Advice for a online music retailer startup

My father left his job one and a half months ago after deciding that he was sick of having a boss and a day-job :-)

I have a background in Entrepreneurship having started a small business before and having entered a few Business Plan Competitions - I decided to help him achieve his dreams of being self-employed and creating his own job.

We came up with the idea of him starting an online music shop selling brand new CD/DVDs. The idea wasn't particularly unique but he's a giant music buff and has been dealing (as a hobby) in this industry for a long time.

At the moment, he's primarily retailing through eBay and the online Auctiva-based shop front (http://gonzomaximusic.com ).

We currently have,

• One or two main suppliers/wholesalers
• Around AU $3K revenue in the last 30 days (at ~40% GP after eBay/PayPal fees)
• Steadily increasing/growing

I'm hoping there must be people out there in this community who have been down this path and done it all before. What are the DO's and DONT's of selling retail goods on eBay and through a website? Is it sustainable over a long period of time? Should we scrap the whole idea and attempt to find something where there is a stronger unique selling proposition?

Are there any books people recommend on being a eBay Powerseller? Should we aim to get off eBay as soon as possible? What tools do people recommend? (We're currently using Auctiva extensively as well as eBay's Selling Manager Pro)

[FYI: We're based in Australia and selling mostly through ebay.com.au at the moment] Any help, advice or insights greatly appreciated.

Hey James you might want to get in touch with Corey Kossack. He successfully started and sold a company doing exactly what you are wanting to do. He even wrote a book about it which could provide you further insights into how he did it.

You are in a business with a lot of competition. Focus should be on making the buying process easier or turning the tables around. Some suggestions could be:

1. If there is a large iPhone community in Australia maybe you want to build an app where people could order through the app?
2. In Singapore I have seen several companies replicate the Netflix model. Look at Hollywoodclicks to get some ideas.

Exploring options to enable scaling your business will be critical in your success.

Hope that helps.

James - I wanted to point you to a couple of niche music vendors for inspiration and potential contacts/research.

The first is Todd the Vinyl Junkie, he sells vinyl LP's and equipment, I believe the business was started a couple of years ago.

Second is Headroom audio, makers and resellers of headphones and amps, Ty (the founder) is a great guy, active in the community and I'm sure you could start a dialog with him.

Finally, Headfi.org, not a reatil site, but a community with connections to a lot of cottage manufacturer & retailers.

Good luck and remember, the most important thing for you and your Dad is to know, know, know the market!

There are a lot of things you guys could do. Here are a few things I learned here and there -

• Stay on eBay until your website really picks up. Send your website branding stuff to all sales from ebay.
• Build community around your website, add forum, feedback, ratings, cross promotions etc. This can drive free traffic to your website.
• Facebook fan pages, groups etc. work well.
• Identify top 10 competitors and find out their business strategies.

If you want to be sustainable, you're going to have to look into electronically transmitted media and not CD/DVD's. I know there are niche markets for vinyl (DJ's, Audiophiles), not sure anyone has warmed up to the CD as much. DVD's may make it longer.

Is there anyway to promote any local music or film school? You may be able to coordinate with a local studio and be a distributor. Something to differentiate yourself.