For Success in Ecommerce, Answer ‘Why?’

Since you are reading this on Practical Ecommerce, you presumably run an ecommerce business or are thinking about it. The purpose of this article is to ask you “Why?” That is, why invest the time and energy to sell your products and services online?

When people ask us about our occupations, we often answer with what we do. An ecommerce merchant would typically answer with something like “my business sells specialty men’s clothing online.”

But step back and ask why you run an ecommerce business. There are many answers, I suspect.

• “This is how I make my living.”

• “I am passionate about ecommerce and believe it has a great future.”

• “My brick-and-mortar store is suffering from declining revenue. Ecommerce is a way to reach new customers.”

• “I am investing in ecommerce because I can grow the business and sell it when I’m ready to retire.”

• “I have unique products. Ecommerce is the best way to reach my target audience and still make a fair profit.”

• “It’s something I can do out of my house and does not require my full attention.”

• “Ecommerce creates more efficiency in my sales staff.”

• “I hate going to physical stores and I love shopping online. Many folks feel this way. It’s the future of shopping.”

In other words, understanding why you work in ecommerce is important. It will allow you to plan for the what, where, and how.

Start with ‘Why?’

Simon Sinek is an author, speaker, and business consultant. His seminal TED Talk in 2009, “Start with Why: How Great Leaders Inspire Action,” has been viewed more than 20 million times.

I watched that video many years ago. It sticks with me today. Many owners and leaders often just look at the what and how of their business.

I’m a former ecommerce owner. My wife and I bought a small online bead store in 2002 so that she would have a part-time gig that she could do from the house. I later quit my full time job to join her. We believed we could build a solid lifestyle business out of it.

We were successful at accomplishing that goal. We paid our expenses, raised three kids, saved for college, bought a commercial building to run the business in, and later sold the business to another entrepreneur.

I now work every day with personnel from large corporations that are investing millions of dollars into ecommerce. Their why is to increase revenue, encourage channel shift, lower operational costs, reach new markets, better service their customers, and so on.

But, really, they struggle with the “why?” — other than that’s what their board or executive leadership team decided. It’s difficult, however, for my company to design a world-class solution for a large corporation unless we can uncover why it is investing in the first place. All the whys tend to be revenue and profit focused, to deliver an adequate return to investors.

It’s difficult … to design a world-class solution for a large corporation unless we can uncover why…

Aligning the Business to the ‘Why?’

When I look back on our bead business, we were successful because we aligned the company size to our why, which was to build a solid business that didn’t grow too fast, didn’t require us to involve other investors, and didn’t require dozens of employees, human resources, reams of policies and procedures, and so on. It allowed us to live a comfortable life with an opportunity to recapture some of the initial capital we invested if we were to sell the business, which we did.

At the end of the ninth year, we were ready for a change. We were tired of the need for constant availability and attention, the daily grind of receiving and shipping products, managing our small team of employees, and optimizing pay-per-click ads and organic search rankings.

To grow the business, we needed to invest more, hire professional managers, and undertake many other things that did not align with our lifestyle. That led us to sell the company and look for the next thing to be passionate about.

In my experience, managers, entrepreneurs, and corporations make better decisions on how to invest in and grow their businesses if they understand why they are doing it.

For example, if your why is to be C.E.O. of a business with 200 employees and $100 million in revenue, your what, where, and how will be much different than my journey. You will likely need to raise money — especially if you are starting from scratch. You will likely have to recruit top digital talent to compete with Amazon, Walmart, and all other large and well-heeled retailers.

If you want to manufacture high-quality, world-renowned products and control your brand and sales channels, that’s a why, too. To do that, you know to build a high-level customer experience and invest in creating and promoting your brand. You can sell on big, online marketplaces if you choose.

In short, selling products and services online does not, alone, sustain a business. Understanding why you sell those products and services is paramount. Over the coming months, I will explore strategies and tactics to help you achieve the why of your business. Stay tuned.