We can all probably agree that the most perilous period in the lifetime of every ecommerce business is its earliest days. This is the period where the tiniest of mistakes can spell doom and where a single slow month can mean closing down shop.
Therefore, it is logical to think that surviving this initial period is everything and that the next phase is much easier, this being the period of initial growth.
In reality, however, many ecommerce business owners discover that growing such a business can be just as complicated and difficult as keeping it afloat through its inception and early infancy.
Not Updating the Ecommerce Business Model
Unless you are an ecommerce savant, you probably formulated some kind of a business model before you started selling your products online. You worked out your expenses, your expected revenue, your margins, etc.
Since you survived the earliest days, you did most of it right.
However, thinking that this same model will work in this new reality of more customers, more expenses and a larger line of products is a mistake. When these important factors are modified, the entire model gets skewed. This is basic business.
This is probably best described by an example. Let’s say that for the first six months, you sold your products mostly locally and those products could be packaged in small boxes that cost very little. You offered free shipping because the costs did not cut too deep into your bottom line.
Now, all of a sudden, almost half of your orders are from abroad and you have started selling physically bigger products that require larger boxes and that fall under a more expensive category of shipments.
Without seriously rethinking your free shipping policy, you might just be setting yourself up for some very rough times.
Be open to adjustments and compromises.
Sometimes they will be a necessity.
Another quite common mistake made by owners of growing ecommerce business is that they start losing focus. In other words, they start spreading themselves too thin.
For example, let’s say that you sell handmade soaps in your ecommerce store. You started off with four different types of soaps that you made meticulously; carefully crafting every one of them and making sure they are as well-made as humanly possible.
Now, as your customer base is growing, you start introducing new products to your line. Before you know it, you are partnering up with someone who makes hand luggage (soaps, travels, you get the connection) and all of a sudden, your ecommerce shop loses its identity.
An even worse scenario is compromising the quality of your products because you start diversifying too much.
The best way to avoid this is to be very honest with yourself about what made your business the early success it has been and how you can nurture this while slowly moving forward. No one is telling you to stagnate, just make sure you developed naturally.
Hiring the Wrong Way
Once your ecommerce business starts to grow, it is highly likely that you will need to take on more people. Perhaps you will need someone to help you with manufacturing your products. Perhaps you might need someone to take care of your website 24/7. Perhaps you need marketing people or customer service experts.
It will all come down to you having to hire new people. The problem here is that most people do not know how to hire.
They think they know how to hire, but it turns out to be more complicated than it seems.
They end up with people who are not productive, who are wrong for the job and who end up costing this new growing business a lot. Too much, in fact.
The only right way to hire people is to come up with a structured hiring process and then stick with it. This will do away with guesswork and hiring on a hunch (something that rarely works out for the best) and it will allow you to truly objectively assess all the candidates, hiring only the people you are certain about.
Attracting top talent can be even harder and more costly. Be smart about your employer branding and do not hesitate to look at options such as short term loans for hiring truly the best people in the industry. It will pay off.
Wasting Money on Marketing Hype
Marketing (especially digital marketing) is an integral part of running an ecommerce store. Without doing a bit of marketing here and there it is near impossible to compete with other online stores. Considering your business has entered the growth phase, it is also likely that you had already done some decent digital marketing.
The problem arises once you start getting too crazy about digital marketing, that is, falling for every digital marketing buzzword that comes along.
Do not get fooled, they come along at a surprising pace.
Various “experts” will sing praises to practices and tactics that show a bit of potential but that are nowhere near vetted and tested enough. Falling for this kind of hype will have you wasting serious amounts of money on practices that will get you nowhere.
Whenever you think about investing in digital marketing, do research and make sure that you will be getting returns on your investment. Only if the expected ROI makes sense for you, should you put money into various digital marketing campaigns.
Unfortunately, this is only scratching the surface of all the things that can go wrong once your ecommerce business starts to grow. In the end, it will come down to being honest with yourself, never rushing into anything and avoiding shortcuts.
Everything else will fall into place on its own.
AUTHOR: James D. Burbank has spent almost two decades in brand promotion, both online and offline. He is the editor-in-chief of BizzMarkBlog.