Four ways to impact your SMB for the better now and for years to come
e-Commerce businesses wear many hats. After opening an online store, they quickly learn they have to become experts in all manner of things—marketing, social media, sales, shipping, and fulfillment. Each of those categories goes deep: Not only does an e-commerce owner have to understand all the different avenues of marketing and the different models of fulfillment, they usually find themselves literally packing boxes and sending them out the door every day. Buried in day-to-day operations (usually in a box of shipping peanuts), how can an online retailer keep an eye on the industry so they can better compete? Since I’m buried in the industry every day, I put together a list of game-changers e-commerce SMBs should apply to their businesses to gain better focus for themselves and for their business in 2016.
Marketing is the most impactful area for e-commerce companies to grow, so it’s certainly one of the more important areas for SMBs, especially as you’re looking at ways to gain access to new customers and revenue streams. #eCommerce #GameChangers for #2016: 4 ways to impact your SMB for the better now and for years Click To TweetFor a small businesses to grow and get visibility, it should be no surprise that an investment on the marketing side is required to get that visibility, but that category is so broad. Here are some areas of the market that are inviting strategic growth in 2016:
- Multi-channel: Multi-channel is about selling on different stores, whether it’s selling on your own store, through online shopping cart platforms, or on a marketplace like Amazon, eBay or Etsy.
Selling and experimenting in several locations is necessary in today’s online market but it requires the right tools to stay ahead of the business. Many e-tailers don’t realize that it’s possible to sell on several channels and still sync financials and inventory on the back end. And now it’s even easier to list on marketplaces, put your products out there, find an audience, and test and fine-tune your products and margins. You can even use the available tools to understand how your products are performing, try different pricing, and experiment with different catalogs and messaging.
- Omnichannel: Businesses are evolving to cover their sales through traditional brick-and-mortar stores, through an online presence in several locations, and also through expanding the availability customers have across those channels on different devices with different interfaces. For this and many other reasons, it’s becoming more important to provide a cohesive experience for the end buyer by going omnichannel.
- International: The expansion of international markets means tremendous growth potential right now, partially because it’s becoming increasingly easier for the small business to ship products overseas. A lot of the big carriers have made strides in expanding their international fulfillment networks and greater visibility online. The international audience is looking for products from all over the world, and so expanding your business international markets is another strategic way to grow.
Integrate and automate
It’s hard for e-commerce SMBs to streamline, even when just selling on a single channel, but once channels are added, the complexity increases tenfold. You may wonder, “How do I list my products on all these different channels?”, or “What is my strategy for keeping my inventory in sync, so that I don’t oversell—and now I have customer complaints?” Amazon and eBay, which have the lion’s share of the traffic online, have very strict rules around fulfillment and customer reviews. So if your customers have a bad experience, you’re going to get bumped down in the ratings and your visibility is going to take a hit. This universal problem is at the heart of why SMBs should automate and integrate their data and operations.
- Automation: Think of the amount of expense that goes into paying employees who are spending time either keying in data or having to shuffle between applications or manage the information that’s flowing to and from QuickBooks or Excel. There’s software to automate printing of a shipping label. There’s software to automate syncing your inventory. There’s software that tells you how your sales channels performed and even who’s on your website. There are chat applications where you can proactively initiate a conversation on your website.This is available now. Automation is a no-brainer.
- Integration: Integration is the BFF of automation—a solution that will help your systems talk to each other. I started Webgility in early 2007 to solve the problem of integration. We saw this big gap in the market where small businesses were using QuickBooks for their accounting, and they were using a couple of different sales channels, but there was nothing connecting the two. Sellers had sales data in their online store and had to find a way to get it into their accounting system to pay the right taxes. Seems simple enough, but now there are many more apps and systems that need to connect, so integration is more important than ever.
In fact, the faster we are solving this problem, the bigger the problem’s becoming because there are so many new sources of data and each one of the applications is vying to get some part of your small business back office. What you’re left with this convoluted mess of data everywhere, and it’s difficult to bring together all of the different data so you know what’s happening in your business. I think one of the biggest things that a small business can do to really change the game in their favor this year is to make sure that their business remains integrated.
Collaboration is key for your day-to-day operations, but we know it’s tough to find ways to communicate both across channels and throughout the organization. In some cases a single employee may have access to sales information, but let’s say you haven’t solved the integration problem perfectly, it’s still very hard to sync all that data throughout the system.
