What should E-commerce Entrepreneurs Focus On?

There are a lot of voices in eCommerce for an entrepreneur to listen to.

What should I do first? It's simpler than you think. I was asked that question by Valentin Radu on the eCommerce Growth Show recently.

Here's what I answered.

First, I think you have to nail your operations - basically: can you deliver on your promise? Fulfillment, logistics, service, returns. Get the basics working so that you know if you are making money from a gross margin point of view and can ship products on time and to customer expectations. A lot of people get in trouble because they are scrambling to get things out the door each time. Inconsistency means high variance. Get your process down and solid before you try to grow. Growth will then force new changes to your processes.

Syed Tabish points out how Amazon is again a shining example of this - “I believe operations was one of the main reasons Amazon was able race to the top of eCommerce market and so many others are still struggling to master that aspect of the business. It is very difficult to make incremental progress in your business unless you have mastered the operational part of eCommerce no matter how much money you spend on marketing.” I agree, and so did Jim Ayyad, who added “Jeff Bezos captures it perfectly - start with the customer and work backwards. If you can do what you say you’re going to do, and there’s a few bucks left for you at the end of the transaction ‘lather, rinse and repeat’ with that product and others.”

I think the second focus is: can you amplify that promise by attracting customers consistently? Focus on the top of the funnel. If you can't get people interested, there is some problem with your promise and/or landing pages.

Finally, focus on this: can you attract new customers profitably? In this area are things like LTV (customer lifetime value) and conversion rate. I would rather more people start with the downstream operations than starting with advertising. It's worthless to spend money getting someone to the site if you can't make them happy when they finally receive the product. There is so much more, but these are usually the starting points for me.

Stephen Akomolafe echoed this, saying it “seems "simple" but execution is key. You need to deliver first time and every time after that, because the way word of mouth can kill the business, it can also be the tipping point when your valued customers become advocates for the brand.”