How to start a "middle-man" internet website

Guest

Hi,

I am looking at starting my own internet-based business and I am just
looking for some general advice at how to go about it and the kind of
problems I would have to deal with. Links to relevant websites would be
greatly appreciated (searching for things like "starting an internet
business" on google turns up millions of marketing websites).

First, some background: I am very experienced at writing websites and
engineering complex software. For example, I could write easily make
file-sharing, VOIP, internet chat etc. software (given enough time) and
implementing working business websites like Amazon, Ebay etc. would be
trivial for me. I am looking to use these skills to help me start up a
business as it lets me bypass the expensive process of paying software
engineers to make a website for me. I have very little businesses
knowledge however.

My main plan at the moment is to think up a low risk internet based
website idea. By this, I mean 1) Should anything go wrong, I wouldn't
be liable for huge amounts of money. 2) Should things not work out, I
could abandon the website and not have to worry about angry customers.
3) I wouldn't need any significant capital. This may not be the best
criteria to have, but I am more looking more to experiment with
something low risk at the moment whilst at my current job and pursue it
more aggressively if it goes well.

One idea that I am looking into at the moment is commission based
websites. For example, I could make an easy to use website that sells
mobile phones for several other companies. Say, Nokia sells one
particular model for =A3100, my website could offer the same phone for
=A3110 and the =A3100 would then be passed onto Nokia. Nokia would then
be in charge of delivery and the phone contract. This would obviously
work for other products, such as cars and holidays. I believe
lastminute.com simply acts as a front for different travel agencies and
passes the contract onto them once the customer has paid.

The appealing part of these types of websites is that I could shut down
with little notice as I would have no long-term customer contracts and,
should an ordered product be faulty, undelivered etc. the expensive
liability would lie with the other company and not me. The only part I
think could go wrong would be if my website accidently ordered 100
items from the other company, instead of 1, and the mess causes them to
lose money they want back from me. What could I do about this problem
if my faulty website caused them to lose money? Could I buy insurance
against this?

My main question is, how would I go about being a middle-man to sell
another company's product? For example, how could I sell, say, phone
contracts from Nokia, holidays from Thomson Holidays etc.? I realise I
will have to contact them, but will they just let anyone do this? For
example, they will need to give me access to their computer servers
which handle sales so my website could send them orders. Will they
expect me to be registered for something (say, being a registered
travel agent for the holidays) or pay a large deposit? Is there
anything obvious in my rough business plan that I've overlooked?

Thanks.

Wayne Lundberg · Guest

<monstermunch@fmail.co.uk> wrote:
Quote: I am looking at starting my own internet-based business and I am just
looking for some general advice at how to go about it and the kind of
problems I would have to deal with. Links to relevant websites would be
greatly appreciated (searching for things like "starting an internet
business" on google turns up millions of marketing websites).
---snipped for brevity---

The new wave in marketing by cutting out the middleman has been well
developed over the past couple of years. It's called Drop Shipping. There is
an online catalog with thousands of companies willing to accept your order
with payment and they will ship directly to your customer at wholesale
prices to you. You sell retail, or whatever mark-up you can get away with.

Go to my son's website www.rcsailcars.com and just take a peek as an example
of a product being sold through drop ship and brick and mortar dealers.
Click on the link to Drop Ship Source Directory (If you end up buying their
directory my son gets a commission). We are getting an average of 1 inquiry
per day and some inquiries turn into potential distributors for the sail
car.

Here's how it works. Let's say "Dicks Hobby Spot" sends us a note telling us
he found our site through the Drop Ship Source Directory. We then send him
boilerplate with all the details and even a basic price list for him to
evaluate. We invite him to use whatever graphics from our many pictures in
different places including the album. We then suggest he buy a unit to learn
how to use it but we don't insist they buy one. Then we tell them that we
will ship to his customer on receipt of payment either in Paypal or credit
card. On receipt of the money we ship to his customer per their
instructions.

Generally speaking the price breakdown is something like this: End user pays
$150 for a kit, drop ship dealer pays us $110 for the kit, which costs us
$80 in materials and components. If we used the old marketing method of
using a distributor, we would have a four tier price structure but the
distributor would have to buy in large quantities which would justify your
selling to a distributor.

This is an excellent way to start a business with no inventory, no risk, no
up front cash. Just do your best in creating sales literature via the
internet, establishing communication with your prospects and suppliers and
rake in the cash when you find a product in high demand at the right prices.
My son's business has a very low demand factor in that his product is an
unknown. It takes a lot of hits to get a customer's attention because the
paradigm for sailing, is sailboat not sailcar. But we have learned a lot
during this exercise that started some four years ago.

For access to the California Colleges Intensive Entrepreneurial Training
program online go to www.pueblaprotocol.com and get started. It's completely
free. I am the instructor.

Wayne

Guest · Guest

I think you need to develop what your customers want, not what you
think your customers will want. If you have no idea, then you will need
to do some better research into what is out there now and what is
lacking. You said you could do an ebay/amazon kind of site easily. One
thing you can do is do a web search for "enterprise web software" then
systematically go through what you find, and replicated the basics of
some that look easy to do. Run some google ads and see if you get any
responses.