The problems that we face as small business owners are all unique, yet there are some patterns that emerge over time. The most common theme is that of the under-performing e-commerce site. The market niches that they seek to serve are all completely different, yet the common thread in the stories is that they started their sites full of optimism between one to three years ago, and despite some tinkering with the site to improve it and some investment in marketing their sites, sales have been disappointing, to the point now that they are on the verge of packing it all in and going back to work
I’ve spent quite a lot of time and effort examining what separates the wheat from the chaff in e-commerce and having spoken to many successful e-commerce site owners, I’ve boiled down to three principles the many subtle differences that separate the successful e-commerce operator from the many e-commerce site owners that struggle to make a living, or even to turn a profit at all. I’ll share those with you now, in the hope that they might be of some benefit to you. Although, I am speaking specifically about e-commerce, these three principles can be applied to any business, whether online, bricks and mortar or a combination of the two.
Focus is the first principle. The successful e-commerce site owners I know have all identified a profitable, underserved niche and have focused their efforts exclusively on conquering that niche before widening the scope of their product or service range. To paraphrase Guy Kawasaki in his classic book “Art of the Start”, as a small business you are trying to start a fire with matches, not a flamethrower. This attitude is not pessimistic but rather realistic about the appropriate strategy given your resources. The time to be ambitious is when you have successfully conquered your chosen niche. There is nothing stopping you then from conquering another, then another and another until all your little niches add up to total market domination. Obsessive focus on the immediate task in front of you seems to be a mark of the successful e-commerce operator.
I’ve heard it said that “it’s not practice that makes perfect, only perfect practice makes perfect”. That is one of the most dangerous ideas you could possibly take hold of as a bootstrapping entrepreneur, as the truth is the polar opposite of this idea. Brian Tracy teaches in his seminars that anything that is worth doing well is worth doing poorly many times. The reality is that you can only ever master anything after doing it poorly often enough to get better through experience curve effects. Perfectionist entrepreneurs often give up long before they have become excellent at what they do and long before their consistent approach can erode its way into market consciousness.
Provided you have done a proper job of planning in the first place, don’t change media, don’t change messages & don’t vary your graphic format. Do not change your identity once it is established. Consistency creates familiarity which breeds confidence which in turn is an essential pre-requisite to sales. The incessant tinkerer will and often does completely undermine these efforts.
Patience is the third principle. I don’t know anyone that has recouped their investment in their e-commerce site within less than six months, but I know several e-commerce site owners that have generated more than a hundred times their initial investment in profits over the course of several years. Patience is a pre-requisite for success in e-commerce. All too often, I see site owners metaphorically digging up the plants to check the roots. So anxious are they to see results immediately that they tinker and thus undermine the good work they had done initially.
Patience is the most misunderstood and poorly applied principle of the three that we have outlined, as some e-commerce site owners use it as an excuse for poor performance and a lack of investment or commitment. When starting an e-commerce business, you are effectively faced with a choice of two strategic paths.
Firstly, there is the passive start up, wherein you allocate only a small amount of the required budget and resources required to compete in your category. Instead, you make a substantial commitment of time for months and even years before your site is up to speed.
Secondly, there is the more aggressive start up, in which you budget correctly and honestly and spend the required amount from day one, giving you the ability to aggressively grab market share from day one.
Those that are successful have invariably chosen the second path. This passive approach, sometimes excused in the name of patience, causes the following problems immediately.
• Insufficient traffic due to poor onsite and offsite SEO and inadequate marketing.
• Poor conversion rates due to looking like the “poor relation” in your category
• No systematic attempts to nurture “leads” or to provide any “value added” for your customers beyond simply the opportunity to buy a product or service online.
Inevitably this leads to frustration on the part of the site owner and eventually disillusionment. In some cases, desperation forces investment but it is substantially harder to elevate a weak brand than it is to promote a brand that’s strong from the start. Ultimately, this path ends up being the hardest to walk and, ironically, the most expensive.
These three principles, when applied to the execution of your e-commerce business stratgey, will have a huge impact on it's success. It's easy to lose your way in the day to day pressure of running your small business. If you find yourself feeling like numerous other e-commerce site owners before you and wanting to cash in your chips and walk away from your small business dream, contact us before you do and see if we can help you rediscover your passion and your profits.