33 Lessons Every eCommerce Entrepreneur Learns After Starting A Business
(and wishes he or she knew better beforehand)
Every now and then, I talk to online storeowners and ecommerce entrepreneurs and see the same mistakes they are making knowingly or not that sabotage their success. Some are open to the feedback; some prefer to learn on their own mistakes. Which is probably the best lessons one can gain during the entrepreneurship phase, as the best life lessons are in fact your own.
Yet, smart people prefer to learn on other peoples’ mistakes, because life is too short to make your own. They read about them, talk to other shopping websites and do pivot away the dangers that can get their startup down or eaten alive by sharks. Here is my list of 33 lessons or not to do things that you can use to refocus your time on something that helps your business versus tanks it.
1 Thinking that launching the estore is the most critical milestone
Well, it is. Except, it is the easiest one to pass. The real work starts in gaining and sustaining the momentum of growing your sales and staying in the game. That is what will take most of your resources, time, headaches, hopes and wishes. So, while planning the launch, do not sweat the ecommerce platform or the best possible branding you might have. Instead, focus on creating the best converting design via platforms like Shopify or WordPress (yes no need for Magento and its super expensive developers to employ for as long as you run your estore or Volusion (a very old and a crazy one in my perspective)). Think simple here and think hard where you spend time and money on creating an ongoing pipeline of online traffic that is sustainable and reasonable.
2 Not spending enough time, passion and diligence building and curating your email list early on
This is the most important marketing asset that you have to start building and investing into jealously like a lover. Because, if you do not, you will run out of money advertising your online boutiques, because you will have to. Advertising is expensive and email is the gateway to freely talk to potential shoppers. If you start collecting our email list early on, and segmenting it early on, you will build a profit generation asset that helps you sell on the backend on and on.
3 Doing email, social and PPC mass marketing style
Congratulations on doing the work! It takes lots of effort. Yet, if your message is the same across all your channels to all of your customers, you are wasting the time. I am not even asking to personalize the way Zappos and Amazon do, all I need is a slightly different message based on what I purchased or expressed my interest in. Do get that data through a bunch of free and low cost tools about your prospect list, search personas and do a variety of marketing communications based on those characteristics. Group your email and KW lists, and pay attention to changes every 2 months looking under the hood. You will find much more effective ways to bring your prospects back to your site at the right time to buy.
4 Pricing in isolation, having no regard or research done on what market offers already
This one always baffles me. I shop a decent amount online, as I cannot stand getting into lines after the post Perestroika childhood back in Russia or being stuck in a mall on a busy holiday in US. I like speed, freedom and getting exactly what I came for. So, I do shop online personally and out of professional interest almost daily (it is a habit). So, I see all kinds of products, offers and pricing. I know where I can buy quality cosmetics that are organic and at a price that is low enough. I respect brands too, I look under the hood for each product (the ingredients, where produced). In other words, I know my options. If I cannot get it on Amazon and I really want it, I might think about paying for shipping, yet the chances are slim. So is the majority of the online shopping population, we have expectations for free shipping, we are knowledgeable enough to research like a pro. We might get curious and buy and still have remorse the next day and return it. If you price your product purely based on your own calculations, good for you, but do keep in mind that there are alternatives and you have to fill the gap of why your product stands a chance vs. them as the price is a key factor in this decision making process. I always roll my eyes on bra startups that have beautiful products at $50 a piece. They have nightmare stories of women not fitting into any other bras and that is why they buy from them. Sounds like an overblown by marketing problem. Not really, me thinks and likely many other shoppers, and not for that price. I know I get a similar one at Nordstrom rack at any time of the year for under $3. I will still peruse your catalog for ideas and buy elsewhere. So, do offer something else I cannot really get. And admit it that about your brand I do not care just yet.
5 Not spending enough time on product assortment research and analysis
So, you run a catalog site and you have tons of stuff that overwhelms me on your home page. First thing I think of, I can probably find it on Amazon. So, do not look like a mass merchant site if you sell multiple products. Look like a quality niche site that has truly unique assortment not easily available elsewhere. Look at what people buy the most demand wise and offer that on yours. Smart ecommerce entrepreneurs use technology to gather best products, pricing across their niches and competition. They make merchandising decisions accordingly. Ultimately, they get more profit. True stories (some in my book, some all over the industry, simply ask, some examples I shared prior).
