, I invited him on the podcast.
Here is our conversation. The full audio is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: What is going on?
Mike Carroll: In September, I was laid off from a job I had held for eight years and returned to school to finish my degree. I will finish in May and am exploring new opportunities. I have been in sales for 25 years. I have sold mortgage insurance to banks, corporations and credit unions. I sold home and auto insurance through my own agency. In college, I sold Kirby vacuum cleaners door to door. I don’t recommend this. However, I learned to deal with rejection quickly.
You recently asked me if I had considered e-commerce. I hadn’t really done it. I bought some stuff online, and that’s it. The possibilities of what I want to do and explore are wide open. I would like to know what e-commerce avenues you would suggest pursuing.
I have owned a business, but insurance is not a physical product like e-commerce. I wouldn’t know where to start. What types of products should I sell? Should I start something from scratch? Do I find a broker to help me buy a business? What types of skills do I need?
Bandholz: You have negotiation skills from your business experience. These apply to e-commerce with supplier management, employees, etc. The direction you take in ecommerce depends on what you’re good at and what you’re passionate about. I love building a business from scratch, getting that first client, and scaling.
Another option is to buy a business. This would suit people who thrive in the areas of systems, organization and optimization. They could find opportunities from inefficient companies and make improvements. However, buying a business generally involves more risk.
I recommend starting from scratch if you’ve never had a business because the risk of placing, say, a $1,000 inventory order is low compared to buying a million dollar business. of dollars.
Additionally, a new business can outsource many tasks. Third-party logistics companies – 3PLs – can store, package and ship your orders. Independent consultants can photograph products, create and manage the website, and market your items on Facebook and Google, for example. Product designers and manufacturers can design and produce inventory. In this model, you are the quarterback. It’s not unrealistic for a solo entrepreneur to start a business earning $1 million per year with no employees.
It would be hard work. Again, many outsourcing options exist around the world, such as Eastern Europe, Ukraine, and Poland. The Philippines has many talented workers who also speak English.
Carroll: How can small ecommerce businesses compete with Amazon?
Bandholz: Finding products that suit enthusiasts is the best way to go from zero to one. Many successful entrepreneurs study Amazon data to find out the best-selling products. They read reviews of these products to look for opportunities for improvement, then develop their own version based on this information and launch it on Amazon. In other words, they improve a product that many people are already interested in.
Another option is to fill an unmet need of people who will pay more for a product. We had a guest on the show who sells chinchilla cages. His inventory is wire. When he receives an order, his team makes the cage and ships it. It does not need storage space or production costs for unsold finished cages. It promotes efficiency through manufacturing. It has employees and manufacturing costs, but its niche is specific. It provides chinchilla owners with what they need.
Carroll: I know what I like, but maybe the market doesn’t need it.
Bandholz: The right product at the right price, to the right customer, will make your life easier. Avoid products that are very similar to your competitors or too expensive to make or purchase. Find a unique product that only your business offers. Highlight your brand. A great product with terrible branding is easily replicated by competitors.
My ideal ecommerce product would be small and lightweight so I can easily ship it. It would be expensive – something that consumers would pay a lot for and buy regularly and that would not go bad. It’s the holy grail of products. This is also what seemingly all marketers are looking for.
Look at the world. Everything is a product. Ask yourself, “Would I want to sell this?” What would be the advantages?
A friend who participated in the podcast sells his own dance class videos that couples can follow at home. The company is called Show Her Off. You could make it as a golf instructor given your expertise in the sport. Target the person who wants to learn golf to build business relationships. Sell the course for $500.
How can people contact you?
Carroll: You can find me on LinkedIn.