NevBlog

Neville's Digital Surrogate Brain

eCommerce

Outsourcing Lesson & Examples

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Outsourcing has been a thing big companies have been using for years, the main reason to slash costs of manual and intellectual labor. However, there is probably even more benefit to outsourcing for smaller companies, yet a lot of people have no clue how to utilize it.

I’ve outsourced projects before, but thanks to a mentor of mine, I’ve been exposed to several projects and shown the CORRECT way to do it.

There are three major tips I’d give:

1.) Be specific as possible.

2.) Include non-lengthy descriptions.
Make sure you write where everything should go, how it should work and what it should look like.

3.) Use visual aids.
Photoshop will be your best friend in making a design project go smoothly. If you already know what you want, the best thing to do is make a Photoshop representation of it, then the programmer will do their thing and make it work. These are especially important if you’re using an offshore programming team, as subtle language differences sometimes spoil directions.

4.) Always bargain.
Outside the United States, especially in less developed countries, bargaining is a typical part of buying stuff. Programmers will often quote you way too high, so you just have to bargain down the price. If you stink at bargaining, go to RentACoder.com and set your own project price.

I’ve learned if you don’t a put a lot of effort into planning the project, it will come out terrible, take a long time and cost a lot of money.

If you spend a lot of time initially spec’ing out the project, it will go extremely quick, come out great and cost less since the programmers know exactly what to do.

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TWO OUTSOURCING EXAMPLES:

1.) This is a spec sheet I made recently for my online business House Of Rave. It outlines for a Shopsite programmer what I want done using visual aids and short descriptions in an outlined form. This way if there’s a problem, I can say “Section 1.c has not been done yet.”

You can view a snapshot of the Word document below:

2.) This spec sheet is from my recent FacebookProfile project I did a few weeks ago. I knew EXACTLY how I wanted it to look, so I created a visual representation of the site using Photoshop and then marked up specific sections and functionalities.

I didn’t already know any WordPress designers, so I posted this project on RentACoder for $220. A few hours later I selected the highest rated programmer to respond and the project was done in no time.

What was great about this project was the very little communication involved, as I had already so specifically stated what I wanted. Generally there is a lot of discussion back and forth between customer and programmer if it’s not clear what is wanted.

You can view a snapshot of the Word document used for the FacebookProfile.com specs:

Medium to large projects get much harder, and the important part is staying on top of the project and documenting progress.

FINDING A PROGRAMMER:
If you’ve got a project, first spec it out so you know exactly what you want. Then go to any of the following sources to find someone to do it:
1.) RentACoder.com – You can set your own price here, view other projects by the bidders and read their feedback. Basically an Ebay for any sort of project. Also try eLance.com.
2.) Craigslist.org – Simply post your project in your local city (or better yet, a big city like San Francisco or NYC) in the Gigs –> Computer section. You’ll be surprised at how many responses you can get locally and from abroad.
3.) Forums – If you’ve got a very specific project you’re working on, go to some popular forums about that subject/software/hobby and post the job.

Facebook Profile Website

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I’ve tried the advertising-only website before with FancyBlog.com, but the income wasn’t worth the effort and interest waned and invariably so did the site. I see more potential on this new advertising-only site, and hopefully it can become pretty big if I play my cards right.

The new site is called FacebookProfile.com, which is a Facebook tips/tricks/fan site.
Facebook is a social networking site with massive popularity amongst the college population. It’s clean, fast and constantly adding new features. Noah from OkDork works at Facebook and is always ranting about “How awsome my job is” and “How cool it is to work at Facebook” all the time.

I didn’t want the site to look like a blog, but I love the functionality of blogs. So to make posting easier, I used WordPress, but created a custom design theme that imitates the Facebook design:

FACEBOOK SCREENSHOT:
FACEBOOKPROFILE.COM SCREENSHOT:

This way when people stumble upon the page via search engine or link, they know for sure it’s a Facebook-related website…without even reading a word. Since search engine traffic is already rising quickly (even after only a few days of being online), this is important.

To create the site I:

  1. Installed a regular WordPress system on the FacebookProfile.com domain.
  2. I literally took a screenshot of my actual Facebook profile from the internet, then Photoshopped it to include the WordPress blogging elements (Pages, Categories, RSS Feed etc.)
  3. Started writing a few posts just to keep some content on the site for the programmer.
  4. I then found a WordPress designer through RentACoder who could retool the website to look like my Photoshopped rendition of the webpage. This cost me $220. I probably could have got this done cheaper, but I paid more to get someone who could do the project quickly, had a high ranking on past projects and prior experience with WordPress.

