How to Launch an eCommerce

​The journey began in the latter half of 2009. This was near, what we did not know at the time, the tail of the Great Recession. My best friend from high school and his buddy had launched a marketing company in their spare time to promote online video chat services. A few weeks later they launched the buddings of an eCommerce website and asked me to co-found the company. We would end up growing the business to half a million in annual revenues in 3 short years and launch a second eCommerce business with a different product offering performing similarly. Along the way, we opened a successful co-working space in the heart of Downtown Los Angeles, and a few other projects that did not perform so spectacularly. People have always asked what early steps attributed to our success, and I intend to document just that because over the years I find many entrepreneurs ignoring the basic actions required to build a successful business. To add to that, even though we did not know it at the time, but these fundamentals are what’s taught in my MBA classes and Product Management courses at General Assembly (which I also took).

Step 1: In-Person Market Test and Research
Instead of telling you what you should do, I will just share what we did. We ran the streets, so to speak, and gauged customer interest in our product offerings by attending in-person events. For our particular line of products, automotive aftermarket accessories, we went to local car meets, cars & coffee, etc. These in-person market research tactics are challenging because it requires you to get out of your comfort zone and talk to people in person. Ideally, you want to have some samples of your products to take with you to sell to interested customers. This step cannot be lightly overlooked because it provides you validation that a) a customer is willing to pay you for your product (not just a verbal “yes”) and b) you know how to sell your product (aka. convince someone to buy it). Over the years, I have found stiff resistance from entrepreneurs unwilling to talk to potential customers and merely assume people will buy their products. I would attribute this as one of the top 3 reasons why entrepreneurs fail.

Step 2: Set up a Basic Website
I purposely put this step second because many people will rush to put up a website instead of talking to real customers because this is easy to do. I am frequently guilty of this myself where I will buy a domain and set up a website before ever talking to one potential customer or end-user. However, there is a caveat where if your product is something digital, you will need to set up a site to test the demand for the digital good. I have read many stories where smart entrepreneurs will build sites with products and features that do not even exist. However, there will be a link to a “Thank you for your interest, coming soon” page so they can collect data on how many people were interested enough to click through to the product, service, or feature. It is better to lose a few customers than waste time building a product or service that no one needs.

I want to stress this point, build a BASIC, simple, website. The beauty of the internet is that whatever you make will be improved upon and all your future customers will never see or know how terrible your site was before. Unlike a physical location, you can always “remodel” your online brand and presence overnight. Use generic photos, “borrow” product photos if you have to. Remember, at this stage, you are only looking to validate your product or idea to small groups of people. Odds are nobody will even find your site. Remember, Rome was not built in a day.

Step 3: Online Marketing Test
Armed with the real-world knowledge of how to sell to customers in-person and a simple website, our next step was to test our marketing messaging online. For that, we went straight to CraigsList and online forums. There are many mediums online to test your marketing messages to see what resonates with customers and what is effective for, ultimately, converting customers. Some recommended and cost-effective ways are Facebook ads. You can quickly learn through YouTube how to run pay-per-click ad campaigns so that you only pay for marketing messages that are working.

Step 4: Source Products/Start Development
Yes, we waited this long to source products. Why worry about sourcing products any earlier if you cannot personally sell any? I always advocate entrepreneurs to buy samples for as long as possible or even a competitor’s product and try to sell that. The whole idea is to minimize your initial financial risk. Even if you have to buy a product at full price and sell it with ZERO profit, please do it. You may think you have the greatest idea or product under the sun, or you may think you are the best salesman or marketer on God’s green earth; prove it. You can do that without sinking a massive investment into a Minimum Order Quantity (MOQ) or undertake any development costs.

We were able to buy minimum orders of samples (<$1000) on Alibaba, and although our shipping costs were inefficient, we ran extremely “lean” and “scrappy” (two words you will frequently hear if you have not already). The whole idea of a start-up is that you operate minimally enough to survive. Starting a business, as with most things in life is a marathon, not a sprint. Many hackathons and start-up weekends will instill the opposite mindset that a business can be built over a weekend. In this digital age of instant gratification and overnight billionaires, you will learn that it is all an illusion. Anyone who succeeds overnight is building upon prior experience, or the expertise of a partner or investor and that is often overlooked in the sensationalized start-up stories.

Step 5: Branding and Marketing
About three months in, we had our first online customers who found us organically through the search engines (Google, Yahoo, Bing, etc.).  At this point, we found it appropriate to rework our online branding. We went through a simple branding exercise and came up with our mission statement because with real customers we now had a real “business.”

Serial entrepreneur, podcast host, investor, reader, writer, content creator, traveler.

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