Part 9: Beating the Superstores
Alright, we've talked about the best way to start retailing online from home, on a shoestring budget. We've talked about how to avoid all those who pretend to be drop ship distributors, and are not. You've listened to me bellowing about the Real Business World, and you're still here. That's a good sign!
Now let's talk about the question I get the most often from people considering their own Internet Store:
"How do I sell online from my home, and beat Wal-Mart's prices?"
Well, let's see. Here's the basic step-by-step procedure:
Go to a bank and borrow about a gazillion dollars.
Build warehouse and shipping facilities all over the world.
Buy your own trucking line.
Spend decades establishing relationships with manufacturers and distributors.
Buy and warehouse millions of products at once, to qualify for rock-bottom discounts and millions of dollars in manufacturer rebates.
Hire a top-flight Information Systems staff to build and maintain a really expensive web site.
There you go! You're ready to take on Wal-Mart from home!
Hmmm...not practical on a shoestring budget?
Of course it isn't. You're not going to set up a home business from your personal computer and BEAT prices from Wal-Mart, K-Mart, Best Buy, and all the other bricks-and-mortar superstores out there. It's not possible. Never gonna happen. The sooner you get that idea completely out of your mind, the better.
I don't care who promises you what. As I've said, Internet Business Opportunities, Get-Rich-Overnight schemes, sites and companies who tell you how amazingly low their wholesale pricing is on the products that YOU can sell with THEIR foolproof systems are not telling you the truth. Anyone who tells you that you can beat the superstores' prices is lying to you. They'll take your setup fees, leave you with their "amazing" business system, and the only thing you'll be amazed at is that you fell for it in the first place. Don't believe them.
Now...let's have a moment of silence for the mental demise of that particular idea...it's fading...fading...please just sit quietly and watch this idea fade until it's completely gone.
Done? GOOD! NOW, let's move on to the REAL world, and discuss what successful Internet businesses already know: how you ARE going to make money with your Internet Store.
Let's say you're walking across a level, wide-open field of short, green grass. The field is so wide that you can't see where it ends on either side. Nothing but flat, green grass to the left and to the right of you, as far as you can see. However, it's NOT that long a walk to the other side, directly in front of you.
Spaced across that field, from the left to the right, are big boulders. Some are bigger than others. They are spaced far apart, leaving plenty of room to stroll in between them to get to the other side.
Should you walk straight to the biggest one, a boulder the size of a house, and try to push it out of your way to reach the other side of the field? Well, you can try, but I wouldn't. So how do you get past the boulders, to the other side of the field?
You simply go around them. There's PLENTY of room to do so, as I said.
Now, let's relate that to the Internet.
The field is the Internet Marketplace.
The other side is where your customers are.
The boulders in your way are the cut-price superstores.
JUST GO AROUND THEM. It's basic common sense.
The thing that most people don't stop to consider is that Wal-Mart, K-Mart, etc., etc., do not carry every product ever manufactured in the Known Universe.
Here's an example, from a recent conversation I had with someone about this subject. He wanted to sell Power Tools online. He told me that he had found a great source of power tools that could be drop shipped to his customers directly from the wholesaler, with no minimum order. One at a time. Then he told me that he had actually gone to a Wal-Mart store, and compared prices on the power drills that they had with the wholesale prices he was getting on the same drills. He said there just was not enough room to make a profit. In some cases, the Wal-Mart price was lower than he could get them one at a time from the wholesaler. What could he do? He was ready to give up entirely.
I had one simple question for him:
WHY are you walking directly to that big boulder in the center of the field, and purposely butting your head against it?
At the time of this writing, Wal-Mart only sells ELEVEN different power drills, from FIVE different brand names. THERE ARE HUNDREDS of different power drills out there, from DOZENS of brands. What could possibly possess this man to try to sell only the exact same products as one of the biggest cut-price superstores on the planet?
All he needed to do was pick a few power drills that Wal-Mart DOESN'T sell. He could even sell the same brands; just different models. There are a LOT of them.
This is what sales is all about, folks. You don't need to have the lowest possible prices on the planet. If that were true, there would only be ONE STORE on the face of the Earth, by process of elimination. It's not about pricing everything just a couple of pennies below everyone else. Be creative. Research the competition a little. Sell things that they're not selling. Or simply draw your customers into your store with things the big stores aren't selling, and then show them the things the big stores ARE selling. Once they're in your store, it will be easier for them to pay a couple of dollars more to buy those products from you as well, rather than to trot off to Wal-Mart to compare prices.
I see people all the time who are trying to set up an Internet store, and simply going to the biggest search engine they can find, and comparing their wholesale prices against the biggest superstores and auction sites out there.
WRONG! These people are bouncing off those boulders in the middle of the field like a pinball caught between two power-bumpers.
Go around them. There's plenty of room.
Something you have to realize and accept to become successful in business is that you're NOT always going to get the lowest possible wholesale price when starting a small business. Nobody does. If anyone tries to tell you that you will, run fast and far in the opposite direction. They are NOT telling you the truth!
You can't always get the lowest possible wholesale price. That's OK! You can still sell your choice of excellent products from hundreds of brand names. We do, and it works.
Superstores carry a LOT of products, but they can only carry a FEW of each kind! Kmart sells about 30,000 products overall. In our Drop Ship Source Directory, you'll find a combined total of almost 600,000 products that YOU can have Drop Shipped right to your customers. Think there's a little room there? :o) Sell the products in those same general product lines that THEY have to leave OUT, because they just don't have the shelf space.
So, don't worry yourself into a frenzy about product pricing. Getting caught up in the "gotta have the absolute rock bottom price" trap is the worst thing you could do. Selling products is a LOT more than just having the lowest price. Once you realize that, you can do anything in business.
Letís go on to Part 10: Web Sites vs. Auctions