MBA1246 5 E-Commerce Mistakes To Avoid

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Hey O welcome to the $100 MBA show, the business podcast you can count on every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online and in today's episode you will learn the five E Commerce Mistakes to avoid if you run an e commerce business then listen up. Today's episode is all about the five most common mistakes you can make with an ecommerce business that you want to avoid totally. How do I know? Well, I made these mistakes. One of my larger businesses in the past was my own e commerce website, my own clothing line and I learned these mistakes the hard way. Avoiding these mistakes are going to save you so much money, so much time and give you a leg on the competition because many of them are making these mistakes. I believe E commerce is a totally different business category like SaaS, software as a service or like consulting. It's a business model that plays with different rules because it plays with a different market. And to win in the e commerce game you gotta play it right because some of these mistakes almost cost me my business. Let's make sure you steer clear. So let's get into it. Let's get down to business. Alright, five mistakes you want to avoid totally with an ecommerce business. Just to clarify, E commerce is selling physical goods via your website. You don't have to have any physical location. In fact, a lot of e commerce start out of somebody's garage and they expand into remote warehouses where they can fulfill their orders and that's where I want to start. Fulfillment. Many people don't have a fulfillment plan. When they start their ecommerce business, they think to themselves, I'm just gonna fulfill the orders myself. I'm going to pick and pack them myself, I'm gonna ship them out to my local post office and deliver them to my customers all myself. That sounds good and dandy, but that's not really planning for growth or scale. That's just not sustainable. I did that at the start with my own clothing e commerce business back in the day and I ran out of steam very quickly. I couldn't keep up with the orders. I'm not saying I had hundreds of orders a day, but even if you have five or ten orders a day, that's a lot of work to do to pick and pack 5, 10 different orders. Head on over to the post office, make sure you're sending it to the right address, doing everything manually yourself. Even if you have UPS come to your door, it's still a lot of work. You should only be fulfilling your orders at the start for proof of concept to see if your business is viable. Once your business is viable and it's rolling, you need to have the next step. You have to have the next level, which is having somebody fulfill for you. Fulfillment centers and there's tons, you can google them. Shipwire is the one that I use where basically you send all your goods to Shipwire or to the company. Your goods are packaged already individually and they have skus, which is like the individual serial number for each item. And they will be your inventory, they'll be your warehouse. And then you hook up their system with your actual website so that when an order comes in, they take care of it. You don't have to deal with it. They pick it, they pack it and they ship it out to the customer. These companies have discounted rates for shipping so they can help you out with that. And they'll charge you for warehouse fees as well as picking and packing each order. You can incorporate these charges into the price of the product or the order. And this is actually what a business should be, outsourcing things like this. Too many companies make the mistake where they wait too long to do this and what happens is that they get a lot of disgruntled customers. They get people that don't get their order on time, the orders are wrong or they get shipped to the wrong address because hey, we're human and this is not our full time job. We have other things to do in the business. So outsource fulfillment is something you need to focus on very early on Once you start fulfilling your orders, don't make that mistake. Okay, mistake number two, overstocking. Overstocking is a whole lot worse than understocking. I made the mistake where I was understocked for a bit and I had a huge demand for my customers for certain lines of my items. And I was like, man, I need to buy more, I need to produce more, I need to order in bulk. And I did that. And I had a whole bunch of stuff in my warehouse just sitting there. And again, the warehouse is going to charge you for every item that they're storing. So you're being charged for something that's not sold yet. You got to strike that balance between overstocking and understocking, and you should lean towards understocking. Why? Because overstock is going to cost you money. Understocking. The worst case scenario is that you're going to be sold out and you can have backorders. You can actually sell pre orders to something that is not available on your website. So you could say, this item's not available, but it will be available within 10 days. You can order it now. We'll ship as soon as it comes in. And then guess what? When they pay you, you order that item, you get it manufactured, and you send it out when it's ready. So mistake number two is overstocking. Mistake number three, not building an email list. This is something a lot of E Commerce stores neglect totally. They say, hey, I'm E Commerce, I'm selling products. I'm not an informational marketing. I'm not selling courses. I'm not a coach, I'm not a consultant. Access to somebody's inbox is gold. And E Commerce has so many ways of accessing inboxes, but by offering coupons. Some of the best ecommerce stores utilize this strategy. One that I just visited recently called Koala.com, which is a mattress startup in Australia. As soon as you enter the website, they give you a popup that says, hey, give us your email, join our newsletter, and we're gonna take $100 off your order right now. And what they do is they send you a coupon in the email, but they also apply the coupon to your cart immediately. That's very enticing. $100 off. I think they also offer a free gift if you don't want the $100 off, like a free pillow or something like that. But the point