10 E-Commerce Do’s and Don’ts

By ILYA POZIN

1. DO test your product.
2. DON’T assume that people will just find your site.
3. DO set aside a budget to test marketing.
4. DON’T bank on raising more money.
5. DO listen to your customers.
6. DON’T try to be everything at once.
7. DO build a solid foundation before launch.
8. DON’T give up quickly.
9. DO have a business model that makes money.
10. DON’T spend 12 hours a day sustaining your company.

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A very helpful list of things that you should contemplate when running your own store. In fact, I think it also applies to brick-and-mortar retailers.

And this is my experience so far based on the points shared above.

1. DO test your product.
Very true if you want to have the confidence boost when selling your products. One of my stores has got more than 3,000 products, so I don’t think I can TEST every single one. You are your own best critic, and if you won’t use the products yourself, how can you make your customers use them?

2. DON’T assume that people will just find your site.
Yes, if you are running your own store, building that traffic is the most challenging part of the game, for at least the first 12 months. As suggested in my earlier post- leverage on the platforms, but don’t rely on them too much.

3. DO set aside a budget to test marketing.
You don’t know what works, yet. So keep trying out new channels and cut your losses fast. If everyone is doing it, doesn’t mean it’s going to work for you.

4. DON’T bank on raising more money.
Never had experience on this one, not yet. But I suggest that you spend your time in building up your core business and make it work first.

5. DO listen to your customers.
Well, not all of them are always right, but you can really improve faster based on the feedback customers gave you. We are even giving out freebies to customers just to hear what their suggestions. You will be surprised how ‘truthful’ they are.

6. DON’T try to be everything at once.
Unless you have a 100-employee gig going on, it’s never a good thing to spread yourself too thin. You can only spend that much time talking to suppliers, designing your own brand, developing your marketing plans, fine-tuning your stores. And if you are like a lot of start-up, your most precious asset would be your time. Doing the right or wrong things can make or break your venture.

7. DO build a solid foundation before launch.
Yes, I learned this the hard way in the bookkeeping department. We are still catching up with backlogs, but be careful of the perfectionist syndrome.

8. DON’T give up quickly.
Ahh… When do you call it quits? In my opinion, you can’t really quit something. You merely try a different way of doing it. Read The Dip. There’s a reason why there’s a barrier to every business you go into. In fact, the barrier is the very reason why the reward is real.

9. DO have a business model that makes money.
That’s why you are in a business in the first place, isn’t it? Your responsibility is to survive, and survival means profits. As much as they say you need passion, I think you also need bread and coffee on the table every morning.

10. DON’T spend 12 hours a day sustaining your company.
More hours doesn’t mean you are more productive. Being a workaholic, I cannot say what is the right amount of time you should spend on your venture. Delegate when you can, so you can focus on the more pressing issues. In the beginning, everything is pressing. Balance is key.

2013-09-17T23:44:34+00:00September 13th, 2013|E-Commerce, Entrepreneurship|0 Comments

9 Data Sets for Your Ecommerce Store

Just a few days back, I wrote on the metrics that you should focus on when running your online business.

And Scott Gerber (via Mashable) has got 9 data sets from 9 different entrepreneurs:

  • 1. User Acquisition Costs
  • 2. Abandoned Carts
  • 3. Google Analytics Experiments
  • 4. Visitor Value
  • 5. Lifetime Value
  • 6. Traffic
  • 7. Lead Source ROI
  • 8. Purchase Funnel
  • 9. Percentage of Mobile Visits
  • If there’s one thing I would add to the list above, it’s the Customer Engagement metric. Simply put, the Customer Engagement metric measures how effective your marketing messages are. For instance, open rates and response rate for your email campaigns. Click-through rate for your ad banners. Leads from your Youtube videos. Comments on your blog or Facebook posts.

    Measuring performance and tracking your numbers is very important but you should always be careful not to overdo it. Think of the big picture.

