In this fourth step in your journey to start your new online business, you’ll learn all about setting up your products and services that you plan to sell.
We’ll cover several important topics such as suppliers, warehouses, packing, shipping, wholesalers, dropshipping, print-on-demand, and white-label resellers.
You’ll quickly discover that topics in this step are highly related to topics that we’ll cover in the next two steps about setting up your business platform backend and frontend. There’s a lot of overlap. But trying to discuss everything at once is just too much! 🤪
So, in order to get a better handle on your products and how they relate to your business platform, we’re going to break down the information into three separate articles (Steps 4, 5, and 6).
You’re now on Step 4 of the 8 steps in the how-to guide for starting an online business.
- ✅ STEP 1: The Basics
- ✅ STEP 2: Define Your Business
- ✅ STEP 3: Set Up Your Infrastructure
- ✅ STEP 4: Set Up Your Products
- ⬜ STEP 5: Set Up Your Backend
- ⬜ STEP 6: Set Up Your Frontend
- ⬜ STEP 7: Marketing
- ⬜ STEP 8: Money Matters
Set Up Your Products
What is it you are going to sell through your new online business? Are you going to sell goods? Services? Both?
PRO TIP: Technically, the word products can refer to both goods and services. But often, the word products is used as a synonym for goods, like in this article. 😊
Whatever term you use, there are a few important distinctions between the two.
Even if you’re only creating blog content to do affiliate marketing or to generate income through ad revenue, it would be helpful to understand these concepts.
So, let’s dig into each type…
If you choose to sell goods, you’ll need to figure out where you’re going to actually get the products you plan to sell.
You have two choices:
Create your own by going the do-it-yourself (DIY) route.
Sell ready-made products from wholesalers.
If you plan to go the do-it-yourself route and create your own products to sell, there are a few things you should consider. You should ask yourself these questions:
- 🙋♀️ If your product is digital, are you going to write your own software or create your own files? Do you have the skills to do that? How long will that process take? Are you set up to fix bugs and support the product over time?
- 🙋♂️ If you will be selling your own handcrafted physical product, how long does it take you to create one? How many can you create per day… and will that be enough to hit your business goals?
- 🙋♀️ What type of parts and materials will you need, and can you source them reliably over time? How long will those materials take to ship to you? How can you ensure quality and consistency in what you make?
- 🙋♂️ What happens if your online store takes off or is especially busy during holidays… will you be able to keep up with the demand, or would you need to hire employees, delay shipping, or decline purchases?
- 🙋♀️ If you are making physical products, will they be handmade? Will you require a 3D printer, manufacturing tools, extra office space, etc.?
- 🙋♂️ What happens if you decide to go on a trip or take time off? Will your business still have enough products to sell during those times?
- 🙋♀️ Do your products have an expiration date or go bad? Could they spoil or go bad during shipping?
You might need to work with suppliers or manufacturers in order to create your finished product.
Suppliers for DIY
Suppliers are companies that can provide you with the individual pieces that make up your finished product.
You can buy these raw materials from suppliers at a wholesale price, which is a reduced cost for businesses like you who will go on to resell the goods or incorporate them into your own products.
Manufacturers for DIY
If you need specific pieces or custom-designed parts, you can contact a manufacturer to create exactly what you need for your products.
Manufacturers will produce your parts to your specifications and then ship them to you so that you can integrate them into your own products.
Manufacturing usually refers to the creation of physical goods, but a similar concept exists if you need to hire out the creation of parts of your digital products, such as coding and graphical design.
Warehouse & Shipping for DIY
Once you have the products, how are you going to store them?
For digital items, you just have to store a single copy of your product. But make sure your product files are backed up on one or more reliable servers.
PRO TIP: Another consideration for digital products has to do with security. Are you going to use a digital rights management (DRM) system that wraps or integrates into your software?