The idea for this project came randomly while I was searching for domain names for a different project. I also remember reading about a whole cottage industry that revolves around MySpace custom templates, images, text and media add-ons….and thought Facebook might eventually move somewhat in this direction.

I’m still working on bugs, such as how to prevent WordPress from auto-formatting my Facebook ASCII Art text….but those are just small hurdles. The site has already been getting 50-100 unique hits a day, which is not bad for a non-advertised site which has been up for 7 days.

So FacebookProfile.com has officially been launched….not much content as of yet, but more to come!

Cheap Ecommerce Shopping Carts

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I’ve tried and used tons of different Ecommerce shopping carts over the years, and some online shopping carts can be very expensive. Nowadays, open source shopping carts have sprung up all over the place that offer novice web users the chance to open an Ecommerce store…..FREE.

For a recent partnership business I’m helping start, I did a review of several open source shopping carts which allow you to start a fully functioning Ecommerce store with little know-how and little money:
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OScommerce:
This is the big daddy of open source shopping carts. It has an enormous amount of users who regularly contribute to their support groups and add on modules.

Pros:

  • FREE
  • Easy to install
  • Huge support section and forum.
  • Add on modules created by the community for free
  • Great selection of out-of-the-box OScommerce templates available (for money) at TemplateMonster.com
  • When you purchase a template, the entire shopping cart is already included for free.
  • Can have a store up, running and accepting orders within minutes.
  • Simple checkout screens.

Cons:

  • Templates are extremely hard to manipulate, will most likely need to buy a professionally made template or have someone help.
  • A little “Bulky” on the backend.
  • Will take a little getting used to the backend: adding products, adding options. Not as intuitive as some of the for-pay shopping carts.

OScommerce Frontend

OScommerce Backend

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Zen Cart

This is basically an easier to use offspring of OScommerce. From my experience, it is almost identical in every aspect to OScommerce, just a cleaned up interface. The only major difference I saw was the ability to easily upload multiple templates, something OScommerce is pretty fussy about. Zen Cart is also slightly easier to use in the backend, but once again, is almost identical to OScommerce.

Zen Cart templates are not hard to find (for pay), but OScommerce has more templates, more add-on modules and a larger community of users.

ZenCart Frontend

ZenCart Backend

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X-Cart:
This is a for-pay shopping cart that allows a full, turnkey solution to Ecommerce:

Pros:

  • Easy to install
  • All add on modules and templates usually cost money, but are professionally done.
  • Easier to use than OScommerce and ZenCart.
  • Has easier add-on features and a clean interface
  • Easier to get professional help than the open source carts.
  • Has very nice upselling features and makes it easy to upload multiple images for a product.

Cons:

  • Not open source. If you have complicated modifications to make (which most people don’t), this shopping cart will be much harder to manipulate than OScommerce/ZenCart.
  • Costs at least $200 for the software, plus extra money for templates and add on modules. Probably not the choice for an uber-cheap startup.

Xcart Frontend

Xcart Backend

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All of the above shopping carts allow for easy merchant account integration and are a complete out-of-the-box solution for starting an Ecommerce store. I’d suggest first downloading OScommerce and trying it out. Add a few products, add some categories, place a few orders yourself and get used to the feel of it. The only requirement is a web hosting plan that allows you to create databases.

Verdict:

OScommerce: Use if a free solution is needed. Best option when looking for free upgrade modules. Best options when looking for great looking templates.

ZenCart: Use if a free solution is needed. Works slightly simpler than OScommerce.

X-Cart: If you’ve got a few hundred dollars to spend and want a nice looking store with upsell features and easy multiple image uploads, I’d recommend Xcart. They have a free demo also.

If familiarized with these sorts of shopping carts, you can have a brilliant idea for an Ecommerce store and actually exectute the idea while you’re still motivated about it rather than first having to learn about ecommerce!

How My First Online Business Works

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Inundated with emails about this, I decided to show how House Of Rave works. This is just one example of how I use a drop shipping service to make money on the internet. There are still some inefficiencies, but this is the way I handle things now.

I will show what happens from the time I get an order, till the customer receives their order. Everything is done in 5 steps. I can accept, process, account for and send off 2 orders in around 2 minutes with this system. 10 orders will take me about 10 minutes with this system:

1.) Check, View and Review Orders.
I login to the backend of my Shopsite software to see how many new orders I have waiting. I click to view all the orders and do a quick skim of the order information. I am looking for any subtle signs of fraud at this point. After 5 years, I’ve become pretty good.