6 Ignoring competition completely and trying to build a unique brand with no associations
It is very refreshing to see innovative products being built, designed and launched on their own branded eCommerce sites. However, what kills all the online potential is the marketing decision to create a new niche and a new category and a new brand at the expense of its own creation. The company will not use any words that are within the niche or related products and god forbid mention any competitors and only will invest into its brand name in PPC, SEO and other internet marketing. I can respect the decision and see the rationale behind it. Yet, firstly it takes years to build a new brand in consumers’ minds (which you do know already and have prepared for years of funding). Secondly, and most importantly, you have to associate your new product in customer minds with the alternatives they are using now or whatever they are familiar with. And you have to use these terms to communicate to them and get their attention first. If you completely ignore that, you will be not be considered, be discoverable or seen. Like in old times of trading merchants, you have to speak the language of the foreign crowds to sell your merchandise. When I grew up in the Far East of Russia, we had huge self-laid Chinese markets on the streets, where the immigrants from the China, barely speaking any Russian sold all kinds of goods. They did learn a few words in Russian that referred to a product category or brand and they yell out those names. We, the buyers, knew that those are not the brands they sell, but we go the idea that the goods they offered besides the obvious visual appearance are like those names they called out. These Chinese immigrants outsell every day any local merchant. Imagine that online you need to get my attention and if you know nothing of what I am considering and speak none of those words or say we are just like Nike, but better, then you lost me. The same applies to online marketing for your new product in a new niche or category. If you sell a wine accessory, connect it to all the wine products, plus your brand, because just speaking your brand language will get you no where. Place your new category in the right consideration set to stand a chance.
7 Copying exactly the language, promotions and style from every known online retailer or a major category competitor
This sounds like a way to make it happen by being super aggressive and opportunistic, but you forget that your audience is the same online shopper who has seen this “show” or ad or copy before. If your site looks like a stage from the same skit, at which those online shoppers always shop at, they might not even realize you are a different store. Differentiate for real, do not skip on this exercise, and truly think how you can offer your products in a better, sexier and more appealing way. Add novelty and surprise to your designs to capture that attention and keep it focused on going through with the purchase. Do not be like everybody else. Yes, follow the web conventions and shopping experience expectations, do market research and get inspired, yet add some pizazz of your own.
8 Not thinking through every % of profit you give away from selling your product to delivering it to your customer
Selling online is not cheap, you pay % of your sales to many partners from your drop shippers to payment processing software. 1% here and 2% there eventually add up, leaving you a pretty skinny profit. I see that some ecommerce startups make partner decisions based on comfort and relationships or do no due diligence in projecting the estimates of how this kind of relationships might work out financially and what their other alternatives might be. And, as we all know, switching platforms, tools, and partners only adds costs and takes away time from your growth momentum. Heck, it takes energy too. So, hate it or not, do sit down and do the tough love thinking if all your relationships you invest into add up properly. There will be discoveries to save money too, if you know where to look.
9 Having no marketing strategy defined for the entire year
And scrambling to come up with promotions for the upcoming holidays in the next two weeks. Which is too little time to do a really good, quality job. Marketing strategy gets a bad rap for some reason and is not well understood. It is not simply a list of high-level goals and 2 or 4 tactics to achieve it. A good marketing strategy plan has a number of executional, strategic and customer specific write ups that guide you through the entire year. Writing a marketing plan is a very worthwhile exercise and not just for MBA students. Think about it, if you have no game plan for the next year to bring a certain volume of traffic, you have no clear picture how on earth you will do that. Talking to a bunch of consultants can be a start, yet ultimately, it is you who should sit down and write the plan up and see through all the details from start to finish or have someone who did it many times before and executed via it too to help you out. Do not forget that buying it with no input from you is a waste. Only you know your business well, your resources well, your capabilities. So, why do you skip this vital activity or do it half way?
