Historic Collectibles: An E-Commerce Startup
Starting a business can be a daunting task. Many prospective business owners think it is less costly to choose e-commerce. While this may be so, an e-commerce company still requires an investment (Holden, Belew, Elad, Rich, & Gulbrandsen, 2008). The owner will mitigate some of the normal overhead expenses by taking on tasks instead of paying professionals and working from a home office.
Historic Collectibles will sell old postcards, stamps, advertising cards, and documents via the internet. Old items have a ready market from many buyers, including collectors, historical societies, and museums (Andrews, 2012). Even food and retail establishments look for items that are vintage themed. For…show more content… Shipping ease and storage requirements are also factors the owner considered. Shipping costs are a matter of concern for any e-commerce site. Every year the major shippers raise their rates. The United States Postal Service will even eliminate its commercial base pricing in 2016, leaving small volume business owners to go back to higher priced retail pricing (Trunkett, 2015). It is hard to compete against larger vendors who offer flat rate or free shipping. However, items that Historic Collectibles will carry is generally small and lightweight, a plus from both the shipping and storage ends. Because first class postage is possible for most of Historic Collectibles’ stock, it may be easier to build the shipping cost into product price and make the company competitive with bigger vendors (Bulger, 2012).
Start-up costs for Historic Collectibles may include legal costs, setting up an office, establishing an online presence, purchasing software, a dedicated phone, and acquiring initial inventory. As a small one-person company, the first question is whether to begin as a sole proprietorship or incorporate as a Limited Liability Company (LLC). Both allow for pass-through taxes, meaning the owner will report profits and losses on her personal income tax return (Holden et al., 2008). This eliminates the need to file a