5 Ways to Scale Your E-Commerce Business
Posted by Shaziya B on Thursday, March 10, 2016 - 17:15
In a world where e-commerce is king, it’s become increasingly difficult to differentiate from the many, many competitors worldwide. For example, a company in the U.S. might sell a t-shirt for $8 a piece, whereas a company in China might sell the same item for $2 a piece. It’s obvious which the sensible consumer would go for, so it’s inherently the responsibility of each e-commerce business to set themselves apart from its competitors, and also stay visible.
Many entrepreneurs think the best way to scale a business is to decrease pricing and stay competitive. This isn’t always true. Lowering your selling price doesn’t lower your cost, which means your margins are slimmer. The consumer may benefit from lower prices, but an e-commerce business, like any other business, is a mutual partnership, and you must be left in the black, too.
Your business is most important to you. Treat it like your child, and you’ll find exponential success.
Here are some simple, tried-and-true methods to scale your e-commerce co., and stay a happy person:
1) Know what you want to achieve.
No. This doesn’t mean profit. It’s sort of like the first rule of Fight Club - don’t talk about it. We get it.
Maintaining profit is much easier when you know what your business stands for. There’s plenty of cookie-cutter businesses out there, and they’ll never scale as quickly as one that can differentiate itself from others in a simple, yet creative way.
Once you accomplish this, realize that you don’t have to spend tons to scale your business. The most successful business will always be one that has effective cost control. This not only increases profit, but it also lets the business remain liquid. The more liquid you are, the less you worry about borrowing, meaning the business can stay afloat with both a direction and the funds to run it.
2) Know your customers.
Marketing is an age-old tactic, which has recently begun coming to the forefront for its necessity in a business. It doesn’t have to cost much, but it will need time.
You already know what you’re selling, but now you must know something else: know what your customers want. This sometimes tedious process involves research, testing and engaging with the masses.
Here are three things to keep in mind:
- Network, network, network: Follow a wide range of thought leaders who can provide you with an insight into your industry, its current and future trends, and your competitors or businesses similar to yours.
- Data is your best friend: Adopt a data strategy that allows you to collect specific datasets on your ideal customer. Then, learn how to target your customer with impactful content, products and ideas.
- Automation increases interaction: Using social media, email marketing and PPC campaigns will help your customers reach and learn more about you, and you’ll also develop a direct opportunity for lead conversion.
3) Location, location, location.
In real estate terms, this means ensuring your property is in an ideal and accessible location for buyers. In the world of e-commerce, this means reaching the the ideal customer in the right place.
If you don’t know where your customers are, you can’t reach them. Simple enough.
For targeted content, verifying your customers’ contact information at point-of-entry is key. If a customer leaves, you can reach them simply by the information they willfully provided - this increases direct engagement with the customer, and also lowers the possibility of cart abandonment. The more correct information you have, the more chances you attain to connect with your customer.
On the flip side, for an e-commerce biz, fulfillment is what determines whether a customer will be around forever or not. Getting a package sent to a wrong address will result in tedious time spent in tracking the package and dealing with an unhappy customer. Of course, the way you handle the customer at the time can still earn back loyalty, but… Who wants to take that risk?
Get your customer to love you the first time around.
4) Follow up.
This may seem like an obvious one, but many businesses don’t realize the importance of a simple follow-up email or call. This shows your customer that you value them, and you want them around for the long-run.
A follow-up can be a simple correspondence asking how they liked the product, or it could be ongoing correspondence updating your customer on new products, or inviting them for more interactive sessions, again, to learn more about what they want. This is a win-win for you. The customer is able to connect with you, but you’re able to keep an ongoing tab of research on current and future customers.
5) Keep creating.
It’s easy for a business to get complacent. If you’re selling t-shirts, you don’t think to sell more.
This is wrong.
I’ll give you an example of a business that received funding on popular ABC show, Shark Tank. Tipsy Elves came in with a very seasonal idea of ugly Christmas sweaters. Their sales were through the roof, and cybersecurity mogul, Robert Herjavec, bought into the business model.
They continued to make millions, but… They were still strictly seasonal. How do you scale a business when you’re not innovating?
Tipsy Elves used their strategic ideas to target new customers year-round. This meant jumping into a wide range of year-round clothing, such as ski suits, t-shirts and leggings. They could’ve gotten comfortable in the idea of ugly Christmas sweaters, but to have year-round revenue, it was best to have products that catered to an audience on a daily basis.
Using these five tips are a simple starter-pack for your e-commerce business to scale without using profit to gain more customers. A simple act of monitoring, interacting and following-up can help your business take off.