Just like with any other business, the ultimate goal of every ecommerce business owner is to make their company grow and make more money. Turning a fresh new online store into a serious company is hard work with innumerable pitfalls that the business owners need to avoid. The good news is that with some smart practices and a lot of meticulous maneuvering, an ecommerce store with great inventory can turn into a money-making machine that employs a number of people and ships its products around the world.
But, how exactly do you grow your ecommerce store the smart way? How do you avoid making those direst mistakes that can ruin everything you have accomplished up to that point?
Adjusting Your Business Plan
All online stores that survive the first few months and actually see some growth share something – they all have a strong business plan from the start and their owners understand how to stay in the black, so to say.
A strong, carefully constructed business plan is the cornerstone of every ecommerce business, showing you exactly where the money is coming from, how much of it is coming in, where and how much of it you can and should spend and much, much more.
When you run a growing ecommerce business, it is essential that you understand that your business plan has to evolve together with the company. For instance, you may have offered free shipping because all of your customers were local or at least close-by. Once your business goes global, free shipping might become too expensive. Or, you may have been setting aside 50% of your revenue on marketing in the early days. Now that you are making much more money, 50% is far too much and there are some more pressing expenses to cover.
Your business plan will always remain the very core of your ecommerce business, but this does not mean it is immutable. It is a living part of your company and it has to develop together with it.
Making Smart Hires
The majority of ecommerce companies start off as one-person or two-persons setups. In the early days, you have to take care of everything as you simply do not have the money to pay someone to handle responsibilities. While this can be frustratingly tiring, it also gives you an unprecedented level of control over your business.
After a while, however, a growing ecommerce company becomes too much for a single person to handle. Even if you spent 24 hours a day doing nothing but running your company, there comes a day when an online store grows so much that there is not enough time for one person to handle it all.
In other words, the time comes for you to start hiring people – marketing, logistics, accounting, legal, etc.
The biggest problem with hiring is that it is far more difficult than you would think. Finding the right people who will have the experience and the skills you know is not the easiest task in the world. You also have to consider how they will fit in a company that you built with your own two hands. You have to consider how they will fit with each other. You have to think about the right compensation for them, about engaging them and a billion other things.
And do not get fooled, you cannot afford to hire the wrong people. Wrong hires have dire effects on the bottom line and you do not have the time nor the money to fill every position three times before you find the right person.
Brush up on your hiring skills. Contact a recruitment agency. Just don’t rush into anything.
Managing the Logistics
One of the aspects of ecommerce business that many people are not prepared for is the logistics. Where do you purchase your inventory (in case you are a reseller)? Where do you manufacture your inventory (in case you sell your own stuff)? Where do you procure material? How do you pack? How do you ship? Who handles your shipping? How much money do you spend on it all?
These are all questions that ecommerce business owners need to answer and as an ecommerce company grows, these numbers only grow in number and importance.
For example, you may have used the post office or local carriers to handle your shipments in the past. Now that your company has grown, it becomes obvious that you will need to find a logistics partner. Do you go for a warehousing + delivery combo or do you hire a comprehensive 3PL partner? Do you hire a freight broker? Do you know how to vet a freight broker (are they licensed, do they have a BOC-3, their UCR, etc.)?
When you consider how much it could cost you to do this the wrong way, it becomes quite obvious that you really have to be super smart and careful about handling your growing logistics needs. Once again, you just cannot rush it.
There are other things you will need to keep in mind when growing your ecommerce business, but your business plan, your first hires, and your expanding logistics are at the forefront of it. If you handle these the right way, you should be okay.