DRMs add a layer of protection that helps block others from freely sharing your product with their friends or on the Internet. DRMs can also prevent customers from modifying your code. If you are selling high-value digital software, you’ll likely want to use a DRM.
For physical goods, you have a couple of choices for storing and shipping your products:
DIY storage and shipping.
Store your products in your own home, office, or storage unit. When an order comes in, manually package up your product, create a shipping label, and ship it off.
If you go this route, you’re going to need some basic tools and shipping materials, such as:
Also, if you plan to use a 3rd-party shipping service that doesn’t come to your door to pick up your package, you might have to drive each package to the shipping facility, such as to a UPS or FedEx store.
🙋♂️ How are you going to deal with customer support and returns of your products? Do you have someone at your business location that can accept returned products?
You’ll also need a system to track your orders to make sure they were all delivered properly.
Doing it yourself obviously has a lot of potential drawbacks, but it is perhaps a good way to start if you have very little inventory or expect a lower sales volume. For a good customer experience, you need to be available at pretty much all times to manage and fulfill new orders.
I recommend you check out these shipping services, which will help you streamline the process:
Or, use a fulfillment service.
Instead of doing it yourself, you can use a warehouse service that will store and ship your products for you. These services are called fulfillment services and they can help you both store your goods, package them up, and ship them out directly to your customers on your behalf.
PRO TIP: A fulfillment service is called a third-party logistics (3PL) company because they help you with the logistical aspects of moving your products from one place to another.
If you use an e-commerce fulfillment service, you can send your inventory in bulk to one or more fulfillment centers throughout the nation or the world. Then, when a customer orders a product, the closest fulfillment center can pick, pack, and ship that product to the customer very quickly and cheaply.
Fulfillment services can integrate directly with your business order platform to automatically trigger shipments to customers. If you decide to use a fulfillment service, here are some companies that can help:
Wholesale, Dropshipping & On-Demand
Instead of making the products yourself, you can purchase finished, ready-made products at wholesale that you can then sell to your own customers at a marked-up retail price.
Like the DIY model above, you can use suppliers to find products that you want to sell in your own online store.
PRO TIP: Supplier marketplaces usually aggregate and sell multiple brands across specific niches. Thus, some suppliers might be better suited for your niche… so make sure to do some research.
And many suppliers offer tools to integrate directly with your own site or with other business tools you use.
Similar to the DIY model, you’re going to find yourself facing many of the same storage, packing, and shipping problems when you go the wholesale route if you plan on managing the order fulfillment yourself. But luckily you don’t have to! 😍
There are two very popular wholesale approaches that allow you to completely sidestep the fulfillment process: Dropshipping and On-Demand.
With dropshipping, when a customer buys a product from your online store, your backend system sends that order directly to the supplier, who then fulfills the order and ships it directly to the customer.
All of this is done without needing to first buy and store the product in your warehouse!
That’s right… you don’t need any inventory to do dropshipping, and you don’t have to worry about packing or shipping a thing! 😍
And because you don’t have the risk of stocking up on tons of inventory and storing it, this opens up the possibility to allow you to offer a TON more related products in your online store.
PRO TIP: By using a dropshipping supplier, you can easily and quickly offer hundreds or thousands of products that relate to your niche.
However, there are still some downsides and possible pitfalls when doing dropshipping:
No matter what type of business platform you end up using to run your online store (we’ll cover that in the next steps), you’ll likely find a dropshipping supplier that you could integrate. For example, most suppliers can integrate with WordPress plugins, Shopify, WooCommerce, BigCommerce, etc.
PRO TIP: If your primary focus is on the Amazon marketplace, you should be aware that many dropshipping suppliers can also integrate directly with your Amazon Seller account.
To get started, check out these dropshipping marketplaces:
And, if you want to find new niches, products, suppliers, or want to do some research on competing dropshipping sites and advertising, you might be interested in checking out:
Dropshipping Research Tools
Another approach that is similar to dropshipping is called print on demand (POD), on-demand manufacturing, merch on demand, or simply on-demand.
