Scaling is key to ecommerce success, without it, you'll be playing catch up while others are expanding their influence (and bank account.) Here, you'll learn what scaling is and what to expect as you rise in ranks.
Struggling with conversions, or building a new store? Explode your sales tonight, with Debutify — the highest-converting FREE theme.
✅ Blazing fast
✅ Sales add-ons
✅ 24/7 Support
✅ Start Free 14-day Trial ? https://bit.ly/2Rcz0hF
✅ Subscribe to Debutify on YouTube ? https://bit.ly/2DO7YKI
✅ Listen to Debutify Podcast on Youtube? https://apple.co/2R5tfT8
? FREE MENTORING GROUP
Get answers to all your e-commerce questions from Ricky Hayes, 8-figure entrepreneur!
✅ Join Ecom Dropshipping Masterminds here ? https://bit.ly/32dHCLC
? FOLLOW DEBUTIFY ON SOCIAL MEDIA
? Instagram: https://bit.ly/2Zn9WJn
? Pinterest: https://bit.ly/32cLso4
? Facebook: https://bit.ly/3jT4dmy
? LinkedIn: https://bit.ly/3m0Vfpj
? TikTok: https://bit.ly/2R6Edb1
? YouTube: https://bit.ly/2DO7YKI
? FREE CONTENT: GROW YOUR SALES
⭐ Free 14-day Trial: https://bit.ly/3bNgru3
⭐ Read the Debutify blog: https://bit.ly/2FgGRIC
?SEND US YOUR FEEDBACK
? JOIN THE DEBUTIFY TEAM
?️ Want To Be A Guest On Debutify Youtube Channel Or Podcast?
If you wish to be part of our channel, we are looking for influencers, known figures, to interview. If this is you, please apply here ? https://go.oncehub.com/DebutifyPodcast
DISCLAIMER: Any advice I give is solely based on my own experience and research. There is no guarantee as there are many variables that will impact your success. Everything stated should be taken as opinion.
DISCLAIMER: Links included in this description might be affiliate links. If you purchase a product or service with the links provided there may be affiliate links. Thanks for supporting the Debutify channel and company, DEBUTIFY CORP.
Tags: #scaling #businessgrowth #ecommerce #e-commerce #workfromhome #passiveincome #businessincome #businessdevelopment #onlinebusiness #dropshipping #debutify
It’s good to have you here. Today’s plan is to talk about scaling. I’ll begin with the definition. Scaling is a common dental procedure.. Sorry, sorry wrong tab…
Scaling, in the most simple of terms, is expanding the operation to facilitate growth. A company grows by offering new products and services, by revising their brand and mission statement. A company scales when those services are now accessible to a wider audience. Revenue and profits tie in to both these terms, and generally it’s something you want to see happen.
A small, community based business can see incredible growth; maybe it gets a website that locals visit, or it ends up in the newspaper, or it sponsors a soccer team. When it decides to scale, this grassroots operation becomes a local business around the city by adding additional chains, or by having a storefront location as opposed to being a kiosk at the flea market. Don’t knock it, it’s happened. Now it’s showing up in more newspapers, it’s sponsoring a local show, it’s website is gaining more traffic. From there, a local business can become provincial or statewide. It can go from provincial to national, national to continental, continental to global. Now instead of one website it has a dozen for different languages. That one storefront location is now all over the world, and as such proper scaling means there is a support network that is tasked with managing it, the actions of this support network by the way, have an exponential effect on the operation. Where the owner at one point spends a day making decisions on how a store is run, the next, they’re making decisions on how to run all 100 across the globe. The higher up in the hierarchy, the more impact each person’s actions and decisions will have.
What I’ve described to you is a slight hypothetical, but it’s based on events that have taken place thousands of times. I strongly recommend checking out our episode on the history of dropshipping to help get a clearer grasp on the history, as without scaling, dropshipping doesn’t occur. Ecommerce, being a critical component of scaling and dropshipping also has its own history. The first online transaction is reportedly a marijuana deal between students at Stanford and another at MIT. The first public transaction online took place in 1992 over a Sting CD. As of this writing we don’t have a history of Ecommerce Episode but there’s plenty of fertile ground there.
I want to study two major worldwide businesses operating at scale, one that was primarily based online, the other in the physical world.
