Want to start an Online Anime Store?

Every Anime fan’s dream job would be to either work at or own an Anime store. But unfortunately, it’s almost impossible to work for an Anime store without knowing someone that manages one.
I live in a state which doesn’t have any actual Anime stores anywhere; only a small pop-culture shop which happens to sell a few Anime dvds (now we have a Japanese plushie shop). So a few years ago, I decided that I would try to put my time and effort into creating my own online Anime store. It just made sense at the time… I would be my own boss, selling products I had knowledge of, and I wouldn’t need heaps of money or revenue to run it as I would for a physical store front. Unfortunately for me, after starting my online store and running for a few months I needed a bank loan, but I was turned away as no one thought I would make enough profit to repay the loan.
(Everything is written in an Australian point of view. Circumstances will be different in other countries.)

My first step was to learn a little more about small business management. I applied for a course at the local TAFE, but looking closely at the course structures, there was hardly anything relevant to starting an online store, not even anything to teach me about online marketing/SEO. I chose about 4 months worth of units for the course and left, as all I needed were the basics, and knowledge of how tax works (GST in Australia). After doing the course, I had to learn everything myself, from Customs Tax and Duties to markup schemes for products. After that, I was set to start building my website.
If you live in Australia, the ATO provides HEAPS of free information for starting a small business and info on tax. I would definitely recommend getting as much of this info as possible and spending a few days reading all of it if you’re unable to attend a course.

So, how do I get started on the website?

If you don’t have any knowledge of html or php, don’t worry, because you won’t have to build an online store from scratch. There are free website packages which you can download and install on your server, and tweak the settings and themes to suit your needs without touching the coding. I personally chose OsCommerce, which a few years ago was quite fiddly to customize (I’m not sure if that’s changed or not these days), but there are plenty of other solutions which should be much easier to use.
First, you’ll need to get yourself a domain name (URL) and webhost. There are a LOT of choices here, and a lot of webhosts can sell you a domain at the same time. I chose AussieHQ for their reliability, but compared to other hosts they can be a little more on the expensive side. Spend a little time to compare hosts and chose what’s best for you. Whirlpool is a great place to read what people are saying about webhosts.
One feature to look for while selecting your webhost, is if they provide automatic installation of e-commerce website software. This can save you a little bit of time and is perfect for first-timers.
When choosing your domain, if you’re an Australian, don’t look past a .com.au. You’ll want your customers to know you’re local, as most Australians will much prefer buying within Australia. But don’t think that will stop you from being able to get international sales.
One other thing: Make sure your website caters for a variety of payment methods, and not just ‘one or the other.’ Some people can pay with Paypal, others can’t/don’t want to. Accept options like bank deposit, cheque and money orders.

Can’t I just use eBay?

Of course, eBay would just make everything much easier for you. Mind you, a lot of wholesalers will want information on where you’re selling your products, and some of them don’t like you only reselling on eBay. I guess they want to actually make sure you’re a business, not just a random person looking to make some pocket-money.
To most people, eBay stores don’t seem to be quite as professional, and as far as marketing goes, you’re pretty much restricted to customers searching for your products, amongst thousands of other sellers, just on the one website.
Besides, having an actual URL (www.youranimestore.com.au) looks much better on advertisements or business cards.
You can however have an eBay store alongside your website; a lot of online stores actually do that to sell their products to a larger audience. Buyers will end up trusting you a little more if they notice you’re an established online store with an ABN (or international equivalent) rather than just a random eBay seller. A lot of people I know don’t buy Anime merchandise on eBay, as there’s a large amount of fake/bootleg products circulating eBay.

How much will this all cost?

The good thing about running an online store is the lack of costs involved. All you really need to pay for when running an online store are the costs for your webspace and domain name which in most cases you can pay for on an annual basis. Everything else is just run from your own computer, which technically you can claim a portion of back in tax for business purposes (heck, you could claim back on a portion of your electricity bill too). You will need a printer to print invoices (registered businesses within Australia HAVE to provide an invoice with all sales), and you will need to pay for postage and packing materials. Online stores generally charge for shipping costs rather than postage materials.
Of course, you’ll also need to pay for the registration of your business name (on the other hand, ABNs are free). I can’t quite remember how much I paid for my business name, so it’s best to talk to your state registrar.
As for stock, you’ll be surprised at how much stuff you can get with a few thousand dollars depending on where you get your stock from (and I damn well hope you’re getting it from Japan, but more on that later). One thing I should mention is Customs Tax and Duty fees. If I remember correctly, orders over a cost of $1000 are subject to Customs fees. This kind of sucks, because the more you buy at once, the less you pay for shipping, the quicker you get all of your stock, and depending on how the wholesaler charges, the cheaper the stock is. Customs will hold all of your stock until you pay the fees, then send it off once they receive it.

Where do I get my stock from?

