After studying Google for five months, Yates has been able to get eLearningtoys.com to pop up number 3 out of more than 12 million Web sites for "learning toys."

Thinking of starting your own online retail toy outlet? Anne Yates, president of Manchester, N.H.-based eLearningtoys.com, recommends a solid business model, business plan and financing.

This advice springs from her own mistakes. Yates and her partner, Claire Laberge, spent all they had on beginning the company, making it difficult for them to get a Small Business Association loan due to strained personal credit.

“It’s really important to start the business aspect before you get any toys,” Yates advises.

Even with their rocky beginning, she and Laberge have grown from selling specialty toys on eBay out of a 10-foot square storage area to running their own site. They now store inventory across 4,000 square feet of warehouse space.

According to Yates, the greatest challenge with running an online store is technology. She stresses that it is absolutely essential to have someone in the office who understands search engines. After studying Google for five months, Yates has been able to get eLearningtoys.com to pop up number two out of 14 million Web sites for “learning toys.”

“It’s not about opening an online store and being able to fill orders,” she says. “It’s about understanding how the search engines work.”

In addition, Yates says you must offer something competitors don’t. eLearningtoys.com deals with 139 vendors, taking one or two items from each and making sure that they don’t conflict with each other.

“We find the very, very best of this one thing,” she explains. “It’s a matter of finding out why one product is so much better than another one.”

Yates also recommends against engaging in price wars. Instead, she focuses on presentation, including the quality of the worded explanations and images. She also provides the personal touch, noting that online gift shopping is a growing trend, making up roughly 60 percent of her business.

“We always offer flat-rate shipping, and we always offer free gift-wrap with a handwritten message,” she says.

Another important aspect is continuous research. Yates has found that it helps to be in constant contact with manufacturers to learn what their new products will be. The technique proved gold last year with the Little Tikes (ToyDirectory) Ultimate Beach Ball Sprinkler.

“It was too late in the season when it came out, and Toys “R” Us and Wal-Mart had not picked it up because they have to buy so far in advance,” she says. “The specialty e-tailers have an advantage with that. I sold 119 of those toys within a month and a half, which was pretty astounding.”

According to Yates, starting an online business takes just as much effort as a brick and mortar store.

“If anything, it’s harder because of the vast amount of data that’s required,” she says. “At a regular toy store, you close the door and you go home. There is no closed door online.”

Writer's Bio: Brenda Ruggiero is a freelance writer from western Maryland. Read more articles by this author