    2013-08-28T02:24:10+00:00August 28th, 2013|E-Commerce, Entrepreneurship|0 Comments

    E-Commerce Platforms with Hidden Agendas

    E-Commerce Platforms with Hidden Agenda

    On one fine morning, you get a phone call from XYZ company telling you why you should sell your wares with their up and coming e-commerce platform. And they tell you all the astronomical traffic they have (which you will take a lifetime to build) and the merchants that are already selling with them. And most importantly, they tell you, your competitor just signed up with them too.

    And without much hesitation, you tell them,”OK, how do I get started?”

    In the beginning, as with all fairy tales, it was all sunny and rosy. A few weeks after you list your products on XYZ’s platform, you watch your daily sales spikes. And you begin uploading all the inventories you’ve got and populate the store you have with Company XYZ. You then begin to invest more and more time and advertising money with them. You thought, “How can this go wrong? Why didn’t anyone told me about this before?” And you start giving all the love to this new platform that promises to escalate you to new level of riches and fame.

    And after about 6 months of exponential sales growth, you realized something is amiss. A search on your superstar products suddenly returns more results than it did previously. Which should be a good thing, this would mean that your SEO efforts are paying off. The only problem is that these similar product listings do not link to your store, but rather to another merchant. And you call up your friends who are also selling with XYZ. And they revealed the same thing.

    And then more of your top sellers begin to appear, only this time the cash does not go to you.

    And you’re furious! You picked up your phone and called up the account executive who assisted you with opening a store with them. Now you remembered that why he had that sly grin when he was talking to you. It suddenly become clear to you that they never said anything about not using the data they gathered from merchants for their own benefits. You were never in their big picture of expansion.

    They gave you the platform free of charge, but someone’s gotta pay for programmers and the hosting fees. Company XYZ is not a charity, it was pretty clear from Day One. In fact, they never acted like one- they are super aggressive in signing up new merchants and spends millions a month just in advertising.

    And now they know what Malaysian online consumers want, and they can provide it with a lower price tag and more varieties, with free delivery, 365 days money back guarantee and possibly even a note that says, “This is an original, unlike the ones you see on…”

    Ouch! And you go back to your drawing board, blow off the dust from your own online store, and realized that your months of neglects is showing. There’s no new product updates, no new articles on your blog and the figures in your analytics are dropping month-on-month. Well, at least the bounce rate was up, eh wait, that’s not a very good thing, is it?

    Okie, maybe you think I made it all up just to spite one of the big players in the e-commerce platforms. Maybe I heard one of them called me names behind my back. Or they took me off from their list of keynote speakers.

    None of the above is true. It did happened to 2 online merchants I know personally. I almost enrolled in their guinea pig programs but thanks to the ‘misfortunes’ of my 2 friends, I escaped from these ill intentions.

    I am not saying that all big e-commerce platforms behave as such. Not everyone has a hidden agenda. There’s always good people around with decent business models. One way to find out is to ask other merchants’ experience with these platforms. Hence, it’s always important to get away from your computer and warehouse to socialize with real humans who can provide some real world experience. There’s a lot to be learnt from offline sources.

    People are always willing to share with you if you don’t have any hidden agendas.

    2013-08-23T21:36:00+00:00August 23rd, 2013|E-Commerce, Entrepreneurship|2 Comments

    The Customer’s Economics

    Abort Shopping Cart

    Had an interesting chat with Swee Yeong (entrepreneur and angel investor in the Malaysia tech scene) earlier this week. He mentioned about 2 very important metrics that businesses, especially e-commerce businesses should look into:
    1) Customer Acquisition Cost
    2) Customer Lifetime Value

    Companies often tries very hard, and I believe that’s an understatement, to acquire customers. And when these would-be customers convert into real customers, these very same companies usually do nothing to keep these customers happy. And then, the customers leave. And the whole cycle repeats again.

    I believe a lot of this is contributed by one key factor- the performance metrics. Here’s the ugly truth- most company evaluate their performance on how much sales they get over a period of time. And if they go a bit more further, the profits they make out of the sales. And that’s the easy part of the game, and most company can provide this sort of reporting to ‘The Management’ without any problem. How difficult can that be? Just sum up all the sales from all channels, and then minus away the expenses incurred. Job’s done.