I can view individual orders or all the orders at the same time:



2.) Charge Orders.
This is the most inefficient step, as I choose to process cards manually to become more familiar with the customer names, locations and spot fraud. I login to my merchant account digital gateway and copy/paste from Shopsite the needed customer information. This step goes quicker than imagined because I use my tablet PC pen.

Here I find out if each order is legit. If the order is declined, I make a note of it and move on. If the order was paid for using PayPal, I login there to find if payment was made. If the order looks suspicious or comes back with negative address verification, I will often call the person on the spot to verify the order.

Manually charging orders seems a waste since I can simply press a “Charge” button instead. However, over time I have noticed that I start to remember customer names, locations and ordered items. Since this step exposes me to the orders, it helps me identify order patterns and it drastically reduces my fraudulent orders (Although this isn’t as much of a problem compared to a few years ago).

3.) Enter Into Accounting System.
This step is very quick and allows me to see my estimated current profit, my expenses, what I owe etc.. I’ve used some pre-made accounting modules for Shopsite in the past, but I like my Excel sheet better. Over the years I have honed it to help predict my profit at the end of each month. I don’t know my exact profit until I get the monthly bill from my supplier, but this Excel sheet gets me damn close.

4.) Create with Word & Send.
This step is the way THIS particular business of mine works. Once an order is ready to go, I copy/paste the information into a Word document and send it via email to my supplier. From there, they print it as an invoice and send the order. This is the way my particular supplier chooses to do business, others may have different methods.


5.)Followup.
My supplier will send me a tracking number once the order is sent. These go into my tracking system where customers can check the status of their order. The tracking module also sends customers their tracking numbers via email automatically.

How I make Money:
I pay wholesale price for the products I send out from my supplier. They send me a bill for the products & shipping each month. I charge retail price on the website and bring in all the money myself. At the end of the month, I cut a check to my supplier and the difference is my income after product expenses. I then subtract my server costs, merchant account costs, PayPal costs and phone bill costs to get my total profit amount.

I’ve made about $800 – $1,000 every month for 5 years doing this. I’ve recently made additions to the site which have doubled my profit to about $1,600 a month. I plan to make this side income generate about $5,000/month in 2006.

I’ve had other online businesses which operate differently, but this process works best for HoR. There is still a lot of room for improving the efficiency of this system, and in 2006 I’ll have time to concentrate on it.

One thing I find the funniest about this business was my first order. I had no clue what to do with it. I just got the business running first, and was forced to figure the rest out very quickly.

Hopefully this helps someone further understand the inner workings of this type of small business!

Increasing Online Profits Further

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One business I own and openly talk about is House Of Rave .com.
It has consistently made between $800 – $1,000 every month for the last five years. I particularly like this business because it’s extremly simple to run and I have no inventory.

I’ve been very satisfied doing a minimal amount of work on House of Rave and making a few hundred dollars a month, but I am graduating this December and will have more time to focus on my businesses. I recently set out some Forecasted Goals for HoR and how I would go about accomplishing higher profits.

On September 2005, I set my sights to start breaking the $1,000 barrier per month by years
end. In October I beat my forecast and brought in $1,120. In November I beat my expected forecast, bringing in an HoR record of $1,630. This increase in sales seems to be directly related to the changes I’ve made to make HoR look more consistent and have faster customer support.

My actual income for November 2005 was higher than $1,630, and I report the actual figure on my tax statements. However, I always understate my profits so I don’t withdraw all of it from the HoR account. This is because online stores tend to surprise you down the road. For example, I may bring in a $200 order today which gets charged back for 3 months down the line. Since I understate what I can withdraw from my business account, I have extra cushioning building up for those surprise expenses.

The good thing about the business is I don’t have any inventory, I’ve had a great dropshipper in California who does all of that. The negative side is I haven’t seen 99% of the stuff I sell. To increase sales of already popular products, I’ve been ordering my own products and doing photoshoots with my ghetto photo studio.

I’m currently taking pictures, videos and writing my own descriptions for many of these products. I will keep adding 1 or 2 a week when time permits.

I did a photoshoot, video and instructional post on this Scrolling LED Message Belt Buckle. The photos were taken in my room and edited with Photoshop. The video was also taken in my apartment.

A customer emailed me while I was doing the photoshoot saying she had lost the buckle programming instructions, so I decided to make a full instruction manual for the customers. The original instructions are a little hard to use and have some confusing grammar, so this should help people out.

