I am always ready for a new challenge as a leader. Truthfully, I need a new challenge every few years to accelerate my skills. So, after years of operating both a retail operation and consulting company, I decided that I wanted to try e-commerce.
Although it has only been 30 days, I must confess that I have learned more during this time than I have learned in 15 years as a successful founder. I will admit that it is much easier to manage than my retail stores, where we focus on overhead, common area maintenance (CAM) fees, insurance, security, employee turnover and theft, product placement and most importantly-- safety. However, e-commerce requires you to know your buyer inside and out.
If you have been thinking of starting a product-based online business or adding it as a sector to your company, here are four of the must-haves that I have learned over the past 30 days that have helped us triple our investment in one week.
Choose product(s) that you love .
I have watched other e-commerce models start and fail because the founder was only incentivized by money. There is one specific reason why you must choose products you love -- customer service.
My team and I answer approximately 150-200 questions in an average day. I realize my extensive knowledge about the product has been crucial to closing sales on a consistent basis. I am able to recommend alternatives and guide customers into a decision, while creating repeat business and positive user reviews.
Make your policies clear .
Although potential customers "see" what they want to see on your website, you have to reinforce your policies in a clear manner, which finalizes the conversation. Over the past 30 days, I have had numerous requests from people to bring sample products to their home, or "meet up" in a parking lot equidistant to my office. I have to continuously refocus the conversation back to the guiding principles of my company.
Understandably, customers will make outrageous demands of your time and expertise in any business, but you must set clear rules to govern your interactions and requests from your customers. Always point them back to your rules, FAQ's and policies as a way to keep all interactions germane to the sale.
Source and build relationships with the best vendors .
I am so happy that I took the time to interview, sample and source the highest quality vendors to create my products over the past year. Although we are still early in the business, the one positive feedback we have received in addition to our customer service team is the quality of the product.
Do not rush to market with the cheapest product and the highest markup just to make a profit. Although profit is key, taking meetings with vendors is priceless to your success. The vendor becomes a valuable relationship and resource for the business, that can introduce you to market trends and work with you to set better pricing on wholesale orders in the future.
Start lean .
The best piece of advice I learned after listening to a podcast with Marcus Lemonis, star of the hit show The Profit, is that wasted inventory can go stale in the market fast. Only order what you need to get started and do not over-forecast.
I started my e-commerce site with just $10,000 in inventory. I am overjoyed that we tripled our investment within the first week. However, my inventory manager has decided that we will continue to only reorder our best selling items to continue to scale the business at the same rate for the first three months as we are testing the market in each season.
Now, more than ever, you should consider adding an e-commerce element to your business model. If you know your product and remain effective at bringing awareness to your brand, you will attract a consistent and repeat customer base. Best of all, the overhead is low, with limitless profit potential.