10 Things I Would Do Differently in my Ecommerce Business
After I sold my business last year, I wrote a series of articles on the importance of developing an ecommerce strategy. I’ve written over 70 articles since then, addressing best practices and how to improve an ecommerce company.
But in this article, I will address what I would do differently in my business, knowing what I do now. Here are 10 things I would do differently if I were to start a new ecommerce business today.
1. Get More Outside Advice
As an entrepreneur, it is easy to fall into a trap of thinking you know more about your business than anyone else. In hindsight, I would organize a team of business advisers.
I would seek financial experience, ecommerce experience, entrepreneurial experience, and someone with experience and skills I do not have. This could be a board of directors for a corporation. Or, it could be a quarterly lunch or get together over a beer at the local pub.
Share your business status, what’s working, what’s not working. Talk through your objectives for the short term. You’ll likely get some good feedback. If nothing else, you will need to organize your thoughts and push yourself through a review of your business on a regular basis.
2. Go for Traffic, Revenue, and Profits — In that Order
When we started our business, we focused on growing a highly profitable company. We were not focused on building the biggest brand with the most traffic. Several of our competitors focused on traffic and revenue growth. Over time, they grew much larger than us.
Though I do not know if they became highly profitable, they grew their revenue and cash flow to be much larger than our business. I wish we had invested earlier in revenue growth. We did do that after about four years, but we never really gained a competitive advantage. We were more of a highly successful niche player. I think we could have been in the Internet Retailer 250 list if we had jumped on the opportunity from the beginning.
That’s harder to do today with the number of ecommerce operations. But, whatever your business, grow your traffic and revenue first. Then tune your operations for higher profitability. I’m not suggesting you lose a ton of money, just be willing to sacrifice some profits for future growth.
3. Hold on to your Cash
You can never have too much cash. Apple’s stockholders seem to think it should reinvest its cash or increase dividends. But I say keep whatever loose cash you have, available for reinvestment.
Skip the new car. Invest in mobile, multichannel marketing, and new products to sell. Save it for a rainy day or new investment.
4. Emphasize Multichannel Selling
We started selling on Amazon in 2010 with great success. I wish we had done it two years earlier when Amazon’s marketplace was ramping up. Today, I’d be looking at all my multichannel options very aggressively.
Advertise your products on Google Shopping and use Google’s Product Listing Ads. Become visible on comparison-shopping engines. Build scalable pay-per-click campaigns in case your search rankings diminish because of a Google algorithmic change.
Sell on the marketplaces best suited to your products. Look at new social commerce opportunities with Pinterest and Wanelo. Use Facebook and Twitter. Get your online store mobile friendly now. Make sure your emails are mobile friendly too.
5. Do A/B Experimenting and Testing
Creating a great customer experience in your online store usually takes many iterations. You need to constantly improve your search and navigation, merchandising, shopping cart, and checkout.
Do this with systematic A/B testing or multivariate testing if possible. Unfortunately, many online stores do not have enough traffic to generate statistically significant results. You need about 100,000 unique visitors per month for accurate A/B testing. But if your traffic is less than that, you should still experiment and test. If you have a low sample size, but see a high percentage change from a test — say a 40 percent increase in clicks on a button color change — you can be pretty sure that’s a good change. If you see a 2 percent increase, you won’t know for sure.
Give it try. Focus on your shopping cart and checkout where you may have the highest impact. Try a mini-cart and a one-page checkout — both are likely to show positive improvement.
6. Delegate More Tasks
I should have delegated more responsibility to a couple of key staff members. They would have benefited through the opportunity for more personal growth. I could have focused on more strategic activities.
7. Go Low Rent
You own an ecommerce business. You have offices and maybe a warehouse. You don’t have to impress anyone, especially not your staff. You rarely, if ever, hold a customer meeting.
Keep your rent low. Have adequate space and equipment, but skip the class A or B space. This will help your profits and help lower your breakeven point.
8. Adjust to Economic Changes Quickly
I was proud that we kept our staff together — with the exception of a single part time employee — through the worst of the recession. We cut back some hours, but we did not have to eliminate any of our regular staff. However, in hindsight, I probably should have.
If you find yourself with too much space, equipment, or staff, try to downsize quickly. Don’t let your bleed cash on things you are not using or resources that you don’t have fully utilized. You can always shift back.
9. Do More Ecommerce Networking
During my 10 years of owning an ecommerce business, I attended exactly one Internet Retailer conference. I learned a ton, but never attended again. I corresponded with handful of other ecommerce owners, but I had little exposure to other solutions and strategies. Today, I have a large network of vendors, consultants, and business owners that I talk to. I read many ecommerce blogs and articles. I attend webinars. I know far more than I did while running my business. I wish I’d done that all earlier.
10. Use Analytics
To our credit, we used analytics in many areas of our business. But it took us a few years to get the hang of it. Let your analytics drive your marketing, product selection, store design, and operations. Use every tool you can to capture and analyze your data. Make decisions based on the numbers, not what feels right.