For the physical one, I’m going to talk about McDonalds. At first, in 1940, the McDonald brothers Dick and Mac had a typical drive-in restaurant with a big menu and servers that would come to your window. They redesigned their business in 1948 because they realised that they could provide customers with even better value, while also being a more efficient business. Their new restaurant was now drive-up only and their revamped menu had only nine products for sale, most notably a 15 cent burger. To compare that to now, that’d be a dollar sixty five. Incidentally, many small businesses today have begun their stories operating with similar simplicity. I’m going to keep the rest of this brief because this kind of research makes me hungry. An agreement between the brother’s and Milkshake Multimixer Merchant Ray Kroc was made in 1955 to begin a nationwide expansion of the restaurant, followed by a corporate buyout in 1961, earning the brothers 2.7 million, which now would be worth closer to 18 million. Their first worldwide ad campaign “i’m lovin’ it” wasn’t launched until 2003. Which means that this company’s expansion was predicated on word of mouth, satisfied customers, geographically based ads and most importantly, an efficient business operation. The company is facing struggles in modern day, between covid, thousands of competing restaurants, blueapron, but they’ve managed to keep themselves relevant to the times, with an expanded menu that’s modified based on the culture, consumer transparency with their global Q&A campaign and as of 2017, deliverability on UberEats.
On the virtual side, though no less impactful on the physical world, we have Amazon. It doesn’t get much bigger than Amazon. But something to keep in mind is, they are a business platform. They do sell their own products, which is how they started, but they are a market as well as a store. Let’s have a look at their history so we can understand how they scaled.
Ok… So… This is not the most relatable story by far. But it’s important to know. Jeff Bezos was a Wall Street Hedge Fund executive, he founded Amazon in 1994 and initially it was a bookseller. It met with a great deal of skepticism and pushback, one point to consider is it wasn’t profitable until 2001. Bezos understood intuitively that as the internet was fast growing, his business needed to grow as well. By 1997 Amazon had one million customer accounts. Amazon went public in May 1997 and raised 54 million on the NASDAQ market. One point Jeff Bezos made early on is that Amazon’s job was to resolve issues with the online marketplace and make it easier for customers and merchants alike. They could test their own theory by also selling products.
Amazon later implemented the Associates program, by 1999 had 350 000 other merchants selling alongside them. In 2002, they launched AWS, a service I’ve been using personally, which allowed business and individuals to rent out storage space. I’m a podcast producer by trade, it’s how I made my way here, and Amazon AWS allows me to host podcasts through their service. If not for them, I would need to… find another hosting service… or attempt to host it myself… Which is not economical whatsoever as my expenses would grow and my profits..not so much.
What both these companies have in common are an efficient foundation, a vision for growth by their founders and products and services that, while needing to adjust with the times, will largely remain in demand. There is also much to differ between the two, because Amazon is a market that sells other products. But I do make the observation that through promotions like the toys, other companies can use McDonalds as a means to sell their brand.
To scale a business, you should first understand how the different levels are perceived. One thing to consider within Ecommerce is that if we’re selling online, the barriers aren’t the same as brick and mortar. You're limited by language and where you advertise. Forbes puts the three levels of scale from 0-100k, your foundational stage, 100k-500k, your momentum stage, and 500k to a million, your “preparing for future challenges” stage, which I would refer to as your “frontier” stage. This is something important to take in, a lot of these articles are making the presumption that your earnings are already into six figure territory. This may seem daunting if say, you’re a dog walker, but this is scale at its fundamental level, your day’s work can have an impact on hundreds of thousands of people around the world.
Let’s look at what strategies and expectations are in place for each stage, this is not from just one website, rather it’s been cross referenced from several sources.
Starting with “foundation”
It’s not just Forbes that used this analogy, it’s common parlance in economic media to refer to your business as a house. A house needs a foundation, it needs personnel and materials to be built, and there is always going to be something to work on. Also, based on zoning bylaws, you may need to get creative with expansion if you have that in mind. In that sense you may end up selling the house and building a much bigger one. One with a backyard.
-Make sure your website is SEO compliant. Your keywords must be in line with what your potential customers will be searching for, the sooner they’re properly implemented the better.
-Give customers a means to signup via email, and while you’re at it, put them to good use. Send out automated emails based on activity. One key area that needs to be addressed is cart recovery. Cart abandonment is upwards of 70%, and that can be from poor load times, distractions in real life, buyer’s remorse. It’s recommended that, rather than lose the sale altogether, you can offer a “WAIT DON'T GO” discount of 5-10%
-Optimize optimize, see how I didn’t say it a third time? Didn’t need to. Every second counts when loading your pages, so cut your loading times down from 7 seconds to 6.