Add in multiple employees and more infrastructure like a warehouse, and collaboration becomes an even bigger problem. Nowadays business functionality is outsourced and there can be consultants involved, so not only is it a challenge to have a conversation with 10 people within an office separated by cubicles, now you’ve got people distributed across the world—all trying to communicate about something as simple thing as fulfilling an order.
Just the pace at which you need to run your business it’s really critical that you bring all of your employees and different staff members, whether they be full-time or otherwise, all into the same fold. If you’re spending all your time in jumping between applications and you don’t have a centralized place from where you can collaborate, you end up getting pulled into a particular item instead of looking at broader growth metrics and understanding if your business is actually improving.
Here’s an example: You’re having a conversation about an order, but that conversation is happening over email even though your order fulfillment staff might have shipped it out already and your inventory guy is already calling the vendor to get another shipment of that product. At the same time, you also may have your salesperson trying to update the copy for that product online. So all the different folks that are involved in the journey of the product and the fulfillment of the operation side need to come together or the business is doomed. Why is this so important? Because Amazon has it all figured out and out the door before you even send that first email.
Convert data into business intelligence
Using data to educate yourself and your team can really change the game. For the online retailer, if you don’t know your cash flow, how much inventory you have in stock, which orders you’ve fulfilled or not, whether the traffic on your website grew or not, or whether you had 10 customers complaining on your social media feed, how do you run your day-to-day operations?
Sure, it’s difficult to analyze the numbers because information is everywhere, you’ve got apps for everything. On top of that, you have to stay compliant and, given fees and expenses, figure out which store are bringing in the most revenue. But only once you’re able to analyze how your business is performing on different channels can you take the right steps to figure out what channel, product, or pricing is working—or not.Business intelligence is a game changer no matter the size of your company. #Unify #Sellbabysell Click To Tweet
Business intelligence is a game changer no matter the size of your company. If you’re a small business with four or five employees, you’ve got to be the one that’s looking at the big picture, understanding what’s going on, and making the right decisions. If you’re a large organization with dozens of people, your systems are expanding, you’ve got different staff, you’ve got different parts of the funnel from your marketing and sales to your order management and fulfillment to vendors. Either way, you’ve got to look at all the different parts of your business and really comprehend and act on what’s going on.
Typically, a seller looks at their store and sees they did 200 orders at their average order value—those are metrics. That’s a great form of very basic analytics that tells you what happens on one channel in one store. But real business intelligence really looks at that transaction and that channel and is able to understand the profitability of that channel. Ask yourself, “Do I understand which channel is really effective?” “Where am I getting my most valuable customers?” “What are my margins?” Business intelligence is about looking at that information and, to a certain extent, not having to overthink it. The system should tell you what to go do. Intelligence should be about actionable steps that you need to take to improve your business, like knowing your most profitable item and your least profitable item; and knowing if you’re improving your business by marketing to particular customers because their of high value over the long-term, or are you potentially spending your time talking to customers that come in and buy one small thing, or if your margins screwed up when you ship to a certain part of the country.
When it comes to customers, there are a number of interesting marketing metrics—and resulting intelligence—that you should be gathering. For example, what’s your most effective marketing channel, and what are the dollars you’re spending to acquire a new account? You look at the cost per lead, and then once you get that lead in, then how do you convert the buyer? So, what’s the actual cost in acquiring that customer and now that you’ve acquired the customer, you’ve actually sold them a product, you’ve got some revenue coming in, but truly you’ve got to look at the next part of the funnel, which is, what did it take for you to fulfill that product—shipping cost, warehousing cost, fulfillment, third-party systems. These are you’re attainment fees. Knowing this information can change the game for your business.
One of our customers was running a small brick and mortar wedding collectible store when she found us about five years ago. She realized that the brick and mortar business and the overall growth of her business was stalling, so she decided to launch an online store. She then launched niche stores within Amazon and the marketplaces, and now she’s experimenting with different catalogs and looking at different suppliers. She’s the kind of SMB owner who is changing the game for her business and competing. Competing SMBs are looking at new ways to grow, streamline their operations, collaborate, and convert their sales data into actionable business intelligence to benefit their stores, customers, and products. These game changers are the nuts and bolts of how a business change the bottom line this quarter, this year, and send them down the right road for years to come. Check out how this retailer increased revenue from $1.9M to $5.5M.
– Parag Mamnani, Founder and CEO