10 Having no execution strategy either for the entire year
This is the opposite scenario, when a startup might have a high level strategy, yet is looking for someone else to execute it. You have to think about the execution a bit more versus simply loading the key work to a bunch of freelancers. There got to be a cohesive direction and you need to realize that you can trust those people to execute super well, because 50% of your success is based on the execution. How you do your online marketing in ecommerce matters a great deal. A good strategy is 15% of your efforts yet normally bringing to you 80% of the success. It is followed by 50% of execution or daily work that contributes to it with a 35% chance of anything else happening to your business that might divert or distract you. So, be like an athlete who is training for the Olympic gold, see through each detail and do or manage most of your execution, because it is you who needs to make the finish line, not the agency you hired (unless they are motivated and compensated accordingly or their reputation depends on that). Most consultants and agencies seem to care about being paid their chunk, do the job within the scope and move on. You need more than that for successful online business.
11 Thinking PR on Forbes and Techcrunch will bring qualified shopping traffic
Love this one. Some entrepreneurs fully immerse themselves into the game of generating tons of PR and articles, which is great for gaining attention of other startups and VCs. Yet, PR might not be a good sustaining strategy for ongoing traffic generation. It is a vehicle that can add boosts at the appropriate times, yet you cannot put all your online marketing eggs into this basket, it will not turn up very well. It is a good part of a marketing mix, yet not the key driver, so do not count your fortunes just yet because you are mentioned at Fortune or TechCrunch. Plus, remember the audience on those sites, people who are looking for news in business and tech, not online shoppers. How many times, I would meet a site owner that looks like a superstar and boasts about all the mentions they got on this publication and this, when I ask how much he sells, I get not a clear answer. Of course, being me, I look under the hood, check their facts of traffic and do my analysis and see zero nada traffic or any patterns of a healthy ecommerce site. People who make money in ecommerce most of the time do not write articles about it or being published everywhere, they just keep investing time and resourcing in growing their estore and numbers speak for themselves. Isn’t it like anything in life?
12 Thinking people online will pay 100% attention to your marketing
We all get super excited about our ecommerce startups and think that the world is our stage and everyone is waiting to see our performance debuts. The reality shows that it is not the case. Yes, the majority of the world population is online all the time, but they are distracted by many things. Each of us has to go through so many steps to even make a decision to buy if we think from the cognitive costs perspective. Our minds need to collect the energy (activation energy), still keep thinking about anything else we are not doing or buying (opportunity costs), battle the inertia and will power, shush our fears or the ones your site design imposed on us, bypass hormonal changes (stress and some deal with PMS, more common for healthy people than you think) and finally, we arrive at a stage where the attention still needs to be summoned on your shop story. Then, there are multi-tasking distractions that we do, our perceptions of you and unrelated to you but based on our prior experiences and our socializing on Facebook here and there. Soon enough into all those online activities and we walked away from your theater and abandoned your shopping carts. How many times I would add items to the cart and get totally distracted to forget I was shopping. All the that urge and desire that you created in me via your images, copy and reviews now is gone. Something else took my fancy. So, if all this happens to any human being, study the work of conversion optimization experts, add neuroscience triggers to base your marketing and site experience on. Unless, you only want your mama to shop there.
13 Hiring or looking for online marketing experts on Elance for less than $100 to run your PPC, SEO, content marketing campaigns
Ok, let’s be real. If your online business depends on ongoing traffic at enough volume to convert into nice monthly revenue, do you think hiring a cheap freelancer to do the most critical job will do it? To me this decision almost looks like giving access to your 401K or IRA plans to someone on Elance to invest. Would you do that? So, why do you think hiring people for this much money to bring you maximum return will work? Study the field yourself, work with reputable experts that stand behind their work and give value. You will only receive 10 times more. Search for cheap, you will get cheap.
14 Hiring people to do critical work like a site design or online marketing because they are your friends, cousins
This happens because we do need to run on a tight budget and we do get emotional about our online shops. But, similar to the investment metaphor I used above, do you think you can trust your brother do a critical job on your business because he is your brother first and skills are second? I would not. You need to connect, observe and hopefully get lucky to work with people who brought the results already that showed up in traffic, sales and customers not the ones who you like or related to (unless by a coincidence it is the same person). Some ecommerce entrepreneurs that I interviewed for my book shared that regret with me a few times. They would stress that relationships do matter, yet making decisions based on solely that made them go through rework and pay twice for what could have been done properly who had the skills and experience first. There were stories of ecommerce replatforming for over $50,000 and a year long of wasteful marketing with over $100,000 for not clear results. In fact, they had to hire someone to find they results of the internet marketing agency work via web analytics data. Sounded crazy to me to hire one consultant to watch for another.