The video I took of the belt buckle features the now World Famous Crotch of Neville Medhora:

Another product I enjoyed playing around with were the Ultra High Intensity Glowsticks. It’s like a regular glowstick but they burn themselves out within 5 minutes. I ordered these to see how bright they were. I took some photos and two videos demonstrating the brightness.

The first video shows the cracking of an ultra bright glowstick, and the second video shows my skills at swinging glowsticks. I can’t afford real actors or anyone with talent, so I enlisted one of my roommates as camera man and shot the videos myself. This was a zero budget production, so I had to settle for that! I simply used my Casio Exilim for filming.

The last product I’ve recently updated was the Glow Paint I carry.


I added some nice before/after shots to show the effect and give HoR a free plug.

There are several reasons I am adding my own content:
  • Search Engines. A good amount of unique content on a page helps higher positioning.
  • Branding. House Of Rave needs to become more engrained in customers minds.
  • Customer Comfort. The customer must know that HoR is a real business, and unique content should help. This is especially important for online retailers.
  • More Information. The customer can get a better idea of what a product is with additional forms of media and descriptions not found anywhere else.

Hopefully enhancing the product pages with unique content will help increase profits in the long run. I see no reason why HoR cannot be a $5,000 p/month part time business by the end of 2006.

Make a Cheap Photo Studio

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When starting any small business it’s best to bootstrap and avoid large costs. If you sell products online and need professional pictures taken of the products, skip that step and do it yourself. I’ve done this for a while by making a Cheap Photo Studio:

INGREDIENTS:
-2 pieces of white poster board (Regular white paper works too)
-Swivel Lamp
-Regular digital camera
-Basic Photoshop skills

Depending on what you are photographing, setup the poster board(s) accordingly. The goal is to take a picture with a clean, white backdrop without lines or interruption. Blemishes or lines can always be removed by Photoshop later.

For Example:
I took a picture of an old playing card.

With Photoshop I brightened the picture and removed all the red and white blemishes.

Playing around with Photoshop yielded this picture which looks nothing like the original. Point is: digital enhancements can make even bad pictures look good.

You can also do the same thing with less 2-dimensional objects such as this lock:

<-- before Photoshop

After Photoshop:

Just 2 magic eraser clicks in Photoshop and some cropping made this clean picture. The already white background makes Photoshopping very easy.

Pictures like this can also be used to enhance Ebay auctions or Craigslist postings. This is just one way to save money when running or starting an online biz, especially if running on a low budget.

Owning A Business Can Be Worse Than A Job

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I have a problem with all these “Get Rich” books. They lie. They routinely say, “Working for other people is not the path to wealth” and owning your own business lets you “Do things your way”

What a bunch of crap.

I’ve run into so many people young and old who simply say, “I want to own my own business some day”. Have they really thought about this?

Have these people seen what owning a business is REALLY like? It’s not for everyone. People see certain wealthy people with businesses and see their luxurious lifestyle, but they don’t see what the majority of business owners live like. There are over 22,659,000 businesses out there, not all of them have founders that live like royalty.
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Some reasons why people want to run their own business:
1.) Freedom to do what you want, when you want.
2.) Loads of cash.
3.) Ability to choose which days you work.
4.) Choose who you work with.

It’s time to shatter some dreams. I want to share some of the less glamorous examples of business owners I have seen:

Business 1:
Mr. X was successful in the corporate and business world. He wanted a new venture so he invested in a large franchise chain. He bought the land, made preparations and opened shop. The store was a big success, land value skyrocketed and the money was flowing in. Then he sold it because he hated it so much. He had to deal with his employees who would constantly steal, outrageously obnoxious customers, very long hours, sexual harassment cases caused by employees, and tons of paper work and a boatload of accounting. If he wasn’t there, there store would probably fall apart.

Business 2:
Mr. B opened up a franchise restaurant. Money is good with the three stores he owns, but he is constantly looking for new employees, dealing with landlords, having to suffer bad months where weather effects sales, bad years where the economy is down. Mr. B has a pretty average lifestyle yet a large amount of responsibility with his three stores. He spends a lot more than 9-5 working at his stores. He could easily live the same styled life if he and his wife both worked. So instead of a regular 9-5 job, he has a 24/7 job with lots of stress and unpredictability.

Business 3:
An asian friend of mine owns with his family 2 successful gas stations. In his 20+ years of life, he has NEVER taken a single vacation with his entire family at the same time. His parents have not missed one day of attending their stores in 15 years. Enough said. He drives a pretty fancy car…and you know the only place he drives it? From home to his gas station and back.

