I need some advice on whether what I am about to describe can be turned into a viable business. Please note I am relatively new to the e-commerce space and this would be my first real attempt at a real store.
A manufacturer of a product is offering to sell it to me at 20 dollars and it currently retails at around 50 dollars in various offline retail stores.
My plan would be to set up a Shopify store, run Facebook ads to it and sell the product online and sell it for 50 dollars. Please note this is a one-product type of business and there really isn’t anything to cross-sell and the only upsell would be to offer more of the same product at a discount.
What’s making me confused is that I’ve always read you should aim to buy a product for 1 dollar and sell it for 4. With my situation, I would be buying it for 1 and selling it for 2.5, so not really as great of a margin as buying it at 1 and selling at it 4. But then I’ve read of people who buy a product for 20 dollars, double the price and flip it for 40 and are happy doing that.
My biggest worry is the cost of Facebook advertising as I am worried it might cost 15 to 20 dollars to acquire a customer (based on a few articles I have read).
I would appreciate some feedback before I put down any real money into this idea. I would love to hear if you think it’s possible to make profit running an e-commerce store with one product buying it at 20 cost selling it at 50.