Custom orders work for used items, hand made items, or hard to find items. In fact, for some items, this is the only way they can be produced.

As a business startup, this has some major advantages. You don't have to stock items that might not sell, and you can get paid before you have to lay out cash on stock. Your store does not require a shopping cart (though it can help for some items), and you can negotiate details via email.

Of course there are some major disadvantages also. Because you may be purchasing with someone else's funds, you must have the ability to make good if a disaster occurs. And for customers to pay you, then wait two to three weeks or longer, for an item to arrive, means that they have to really trust you.

I ran a custom order site for used laptops for quite a while. It worked well, and my customers came back to me for repeat purchases because they got a better value through a custom order than they could through other means, and without the risk of eBay. I made many purchases through eBay, but had quite a bit of experience in knowing what was truly a good deal, and what was not.

A custom order store is set up differently than a click and ship online store. I'll go through the basic process here.

1. Your product must be unique enough to justify the wait. With used laptops, the unique advantage was that they could get precisely what they wanted, at a significant savings. With craft items the advantage may be that they can get items that are available nowhere else, or that they can choose color, size, or material combinations. Custom order stores also work well for some other hard to find items.

2. You must have a predictable source. That means, if you are going to deal in used items, you must know that you can get them at a specific price, on a regular basis. eBay can be used only if the item you need comes up regularly, and the prices stay fairly stable. For crafts, you must know that you can predictably produce the requested items, with a predictable quality. You need to know about how many you can produce in a set time period, and when to tell people that the wait time is a little longer.

3. Your website needs to be set up with certain features:

• The store is set up the same as a regular online store, with photos of actual goods, and details about them.
• Prices must be posted on the site. I posted a high average price. Often I could quote a slightly lower quote at the time of the sale since laptop prices declined instead of increasing. I gave myself a good amount of flex on the price so that if I could not find a bargain I could still purchase the item and make a profit. Make sure the prices you post are not so high they scare off your buyers, but make them high enough to cover unexpected increases in materials or wholesale items. If you just list "email for price", you will get far fewer customers! Trust me on this one, people feel like asking is a tentative commitment, and they shy away from that. If you post the price, they can make their decision that you are worth asking for more info from.
• Photos are critical. One color is fine if you have a range of options, but you need to be able to clearly show the quality of what you are selling, and to represent that you know what you are talking about. This is a major issue in establishing trust.
• You can have a shopping cart if you do not intend to negotiate individual items. But you should not have a shopping cart with automatic payment processing unless you are SURE you can produce or obtain the items as listed. I did not have one with my site because specs on used laptops vary widely. I just listed a common spec and a price for that, and I could have used a shopping cart if I had made sure that each laptop had at least the specs listed.
• You need a PayPal account, or other means of collecting payment. PayPal lets people pay now without registering, so it is much more flexible.
• State clearly on your site how long the average wait time is. Make it clear that this item is produced on demand, and that average ship time is one or two weeks - however long you are certain you can produce the items within. You can say, "items usually ship within two weeks of receipt of confirmed payment" That means that you can ship within two weeks of the time the check clears, not when you get the check. That way you don't get burned.
• Your site must also have a means of negotiating if you want to negotiate individual details. Usually an email link after EACH item is ok, but you can also put an email form on your site with fill in details if your items have similar details.
• You must be able to communicate clearly with your customers. If you cannot write well enough to email clear information, then this type of store is not for you. Most people online would rather email than phone - it is more convenient. Some people would rather phone, so have a number available also, but don't expect to be able to run a custom order store unless you can clearly convey information to your customers about your products.
• Your site will need a Policies, and a Returns statement. They need to be clear and concise.
• Shipping costs need to be listed, either by weight, or by the item, or however you are going to calculate shipping. Your shipping policies should be defined in the Policies area of your site also - which shipper you normally use, whether you typically include insurance, or whether that is extra.

The other aspects of this business are pretty much the same as any other business, except that the power of word of mouth may be stronger. For that reason, it is good to have a downloadable brochure on your site, along with a business card download (explained in the Downloadable Publications guide) so that your customers can share your info with friends. An affiliate program may be especially effective if you are serving a tight niche market. Combined with business cards, this is very powerful marketing. You won't get the world beating a path to your door this way, you will get a few additional customers a week from it when things get going, but those customers will be the most valuable ones. They will be ready to buy what you have, and willing to be pleased. If you live up to their expectations, you will get repeat orders.

Risks are high with some things. Each time I took an order, I was gambling in a sense with someone else's money. I had to be sure that if I took a risk, it was a risk I knew I could live with if it turned out wrong. If the laptop I ordered failed to arrive, I had to be willing to purchase another right away. If the parts I ordered did not work, I had to not only order more, I had to make it right with the customer because of the delay. I had to assess the risks carefully and purchase with less risk than I might take if I were ordering for myself. And I had to be sure that I knew the business, and the pricing norms well enough to profit and deliver a reliable product. Laptops are definitely something that should not be done by anyone but someone who is expert enough to part out a unit if it fails to work, or who can make needed minor repairs or replace parts if something is not right, plus I had to be able to test them completely before shipping.

As long as you understand the risks, a custom order store can be a great way to get started on a shoestring.