With this method, the product doesn’t physically exist until the customer places an order.
Similar to dropshipping, the order is sent to the supplier, who then manufactures the product on demand, and then ships it directly to the customer.
In addition, these companies usually deal with customer support and returns themselves! 😍
Another cool thing about on-demand services is that it opens up the possibility for you or your customers to customize products. For example, you can allow the customer to choose a custom design or custom text to place on the product during the manufacturing process. This is especially great for brand merchandise.
On-demand printing also has its own potential downsides:
If you want to go the on-demand route, you should look for services that offer the types of products you want to sell.
Also, similar to dropshipping services, some on-demand services offer full-blown, custom turnkey online stores that you can purchase.
Here are some popular on-demand services you might be interested in:
If you’re not planning on selling a good through your new online business, you’re most likely going to be selling a service. (Science! 😉)
Services can be an intangible activity, such as providing consulting or marketing expertise. Or services can be very well-defined, such as access to an entire online system or to specific features of your software.
Usually, you will charge your customers an ongoing fee to continue receiving or accessing your services. When the customer stops paying, you usually stop providing service or block their access. Pretty straightforward.
Unlike a good, where the transaction is usually finished once the customer receives it, a service usually requires you to do much more ongoing work:
Also, if you ever decide to change your prices or add/remove features, you’ll have a lot more to consider:
So, make sure you really think through your pricing model!
Here are some other important things to consider when starting a service-based business:
- 🙋♀️ Although you might have a solid understanding of the types of services you offer, how are you going to convey your services to your customers? How are you going to brand your services? Do they each have their own catchy name?
- 🙋♂️ How are you going to package up your services? Is it all-in-one, or can customers buy your services a la carte? Are the pricing plan names informative and clear?
- 🙋♀️ Why should visitors trust you to provide your service? Are you going to show them reviews, case studies, interviews, competitor comparisons, and/or customer testimonies on your website?
- 🙋♂️ Are you going to provide a service-level agreement (SLA) to guarantee that your service will perform according to your specifications so that your customers can rely on the service? This is particularly important if you are creating a business-to-business (B2B) service.
White-Label & Private-Label Resellers
Before we move on from this topic of setting up your products, you should be aware that there is yet another type of business you can set up where you are not selling your own products or services. I’m referring to white-label resellers and private-label resellers.
A reseller business is where you legally sell products and services of other businesses as if they were your own. The products are branded with your logo, name, etc.
White label usually refers to the branded reseller business model for digital software products, online services, and similar tech-industry and business-to-business (B2B) services. Private label usually refers to branding and reselling physical goods and perishables.
Companies that offer white-label solutions allow you to quickly create branded turnkey stores and services that are completely managed by the company. That means you don’t have to worry about development, maintenance, infrastructure, inventory, storage, shipping, or anything like that.
You simply use their services with your brand plastered all over them to sell products and services as if they originated from your own brand. 😎
White-label services are often used by agencies that provide multiple services to their own clients. If you’re planning on creating an online agency, you’ll definitely want to explore the white-label options out there!
White-label and private-label services are usually specific to your niche and industry… so, you’ll need to do a little research to find available resellers that apply to your new online business. And there are TONS of them in all sorts of industries! 😲
PRO TIP: When you’re reviewing websites that interest you, look for words like “white label”, “private label”, “reseller”, “agency”, and “partner”, especially in the links in the footer section of the website.
For example, here are white-label systems that allow you to instantly create your own branded end-to-end online solution for your own clients:
Continue on to the next step!
Woohoo! At this point, you should have your products and services all set up and ready to sell, or at least know which systems you want to use to source your products. You should also have a clear roadmap and pipeline for providing your content.
Now you just need an actual platform to sell those products on. 😉 The next two steps will focus on setting up the two major parts of your business platform: your backend and your frontend.
So, continue on to the next step about setting up your business backend.