-Set up an efficient sales funnel so that traffic is properly guided along. The StoreYa blog breaks the funneling process into Awareness (what’s that?), Interest (I think I like that, it could be good for me) and Decision (I’ll get it).
-Invest your time and capital wisely, two of the main platforms you’ll be advertising on are Google and Facebook, which we will get into in more detail. You can reach out to influencers to work with your brand, and as you gain exposure journalists may be reaching out to you, so make sure you get back to them.
Next we have “momentum” this is where you have an install base of loyal customers, and can now turn them into an asset.
-Large companies like Uber use what’s called a viral loop. Essentially, your established customer base refers the business to their network, people who use a service become excited, and will likely share it with others. To further support this excitement, you can include a referral code that your most loyal customers can share.
-Re-engage customers via a remarketing campaign. You have their emails, so you can send them discount codes, time sensitive promotions, or just check in on them and let them know what your company is up to..
-Make your customer reviews a key visual on your website, the more you display (including the bad ones) the more you legitimize your business to new customers.
-Encourage your customers to generate their own content based on your product. Forbes’ points to GoPro as an ideal case study. When people start using the device it inspires creativity in others.
Finally but not actually finally we have “frontier” again that’s what I’m calling it just so you know, it’s not an official vernacular.
-This is where it’s recommended to evaluate the staff you have if any, and if not, to begin thoroughly assessing what staff needs you have and how to meet them.
-Ensure you’re on good terms with your supplier since scaling might put a strain on them. If need be, find additional suppliers to make sure you can handle this new incoming demand.
-Look for what areas your marketing is limited by, is that poster on the community message board still pulling its weight?
-Since you’ll likely be getting bad feedback, make sure you have your Customer Success Agents ready to address their issues with respect and dignity. And, speaking as a former CSA, make sure they have the tools to actually solve the problem, no one wants to spend all day apologizing with nothing else to do.
Quite a lot to consider. But that’s not everything.
-How much of the business are you doing by yourself? If you’re spending time packing, mailing, shipping, apologizing, responding to requests, that’s not you operating at your highest potential. As the operator of the business, your daily energy needs to be used in proportion to the businesses success. If you spend an hour packing slips, you could affect 20-30 sales, but if you spend that same hour on a marketing campaign, you can reach an additional ten thousand customers. You will almost certainly need to outsource.
Are you going international? If you’re selling primarily to an english speaking audience, you have the Big Five (US, Canada, Australia, UK and New Zealand) but what about all those countries with English as a second or third language? Are you catering the message more to their tastes? Will they understand the nuance in your copywriting? Are you collecting vital data? And if so, is it being parsed and understood in a way you can actually use? Is your business capable of operating both in B2B and B2C space? Are you socially and ethically responsible? Millennials can, speaking as one, be rather guilt ridden. A product made responsibly and with dignity can secure a lifetime of loyalty.
What about competition? If you’re early to the game, others might learn from you and correct your mistakes to their benefit. Having competition is a good sign, it means there’s a healthy demand for your market. You could however be making your way into someone else’s territory, you could be the challenger and not even know it. Are you tax compliant? According to multichannelmerchant.com, as of 2018, 23 billion dollars in revenue is not being collected by governments. Multiply that by every country you want to sell to, as well as every state, county, provincial and district bylaws.
Where's the personal touch? Do email campaigns come across as “focus group tested?” Who’s writing your blog? Do CSAs sound like they’re reading from a script?
As you can see, there is a lot that goes into this, and 1000s of sellers have gone through the gauntlet to bring you this information.
Before we move on, I also want to take a few moments and recognize that for a lot of people, we don't have millions of dollars to invest in an online book market that’s now powerful enough to make their own country. So let’s look at a few small scale businesses that reached for success and made it.
First we have Canva, a massively successful design website, for people in need of professional looking art for the cards, posters and such. According to growth manifesto.com They have over 15 million users, 300 000 paying customers and are valued at 3.2 billion dollars. Their success dates back to 2012 where Melanie Perkins, a designer herself, was finding a lot of the students she was teaching were having a hard time learning professional software like Photoshop. The first thing they understood was the market was there, tens of thousands of people needed good looking content without the expensive route of hiring a designer or the time consuming and also expensive route of self teaching. From there, they built an intuitive website that’s easy to use, removing as many barriers for entry as they could. It’s a self actualizing cycle, because their website is about good design, seeing a good looking website is proof of itself. I also observed that when you’re marketing to other designers, people often running their own businesses, with a product that makes their success easier, you’re also tapping in to a market that does not necessarily need to succeed. If 1000 people signup, but only 100 of them are successes, that’s still 900 other users you helped give a fighting chance. Anyone in business understands that failure is an unfortunate but realistic aspect. Not a knock against Canva, but it’s something to think about.