15 Not reviewing and changing if needed your marketing mix every quarter
Online marketing is a flowing beast. It is like water, changes in volumes of traffic that it brings you. One channel becomes super popular, another emerges, and then there are two that always work for you but not for your competitors. It is good to stay with what works, yet it is key to revise your marketing mix every 4 months and see what opportunities you can catch now, before it becomes expensive and overly crowded. Facebook marketing becomes crowded now, yet two years ago it was a traffic mecca. Search was like that back in 2007. Pinterest plays a big role for clothing, cooking and home and garden ecommerce startups for the last 2 years. Snapchat and Instagram also work well now for many. Spot, try and test those opportunities before these platforms launched ads or raised prices. Be a resourceful entrepreneur, a growth hacker, as they say.
16 Doing online marketing suboptimal style as one offs, which are hard to sustain or examine performance-wise
Some ecommerce entrepreneurs are machines. They do it all from logistics to marketing, except if you start paying attention to the online marketing initiatives, they are executed as one off campaigns, with sporadic gaps in between, no tracking whatsoever or documents generated or lists to review to see what was done. When I ask them what worked and what did not, they have no answers for me. It is sad and almost seems like a wasted effort. It reminds me of people who decide to go on a diet, lose weight and get back to it again without even making notes of what they did and they do it 4 times a year. If you decide to put your time into something, do not just fly with it by the seat of your pants, think it through and observe what you are doing and take notes on the way. You might be able to learn a few lessons, discover a talent and repeat the process faster next time.
17 A/B testing creatively (thinking you are testing by changing a set of features one month and another the next one)
Everyone seems to be testing these days or at least is versed in the lingo. Yet, not many people actually do the testing or do it right. Some think that making a few changes on a site and waiting for the data to come in one month and do a few other the next is like A/B testing. It is not. In fact, you are just guessing and mixing so many ingredients into your shopping experience that it is impossible to isolate and verify. I am not even speaking about people who start testing using any tool and doing it without basic understanding of statistics or realities of life (seasonality, causation, correlation caveats). There is a process to testing, there are biases, there are rules, learn them before you waste time and potential traffic or revenue. Would you want to make bad or false marketing decisions based on inconclusive or biased data? Probably not.
18 Not tracking every critical click or shopping activity in your Google Analytics
I see that most online stores use Google analytics. I also see that the reporting something is not complete. The funnels are only setup from the checkout point (no add to cart events are measured) and sometimes even those are not correctly done. There are so many articles and guides online available for every type of event in the ecommerce space, so read them up and implement the basics. You need as complete data as possible to make better decisions for your site experience and marketing. Too many gaps make for a blindfold marketing, who wants that?
19 Relying on Google Analytics reports and dashboards that hide insights
Google Analytics is awesome, free and is a go to tool for many of ecommerce entrepreneurs and marketers. However, if you only rely for insights on its own dashboards and reports, you might be missing out. To really see what is happening with your site performance, you have to export most of the data and see the patterns through your own dashboards in excel. Your findings will be so much richer. You also need to get qualitative data to understand the why behind the whats’. Then, you can confirm or disapprove your hypothesis via testing, only then you will have a clear picture and a library of marketing lessons and victories to mine from for more profits.
20 Thinking too small, doing meek marketing, so modest, low key and reserved as no one notices
I see some people simply not being brave enough to open up and do good volume quality marketing. The product assortment could be superb. The quality of products rare and stands the test of use, yet the efforts to tell about those benefits are not seen at all. Think about online marketing as a way to get attention. Think of it as a lipstick you put on your site. If you are a female entrepreneur, you know first hand that having some makeup helps a lot to be noticed; in fact people behave differently around you. The same applies to your site and online marketing. Oddly enough, my friend a doctor told me that one way they know the patient is doing better of she has got a lipstick on. So, spend time on your site appearances, on your social media presence and doll it up for selling more of your goodness. Be bold and unique in your communications to the potential customers, entertain us, cheer us up and show what you got up our sleeve, charm and dazzle us. We like to buy from beautiful places, people and stores.