    And there’s always this tinge of excitement when it comes to signing up a new customer or opening a new account. Comparatively, there’s very little mention going to the channels that sells to the same customer, over and over again. Much worse, when a customer stops buying, companies usually go straight into denial mode.

    This largely happens because the customer’s lifetime value is not so easy to profile. It’s not impossible, but it’s just not as straightforward as the standard sales/profit metrics mentioned earlier. And profiling customers according to their buying frequency and volume required more clicks in the reporting system.

    It’s also very likely a supply-demand thing. If ‘The Management’ never needed to know about the values of each customers and what they can do to increase this metrics, nobody is going to go through the trouble of generating these reports.

    In the world of e-commerce, where your competitor is only a click away, it becomes a battle to the death to get customers to stick around. Losing them after their first purchase is not only going to cost you money, you are also probably losing them for good. Of course, there’s a reason why they are leaving but it’s very likely they are not going to tell you, especially if their most recent experience with you hasn’t been a pleasant one.

    Swee Yeong also mentioned that it’s indeed a painstaking process to get these critical customer metrics. You can know which street your customers stay, male or female, fat or skinny and married or single but that’s all there is to it. All the demographics and profiles you have about your customers only helps you to understand more about their personal life, but it doesn’t reveal much about how they response to your marketing strategies. You want to know did they click on your last email campaign or did they even opened the email? If they hadn’t, what would make them want to click? Is RM100 voucher enough to buy them over?

    There are many things you can start doing once you have a very detailed information of your customer’s responses to your marketing techniques. As Swee Yeong puts it, “This is when things start to get interesting.” You can start segmenting your customers into various tiers. The shopaholics and the bargain hunters. The click-happy customers and the untouchables. And with these custom segmentations, this is when you can get creative with your marketing messages and use your advertising dollars most effectively.

    I would love to hear if you have any other metrics that you feel is important when it comes to understanding your customers.

    2013-08-18T01:57:05+00:00August 18th, 2013|E-Commerce, Entrepreneurship|1 Comment

    Mudah.my Scams

    Scams has always been around since greed was ‘invented’. So, with today’s technology, it has become easier to become a victim of scam, and if you look at the bright side, to become a successful scam artist.

    Mudah.my is an online classified platform that allows seller to post their items with a short description of what they are selling, the price of the product and a few photos.

    If you have ever transacted on Mudah.my, you would know that it’s a platform full of crocodiles, as compared to say, Lelong.my. This is not to say Lelong.my does not have their own share of sinister traders, but Mudah.my is one place that these scam artists are allowed to fester.

    The situation got so bad that buyers are not willing to buy unless sellers offer them COD (Cash on Delivery) services- which means a face-to-face, belly-to-belly meet-up for the transaction. This is necessary if you are selling used cars or dealing with properties, but if you are selling a toothbrush, there’s no way you can make it a scalable sales channel.

    I ‘was’ once an active Mudah.my merchant too, but if you are serious about growing your e-commerce business, there are much better things to do.

    So, what could Mudah.my do? Of course, there are many things they should have done to safeguard buyers, because in an online classified platform, there’s only one party that stands to lose the most- the buyers.

    It’s not up to me to advise how the biggest trading platform in Malaysia should go about doing their business. From the way I see it, they definitely do not have the buyers interest in mind, because revenue comes from sellers’ listing fee and advertising credits. This is one website that should have a big ‘BUYER BEWARE’ banner in all their pages.

    As with all anti-scam strategy, here’s a 3-step check list before you transact:
    1) Deal is too good to be true?
    2) Can you easily verify reputation and legitimacy of the seller?
    3) Ensure all transactions (bank-in slips, SMS, emails) are documented for damage control later on.

    2013-08-09T18:03:56+00:00August 9th, 2013|E-Commerce|2 Comments