here is that they are making it a priority to collect emails to grow their email list so they can be able to reach out people with their newsletters and offers and special deals, they prioritize it so much, it's the first thing they ask you to do. They don't ask you to buy, they ask for your email. Why? Because once you leave the website, there's no way to reach you again. So they want your email so they can reach you via inbox. So if you're not collecting email addresses, do this right now. As an ecommerce business, don't make this mistake. A tool that I recommend that does this brilliantly is Gather. You can check them out@gathercustomers.com, but you can also check them out inside of Shopify, which is the backbone of a lot of ecommerce websites. They have an integration of Shopify that's brilliant. They've been featured on Shopify a whole bunch of times and they're a great way to collect email address in exchange for coupons. And they do referrals and all that kind of stuff. Mistake number four, neglecting content marketing. Content marketing is just as important with e commerce businesses than it is with informational businesses, consulting businesses. Whatever you sell, people are looking for advice on how to use it and how to choose it, how to choose the right thing or the right options for them. When I was selling my mail clothing line, content marketing was my bread and butter. I was making so many sales just off our blog. Even though I was selling custom clothing for men. I'd write blog articles on topics that people would search, like how to bow a bow tie, how to iron a dress shirt, or even what is the benefit of wearing an undershirt with your clothing. Basically, I wrote blog articles that would enhance people's experience of using my products. And there were topics people were googling anyway. They would land on my website and say, this site is cool. They write good articles. Let me check out their products. What about mistake number five? Well, partnerships. Ecommerce businesses have a gold mine that they're just sitting on called partnerships. A lot of them do not utilize this easy strategy to grow their business. There are so many bloggers and YouTubers out there that YouTube and write about topics that fit perfectly with your products. For example, there's a blog called the Art of Manliness, which is a blog about how to be a man, how to be a refined gentleman. There's a great YouTube channel called Real Men, Real Style by my buddy Antonio Centeno. Good guy, has an amazing YouTube channel. These guys are talking about style, fashion, men's lifestyle. So a company like Dollar Shave Club that sells shaving blades is a perfect fit for them. They're going to be like, hey, I want to sponsor your videos or how about you become an affiliate of our product? You as the e commerce business, you can say, hey, you have this great audience that loves your content. How about you promote my products and in exchange you get commission. This is a win win for both parties and is a great synergy of liked audiences, audiences that are similar. Let's take apparel for example, like Nike, Nike Lives and Breeze. Because of partnerships, they partner with college basketball teams to have them wear Nike shoes. They're the official jerseys of the NBA. So NBA players wearing Nike jerseys. And of course they sponsor star athletes like LeBron James and Serena Williams. But you might be thinking, well, that's Nike. They're a huge company, they have tons of money. I can't do that as a small business. Yes you can. You could be part of the culture. A good example of this is Manal. Manal sells luggage, specifically a piece of luggage that's a carry on that you can travel with with just that, just one carry on around the world. And they really narrowed in on one demographic, which is digital nomads, entrepreneurs that travel. Manal is a small startup out of New Zealand. I in fact met one of their founders, Doug, in person in Bali, just by chance. But a lot of popular online celebrities, online personalities, entrepreneurs, use the Manal bag and they share it on social and on Instagram and they have a whole section on their website sharing all the Instagram photos that people have shared around the world using the Manal bag. And they've partnered up with a lot of websites that are in that market. People have written about the company and the bags themselves on the Wall Street Journal, Forbes, Lifehacker, Mashable, Men's Journal. You get it. They don't just run their business, they partner up and they make sure they're part of the culture. So don't live in this little world by yourself. Partner up as ecommerce business.

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Guys to wrap up do not make those five mistakes. Don't do fulfillment past the idea validation phase. Don't overstock. Don't neglect collecting emails and growing your email list. Don't just forget and ignore content marketing. And don't don't miss out on partnerships. Thank you so much for listening to the $100 NBA show. If you love what you hear, hit subscribe right now on whatever you use to listen to podcasts. Whether it's Stitcher Radio, Apple Podcasts, Spotify, Overcast, Himalaya, it doesn't matter. We're on them all. By hitting subscribe you make sure every episode is waiting for you on your device, downloaded and ready. Also, by hitting subscribe you have access to all our archive episodes over 1200 lessons. The only way to have access is to hit subscribe. Before I go, I want to leave you with this Ecommerce is one of the most challenging types of businesses because it's a hybrid between a physical business and a digital business. You have to have a foot in tech. You have to have a foot in the physical world with physical products having that physical experience. People actually experience your product in the physical world. They touch and feel it. So as you can see in the lessons that I was teaching today, there's problems you need to avoid in the physical part of the business as well as the digital part. I find that people that don't do well in E commerce focus on one side too much. They don't balance it out and understand that both matter. Both really are critical to the success. Alright, thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.