21 Looking like too many things to too many people, aka selling like a flea market
This happens when a given online business went through a couple of evolutions from one product line to another, where one is a cash and traffic cow and another is something the ecommerce entrepreneur wishes to develop. Yet, he or she is not ready to separate the two by being afraid of losing traffic or SEO or some favor from Google. It is not so much about traffic and SEO in ecommerce, it is more about how many visitors decide to buy. It is about how many of them were prequalified through search and landed where they intended. Google cares the least about your reputation and old traffic too. I’d advise to separate the categories if they do not make sense and create 2 different online stores that attract just the right customer. Otherwise, you confuse people, yourself and even Google. Yet, if the type of the online store is distinct, imagine how crystal clear and precise your online marketing and merchandising can become. The more niche, the more conversions you might get because you will be trapping the right flies into your online store.
22 Having equal decision making authority among all/both partners
This leads to conflicts and really hard time while you are running your ecommerce startup. So many decisions are to be made fast and if both partners or the trio has equal authority, it becomes a mess. If you start with co-founders, do not make a mistake of trying to have equal responsibilities, shares and weight, spare the future tension. Better yet, spell out all of those roles on paper. It just makes sense like a prenup.
23 Launching a niche ecommerce site (similar like a newly famous competitor) and thinking that people from all rural areas of US start making orders
Once upon a time I get contacted by ecommerce entrepreneurs who want to launch the next Warby Parker for a new category or the next Etsy for 3d printing. Being inspired is excellent. When I talk more to them, I realize that the basis for the startup was just the inspiration. All the required research if there is a demand and there is a market was made on too many assumptions and not on validated test. It start with: “We looked at the US population census data and see over X millions women living in rural areas and I bet they all want to buy Armani perfume all the time.” Ok, how do you know that? Us census data can tell you many things that are not true or not exactly as they appear. It might say that these many people earn over so much, but how can you extrapolate that they will buy your products? They only valid test for demand are your original sales. People vote by their wallets, not by the data collected on US census records.
24 Looking for conversion optimization help, ideas and services for free, cheap and all over the place
This is similar to # 13, where the newbies – commerce entrepreneurs, go on a mission to search for the cheapest conversion optimization expert, offer to engage for free or connect to a number of experts on Elance. Do you think it makes sense? If I were a real conversion optimization expert, I know that with my work I can bring extra $10,000 or $25,000 per month, do you think being paid by the hour is a smart business decision? Do you think it takes less than $100 to think through the strategy, do the analysis, set up the testing and spend time to execution? Probably not. For $100 you get a guess, a recommendation at best if you source from the reputable industry expert. No matter how small your startup is, that ecommerce expert is running his startup too and is getting paid for the work. Do you think a good investor will work for $100 to invest your $50,000 into a good allocation portfolio that returns at least 6% at all seasons? Probably not. Same applies here.
25 Not knowing exactly why their best customers or audience buys or would buy their product
The “why we buy” is what all great marketers study and know versus good marketers that guess or get lucky. You want to have a number of answers of why your products are bought, in which scenarios, triggered by what thoughts, life events and other decisions. Answers to these questions generate the best marketing campaigns, produce the most viral videos and help you sell your products at high conversion rate. So, when I speak to some online owners and get blank stares, I get mad a bit inside. Know your customer, talk to them via user testing tools, surveys, follow up emails. Get the answers to those questions and your online business will proper.
26 Generalizing about online shoppers as average women, men, teen
There are no average people, no average users. We make shopping decisions based on psychographic makeup vs. demographic. It is what we think, live and experience individually that drives online shopping and buying. So, by all means use demographic segmentation in your marketing, but do know that it is the behavior and psychology that helps us make decisions, pay attention and part with our money. Study that vs. generalizing your ads and messaging.
27 Having many ideas on marketing and conversion optimization but doing nothing about it
Internet is full of ideas, growth hacking, ecommerce marketing, conversion optimization are the hottest topics of many excellent blogs. I meet startups that are well versed on what could be done, but they do nothing. Ideas are only useful when you apply them. I read over 50 books a year and more blogs on marketing daily, yet I apply all that knowledge in my life or ecommerce startups I am part of. So can you. Make it a habit to learn and apply right away before new knowledge comes in. Time will pass anyway, what you are going to do about it in the meantime? Might as well apply! See tons of ideas, tools and stories in my book with application tips at the end of each chapter if you want skip reading.
