What would you do if you never had to worry about money ever again?
Though the concept of financial freedom can seem like a pipedream, it’s more achievable than ever before. Thanks to rapid growth in the e-commerce industry, anyone in the world can sell to a global audience and profit handsomely.
You don’t need technical expertise. You don’t need a lot of money to get started. And, you don’t even need to have a physical product!
With an e-commerce business, you can work from home, wear your pajamas all day if that’s what you’re into, make your own hours, and earn a virtually limitless income. Once you’ve set up your business and begun making sales, making money can be as easy and immediate as turning on a faucet.
If you’ve never considered an e-commerce business as an avenue to financial freedom, or you have no idea where to start, this guide will put you on the right path.
As you probably already know, there are two ways to achieve financial freedom:
1. You can scrimp and save, allocating every spare penny to accumulate wealth and invest. This often means sacrificing immediate pleasures for the sake of delayed gratification.
While this can be a noble venture and cut out wasteful and unnecessary spending, unless you’re a monk, there comes the point when missing out on a morning latte, a Hawaiian vacation, or “new car smell” becomes a frustrating exercise.
2. You can create additional sources of income. Traditionally, this means investing in the financial markets or buying real estate for the purpose of generating rental income or flipping houses.
Newer techniques have emerged thanks to the advent of the Internet and the growth of the “gig economy.” Some people call these alternative forms of income a “side hustle.” Our goal is to show you that e-commerce can be the most lucrative and fast-growing side hustle you can undertake, and if you play your cards right, you can even turn it into a passive income stream.
Why is eCommerce Growing so Rapidly?
The retail landscape is rapidly moving online. Approximately 80% of Internet users in the U.S. have made at least one purchase online. Further, 13.7% of global retail sales in 2019 were from e-commerce sites. Compare this figure to 2015 when only 7.4% of retail was conducted online, and you can guess where the trend is going.
In fact, by 2040, some experts estimate that 95% of all transactions will be done online.
The last several years have seen double-digit growth in global e-commerce revenue, with 19.8% growth expected in 2020.
The growth of e-commerce can be attributed to a variety of factors, including these four:
1. Convenience: The Internet is open 24 hours a day, seven days a week. You no longer have to wait for a store to open or travel to a physical location to purchase something. Now, every store across the globe with an e-commerce site is accessible. You don’t have to drive anywhere, get dressed, navigate traffic, fight for parking spaces, or deal with awkward social situations to get the products you need.
The Internet also lends itself to comparison shopping. Instead of going from store to store, you can compare prices instantly online and read product reviews from verified purchasers as you narrow your selection and choose a product or retailer.
2. Personalization: Sophisticated algorithms and AI (artificial intelligence) allow websites to adapt in real-time to a visitor’s preferences. For example, when you add an item to your online shopping cart, you might get a recommendation for a complimentary product that other people have also purchased.
3. Mobile Takeover: 52% of web traffic is mobile (accessed from a mobile phone or tablet), which is up from less than 1% just 10 years ago. Further, 77% of Shopify’s (leading e-commerce platform) transactions originate from a mobile device.
As websites become more mobile-friendly, it enables people on the go to make purchases. Consumers no longer have to be in their homes or office to buy something. They can compare prices on the go and purchase from anywhere that their device has an Internet connection.
4. Low Barriers to Entry: In the early days of the Internet, the mentality was, “if you build it, they will come.” There were fewer ways to get the word out about your website, and those methods were prohibitively expensive for individual entrepreneurs.
Today, you can access a full suite of promotional and design tools at a price that almost anyone can afford. Some are even free. For example, the Google search engine can allow your brand to be discovered, and it costs you nothing.
You can also invest a few dollars in advertising on platforms like Google Ads, Facebook, Instagram, YouTube, and other display networks to achieve brand awareness. Influencer marketing, content, videos, etc. are also excellent ways to get exposure.
The point is that all of these economical tools can drive traffic to your website, making e-commerce a money-making option with incredibly low barriers to entry.
Deciding to Start
To get started, you have to make two key decisions:
1. Will you source your own product or dropship?
Sourcing your own product means you either manufacture it yourself, arrange to have it made, or buy in wholesale quantities. The closer you are to the manufacturing process, the higher your potential profit margin, but that reward does not come without significant risk.
For example, what if you spend thousands on developing a product that no one wants? What if you buy too much of something from a manufacturer and you can’t sell it?
If you choose to dropship, then you don’t have to purchase inventory upfront. You don’t even have to worry about storing it or fulfilling orders. The manufacturer or retailer will handle all of the logistics, but the tradeoff is lower margins.
When you’re just getting started, it can be a smart idea to get your feet wet in the world of dropshipping and then develop a product once you’ve identified a void you can fill better than other companies.
2. Will you build your own site or sell it via a third-party platform?
You have a choice about whether you want your e-commerce site to build your site using a tool like Shopify, BigCommerce, or WordPress, or if you want to sell your wares on an already established site like Amazon, eBay, Etsy, Poshmark, etc.
The advantage of having your own site is that you have more control, and you keep the bulk of your profits (minus advertising, merchant fees, etc.). However, attracting traffic can be expensive.
Sites like Amazon and eBay already have a built-in customer base of millions of users. By having your products available on these platforms, you’ll automatically have an audience. As the saying goes, “a rising tide lifts all boats.”
Amazon accounted for 44% of all e-commerce sales in 2017, and the momentum is expected to continue. More than 50% of Amazon’s sales come from third-party sellers, so you can get a significant piece of the pie by having your products available on Amazon.com.
If you do rely on third-party platforms to sell your wares, keep in mind that you don’t have to play by their rules, and you’ll give up a significant percentage of your revenue for the privilege of being present on their site. Still, most people agree that the tradeoff is worth it.
Our recommendation is to make your products available on both your own website and a third-party platform for maximum exposure and revenue potential.
The Bottom Line: E-commerce is a growing field. The potential to achieve financial freedom quickly and without a significant investment is more likely in this space than any other opportunity we’ve seen. By starting an e-commerce site that’s aligned with your interests, you can both make money and have fun in the process.
