First off, operating an online store is a fabulous and
lucrative pastime, so kudos on making that decision. But
before getting into the thick of it, heed my warning, you do
not want to make this same mistake: only maintain one
distributor for each of your online stores. Two if you MUST.

I know what you might be thinking right now, "But the more
products I have, the bigger the selection will be and I'll
end up selling more -- therefore I'll be making more
profit!" And that's exactly what I thought at one point,
too. But unless you are charging sky-high prices or
maintaining an inventory of your entire stock, then this
thought is only half true.

It is true that you may end up selling more, but the reality
of the situation will quickly appear and you will be losing
money with nearly every sale. And this is all centered
around one simple, and easily glossed-over factor: shipping.

Let me tell you a true story. Many years ago for one of my
businesses, I had this grand idea of creating a recreation
room super store. So I found four distributors for billiard
equipment and recreation room accessories, one for board
games, one for pewter products and one for candles and other
neat decoration items. It sure seemed like a good idea at
the time; I would be able to sell people everything a person
would want and need to setup a recreation room with one
shopping cart. I could virtually feel my wallet getting
fatter. Then reality hit when I sold my very first order.

The customer's order consisted of 1 or 2 small products from
nearly every distributor I had. Through the online store's
software, I had it setup to charge shipping based on the
customers final price. When all of the items were tallied up,
the customer was charged about $9.00 shipping, which was
reasonable for the size of the order. But when I turned
around to order the products from my distributors, I needed
to pay $5.00 shipping at this one, $3.00 at that one, $4.00
here and there, and $3.50 at a couple others. My shipping
costs totalled nearly $20! That amount was way too much to
pass on to my customer when they were just ordering a few
small items. They would have cancelled their order and moved
on to one of my competitors.

After that fiasco, I quickly reconsidered the direction of
my business.

So if you've got great idea that would involve more
distributors, try opening a second online store. There isn't
any rule that says you can't run 2, 3, or more online
stores! In fact, you might want to do that anyways -- having
multiple streams of income is a proven way of making the big
bucks.

Even if your stores are selling basically the same products,
you will be able to better corner the market at Yahoo!
Shopping, or whatever place you are selling.

Having multiple business will also give you the opportunity
to test advertising with one store and see if sales grow or
shrink in relation to the others. You could even provide
links to your other stores and advertise them as "sister
sites."  If your customers trust one of your stores, they'll
automatically trust your "sister sites."

Do you see why you should have only 1 or 2 distributors per
online store? It is very important to keep this in mind for
the long term success of your business. Not only that, but
it gives you a valuable opportunity to create multiple
income streams.

Copyright © by Palyn Peterson
palyn@futureinternetmarketing.com

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