Monday, 8 August 2016

How not to fail in eCommerce (Part 1)

When we started Shoptimize almost 4 years ago, little did we know what it takes to build an online store, let alone a successful online business. We learnt along with some of our customers who stuck with us through the thick and thin. There have seen successes and an equal number of failures. We have seen surprises in sectors we never thought suitable for eCommerce and we've been disappointed when everything seemed just right. We still see new leads come to us and talk about repeating some of the mistakes we have learned from. We have managed to avoid some of the pitfalls for eCommerce entrants and I thought I would pen down some of the sure no-no's. As always, exceptions exist and we would love to hear a story where what I am saying is wrong. That is, after all, how we grow.
In the first part of this story, I would like to address eCommerce startups. These are really bright individuals in high paying jobs who decide to take the entrepreneurial plunge via eCommerce. We have worked with a fair share of these now and here is what you should avoid.
1) Excessive focus on features: When really smart entrepreneurs whose primary experience has been dealing with businesses decide to go the eCommerce route, they start building a dream experience for themselves. They have dealt with crazy clients and unreal solutions and they believe they can do better. But their market knowledge is a sum total of 3 people, if we are lucky. And the level of automation they expect pre-launch often leads to either not launching itself or leading to very little money left for the real brand building. Their websites are impeccable and work like a charm. But they do not get orders, once they have exhausted their friends and family quota. They put too much energy into building version 1 and have very little juice left in them when the real world hits them.
2) Not knowing the differentiator clearly: Prospective customers of Shoptimize do not expect us to ask the question. But we ask it nevertheless. "Why are you doing this?". The responses range from long awkward silences, which we do not break, to a fiery defense of their idea. Very rarely, do we come across someone who can clearly articulate why he or she is doing this. Those entrepreneurs almost always succeed. They carry this clarity in every conversation with us, with their vendors, with their employees and their investors. That itself sets them up for success.
3) Being bad with data: eCommerce is a data play. Yes there is a brand element and there is a customer service element. But it needs to all be data driven. Several founders hire the analytics skills that they lack and find themselves chasing their tails. 
4) Being underfunded: When we hear some of the plans that customers have, we are amazed. They are really thinking big. When we tell them how much it will cost to achieve it, they are even more amazed. And when we explain costs, what they will pay us is usually a small portion of it. This often leads to curbing their vision which is the beginning of the end. Sometimes you just need funds. And having them on the table before you set out is important.
5) Not knowing the market: We have worked with customers who charged 3x of product value in shipping. We have worked with customers who sold expensive products but took really cheap pictures of them. The list is pretty long. One thing that was common among all of these was that they did not understand the consumer. They did not have their ideal buyer mapped and targeted. You are jumping into a very competitive and promising space. You need to know it well. And you need to really focus on learning more and more about it every single minute that you are awake. 
One of things that gets us excited to come to work is the opportunity of working with bright, driven minds looking at us as their partners in their new journey. For us, their success means everything. And we hope our experiences benefit them. We really try to be more than just a vendor. And sometimes, we succeed. 


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