Week 2

This week, we only had one class. Brother Lundin, our teacher, had to go out of town, I believe, so we had no class today.

However, since we still had class on Tuesday, I still should have something to say, don't you think? I guess you could say I learned a little.

Okay, to start with, we discussed the differences between the Affiliate business model and Drop Shipping. Both involve selling things that you don't actually physically have in your possession (wow, that sounds a little seedy. But it's okay, I promise!). But that's the end of their similarities.

With Affiliate, what you're doing is actually linking back to another website that does the actual selling, and you get a commission. A lot of places seem to do this, like Amazon, Barnes and Noble and ThinkGeek.com. Basically, you're just a salesperson. It's very easy to set up, costs nothing, and you don't have to deal with finding a supplier beyond a company that's willing to let you do it. On the other hand, commissions tend to be pretty low; you'll have little to no customer loyalty (unless you have a really good reason for people to go to your site instead of the original), and the other site sets the price, not you. Still, it depends on what you want out of your web business. If you want it cheap and easy, and are okay with not making tons, then this works!

Drop Shipping, on the other hand, is more like a regular merchant system, except that you don't hold the merchandise; your supplier does. Your supplier holds on to everything. In fact, you don't even buy it from them until a customer has bought it from you. Someone makes a purchase on your website; you notify the supplier, and they package and ship it out. You build more customer loyalty, and you get to set the price. You also don't have to deal with having a ton of stuff in your living room, especially if its gone out of date/out of style or is otherwise undesirable. Disadvantages here...well, you have to find a supplier. And negotiate with them. And beware of scams (you've got to do that with almost anything though...). You've also got a little more responsibility, like having to deal with returns. It's all trade-offs. Neither is necessarily better than the other, but they may be better at some things.

Outside of these things, we talked about the need to find a niche and a little about fulfillment (which is kind of like drop shipping, but you have to start out with the merchandise). There was another type of business model, which I didn't catch the name of, where you gather information about people who might be interested in a certain thing and sell the names (with their permission) to the people who actually sell the product. On your site, you would provide information about the product. I think it's called infomediary, but I'm not positive.

Anyway, that was this week. Wow, for only having one class, we still talked about a lot!