Revved-Up Retail

The Other Online Powerhouse

eBay may be the first name in online auctions, but Amazon.com is still the gorilla when it comes to e-tailing. If you prefer dealing in fixed-price sales rather than auctions, becoming an Amazon seller may be for you.

Steve Crounse, 48, of Fredericksburg, Texas, hadn't thought much about starting a retail business until the company he and his wife, Le Anne, 48, worked for collapsed in 1999, and they suddenly found themselves without jobs. Given the opportunity to start over, they both decided the internet might have more potential than other traditional jobs.

Steve says they soon learned that "the real trick to being successful on the internet is to find a niche market with products you can't find locally." As sports fans, the pair settled on sports apparel as their niche and founded Best Sports Apparel to sell licensed caps, jerseys and T-shirts. "The bulk of our market is [made up of] displaced sports fans who can't find their team's apparel nearby," he says.

In addition to carefully choosing their merchandise and hiring a company to design their website, the Crounses also evaluated their competition, who were selling the same products but shipping in 10 to 14 days--a lifetime in online terms. So Best Sports Appareladvertised in huge letters on its website that it ships orders on the same day they're placed.

The fledgling business, started in the Crounses' attic, grossed $100,000 in 1999 and grew steadily at about 30 percent to 40 percent a year, to the point that they needed to hire employees and move into a commercial space in 2001. And in 2003, Amazon called asking to partner with them. Amazon would perform all the front-end work, such as handling credit card transactions, and take a 15 percent commission, while Best Sports Apparel would acquire all the inventory.

"We got a tremendous boost from partnering with Amazon," says Steve. "We saw a 50 percent increase in sales within just a couple of months, and [sales through] Amazon now account for about one-third of our total sales." That's a lot, considering Best Sports brought in $3.5 million in 2005. The remaining two-thirds of sales came from the company's website, which it continues to market and maintain.

Although Amazon approached Best Sports Apparel about partnering, virtually anyone can sell on Amazon, Steve says. To get started as an Amazon seller, locate what you want to sell at the website, then click on "Sell yours here." If you'd like to sell items not in Amazon's inventory, or if you plan to sell in large volumes, you'll want to register as a Pro Merchant seller, which costs $39.99 per month. In addition to selling items of their choice, Pro Merchant sellers receive volume-listing tools, frequent-seller programs, special selling rates, and downloadable inventory information.

Whether you're a Pro Merchant or not, putting your item up for sale is a snap since the product image and details are already in the Amazon system. Once the merchandise sells, you receive the sale price minus selling fees. Amazon also takes care of all the billing and payment processing.

Home Is Where the Sales Are
If your idea of the perfect retail business doesn't include the internet, then direct sales may be more your speed. Instead of having a permanent selling space, you can use your customers' homes.

In 1993, Terri Newberry, 43, was looking for a way to earn extra income without having to put her kids in day care. When a friend told her about direct-sales company The Pampered Chef, Newberry decided to look into it.

She learned that the more than 70,000 Pampered Chef consultants worldwide sell the company's line of cooking products to consumers in their homes, at friendly gatherings called cooking shows. She also heard that her $100 startup investment could yield hundreds per month in income, so she decided to try it out.

During her first month as a Pampered Chef consultant, Newberry held five cooking shows and made $502. By her fourth month, she made $1,000. "The business grew much faster than I expected," she says. In 2005, her income from Pampered Chef demonstrations was $118,000, or nearly $10,000 a month, and she is now an executive director, a position for the company's top-performing consultants.

The key to Newberry's success is discipline, she says. "Direct sales is an industry that anyone can try, but not everyone can be successful in. Some people need someone telling them what to do," and that doesn't happen in a direct-sales business.

To keep her business on track, Newberry typically works from 9 a.m. to 3 p.m. four or five days a week, plus a couple of nights a week.

Although The Pampered Chef specializes in selling cookware, Newberry doesn't believe you need to be a gourmet chef to be successful. You do, however, need to be passionate about what you're selling, whether it's cookware, cleaning products or makeup.

Before committing to becoming a direct-sales representative, carefully research the company you intend to represent. Do you love their products? Will you enjoy telling others about them? If not, keep looking for something that excites you.

Another consideration: "Make sure the company will stand behind its products," says Newberry. The last thing you need is to spend your time handling returns.

Finally, check to see how many sales consultants are already in your area. Will you be in demand, or has everyone already attended a similar home party?

Marcia Layton Turner's work has appeared in Woman's day, Health and Black Enterprise. She is based in Pittsford, N.Y.

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This article was originally published in the June 2006 print edition of Entrepreneur's StartUps with the headline: Revved-Up Retail.

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