Business 4:
On a trip to a football game in Dallas, we stayed at a medium sized hotel. The entire family worked AND lived there with no additional employees. The dad was the check-in host, the mom and daughter were the maids, the grandmother cleaned and the son did the janitorial work. We saw them all everyday for 3 days.

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So, with a business you may STILL have to:
1.) Work very long and unpredicatable hours.
2.) Accept low income at times.
3.) Skip out to attend to your business.
4.) Deal with assholes.

I ALSO happen know some people with very handsomely paying jobs. These people go to work from 9-5 and they are DONE. They save and invest wisely and are financially independent…sometimes fiscally better off than their business-owning friends.

So before you make a generic statement like “I want to own a business,” think about it first. It’s not for everyone.

Server Screwup

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I’m still not sure how or why, but NevBlog DNS entries on my server changed, thus leaving the website inaccessible for a few days.

Since then, school has started, I’ve spent over $300 on books…grrr.

Some entrepreneurial adventures will start next week for me.

Speaking of entrepreneurship, my old roommate started a small company called Grade-A-Books. He basically buys back old college text books, then sells them cheaper than the University Co-Op (The bookstore which has a complete monopoly in the area). With a decent investment amount and a lot of organizing and time, he has successfully become a book dealer. Congrats to him! Not many other college students will rake in a couple thousand dollars in a few days!

As for now, I have to get back to reading. It seems this last semester will be my most work intensive yet….but there is ALWAYS time for making some more money!

My Businesses

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HouseOfRave.com:
Rave, Club, Party and Light Up Supplies.

The House Of Rave Full Story

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BodyMonkey.com:
Entertainment and Gift Supply

The start of BodyMonkey
(Shut down to go full time with HouseOfRave.com)
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Palm R e p o r t . com:
Online Palm Reading website that I made around 2006/2007:

Someone once told me I had a small “Money Line” on my hand. I was trying to play a joke back on them and prove them wrong, and was surprised to see a lack of places to get your palm read online.

Seeing an opportunity, I had my favorite Romanian developing team create a custom system that could accept image uploads and Palm R e p o r t was born. Of course finding a palm reader that wasn’t totally full of BS was a whole other adventure!

Recently sold it. (links removed after sold)

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Enwon Inc:
The parent company for an of my ventures.

How I got the name.

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FacebookProfile.com: (Sold)
Facebook ASCII Art, Tips, Tricks, Hacks & Apps Reviews.

Started it for $220 in May 2006.
Sold it in August 2007 for $5,500.

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Resumite.com: (sold)
Custom Resume Webpages

To earn some extra cash in college I started Resumite which developed resume websites for individuals. It worked decently well, mainly I got all my business around the UT campus from flyers I posted.

I stopped doing this and site laid dormant for a long time, I later put it up for sale and got around $200 for it.

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NevBlog.com:
Personal blog of Neville Medhora.

Starting at the age of 22 I started documenting my financial situation for all to see. This made me get serious about my own finances and get serious about improving the situation. Since the start this blog has been featured in many large publications like the New York Times and Wall Street Journal. I used to track all the income I made, but I recently removed it. I don’t consider this blog to be a business, but I have experimented with putting up advertising several times (1, 2, 3) to see if I could make money.

I enjoy maintaining this blog because it helps me keep track of what I’ve been doing and it helps me meet all sorts of interesting people I otherwise would not have met.

I think by far the thing most people enjoy is the Bottled Water Selling Experiment and the Scratch Lottery Experiment. The story that’s helped the most people (I get emails about this every single day) is the House Of Rave story which explains how I setup a drop shipping business from my high school computer.

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Other Projects:
I’ve always loved starting websites, and I won’t go into great detail here about all the small projects I’ve started then stopped over the years. Every one of them COULD have been a success had I devoted all my effort. However some of them were either just not worth the effort, or more importantly, just not interesting to me.

At one point I remember having a wall covered with 10 different to-do lists from 10 different sites I created. From there I realized one of the most cliched pieces of advice is actually true: You’ve got to love what you do.

Oddly enough the most successful things I’ve done were things I really enjoyed doing. My earliest example was “Neville’s Cool Car Archive” from when I was 16. I was obsessed with cars, so I would take pictures from internet, Photoshop the backgrounds black and post them online as computer desktop wallpapers. I did this from the only domain I owned: Neville1.com. Back then the site was getting so much traffic it kept overloading my hosting account, and since I never thought of trying to make money from it, I eventually turned it into a personal website.