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From Home to Warehouse: Starting Your eCommerce Business

 

 

by Ken Myers

 

Developing an eCommerce business from home could save you a great deal of money in the beginning. As you are already paying for the overhead of your house, the only large expense you should have is your purchase of inventory. Everything else is relatively cheap. Even the website itself shouldn’t cost you more than $100 per year if you use the right hosting and domain registrar. However, what happens when your eCommerce site begins to consume more and more of your house?

 

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Before you consider moving the eCommerce store out of your home, there are several aspects to consider that many inexperienced business owners don’t take into consideration. There are comforts within your home that you regularly take advantage of that may not be available in your new business locale. How do you make sure you can continue the success of your business without the security of your home environment?

 

1. Rent

Before you start packing up your business equipment, you need to ensure that the income the eCommerce store brings in can support itself. Your initial investment to get the proverbial ball rolling should be the only money you put into your business from your own pocket. If the business can’t sustain its own income, you could easily tap all of your resources in less than a year.

 

2. Electricity

The eCommerce store also needs to be able to sustain its own electric bills. Depending on how many workers you bring in to the new establishment and the computer equipment you utilize, the bills should be relatively small compared to what your family taps at the house.

 

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3. Internet

Obviously, your eCommerce business is going to require the Internet. However, this expense should be very low. While we all would love to download full-length feature films in a matter of seconds, does the eCommerce business need such bandwidth? Start off with a low speed until your business can justify increasing the bandwidth depending on your needs. Essentially you are using the Internet for receiving customer orders, shipping, and processing payments – not streaming the latest movies and/or games.

 

4. Do You Need a Server?

As there are a great deal of business applications available in the Cloud today, the need for an actual server is ever decreasing. However, some individuals like the comfort of controlling their own information without worrying about Internet down-time. A file server can be extremely cheap to build if you are one of those individuals who need a centralized location for images and data for your eCommerce store. A desktop file server doesn’t require extensive hardware or mind blowing graphics – just a large hard drive. You could save a great deal of money by using such a small server design.

 

5. Tangible Assets

In order to accurately portray your company’s value, your assets need to be properly recorded. Are you “loaning” your eCommerce business the use of your desk, chair and computer? Do you have to purchase these items for your business separately? If your business is going to own its equipment, you need to make sure your “moving budget” can sustain the expense. Remember, you want to use as little of your own money as possible. The business should be able to pay its own way.

 

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6. Shipping Supplies

As you have been conducting your business from home, you may already have a great deal of supplies for shipping products. Are you using the right vendor for these supplies? Although Wal-Mart can be a cheap outlet, companies such as U-Line could decrease your shipping expenses by more than 50-percent in comparison. When you have to purchase supplies in bulk, it is more cost effective than the alternative.

 

7. Address Change on the Website

For the home-based eCommerce, using a PO Box will help keep unwanted mail and persons from knowing where you are located. However, customers are more likely to spend money online if they can verify that your business is a real establishment with a direct phone number. Too many scams have been offered to the general public and many buyers are becoming more and more cautious with whom they spend money with. Some eCommerce applications such as Prestashops will also incorporate Google maps to demonstrate to the buyer exactly where your business is located – which provides a great deal of comfort to some of these more cautious individuals.

 

Your eCommerce business should be able to carry its own weight in regards to moving into a new facility. As long as you plan on growing your business to fill the establishment, the expense shouldn’t be a waste. Keep in mind that your business needs to be able to develop on its own, and paying yourself and other employees may diminish this capability. Before you move your business, create a three-month budget plan of all the expected expenses of the new facility versus the actual net income your eCommerce store produces. Verify that it will be able to sustain itself before you start calling real estate agents.

 

KenMyersKen Myers is a father, husband, and entrepreneur. He has combined his passion for helping families find in-home care with his experience to build a business. Learn more about him by visiting @KenneyMyers on Twitter.

 

Photo Credits

bplanet | Freedigitalphotos.net | Courtesy of Author

Author : Guest Author

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