Capital GrowthFinancial Strategy

The Simple Formula To An E-Commerce Business

An E-Commerce business could be a great option if you are thinking of starting up a venture, but want low startup costs, flexibility, and speed. And, despite what you’ve read about it, starting the company up is fairly quick and easy.

If you’re a young adult, creating this type of business (or any type of business) is a great move, financially. You’re in a position where you can afford to take risks, so you should go for it, and create an e-commerce store.

There’s a simple formula that comes to light when studying and creating multiple e-commerce businesses.

Here it is:

Find/create products for less money then you sell them for. Then pocket the difference. 

Now, at first glance, you may think that it’s an extremely simple formula, and on the surface, it is.

But look a bit deeper. You need to figure out how to source these products. Then you need to create the mechanism to sell them and get them from the manufacturer to the buyer. But, under every e-commerce business, you can find this formula.

What makes this formula confusing is figuring out two things. 1) Sourcing products that people will actually buy. That’s why the “sell” is underlined in the formula. You actually need to sell the product – which can be an issue. 2) Finding the balance of profit.

Profit = Demand * (Revenue – Expenses)

You need to the price point where you can sell the product, still make money, and continue to have a high demand.

The business that you create is designed to sell these products, and I feel that there are two great models, that anyone – especially young adults and teens can start.

Create, Then Sell

Create products that people want, like art, photography prints or goods, then sell them in an online store. I would choose this method if you have a creative product that you can manufacture very easily. Usually, this means that it is a digital product.

Dropship

This is my favorite type of online business. If you follow the simple principle discussed above, while finding a niche product that’s in high demand, you can make a TON of money. Better yet, once the store is created, its mostly passive income, so you have free time to replicate the model in another niche, and reel in the profits.

Next week, I’m going to publish a full guide on my experience of creating and managing an online e-commerce drop shipping company. If you want to be notified and receive early access, you can sign up for the email below:

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