Running an eCommerce business is never as easy as it seems, and there are plenty of mistakes you’ll make in your first year. Thankfully, many learning experiences can inform future success and help you become a leader in your product category or niche. However, there are some that can lead to significant stumbles and cause you to burn through too much cash to keep the doors open.
So, let’s look at four common mistakes that can lead to significant challenges if left unaddressed. Thankfully, responding to these is straightforward. There’s success out there waiting for you to capture, and now you have the chance to remove some roadblocks early.
1. Keeping product benefits very generic
Many eCommerce brands are built from a dream that sounds like this: “I have an amazing product/idea/marketing strategy that everyone will love, so I’ll make my website for everyone!” That idea takes hold, and the primary sales channel, whether your website or Amazon product pages, is built to attract everyone’s attention. That can ultimately set you up for failure.
You can’t appeal to everyone. So, the benefits you tout need to be broad. That can make them feel unrealistic or boring, especially if it’s a common message. For example, everyone wants to feel more relaxed and reduce stress. But just saying that won’t create a connection with your audience. Messaging that doesn’t explain how you do this or what kinds of stress you reduce will create the feeling that your product is generic, just like its words.
eCommerce businesses know they need to target a specific market to succeed in that first year. You can sell to the whole world eventually, but early sales and recurring revenue are required to get there. So, start by targeting a core audience with your benefit statements:
- Help a parent relax after a long day of chasing a two-year-old
- Ease the sore back of someone who just spent an hour in the car for the commute home
- Let the high school student know they can show off to their friends with the latest style
Even the behemoth that is Netflix targets and segments its messaging.
Any of those messages will inherently remove some potential shoppers. But they create a personal connection with others. Aim that personal connection at the group you identify as your best market.
2. Adding channels before research
You’ve got your audience in mind and have now adjusted product benefits to target them. Now, you just need to reach out to people and share your great offer. Hopefully, your startup work included some consumer research to find out where your audience searches, shops, and spends time online. Few startups have that Squarespace money to blanket every podcast with an ad, so you’ll have to be strategic from the start.
Sometimes, you get those initial channels wrong, or the audience you gain won’t feel to be as much as it “should” be. When that happens, you’ll be tempted to start blasting ads on Facebook, LinkedIn, Twitter, and everywhere else you think your audience could be. Diversifying is an intelligent impulse, but you need to back up any spending with research to avoid just wasting cash.
How do you start? Set aside some money and stalk your competition and brands your audience likes. Don’t just follow them on social media. Dive deep into their processes:
- Buy from some of them.
- Add items to a shopping cart and start the checkout process. Then, abandon the cart to see if they retarget you.
- Search for their goods and related items to see what their ads look like.
- Look at website source information to determine what eCommerce platforms and other tools are being used.
- Use keyword planners for their websites to see what they rank for, and then compare this to your projected keywords. Some advanced tools will do this for you by creating competitor site analysis, but these tend to cost a little more.
- Look at influencers and other areas related to your audience to see what trends are growing or dying.
That and more should influence where you spend next. You can find where the competition lives and what they might be missing. The trends or tools you need may inform what best supports your current channels. You may also identify when a channel is a simple addition because your current technology supports it. Or, you can realize how significant of a time and cost impact a certain channel may have, helping you evaluate if it has a large enough audience to recoup that cost.
3. Thinking of it as an automatic money faucet
Automation is the constant buzzword thrown around when someone is trying to get you to buy their service or software. Almost everything can be automated – what should and shouldn’t is another story – and that can creep into an entrepreneur’s mind. Relying on machine learning and AI for operations can create the illusion that you’re able to create a website and then magically generate sales and deliver orders with minimal effort or oversight.
In eCommerce circles, you’ll often hear this talked about as passive income. Sometimes it’s specific products that customers set to auto purchase, or new entrepreneurs may try to sell you a guide to marketing, platforms, and other tech. They’ll tout the few hours they work and the thousands that roll in while sleeping. This isn’t to say all of that is untrue, but it’s not something an eCommerce business should expect in their first few years.
Businesses take time, work, and investment. For many, you won’t immediately start generating profit. It may even take a while before you generate revenue. And those first profits, reinvest them into the business to keep it growing. Be patient with yourself and your business, and avoid automation that’s touted as shortcuts to profitability.
4. Trying to do it all yourself
An eCommerce company is still a standard business and there are many moving parts and things to master. It’s almost always too much for someone to do on their own without partners, employees, or some outsourcing. That means, one of the most common year-one mistakes is when an entrepreneur tries to do everything on their own, or when they try to take on specialized tasks without training.
The reason you were able to see this blog post is that people have done it before. There are dozens of eCommerce businesses starting right this moment. Lean on all that knowledge to help make smarter decisions and avoid issues. And your best option is to practice this from the beginning.
WPForms data shows that there are many people to talk to about eCommerce.
Map your business and search for recommendations on the right CMS or eCommerce platform. Research your audience and see what other brands they enjoy are doing. Hire a security expert to ensure your website and checkout process are safe and protected. See if a company can get you better shipping rates or avoid the need for a warehouse.
Focus on your expertise and seek out the guidance of others when you aren’t the expert. Go read the story of your favorite brand. Even if they’re a mythological tech unicorn that started out in a garage, they still started with a team.
Look for research that can address your company’s pain points.
The goal for your first year is to get comfortable asking for help. Join an eCommerce group on Reddit or Facebook. Ask LinkedIn connections their thoughts. Find a local business leader meeting. Call your friends. Take an informal poll while waiting in line for coffee or sitting outside of a nice restaurant.
Get yourself into the habit of asking others for help and opinions. That way, when you need it most, not only is the process easy, but you might’ve identified some great resources for your journey.
Scaling is a goal for when you’re ready
The first sales, early revenue, and those initial profits can feel a bit addictive during your first year. You’ll learn some things that work well and resonate with your audience. Often, a path forward emerges and tempts you to rush down it and never look back. When that happens, be prepared to pump the brakes.
Scaling requires a plan, not just an opportunity to seize. All the work you did to survive that first year will have to be doubled to grow in your second. That means checking with the accountant, reviewing legal and regulatory changes, and researching customers, pricing, marketing, and more.
Growth is usually identified as a potential for one product to do more. However, the truth is that it’s an opportunity that requires improvements in an entire business. Make a plan and slow things down to ensure that you’re not overextending capabilities, teams, or products. The last mistake you’ll want to make is driving all that revenue into products you can’t sell or technology you can’t use to move forward.
Guest author: Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
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