Mistakes I Wish I Had Never Made
We all know the saying, “If I knew then what I know now, I’d be much better off”. I was thinking about that the other day and decided to put together a list of mistakes I’ve made during my e-commerce life. I had to shorten the list to just 6 items because there’s only so much room on the Internet.
Mistake #6: Automatically adding customers to your email list. This may seem like a no-brainer today, but when I started out, I assumed that customers would absolutely love to hear from me. So, I setup my site to auto-enroll customers into my email list. I received a few angry emails from people, but didn’t think it was statistically significant. This all changed when my legitimate emails were being blocked by major ISPs because I had received so many spam reports. Doh!
Fix: Use double opt-in mailing list providers such as Aweber. Your emails have a much better chance of making it to their recipient and the people on your list actually want to receive your communications.
Mistake #5: Running sales. Your “once-in-a-lifetime” sales event can easily become a quarterly event and then a monthly event and soon a daily event. I got into a habit of running weekly sales. Sales spiked every Friday, but it didn’t create a net gain because of dips on other days. Your prices should already be competitive. All sales do is encourage customers to wait to buy the next time you’re running a sale.
Fix: A better option is to simply lower the price without flagging it as “On Sale”. As a small business, you cannot, by definition, compete on price alone. So, don’t even bother starting with sales. It won’t end well.
Mistake #4: Obsessing over conversion rates. I used to be obsessed with my site’s conversion rate. We’ve all heard the sales pitch: Increase your conversion rate by just 10% and your profit will skyrocket. This is true. However, this assumes that you haven’t done the major things to your site that can have a profound impact on your CR (like listing your phone number, displaying a secure checkout badge, and having straight-forward navigation). What the conversion rate experts fail to tell you is that tiny tweaks to your site design aren’t going to have a major impact on a small business website. The reality is that the products you’re selling are typically more niche, so consumers aren’t quite as “flighty” as someone comparing mass market toys on Amazon and Toys ‘R Us.
Fix: Instead of running time-consuming tests comparing shades of green on your “Add to Cart” button, spend that time finding the next great killer product for your website. Remember, the only number that truly matters is the one in your bank account.
Mistake #3: Drop shipping. I despise drop shipping. You lose control over an essential part of the sales cycle. You can’t guarantee when a product will ship. You can’t guarantee that the correct product will be sent to the customer. And you can’t ensure that a customer’s entire order arrives all at the same time. I did a bit of drop shipping for about 6 months and was about to rip my hair out. It’s a nightmare and no way to grow your business.
Fix: Avoid drop shipping like the plague.
Mistake #2: Failing to thoroughly test a product. In the early days of my website, I would sometimes purchase a new product without testing it significantly. This came back to bite us in the butt a few times. For instance, we’d be shooting a video for a product only to realize that it didn’t work like it was supposed to and we’d have to return the item. This wasted a ton of time and effort. In another instance, we tested a product, but only one sample. It took a few months for us to realize that the item had a 10% defect rate. Another waste of time, money, and effort.
Fix: Get a sample of a product. If anything seems even slightly “off”, ask for another sample or don’t sell the product. It isn’t worth your time to deal with a product of less-than-stellar quality.
Mistake #1: Not getting a transactional email service provider sooner. The most important emails you send are your order confirmation and shipping confirmation emails. If customers don’t receive these emails, they don’t think their order went through. We use Google Apps because it allows us to use Gmail with our custom domain name. The problem, however, is that Google Apps customers can only send up to 2,000 emails per day. If you want to send out more than that, you’re out of luck with Gmail.
Fix: Get a transactional email provider such as Sendgrid. This is perfect for order confirmation emails, shipping confirmation emails, back-in-stock emails, etc. I feel much better knowing that all of the automated emails we send are going to make it to their destination extremely quickly.
Steve @ten23media says:
All great points Jamie. I can especially 2nd mistake #2, failing to test a product. I failed to thoroughly test a product a few years back and it ended up costing big. Dealing with returns, replacing the defective product... it was a big pain. With better testing I could have avoided it all.
I do however disagree with your mistake #3. I'm sure there are nightmare drop shipping scenarios out there, but I've personally had good luck with drop shipping. I think if someone is going to drop ship they need to make sure they have a really good relationship with the vendor. Make sure all the rules and procedures are clearly discussed so both sides have an understanding of how the agreement will progress. With a clear procedure, drop shipping can be a successful arrangement.
Steve Wylie says:
I agree that drop shipping works if you have the right partners. We are able to offer a much larger variety of products by drop shipping than we ever could if we had to carry and warehouse all that inventory. The keys to a successful drop ship relationship includes ensuring you have accurate inventory from your partners, back-end systems for order entry, EDI implementations when possible.
Our business has grown substantially over the past year due to our ability to successfully drop ship products directly to our customers.
I also agree that drop shipping should not be dismissed as something to avoid. As indicated by both comments, the key is having trusted vendor partnerships and managing those partnerships properly. When either piece is missing, problems arise.
We make tools that help retailers connect with suppliers. The key challenges are ensuring product data and inventory are accurate and up-to-date, moving orders to suppliers for fast fulfillment, and being able to manage multiple suppliers efficiently.
Marketplaces like Amazon.com and both large and small retailers have embraced drop shipping to grow their selection beyond what is possible by only warehousing inventory. If the criteria is whether other retailers outsource fulfillment successfully through drop shipping, then drop shipping is something every retailer should strongly consider.