I’m going to tell you this straight up. Don’t buy from anywhere outside of Japan just because it seems cheaper. You will end up with a bunch of bootlegged items. And don’t let anyone tell you that they’re making profit from selling products via wholesale cheaper than Japan are selling them wholesale. I’ve had “toy experts” tell me Hong Kong stores sell Anime products cheaper just to get rid of them. That could be true, but I’ll be damned if they were selling legitimate Miku Nendoroids for $5 each (I could tell you a story about this, but that’s for another day). The bottom line is, if they’re cheaper than what they cost wholesale in Japan, don’t risk it. And some people will crap on about how it’s cheaper to ship from China, which is a load of bull as it doesn’t cost that much more to ship from Japan.
Anyway, one website that I would recommend initially would be HLJ. They’re an English-language website located in Japan and do wholesale accounts as well as sell to regular customers. I wouldn’t look past HLJ to start with, but there are other places which can be slightly cheaper than HLJ (and as far as English goes, HLJ are easy to communicate with if you don’t already know Japanese). Be aware though, at last check (again, a few years ago) their wholesale discounts started at orders from 140,000 yen less shipping. The more you buy, the higher the discounts are, and they’ll let you know what discounts you can expect before ordering (model kit discounts would start at 22%). They still let you order less than that, but your discounts won’t be as large as 22% (you might end up with 5-15% off).

What should I sell?

That’s completely up to you! Of course, it might be difficult to know exactly what will sell well first up. The best thing to do is go around to Anime forums and see what people are talking about. Ask your friends what their favorite series are, or even choose to stock merchandise for Anime that’s just been released. You could even check around Anime clubs in Australia to see what they’re currently showing and see what people are following. Final Fantasy has always been a good seller, and with Final Fantasy 13 out, more products will be on their way shortly.
As for DVDs and Manga, it can be a hard decision. I decided not to bother with it, because people have access to these easily enough at local stores. As far as Madman DVDs go, apparently you won’t make too much profit on them, and there’s not enough room to undersell local retailers on them and still make a decent profit.
But again, it’s up to you. You can sell anything from plushies to models. Anime magazines from Japan would sell well and the profit on those are good (I’ve seen 400yen magazines sell for $25 in Melbourne), although they’re heavy and cost more to ship.

How much should I charge?

I went around to a few Australian online Anime stores when I asked myself the same question, and found a pricing trend between all of them. Generally, cheaper items get a higher percentage markup. I found that products that are worth up to about 2000 yen RRP (NOT wholesale price) would be sold for double that in Australia. This is especially true for things like trading figures, and Sega prize figures. Also, when buying trading figures, they come in crates of certain quantities. Usually you divide the price of the crate by the number of trading figures included, and you can work out the individual prices from there.
I found everything from around 3000 yen to 6000 or 7000 has about a 50% markup. Everything after that mostly has a 25-30% markup. This isn’t really anything to go by in a strict sense, but it could be a handy guideline to follow. I’ve even seen 5000 yen figures go for as high as AUD$120! As a lot of Australian Anime fans/collectors know, buying Anime figures in Australia can be quite expensive. Most collectors will skip the middle man and import from Japan directly to save money, and often to get something the moment it comes out, via pre-ordering.

How should I advertise?

This is where it can get tough. First of all, do a little research on SEO. It’s a big topic so I won’t talk about it here, but basically it stands for Search Engine Optimization, which should be self-explanatory. This alone won’t get you heaps of traffic, however. The most basic thing you can do is go to your profile pages for things like your forum accounts, Facebook, Twitter, etc etc and update your website field. Don’t go around to public message boards and websites posting about your new online store, as most people consider that to be spam. To start off with, the best kind of advertising is word of mouth. Spread the word to your friends – post on your social networking accounts like Facebook, Twitter or Myspace, jump onto MSN and tell all your contacts (or put the link in your name) etc etc. The more people you tell that way, the more likely they will tell other people about it and create a chain reaction of people mentioning your website to others.
After that, think about making some business cards, or small advertisements that you can leave around places and take to local Anime clubs. You can also ask Anime conventions to add your advertisements in their ‘showbags’ or if you have enough money to spend, you can get your ad printed in their program books.
One nice little feature that you can add to your website is a blog. This can allow you to post about new products or promotions, and in return people will be able to subscribe to your RSS feed to be kept up to date automatically without having to visit your website.
Everything will eventually fall into place and you’ll start getting more visits and more purchases, but don’t expect things to pick up until after a couple of weeks. You most likely won’t see your first sale within the first week of opening.

I’m scared of my competition, they’ve been doing this for years!

I won’t lie here. This can be the biggest risk of starting any online business. There are online Anime stores in Australia and around the net that are well-known with amazing reputation that have been selling for years. When people first visit your store, how will they know you’re a trust-worthy business? How do they know you won’t rip them off if they haven’t heard of you before? One little piece of information you can add to your website to help ease some people’s minds is your ABN. Most people think that as long as you’re a registered business, there’s nothing to worry about. Also, a lot of people who have been selling on eBay prior to starting a full online store already have their reputation built that way.
But putting that aside, you need to consider what you can offer people that current online Anime stores can’t. Can you beat their prices? Can you offer products that current stores don’t sell? What is the incentive to buy from you, rather than a business that’s been in operation for years? These questions will have you second-guessing about if you want to open an online Anime store or not, but if you sit down and plan things out slowly and carefully, you won’t have anything to worry about. One thing you could offer is a pickup option on sales, and this can be more than enough incentive for people to buy from you if you (and the customer) live in an area that has no local Anime store (or the local Anime store doesn’t stock what you do).

Anyway, I hope this has been food for thought for those of you who are dreaming about starting your own business. Just remember, you’ll never get anywhere if you don’t try. Starting an online business is a lot easier than what people might think, and certainly a lot easier than starting an actual store front.
If you’d like to ask me a question about anything to do with starting an online Anime store, or to help clarify anything I’ve said in this post, send me an email. I’m not a small business expert, but I’ve been helpful enough to help an old friend start an Anime store at the same time I opened my online store, so hopefully I can be of help to anyone else who wants to start one ^^;