Practical Ecommerce

LemonStand CEO on Starting an Ecommerce Business

Starting a new ecommerce business can be frustrating, complicated, and risky. LemonStand is a popular ecommerce platform that often caters to startups and new entrepreneurs. LemonStand’s CEO, Danny Halarewich, recently spoke with Practical Ecommerce’s Kerry Murdock on how to launch a new ecommerce business.

Practical Ecommerce: Many ecommerce startups and small businesses use your platform, LemonStand. Tell us an example or two that you’ve seen lately of a good ecommerce idea.

Danny Halarewich: One thing that is gaining a lot of popularity is subscription-based commerce models. That’s really interesting to both the business and consumers. It provides consumers with products that they can get on a recurring basis, which is pretty convenient in a lot of cases. Then it gives that recurring revenue to the business that can provide more stability.

Another thing that I’ve seen recently was a LemonStand customer that was actually building a store that sells live lobsters. So they had some pretty unique challenges to overcome. They’re still in development, but they’re making a lot of progress.

PEC: What are some subscription businesses?

Halarewich: You’ll see a lot of companies that are selling items like snack boxes or even clothing. They’re often based on the customer’s preferences that they set up beforehand.

There’s a Canadian company called Frank & Oak. They’re selling clothing and they’re doing really well. I’ve always admired their business. We have a longer-term customer called Blissmobox. They’ve been around for a while. They sell a healthy snack box kind of product.

PEC: The mainstream ecommerce industry has been around for ten years or more now. Many ideas have been thought of or attempted for ecommerce. Is this a good time to be starting an ecommerce business?

Halarewich: We think it’s an amazing time. Ecommerce continues to grow and doesn’t seem to be slowing down. Technology is much better in terms of effectiveness, and also the barrier to entry is a lot lower. Also people are just much more comfortable buying online. I think that things are definitely aligning and making it probably the best time in history to start an ecommerce business.

But there’s definitely more competition. We always say it’s not a “build it and they will come” thing anymore. It might not have ever been, but it’s definitely true today. That means businesses really need to ensure that they’re offering a seamless shopping experience and taking advantage of modern approaches to digital marking.

PEC: Say I have a terrific product, a product that I manufacture or that I’ve invented. I want to sell it online, to consumers. I come to your company, LemonStand, asking for help. What are your suggestions going to be?

Halarewich: You would have already done a lot of the work by identifying a good niche and then finding suppliers for that product, or maybe you’re producing it yourself. The first thing is to learn about your customer. Really identify who exactly your target audience is. Research them. Speak to them. Call them up on the phone. Don’t try to sell anything, just learn about them, everything you can. Then compile that into a customer persona document, and use that as a guide for your decisions later on.

The second thing is to use the info you just gathered and start crafting your project requirements. Map them out as clearly as you can. Answer questions like, “How do they want to purchase your product?”

For example, if it a product like razors for shaving or something like that, subscription probably makes a lot of sense. How do they want the product to be shipped? Where are those customers located (which will influence decisions on how you accept payments and shipping methods that are available to you)? Also, where do they hang out online, to know how and where you can reach them with your marketing messages?

The third thing, armed with all that info you now have, you can start to narrow down your choices on ecommerce platforms. Decide whether you want to try to build yourself or if you want to hire an expert. An expert could be a freelancer, a studio of a few people, or even a web design agency of 20 people.

PEC: A fair number of smaller businesses fail. You’ve seen business come and go. What are common mistakes that ecommerce businesses make that cause them to fail?

Halarewich: The most common thing is the misconception of “build it and customers will come.” That just doesn’t happen. It’s really easy to launch a store nowadays. You can literally get one up in 15 minutes or so by using a template. That’s not really the challenge anymore. The challenge is getting customers. That’s marketing.

From what I’ve seen, business often fail because they’re not investing in marketing. They’re either just not investing the dollars into it, or the time or the effort, or getting the help and resources they need to build that out and drive the customers to their store.

Once you get traffic to your store, there’s all sorts of other things you need to do as well, of course. But the first thing when you’re starting out is getting customers.

PEC: Tell us about LemonStand.

Halarewich: LemonStand is an ecommerce platform company. We’re focused on retailers that are growing, or ones that aspire to grow. Our customers are usually full-time ecommerce businesses, or they are a brick-and-mortar business and now they are now expanding online.

Those are our customers and we really try hard to focus on their needs around providing a platform that’s flexible, that will support their growth, and also providing educational resources to help them as well. We have a blog that we’re building out where we have various experts write on topics like we’re taking about.

We have been around since 2010. It was founded by our chief technical officer and me. We’re based in Vancouver.

PEC: Do you two own the company?

Halarewich: Yeah, we do. We also have investors. BDC Venture Capital has invested in LemonStand.

PEC: How does a startup merchant, one that is inexperienced and not familiar with his ecommerce requirements, how does that person decide which shopping cart to use?

Halarewich: That’s a great question. I think there are probably a lot of different schools of thought on this. The first thing is to look for an ecommerce platform that you can grow into and that will grow with you. One that is flexible. It will scale with your needs, as your business grows up and your requirements change. There’s no way to predict all the things you may need in the future. That’s just impossible. But you can definitely get some help, again by reaching out to experts.

I would definitely reach out to people who have done it before and see if they can give you some advice on things you didn’t think of or things you didn’t know you should be considering at this stage. Write those things down and use it to compare the different ecommerce platforms. It’s a combination of making sure that you’re not pigeonholed in a platform that is very narrowly focused and won’t flex to your needs in the future and talking with people that will help you guide your decisions for making the choice.

PEC: Anything else?

Halarewich: There’s one thing that’s been on my mind, to suggest to new businesses just starting out. It is to think about mobile shoppers from day one. It is hugely important nowadays; it’s not really something that’s optional. If an ecommerce platform is not mobile-friendly out of the box, then my suggestion would be to move on. Make sure you are considering mobile shoppers right away, and you’re providing a seamless browsing and shopping experience to them. We find that shoppers will often look and browse a website from their phones, whether they’re sitting on the couch watching television or riding the bus, or something like that. Then they will come back later to complete the purchase. But if you’re not providing a good shopping experience while they are on their mobile devices, they will probably hit the back button, or tap the back button, and then find another store that sells a similar product that offers them a good mobile shopping experience.

Definitely I would make sure that new merchants focus on the mobile shopping experience.

Practical Ecommerce

Practical Ecommerce

Bio   •   RSS Feed


email-news-env

Sign up for our email newsletter

Get the Practical Ecommerce RSS feed

Comments ( 3 )

  1. Vicki Hidalgo July 29, 2014 Reply

    Hi: thank you for this informative article on e – commerce. I am in the process of building an
    Online shopping marketplace with a creative
    Twist and am looking for angel investors.
    I moved to SW Florida a year ago from NY.

    I entered into a competition called
    American Dream Seekers to try to get funding.
    The site will cost 20-30k to set up.

    Any advice?

    Regards
    Vicki Hidalgo

  2. Jeff Bronson August 21, 2014 Reply

    I enjoyed this interview and Danny’s insights. I agree subscription based models can be fantastic, if your niche supports it. The ideas are limitless.

    There are definitely a ton of mistakes that can be avoided for startups as well. I share some in this post, based on my personal experience.
    http://www.ecommercewarriors.net/8-ecommerce-business-mistakes-to-avoid/

    • Danny at LemonStand October 14, 2014 Reply

      Hey Jeff, thanks for listening! Your blog looks great, thanks for sharing.

      We should collaborate on some eCommerce educational resources some time!