28 Relying on VC funding and prioritizing traction accordingly vs. customer funding
Some ecommerce startups focus on the wrong goals. They want to get VC funding, which helps, yet moving forward it seems that all they do is to satisfy the reviews of the board versus the reviews of the customers. When raising the VC capital know that they are not with you on board of the ecommerce ship, but offshore, so their expectations differ. It is simply a financial relationship like with a bank, that is it. Invest more into catering to your customers and selling your products well. The VCs will follow. Invest more time in understanding the ecommerce field and connecting to people who know the business and are in the trenches vs. just boards. They might know better what to do and where to invest that money.
29 Doing too much discounting, no one really cares about your 40% off all the time
Once you launch into the ecommerce game, you have to make a choice on becoming an Apple brand that never discounts or a Walmart. Yet, many online boutiques decide to go all discounts in order to gain early online sales. It could be a killing strategy if you have a good product. I am not against discounts, yet I am against the generic 20, 40% off. You really need a good reason to offer it. Perhaps just an introductory price for a limited time and truly be limited. Watch good brands like Bobobos, Betabrand and Warby, see that they do not lead with discounts. They start the selling process with an outcome and benefit, not a deal.
30 Not automating routine tasks with technology or process lists
There was a great cartoon last year on LinkedIn that people shared with a character, pushing a cart with square wheels, while there was another nearby offering round to help. To which the square-pusher replied – no thank you, we are too busy. That made me think of some ecommerce entrepreneurs that keep doing too much unnecessary work and overlooking opportunities to save time and do better. There is tons of technology that is low cost to offload your repeat activities, to make you see insights without drowning in ecommerce data to get things done faster, even yourself. So, why don’t you want to spend a few min to rethink what you can do less of or in a better more efficient way vs. being stuck in the same routines? Or if you got your routines so well, why not document them and have someone else do the busy work while you can do the profit generating work?
31 Running online marketing reactively, no planning and followed through execution
This is not a sustainable way to do business in ecommerce and if you anyway serious about your business, you have to make some commitments. Reactive marketing is never better the one that is well thought out, executed and tested. You literally reap what you sow. Would you expect good harvest if you binge on your PPC, emails and content and see what happens? You do not need to experience it to foresee the results. You are responsible for your online pipeline of traffic and to grow it well, you need to do the research, do the work and commit your time and resources into growing the online biz. Some say, I tried it and it did not work. I dig deeper and see that their so called pilots did not stand a chance of being too short, too hurried, too unorganized, not tracked, out of season or you name any other confounder here. Good marketing is steady, well-planned and executed, not rushed, gambled and tried on quickly.
32 Not having an exit strategy
So, one question I like to ask is why you do what you do. What brought you into the ecommerce space? What is the ultimate goal to sell your site, to have a steady income to supplement what you do or to become the next Zappos? Having an exit in mind is good because it gives you energy when you drive your activities and shows you where to invest and what chances to pass. It gives you clarity in how to run your estore. Think of the exit strategy, then think of the steps to get their – your answers will determine your tools, resources and activities and ultimately your results.
33 Not mastering online marketing and ecommerce disciplines themselves
This is the worst of all in my view. I get it that not all of us get passionate about ecommerce. I get that some should focus on making other decisions. Yet, how can you make solid hiring and investment decisions if you do not speak the ecommerce language enough to see what is bluff and what is solid work and expertise? I personally experienced it in my investment area of retirement money. I had someone else do it for me. I trusted, I checked and saw years of the expertise, but I could not understand the results. I could not know if they were good, bad and normal. Deep down, I knew I was missing something. So, I took the time and started educating myself on the industry. I read books, I followed top investors in the US and abroad, I started reading and listening more and paying attention to the details. In the beginning, I was overwhelmed and frustrated, but after keeping steady, I started noticing that I see now what is bluff and what is true, where should I put my money. So, should you do the same for your ecommerce business, educate yourself too to make smart choices in life.
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