Chapter 6 - eBay and eCommerce

The Internet has lowered the barrier to entry for new businesses to the extent that you can begin trading online under a new business name within hours. Sadly, this is exactly what many people do. There is an assumption that just because a particular business model is now possible, that it will also be profitable. This is not true.

In all key respects, trading on the Internet is no different to trading anywhere else. In the case of jewellery, you are still selling a physical product to real people. You are selling necklaces, rings or bracelets to women who intend to wear them, just as you would at a jewellery party, from a market stall, or in a shop. You need to build relationships with suppliers as you would if you were selling through any other medium, and you have to deal with customer problems and issues as they occur.

The Internet has made it easier to get started, but it hasn't made it easier to be successful. If you are the sort of person who works hard, has an eye for detail, and doesn't expect anything for nothing, then you have as great a chance of running a successful online business as you have of running a successful market stall or shop. If, on the other hand, you are considering selling online because you perceive it to be easy, then you are doomed to failure. The only positive piece of advice I can give you is that your failure is unlikely to involve losing the kitchen sink. Unless, that is, you've been seduced by the prospect of the easy money to be made by sourcing stock from China - more on that later.

There are many options when it comes to selling online, but I'm going to highlight two in particular, as they are the two that seem to attract jewellery retailers most often. The first is eBay, and the second is setting up your own eCommerce site.

What is eBay really like?

eBay is a flea market. eBay buyers are very similar in their mindsets to people who buy at car boot sales. They do not want to spend money, and they are looking for bargains. You are unlikely to make much money selling your jewellery on eBay.

eBay instils the idea that things have little or no value into the minds of its users. It helps create the impression that everything should be cheap, even when it's not. If you attempt to sell jewellery in this sort of market place, one of two things will happen. You will either be forced to lower your asking price in order to attract customers, thereby decreasing your profits to the extent that you will be working for less than minimum wage, or you will have no customers.

While it's true that eBay is responsible for a huge volume of online sales, in real terms it only accounts for a tiny percentage of those sales. The potential market beyond eBay is far more vast than you might have realised, and it is only getting bigger. eBay has passed its peak, but eCommerce itself is maturing and growing every year. If you really are determined to try your hand at online sales, you should look to setting up your own website, and not attempt to compete with other eBay sellers by racing to the bottom in a price war.

Setting up an eCommerce Site

This is not as simple as it sounds. Yes, there are quick and easy routes to setting up an eCommerce website. But a website that nobody visits, or that those who do visit are not prepared to buy from, is a wasted effort.

Here's a rule of thumb for eCommerce: if it's cheap and easy, it's worthless.

Successful websites, just like any successful business, can make a lot of money. Professionals who can design and build successful websites are therefore in high demand, and their charges attest to this. Website designers, SEO experts, web programmers, database experts, online marketing experts - all are highly skilled jobs and all command a high wage. If someone is offering you these skills at rock bottom prices, then you should be asking why. Why are they offering to build you an eCommerce website for £500 when somebody else is asking for £5,000? Surely if they were any good, they would charge £5,000 too.

You know the answer to this already: if it's cheap and easy, it's worthless.

There is a perception that all websites are somehow equal because they start from a blank page or a simple web address. Are all shops equal because they occupy buildings? Are all paintings equal because they start from a blank canvas upon which colour is applied?

Yet somehow, the idea that building successful websites is easy and should therefore be cheap has taken root in the minds of many non technical business people. Your fifteen year old cousin may have designed a website for his favourite band in his spare time, but that doesn't mean that he can design a jewellery website for you that people will be happy to give a credit card number to. That doesn't mean he can write copy that attracts customers and search engines alike. That doesn't mean he can take quality photographs of your colourful necklaces and watches.

For all this, you need professionals. And professionals cost money. Yes, you could start off with a cheap and cheerful eCommerce site designed for £500, but I've seen this happen time after time, and it always ends the same way.

Picture this: Sarah can't afford to have her website done properly, so she uses a guy she found on an online forum who says he can do the whole job for £500, and he'll include all that SEO stuff she doesn't really understand as well. Two months later, the site is ready. It's an open source osCommerce site that looks just like many other small eCommerce sites that Sarah has seen but never bought from. She creates her categories and adds her stock. The images don't display very well and appear distorted - they're all longer than they should be, and when she clicks on a picture to enlarge it, a pop up dialog appears with the same distorted image. She adds an item to her shopping basket and goes to check out, only to be faced with a big red and yellow warning screen saying something about Danger and Security Certificates. She emails her website guy and he replies back saying something about SSL and that's the way the picture is supposed to be and what sort of camera is she using.

Eventually Sarah gets the bugs sorted out, and starts running a Google Ad campaign to get customers in. But she can't afford the £0.70 per click that Google wants in order to put her ad near the top of the first page. Instead, she offers £0.15 a click, but over time nobody clicks on her ad, so she adds her website address to her signature on forums, and mentions her site on Facebook and Twitter. There are a few visits but no sales.

Six months after her website goes live she shuts it down. She's had one sale, from her mother, and no interest from anyone else. Sarah concludes that eCommerce is over rated, that she chose the wrong jewellery and needs to find new suppliers, that SEO is sown up by all the big companies, and that Pay Per Click advertising doesn't work. She considers herself lucky she didn't give up her day job, or go with that professional website development company who wanted to charge her £5,000.

But what really happened?

Sarah's website, that she paid peanuts for, was the online equivalent of a dirty blanket lying on the ground at a street market, on to which she tossed a few odds and ends then sat back and hoped someone would come along and buy something. And what happened? Only her mother bought something.

Should I try my hand at eCommerce?

Not if it's your first step as a jewellery retailer. And not if you don't have the expertise required to make proper decisions about how to get that site built and maintained. And not if you can't afford to lose the money you invest.

eBay is for mugs. You will not become successful selling jewellery on eBay. And a good eCommerce site is not cheap. It costs money to design and build. It costs money to get ranked well with search engines. And it costs money on a regular basis to maintain it, update it, and to increase its Google ranking.

My advice would be: build your business offline. Learn the jewellery trade offline. When you have mastered your products and your customers, when you have built a strong reputation as a jewellery professional, then look into building a website and leveraging the knowledge you have built up offline into an online arm for your business.