Ten things I learnt in my first year of eCommerce!

I'm just wrapping up the financials for my business's first year and reflecting back on the year that was. I sell a unique gift that has seen some initial success and I'm currently gearing up to relaunch an improved version of it. (I'm going to be one of those annoying Redditors that won't tell you what it is but it's actually very easy to replicate). I have a full-time job and three young kids so the business is a labour of love on the side I hope to build up up over time. This sub and others like it have been tremendously helpful during my first year of business so I thought I'd share 10 things I've learnt so far as I always enjoyed and learnt from these posts.

1 – Get your product in the hands of customers!

Do not worry about launching a perfect product. Get it in the hands of customers, listen to their feedback and iterate from there. The first version of my product was very average compared to what it's become. But people were buying it so I knew the idea was good and warranted me investing more time and money in it.

2 – Working capital is important

I'm still working on this one! My business was making money but I wasn't seeing any of it. I haven't pulled out any money and don't expect to for the next six months at least whilst I build up my bank account balance. Any profits I've made have been spent purchasing more inventory and improving the business. Cost per unit can decrease dramatically when ordering large quantities making your product more profitable, but that won't help you if you don't have the funds to buy in large quantities! Despite $60k in sales and healthy profits on the products I sold, I have recorded a loss for the year (only -$60 lol). All the profits I've made have been poured back into my business in ways I know will pay off in the future like branding and equipment.

3 – People won't be excited about your successes

This one surprised me, many close friends and family became disinterested about my business when it started getting traction. I think it comes from a place of envy in that they probably have ideas or want to give it a go, but haven't yet. I don't hold it against them, it's just disappointing. I've heard owning your own business can be lonely and I understand this better now. My idea is also really simple – so I think some people are a bit bemused I've seen success from it.

4 – Add value to each customer interaction.

Know who your customer is and what they value – then add that value to each interaction. The purchase of your product or service is just one touchpoint – there are many others that customers can extract value from and help build your brand. My background is service design so this comes naturally to me – but thinking about the experience you provide your customers can pay dividends in moving customers down the sales funnel, getting repeat business, and word-of-mouth sales. As Maya Angelou famously said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

5 – Customer complaints are gold

Every customer complaint is a nugget of gold that can help you improve your business. It sucks hearing it and sometimes you can tell the customer is just an expert keyboard warrior, but regardless you have to acknowledge their experience and know that sometimes things go wrong. Complaints help you fix blind spots and build a better understanding of what matters to your customers.

Studies show that a customer who complains and has a good complaints experience is a more loyal customer than one who has a great experience first time around. I see so many online businesses who have hundreds of shiny five star reviews on their website, but once you dig a little deeper on other customer review platforms you can see they treat their customers poorly. If you can't afford to rectify a customer's experience, then you can't afford to be in business (within reason of course – some customers can never be satisfied).

6 – Be proud of your business

I struggled with this and it wasn't until I heard a fellow business owner shrivel up when asked about their business that I realised I did that too. Business ideas can be deeply personal, and mine in particular isn't based on rocket science so I always felt uneasy explaining it to people. But how are others supposed to see and feel value in your business if you can't?! Be proud of your idea and your efforts – I don't know how to explain it, but I started making better decisions when I started being more proud of my business.

7 – Your product might not appeal to everyone, and that's okay

I probably wouldn't buy my product, but I know there is a market for it. This is probably related to number 6 as I know lots of my friends wouldn't buy it either. My product isn't mass market and that's a good thing as I've been able to focus on meeting the needs of a particular group of customers.

8 – Have a 2-3 year plan

I have so many ideas for my business – but I can't do them all at once. Putting a plan together for the next few years has helped me prioritise where I put my efforts right now. I can focus on executing 2 or 3 ideas well, as opposed to spreading myself too thin and trying to do it all at once. My plan isn't war and peace, just a few goals and the ideas and strategies that I think will get me there. I refer back to it when I'm having a crisis of confidence. It's also not set in stone – I update it every few months as I learn and grow.

9 – Be prepared to take a loss

Not all profits are financial! If my business fails in 12 months time and I lose money, I am okay with that as I have learnt so much that I will carry into my next venture. When I started I told myself I was prepared to lose $10k by giving it a go, I suggest any aspiring business owners think about what you're willing to lose because it will help you get started and making those first few big decisions.

10 – Know your product's worth

My product is very cheap to produce (shipping it costs more!) but the value my business provides is more than the sum of its parts (see learning number 4!). I have sold over 1,800 units and only one person has complained that they thought it was expensive. Other businesses sell products similar to what I do at a cheaper price – but I think I do it better and I price it that way. Try and understand the need your product is fulfilling and put a price on that.

(I know I said 10 but I just thought of these two)

11 – Don't underestimate customer acquisition costs

I initially budgeted 10% of my revenue for marketing costs. In reality it's been double that for me (at least). My acquisition costs where tiny when my business started getting traction (unbeknownst to me this was Christmas traffic which lulled my into a false sense of security). Make sure your margins are fat enough that you can afford to acquire customers! And never stop thinking about how to get that next customer. The digital marketing landscape is so dynamic that what worked well six months ago no longer works.

12 – Purpose

My business has a great purpose and it makes me feel really good when I'm posting products off. Money isn't the biggest driver for me, so knowing I'm doing something good in the world gives me motivation. Money might be your motivator (and that's okay!), but if it's not try and find a purpose in your business as it will help drive and push you.

Thanks for reading 🙂

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