There are multiple reasons why ecommerce is a popular option for aspiring entrepreneurs. The low barrier to entry, easy access to shoppers, and potential to make sales almost instantly have attracted millions over the years. As a result, ecommerce has become a $3.5 trillion industry and is projected to see further growth in the coming years.
It’s a breeze to get started as an online retailer, yes, but it is considerably more difficult to scale your ecommerce business after launching it. That is why roughly half of businesses shutter within five years. If you want to beat the odds, you have to strategize and find ways to achieve growth. These are 10 easy ways to scale your ecommerce business.
According to Sherrie Ashley, the co-founder of PeopleFastFind, “The first thing that any business needs from its marketing is a base. For small businesses, the only way to create this kind of base is through word-of-mouth advertising. Word of mouth advertising happens when satisfied customers tell people about your products or services, and those people become new customers.To start getting positive word of mouth, you need to create happy customers who are eager to share their happiness with others. Aim to get referrals from at least 25 percent of your customers, and you will notice a positive shift in sales.”
Build a Recurring Business
Subscription boxes are all the rage right now, but businesses that can set up a similar recurring model will reap the same rewards. The first benefit of a recurring business is that your customers will become habituated to receiving products from your store on a set schedule. This makes them resistant to competing offers—and accepting of price increases—because making the switch is inconvenient. Additionally, you’ll see a lowered average customer acquisition cost and maximized customer lifetime value. It costs far less to sell to an existing customer than to find a new one, and the cycle of repeat purchases extends each customer’s time spent shopping at your online store.
Focus on Customer Segments
Once your store has been up and running for a while, you’ll be able to match the products being sold to the group(s) buying them. Do you have a product that’s popular within a certain demographic, enthusiast group, or professional organization? What do people making the same purchases have in common? These are questions to ask to help you segment your customers. You can then use those segments to better refine your marketing messages, which will drive more conversions because those shoppers respond to the personalization. Then, word of mouth within the segment drives more business which, once again, lowers customer acquisition cost.
Identify a White Space
The market has become saturated, which makes finding any white space a challenge. However, it is well worth the effort because you can offer unique value, leverage your market position, and see less competition as a result. Some examples of this are offering high-end product dupes at a lower cost, utilizing uncommon materials for common items, or selling consumer-friendly versions of industrial or commercial products. To get ideas, read customer feedback to see what’s missing from the items they reviewed and then make your next moves accordingly.
Seek a Greater Purpose
Without a “higher purpose,” your business won’t have the longevity required to scale. Whether your approach focuses on environmental sustainability or a charitable component to your business, you need a mission and can create more value by helping others. This will also help you to create a community within your customer base of people who have similar core values that align with those of your business.
Leverage Word of Mouth
The easiest way to spread the word about your ecommerce business is to let your customers and social network do it for you. Many sellers offer discounts or store credits to customers as a “thank you” for referring other shoppers to their stores, but there are other opportunities to amplify your brand. Take advantage of your current customer community, your (and your customers’) social media channels, and influencers in your space to share your brand’s message—this will happen even more naturally if you create a story worth sharing. MVMT and Glossier are two examples of businesses that were built on word of mouth, and they continue to be good role models of this process.
Cut Low-Profit Products
To scale your ecommerce business, it’s important to regularly evaluate your catalog and determine which products no longer fit. Perhaps you sell something that is too different from the rest of your items or have some items that are overly expensive to make or ship. Whatever it is, these products are hurting your margins because they don’t generate enough of a profit. Remove these from your catalog so you can focus on where you’re creating the most value.
Add to Your Catalog
After you cut your low-profit products, you’ll have room to make some additions to your catalog, but you have to add wisely. Start small with one related product (another camping essential if you sell tents, for example) and test its performance before continuing your catalog expansion. Survey your customers to get ideas of what they’d be interested in buying from your store
Diversify Channels
If omnichannel retail is the wave of the future, then multichannel retail is an easily actionable first step. Selling on new channels, such as another online marketplace or in a big box store, lets you grow your total addressable market and experiment. You can see where consumers are shopping for different products and then ensure you’re selling accordingly. Do your research to see which platforms make the most sense for your demographic and expand to those channels to reach new prospective customers.
Manage Inventory
Inventory is the backbone of your ecommerce business, so managing it wisely can help you scale by improving your cash flow. Two of the biggest mistakes online retailers make are overselling, which is a leading driver of poor reviews, and over-ordering so they have products simply taking up warehouse space. Don’t make these errors. Sync your inventory across channels so you have real-time insight into your numbers.
Automate!
Time is your most valuable asset, and you’ll have less and less of it as your business grows. There are certainly instances where it’s best to hire a virtual assistant to handle tasks, but there is so much you can do with today’s technology. Automation helps you maintain accuracy and remove human error in areas from accounting to marketing to inventory management. By automating your back office processes, you also save money by not having to pay an additional staff member and can use that capital for further growth.
If you’re serious about your ecommerce business, you have to think about how it’s going to last the long haul. The best way to ensure longevity is to scale and use that momentum to continue growing and evolving. These strategies are proven, and they have helped ecommerce sellers around the world generate millions of dollars in revenue.
Author Bio
Taylor Gilliam is a Content Specialist at Webgility, an accounting and inventory management automation platform for sellers using QuickBooks and NetSuite. She is currently working on the Beat It! project, which provides resources for retailers affected by COVID-19 to start and grow in ecommerce.
