Riff Raff & Co

E-Comm Challenges in my First Year of Sales

E-Comm Challenges in my First Year of Sales

 My Biggest E-Comm Challenges in my First Year of Sales

(and how I kicked their butt!)

12 months today I made my first sale!! I started this time last year with the smallest order I could manufacture, assembling and posting in my house of an evening and trying to keep the kids from climbing on the many boxes of unsold toys stacked up around various areas of the house.   Flash forward to April 2017 - I have moved my business out of home, a new model in the line (with more to come), several amazing team members and a revenue increase of at least 200% increase per quarter  (the second quarter was 800%!!).   It has been the most challenging thing I have ever done but I absolutely love it and want to share my experiences in the hope that it will inspire and encourage other like-minded people to take the first step.  So here are 5 common challenges that I faced and how I overcame them to now run quite a busy lil shop! 

  1. I want to start a business but I don't have my product yet!  What if it never comes to me?! 

I knew I specifically wanted to start an e-comm store for lifestyle reasons before I knew my product.  I had quit my job post 3 years of mat leave and there were many moments between my resignation and my idea when I wondered -what if it never comes?!  

If you think about it enough it will come.  There are two books I believe anyone interested in e-comm should read: 4HWW by Tim Ferriss (to get you in the mood) and Choose Yourself by James Altucher.  James's theories around exercising your idea brain and the 'idea-sex' concept is truly an invaluable guide for e-comm product brain storming.  Although my idea hit me like a tonne of brick when it finally came to me I had spent literally hours brainstorming with hundreds of good, bad and horrible ideas written down.  I still get an decent idea almost every week thanks to the training I put in after reading Choose Yourself.  Best book.  

When stuck on product design or creation it always can lead to the question of drop-shipping as an alternative product model for your store.  Drop-shipping can be a great option for some stores (reduced financial outlay, lower risk with established market) but it really depends why you are in the game as to whether this model is for you.  If you are looking at drop-shipping be selective with the products you choose.  For me personally and my journey in e-comm it is essential that I can add value to someone's life through my products not just fill people home's with more crap we don't need.  

Oh and finally - how will you know if it is the right idea?  If you have to ask yourself that question keep thinking, keep looking.  When it hits you won't be able to shake it if you try.

2.  Can I get this made when I have NO experience?  Won't the factories laugh my email all the way to the trash can?

Yes you can have this made it and no they won't. Alibaba.com is an amazing market place.  While we do hear the horror stories and many will tell you to use an agent I personally don't believe it is essential at all.  In my experience the factories I have dealt with (3 current suppliers and countless other enquiries) are extremely knowledgeable and obliging - even when you are small.   I didn't need to spend $$ on technical drawings to send over or a completed sample for them to replicate (although I tried and no one locally would touch it with a 10ft pole).  Some sketches, some measurements, many emails, $50US per sample and voila - we have a product! Okay so that is a dramatic simplification but you get the picture.

There are a few reasons I did the groundwork myself than turn it over to a professional agent and the main one is that I had time.  The volume of initial enquiries, the back & forth, the sample adjustments (like the time the sample turned up about 3 times bigger than I had anticipated) it is not for the faint of heart nor the short on time.  When finding the right manufacturer there are no short cuts - as you liaise with multiple factories simultaneously the right one for you will present itself based on your values, budget and above all their communication style.  

My main tip for sourcing your manufacturer - make an template email (but personalise it before sending) to go out to every verified factory capable of making your product that does a decent annual revenue as per alibaba.  Be sure to ask Minimum Order Quantity (the #1 limiting factor for me with no $), lead time, sample process and cost (and specially around costs incurred for sample adjustments).

And don't be stupid - don't send full payment upfront. Deposit only people and only after perfect sample in hand.  

3. Taking the financial risk - what if it doesn't work?  What if I fail?

I had to borrow $7K from our home loan to get started and I felt sick.  I was so nervous I would not be able to pay the money back, that I would fail, that I would be embarrassed to have dreamed big only to learn I should have stayed where it is safe.  

There were a few main points that I spent a lot of time thinking about which helped me manage that fear and take the plunge.

