Getting to the top feels great, but then what?
This question came to mind while I was on a much-needed vacation in Italy walking around the ruins of the Roman Empire. The rise and fall of this world power fascinated me and got me thinking about what lessons can be taken from their mistakes.
Use the profits you make to fortify the fortress of your business, instead of groveling in your winnings. The truth is, the winning formula that got you where you are now is a losing formula to get you where you want to go.
If you don't want to be a one-hit-wonder or a flash in the news you must protect your lead. Here are three ways to establish long term success and protect yourself at the top in the e-commerce game of business.
1. Invest in your intellectual property.
You must protect your product because counterfeits and knock-offs can ruin your business. Before you get too far along, invest in getting trademarked and filling any patents for designs.
I learned this lesson the hard way when we lost close to $1 million due to counterfeits during the early years of business. We went through the grueling process of lawsuits and although we came out on the other side, I knew this was something I would never let happen again. Not losing money is just as important as learning how to make it.
In order to combat this, place timely prioritization on patenting your products. Be aware that a utility patent takes a very long time (in some cases years) to complete but is far more robust than a design patent. Start with a design patent to deter counterfeits and any knock offs while you file a utility patent. This extra step will enable your products to be protected on the platform.
2. Build strong relationships with suppliers.
History has many lessons of falling from the top, take the Egyptian empire as another example. They lost command over essential resources, such as metal, and could no longer produce weapons and remain a threat.
You must be able to produce your product, and if you are the only one doing it, your chances of success are substantially higher.
Negotiate exclusive sourcing agreements with your suppliers and manufacturers in such a way that you are the only person they create products for. Many businesses white label products and rely specifically on their brand to drive the sale. In order to outlast any product competition, you must stand out and the best way to do this is to build trusting relationships with suppliers to produce your product as its own.
3. Build up a stream of accessible cash.
In my eyes, this is the cardinal rule of staying on top of the e-commerce platform-- never run out of inventory.
Get creative with your access to cash, set up lines of credit, invest in short term loans that you can pay off quickly or look into a small business loan. If you still have a full-time corporate job, borrow against your 401(k). One of the perks to building a side hustle while still working is you have access to financial funding that wouldn't otherwise be there.
Use this available stream of cash to invest in building inventory over time. This way, you will outlast the competition and when they run out of stock, you will be standing there ready to share your product with their old customers.
If you are already at the top of your game, or quickly approaching it, take these lessons from history and don't repeat them. Protect yourself so that even if you have a target on your back as the leader, you aren't going anywhere for a very long time.