12 Keys to a World-class Ecommerce Company

What makes any company stand out from the crowd? Is it the products? Customer service? Profitability? Growth? Something else?

Many observers would answer all of the above and likely add other attributes to the list. Companies like Apple and Starbucks come to mind. What about pure-play online retailers? Which ones are the best of the best? How does your company stack up against them? Against your competitors?

The same attributes that make any company great should be used to judge ecommerce firms. Many mid-sized online retail stores — ranging from $300,000 to $25 million in annual sales — are family owned and are limited in their ability to scale due to lack of funding, changing market conditions, competition, and other factors.

Does this mean those businesses can’t be world class? Absolutely not.

The same attributes that make any company great should be used to judge ecommerce firms.

In this article, I’ll address 12 critical factors that can determine whether your ecommerce company will become world class.

12 Keys to a Word-class Ecommerce Company

  • Customer focused. The Internet has made the customer king by providing instant access to product, price, shipping, reviews, and ratings — on any device, at any time. Know your customers. Treat them as you would expect to be treated. Deliver the experience they are expecting, and sell the products they want to buy. Seek new ways to add value and extend the relationship for many years. Online stores come and go. The ones that survive adapt to existing customers and attract new ones.
  • Your brand. Your brand is your reputation. Be sure your brand is visible in the venues where your prospects conduct research. That might be blogs, social media, search engines, marketplaces, email, or any number of other places. Be consistent; be transparent. Make sure your brand represents your products and values and appeals to your target audience. Invest in both your brand as well as visibility. Writing helpful content on your blog won’t do you much good unless the search engines crawl it and real target customers read it. Measure your visibility. Work to improve it where your presence is lacking.
  • Your online store. This is the face of your business. It’s the only contact point many of your customers will ever have. Be sure the design is inviting and appropriate for your target customers and products. Put your search box front and center and offer  powerful faceted search so your visitors can quickly find the products or information they are looking for. Offer reviews and ratings. Include compelling images, descriptions, and product details. Provide your visitors a reason to browse by offering cross-sells, up-sells, accessories, and other related items. Be sure the site is fast, mobile, and secure.
  • Products. Do you sell the same products as your competitors and Amazon? Find new ones. It’s hard to win that war. Seek out unique products; even create your own brand if possible. If you sell commodity-type products, offer up-sells to other superior products. Price competitively and show the value you offer beyond price, such as free shipping, free returns, and rewards programs.
  • Supply chain. This may seem like an odd attribute for a world-class company, but it is critical. Once you find world-class products that meet your customer’s needs, you must ensure the products’ availability. Buying at the lowest possible price and being able to re-order when you need to re-stock are both crucial factors in financial success and in sustainability and growth.
  • Employees. Many ecommerce entrepreneurs think back to how easy it was when there were only a couple of people running their business. As ecommerce companies mature, however, it’s critical to find and retain employees who can help scale the business. This means recruiting people with the skills you need, paying them appropriately, and providing an environment for personal growth. Whether you staff is involved in digital marketing, accounting, or fulfillment, it’s crucial to find the right employees.
  • Profits. Regardless of overall revenue growth, you cannot become a world-class company without profits. Many of the here-and-done online retailers failed at profitability after showing tremendous growth. Even today, there are many venture-funded high flyers in online retail that are losing money and will be gone when the funds dry up. Pay attention to margins, return on ad spend, rent, shipping, boxes, third-party fulfillment, and so on.
  • Working capital. Always have access to cash, a line of credit, or other working capital. You never know when you may hit a blip in your business that will hurt your cash flow. It could be a Google algorithm change, a new competitor, or a supplier that can fulfill your biggest seller. You can never have too much cash. Stash some of your profits away for a rainy day. Be sure to secure a line of credit when times are good so you can use it if trends turn negative.
  • Innovation. For the most part, world-class companies are innovators. They are willing to take risks and try new things. Online retail is a laboratory. Where else do you have access to audiences all over the world, a venue to make them offers, and tools to measure success? Try new marketing initiatives, new products, and new websites. Experiment with different pricing strategies. Sell on different marketplaces. Try something new every month.
  • Infrastructure. As your business grows, so must your infrastructure. Don’t use cheap tools — i.e., your ecommerce platform, order management system, financial system — to run your business. Do go cheap on rent, however. Your warehouse does not need to be gorgeous, but make sure it’s safe, highly functional, and efficient. If your company is big enough to invest in more automation, do it right with scalable solutions, bar coding, and eventually robotics.
  • Culture. You can’t have a world-class company without a winning culture. Your company already has one. Is it the one you created or the one that simply emerged? Are employees happy to come to work? Do they feel as though they are making a contribution? Is there transparency and communication? Make sure your company has a culture that is intentional and purposeful.
  • Adaptability. Remember four years ago when you read in Practical Ecommerce that mobile devices were going to dominate online retail by 2015? Well, it’s already here. It has caused the demise of many online retailers who failed to respond. Many are clinging on, but their market share is dissipated and they will never recover. Beyond mobile, what’s the next big change? It’s hard to say. But stay tuned to your customers and market. Innovate and experiment as new trends emerge.

It’s easy to lose sight of many of these factors as you scramble to keep up with daily operations. But step back every quarter and think about how your company stacks up. Add other factors that are appropriate to your business. Self-examination and critique are important. Seek outside advice. Mentors and advisors will likely ask questions you may have considered.

Dale Traxler
Dale Traxler
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