What You Need to Consider Before Launching Your E-Commerce Business


I am, of course, a huge advocate of taking the leap and starting your E-Commerce business as soon as possible.  The longer you wait, the more likely you are to find an excuse and actually convince yourself “it would have been a bad idea.”  The right time is always now, because the longer you wait, the more opportunity there is for competition to come in and start picking up your ‘would-have-been’ loyal customers.

Before you start your business, though, there are a few things that create headaches for e-commerce entrepreneurs that I’d like to at least mention.  None of these realities are roadblocks though – just things that you have to consider, and oftentimes, if handled very well, can give you a nice competitive edge.

1.  Fulfillment and Distribution

There are a few ways to get this part of your business off your plate completely, including drop shipping and hiring a third party.  The reality is that fulfillment and distribution is extremely time consuming and cumbersome.  You have to fill each and every order, deal with UPS or USPS for shipping labels and such, and then deal with returns.  On the other hand, though, you can really use this to gain an advantage over your competition.  Think about it – this is really the most personal touch you have with your customer – the package that they are receiving from you.  A great example is Zappos; they tried outsourcing this part of their business, and now, fulfillment and distribution is what helped them separate from the competition.  In my specific situation, Blind Surprise is a business based around gifting – so we need to make sure that each and every package is presented in a way we feel comfortable.

2. Customer Service

Once you start shipping, the emails and calls start coming in, and somebody has to handle them. Here is what we’ve learned though; whenever we directly interact with a customer or a potential customer, the conversion is extremely high!  If a potential customer has a question, that mean’s they’re interested, and that interaction is so valuable.

Here are some statistics though from our experience.  So with Blind Surprise, we are shipping random gifts to our customers, so we initially anticipated a high level of customer service inquiries.  We have seen about a 0.5% rate of customer service inquires from our surprise gifts we send out.  This can mean one of two things: (1) we do a nice job of selecting gifts for our customers, or (2) people tend to not want to take the time dealing with customer service on low priced purchases (1 month of gifts with us is only 25 dollars).  So, if you’re price range is below 50, customer service levels may not be too high, but if you are going to pursue high ticket items, it may be more likely to hear from your customers with inquiries post-sale.  But, as I mentioned, every interaction with your customers is valuable, even if the conversation is based around returns.  You can use this interaction to improve upon your inventory, and better learn what your customers want.

3. Competition

This seems so obvious, but you can’t build a six figure online business overnight, even if it is for a product that has a real high demand.  You aren’t the first person to want to start selling billiards cues online, and you won’t be the last, so you’ll need to work hard to get that competitive edge and start picking up part of the market share.

I absolutely would suggest reaching out to competition.  I love when other subscription boxes reach out to us, and vice versa.  You can learn a lot from your competition.  Of course, there are marketing secrets that companies probably won’t share, but even conversations about trade shows they suggest you attend can be helpful.

4. Inventory Management

When we first started Blind Surprise, using one of our apartments for inventory storage was a no-brainer.  We barely had anything so just stacking our inventory in the closet or computer room worked fine.  But a couple months into business, as we were getting hundreds and hundreds of monthly orders, things changed and all of the sudden, the apartment was pretty much a Blind Surprise warehouse – big boxes everywhere.  As your business grows, you will come across the same issue, and this is definitely a good problem to have.  Growth is exciting.

As you can see from the analysis above, these issues can oftentimes be great opportunities for you.  Since they are sort of annoying, it helps filter out the bad companies and give room for other businesses to thrive and flex their strengths.  Turning an industry weakness into a strength is a nice quick way to get a step up on the competition.


Photo courtesy of OnlineMarketingWithVince.com

Leave a Comment

Your email address will not be published. Required fields are marked *