I agree, shopping and retail sites are very challenging to create. Not just because of the shipping and handling but getting enough traffic to succeed.
When people surf the web, they surf by specific products and the stores that generally come up first are the ones that are established like "Target", Overstock, etc. So for that reason, its harder for no-name sites to get traffic.
And I think your 3rd step should actually be first. You need to identify the type of audience you want to target FIRST and then build content, add products, etc last. Affiliate programs and monetization should always be the last step because you won't make any money if you don't have the audience to sell to. And if retail is what they ultimately decide to do, they are going to have to do a LOT of paid advertising. Natural search results don't generally play favorites to start-up retail sites.
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