Before I get to sourcing, there's one thing I need to stress to all aspiring entrepreneurs and that is cashflow. It's not rocket science but cashflow is bloodline of ANY business, it's a known fact but many business owners may not be good at it.
Many e-commerce sellers hop in thinking that:
1. it's a cash business,
2. you can sell via drop ship,
3. there's no need to hold inventory,
and because it's a virtual business so everything should be fast and inventory-less.... we'll you are wrong.
E-commerce is not a virtual business, it's just an alternate business channel for trading goods. The same and common rules of trading still apply: you have to stay liquid and you have to manage inventory movement well.
If you run a business with too little inventory, customers might not wait and will go elsewhere.
If you run a business using drop ship, you still have to pay the suppliers upfront before delivery and if the item arrives damage or loss, you will have to be responsible.
If you run any of the above with too little cash, you won't be able to expand your business efficiently and furthermore it will be risky if you're just starting out.
Paypal and many other marketplaces in the world do not release payments immediately upon delivery, there's a period where the money is held called, 'settlement' which ranges from 7 days up to 2 months. So if you're selling like hotcakes and have no more money to buy new stock because the settlement period is in the way, you need to act fast!
My advice is to make sure that you have a small working capital before jumping into e-commerce.
It will help with a little 'breathing' space.
