10 Things to Do Early On to Build a Scalable E-Commerce Business
Few e-commerce sellers launch their stores with the goal of only ever selling a handful of items per week. Most want much, much more than that—yet the way they set up their businesses in the early days often holds them back from achieving the kind of growth they desire down the road.
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In a previous post, it was emphasized how this conflict often plays out when e-commerce entrepreneurs first launch their companies:
“In the early days, it can be tempting to go with the quick (or cheap) fix. Money, time, and expertise can be in short supply, and investing in basic solutions that don’t require a huge financial investment or learning curve can seem like the wisest solution.”
It’s not that building a scalable e-commerce enterprise has to be expensive. But there are steps you need to take early on to be able to manage high sales volumes in the future. Here are 10 of them to get you started:
1. Choose the right e-commerce platform
A hand-coded e-commerce shop that requires time-consuming upkeep will slow your future growth. Platforms like Shopify and BigCommerce offer affordable—and, more importantly, scalable—packages that can grow with you as your store takes off.
2. Drop shipping, if possible
Drop shipping is, perhaps, the most scalable e-commerce arrangement out there, as the seller is never bothered with physical inventory. Instead, once an order is placed with the store, it’s referred out to a drop shipping partner who handles order processing, fulfillment, shipping, and returns (for a fee, of course).
Drop shipping has its pros and cons, and it isn’t a fit for every product type. If you want to pursue drop shipping, look for partners that integrate with your chosen e-commerce platform (for example, the way Oberlo integrates with Shopify).
3. Look for a manufacturing partner with scalable capacity
If drop shipping isn’t a good choice for your business and you’ve decided to go the custom manufacturing route, pay close attention to the scalability of any companies you partner with.
If you partner with a manufacturer through a platform like Alibaba, total capacity may be stated outright in the company’s listing (as pictured below):
If it isn’t, you may have to do some digging. Don’t get caught with a manufacturing partner that’ll leave you back-ordered as demand for your products increases.
4. Identify fulfillment and distribution partners
A “middle ground” between drop shipping and handling all aspects of order management in-house, fulfillment and distribution partners can increase your scalability by warehousing your products and handling logistics as orders are placed.
Yes, you’ll lose a cut of your profits again. But in exchange, you won’t have to take on renting warehouse space yourself, negotiating shipping rates with carriers or building a team to handle order processing.
5. Use an inventory management system
Items that are regularly out-of-stock on your website will frustrate users—enough that some of them won’t come back. BusinessWire data, shared by Shopify, suggests that “companies around the world lose $634 billion every single year due to stock-outs.”
An inventory management system can help. Look for one that supports all the channels where you plan to sell and that tracks kitted inventory (if your products involve multiple components or configurations). Ordoro and FishBowl are two good places to start.
6. Start building an email list
McKinsey reports that “The average order value of an email is at least three times higher than that of social media.”
Building an email list from day one helps you develop the relationships needed to drive long-term revenue. Tools like Sumo make it easy to build email opt-in forms into your website.
7. Set up automated email marketing workflows
Growing your list is one part of the equation—messaging those subscribers is the other.
The best e-commerce email marketers don’t hand-write every message or manually press the “Send” button on their announcements. Instead, they develop email marketing workflows that automatically send targeted messages following specific actions or triggers.
For example, using a tool like Infusionsoft, you could:
- Automatically send new customers information about your referral program after their first purchase.
- Suggest related items to purchase that could help customers get more value out of the items they’ve already bought.
- Send a coupon code to re-engage old subscribers who have stopped opening your emails or buying from your brand.
8. Automate Facebook ad campaigns
Paid Facebook ad campaigns can be automated in a similar way. For instance, you could:
- Automatically retarget users who visited your website and encourage them to “Like” your brand’s page.
- Offer free lead magnets to targeted segments to encourage email opt-ins.
- Advertise coupon codes to website visitors who added items to a shopping cart, but did not complete their purchases.
9. Use chatbots to provide scalable customer support
When your e-commerce store’s customer support demands outpace what you’re able to handle on your own, the solution might not be to hire a new rep. It might be to integrate a chatbot into your store to answer common questions.
As an example, take 1-800-FLOWERS’ “GWYN”—a chatbot intended to help visitors find the right items on the site and complete their orders.
According to data gathered by Daniel Faggela on the Tech Emergence blog, GWYN has:
- Contributed to 1-800-FLOWERS’ 2017 first quarter results, which showed total revenues had increased 6.3 percent to $165.8 million
- Driven growth of new customers—CB Insights estimates that 70 percent of customers ordering through the chatbot were new 1-800-FLOWERS customers as of June 2016
Your chatbot integration may not need to be this complex (GWYN is built on IBM’s Watson platform), and it shouldn’t replace human support entirely.
But by using a chatbot that can answer common questions about items, shipping, and return policies, you’ll free up your time—and that of your team—for higher-priority work in your growing business.
10. Build scalable teams without hiring
As your e-commerce company grows, its needs will as well. There’s no way around it. More customers means more customer support inquiries, greater marketing demands and more requests for new website features.
All of these needs can be solved without direct hiring, thanks to systems like Upwork and Guru. These platforms can connect you with talent pools worldwide that can be tapped on a contract basis (meaning no HR-intensive hiring requirements for you).
The best time to start building talent pipelines—as well as implementing the other suggestions described above—is before you need them. Build a scalable e-commerce system from the start, and you’ll never get stuck facing demand you can’t meet.
Sujan Patel is a leading expert in digital marketing. He is a hard working and high energy individual fueled by his passion to help people and solve problems. He is the co-founder of Web Profits, a growth marketing agency, and a partner in a handful of software companies including Mailshake, Narrow.io, Quuu, and Linktexting.com. Between his consulting practice and his software companies, Sujan’s goal is to help entrepreneurs and marketers scale their businesses.
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