If you’re a new e-commerce seller, the thought of breaking seven figures might sound like a pipe dream on par with winning the lottery. But really, $1 million is a tiny piece of the e-commerce pie, given that Statista anticipates a nearly 246.15% increase in worldwide e-commerce sales, from $1.3 trillion in 2014 to $4.5 trillion in 2021.
So whether you have yet to make your first sale or are starting to see some traction, how do you position your fledgling retail company to capture its share of this larger whole? Keep the following suggestions in mind.
Starting Out Strong: Build A Foundation
Annual Revenue: $0-$100K
Think of your e-commerce site as a house. Without a strong foundation, you’ll never reach the seven-figure threshold. Though your future marketing strategies may vary based on your industry, skills, resources and experiences, think of the following as non-negotiable for all e-commerce sites:
• Implement SEO best practices. Build your site’s content around the keywords your buyers use. Make sure your site is fully scannable by the search engines. Use internal and external links to quality resources liberally. It may take 6-12 months for your SEO to start driving results, which is why it’s important to start now.
• Add email collection opt-in forms to your site. Some estimates put the impact of email marketing at $44 for every $1 spent. Treat building your list from Day One as a top priority. Tools like Sumo make it easy to get started. Test different placements.
• Set up series that drive sales. Don’t just capture email addresses. Keep your list warm — and drive initial revenue at the same time — with autoresponder campaigns that deliver personalized messages based on subscribers’ actions (such as leaving items in the shopping cart or visiting specific product pages).
Implementing Low-Capital Promotions
Unless you’re working with an unlimited budget, look for low capital opportunities to drive early revenue. The money you save can be reinvested in your business to further accelerate your growth.
• Get started with Google Shopping. While you’re waiting for SEO to drive results, get your products displayed in the search results with paid Google Shopping ads. Shopify has a great primer on getting started with this high-value traffic source.
• Set up a Facebook Product Catalog. Once your product catalog is set up, you’ll be able to take advantage of Facebook’s dynamic product ads. Some users — like John Boris, CMO at Shutterfly — reported a 20-plus % increase in click-through rates compared to other ad types.
• Test Pitchbox to make connections with influencers. The tool helps you determine what to publish, as well as how to connect with the people that’ll share it.
• Sign up for Help a Reporter Out (HARO). Respond to requests from journalists for quotes, and you could earn a link back to your website, not to mention exposure for your company and new visitors on your site.
Annual Revenue: $100K-$500K
Once you’ve cleared the six-figure hurdle, it’s time to start taking advantage of the assets your business has built — in particular, your new customer base. Use the following strategies to build momentum:
• Create a viral loop. Companies like Airbnb, Uber and Dropbox have grown largely off the strength of their viral referral programs. Find your own loop and use it to drive revenue growth through your current customers.
• Leverage customer reviews and testimonials. According to research, 69% of online shoppers want more reviews from e-commerce sites. Make a priority of adding those to your site as well as you start generating early sales from happy customers.
• Invest in brand advocates. Once you’ve delighted your early customers, recruit them. Nielsen reports that people are 4 times more likely to buy when referred by a friend. Launching a formal referral program helps you leverage this effect.
• Inspire user-generated content. UGC campaigns amplify your brand’s messaging without extensive investment on your part. GoPro is a great case study to emulate.
This is also the time to begin A/B testing since you need a critical mass of traffic to generate statistically significant results. In particular, test your:
• Shipping fees (if you have them)
• Account creation process
• Calls-to-action (CTA)
• Button placements and visual attributes
Momentum is, to some degree, a personal thing. What works for one company may not work for another. Pay attention to what your analytics are telling you and amplify the parts of your business that are already working (rather than chasing after those that aren’t).
Preparing For Future Challenges
Annual Revenue: $500K-$1 million
As you scale your e-commerce company, challenges are inevitable. But by planning for the following common issues from day one, you can mitigate their potential impact on your business:
• The Need To Hire And Train A Team: As you grow, you’ll need to continually evaluate where weak points exist in order to get the right people on your bus.
• Potential Challenges With Your Suppliers: Issues of quality or capacity could threaten your ability to deliver promised products.
• The Limitations Of Particular Marketing Channels: Ultimately, you may encounter some that are either unscalable or that have an upper limit in terms of audience reach.
• Negative Reviews From Dissatisfied Customers: Put a crisis management policy in place from day one to ensure responses to unhappy customers are prompt, appropriate and thorough.
• Sales Plateaus Or Declines: These may be the natural result of your brand aging and new competitors entering the market. Investing in new product development and/or line extensions can help, but it’s up to you to stay ahead of the curve.
Hopefully, you won’t face these challenges (at least, not all of them). However, if you do, you’ll be glad you prepared ahead of time with possible solutions.
What other considerations would you add to these lists? I’d love to hear your thoughts on scaling an e-commerce business in the comments below.