  • I constantly reminded myself of the 'break-even point'.  It felt better knowing that if I could just make that number of sales then I would come out of this adventure financially unscathed.  
  • I had my finished sample in hand for longer than 6 weeks before ordering and did a tonne of unofficial market research which helped build my confidence.
  • I had a back up plan.  What would I do if I was stuck with hundreds of unsold toys?  Well other than birthday gifts for the next 5 years I was convinced Catch of the Day or similar would buy them off me on the cheap to cover most of my costs. (True or not? I have no idea but it was important to me that I thought they would!)

 4. I launched and made a few sales (yay!).  But a few months in I am not hitting my targets and the volume of sales just won't increase.

For me this was the hardest bit.  Every morning I would leap out of bed and challenge myself to brew the coffee before checking my Shopify dashboard for any sales overnight.  About 50% of the time I had the willpower to wait - about 50% of the time there was a sale there (not at all connected to coffee).    I would try and remind myself that they were selling, albeit slowly, new product adoption takes time etc. etc., but it made me feel terrible at times. Tears even.  The negative thoughts would creep in and before I knew it I was having daydreams (nightmares) of myself applying for jobs on SEEK again.  

To make the money we needed (my goal at the time was to make enough money to go on holiday with the family once a year and pay for childcare) I knew I had to sell two a day / 14 a week and I was lucky to sell one every second day for the first 10 weeks.  All of a sudden - my birthday actually - something changed and then there were no more days with sales of $0.  Momentum started kicking in and sales then started increasing - 200% increase May to June, 500% June to July, 200% July to August.  I credit the increase to a bit of patience, a lot of hard work, a couple of key changes and lastly a tiny bit of luck:
  • My advocate base was slowly building. So in turn my social proof was starting to come in.  By June 24 there were about 50 toys our there in the arms of little babies and quite a few were having some great success. Word was getting out there slowly but surely and I was still actively asking for reviews, pictures etc.  Organic social momentum was slowly but surely building.  
  • I put our (now very successful) referral program in place.  There are plenty of referral apps around now but the app of choice for me was ReferralCandy - mainly because it gave the flexibility of being able to select your gift rather than having to work on a clunky points system.  It was a slow burn but no doubt it was a very successful and cost effective way of spreading the social word. 
  • I ran my first giveaway competition on June 18 and it was fantastic for exposure.  I ran it on Facebook & Instagram asking for two tags and two winners from each would be drawn.  It did really well and while it didn't necessarily translate to sales straight away I think it was a great tool for capturing some potential leads who then later converted into sales in July via...
  • Email.  I was such a sceptic.  Everything I would read would bang on about collecting emails, what an important tool it was and I just was not convinced.  To me I thought social media was where it was at and for me that meant Facebook - because I am old and I don't feel comfortable in Insta.  ;)   But I was sooo wrong.  They weren't joking - emails are truly the most powerful leads you can ever have in e-comm.  I can send out an email and I am surprised if my sales over the next 24-48 hours are not at least 100-200% on baseline.  So do what you can to get them? For me at the moment I offer a 10% discount which I am happy to do because I recognise how powerful that permission is to engage with a customer who has identified as being a perfect fit for my product.  But there are a tonne of other tactics depending on your industry - offering white-papers, access to articles or exclusive content...  
  • The luck part.  Right at the same time all this was going on my main competitor dropped a shit tonne of $ on PR - TV segments, articles in every decent sized media outlet - print, online...  It was everywhere.  It was the perfect opportunity for me to publish an article on how my product compares and it got great traction.  All for free!  
  • Behind all of this the extra sales enabled me to start my Facebook advertising which is the only paid form of advertising I still use today.  For me it has been great and although I might start to branch out into AdWords and other experiments later this year when it comes to marketing I think it pays to focus.  A book I read last year Growth Hacker Marketing has some great advice and exercises to help you narrow down on which marketing option might be most effective for you and your business and then stick with it.  

I could go on forever but I will leave it there for now.  I hope some of you out there find this of interest and that it helps you on your way to creating the e-comm lifestyle that you dream of.  If there is anything in particular you would like to know and see me write about let me know in the comments below.  

 

Em xx 

 

 

 

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