The next one we have is Bushwick Kitchen, according to sumo.com, they generated 170 000 in revenue in their first year under their initial label, MixedMade. They had their product, honey infused with chili, a novel idea I’ve never seen before, and I go to the CNE. And they had about 500 dollars worth of product, but with the website, they put the carriage before the horse and it worked. Rather than try to stock up on thousands of product with no knowledge of it’s success, they unveiled the product in a conceptual state and then began to manufacture as sales rolled in. From there, they took a grassroots approach to marketing, by emailing their friends and family, followed by making connections with food bloggers and journalists, they built momentum in an authentic way.
Lastly we have Robert Nava and his online outdoor store, National parks Depot. According to business2community.com, Robert Nava’s online store began with a marketing budget of 60 dollars. His story is that of encountering a great deal of friction with authority, thus he only had enough means to start tiny. His first step was a Facebook community page where he sold custom shirts and posted images of nature. The reason why his 60 dollar budget turned into 1000 dollars in sales. This was thanks to the power of dropshipping.
Now, there’s another side to scaling that’s more specific to your business, which is the advertising. Being a creative medium, you can get pretty inventive with how you advertise; I already mentioned influencers and journalists. You can also advertise on billboards, print, TV commercials, secure product placement in TV shows or films or attempt to go viral by doing something weird on internet video sites.
The two biggest advertising platforms today are Google and Facebook. As the leading social network and search engine respectively, they have built a great deal of trust with the customers, and have also collected a great deal of data. This market is rapidly changing. Even the information I share today will change in a matter of hours. Mathematical variables may need recalculation. But what stays ironically the most consistent is to be ready to adapt. Automation, while it varies within both platforms, is a necessity to scale. If you don’t, you will lose days, weeks fighting a battle manually. You will still be in control of the operation, make no mistake, you will be setting rules to determine what ads to scale and what to kill.
First let’s talk about Facebook:
There are over 5 million advertisers on the platform as of January 2020. So you can expect to scale if you want to compete. We’ve talked about how they’re set up elsewhere but I’ll run through it again here just for the sake of it. Facebook ads are the active creative that customers will see, the ads are grouped into ad sets that have a commonality such as demographic or gender, and these ad sets are collected into a campaign. The metrics that you can and should be effectively tracking through Facebook are performance, engagement, videos, website, apps, events, clicks and settings.
As for scaling, these are the some methods that sellers consider when scaling:
Increase budget: You can simply dump more money into your budget, but that doesn’t automatically equate success. What you need to look for is a low frequency score, meaning an ad hasn’t been shown to the same customer repeatedly. That way, the money you spend will be less likely to reach the same customers you did before. It’s recommended to increase your budget slowly as well, in increments of 20% You can, and are compelled to, save time by automating the process to a fine detail, such as if an ad is underperforming, you can gradually lower the budget before killing it.
Use ad targeting to determine who sees the ads. Facebook ads allow you to use keywords to find audiences similar to yours already. Using Look Alike Audiences, you can take the information you learned from current customers and reach out to users with similarities. This will allow you to expand your customer base with a lot less guessing.
Use Audience Insights, a massive collection of data Facebook has accumulated over its lifespan. Facebook can tell you what interests customers you’ve marketed to in the past may also have. So for instance, customers who are big in to movies, might also be big in to TV shows. If they’re big in to cats, you might find they’re also adversely not in to dogs.
Improve Creatives. You can get the math and function side down, but what about the ad itself? You’ll be able to test different combinations of copy with images to see what ones are winners and which ones aren’t. You’re also expected to keep things from getting stale, by changing the copy or images, or by trying a different method such as Carousel.
So the first thing I want you to know about Google ads is that they start strong. It’s tricky to know if an ad will be a winner before releasing because knowing for sure takes testing, but you can learn a lot from research. It’s been reported that Google, having collected troves of data, will be showing your ad to your most likely customers first and then working their way down. So if things are going well at first, arbitrarily adding money to it can exponentially decrease your Return on investment, since they aren’t going to keep showing the same ad to the same people, and the new people are not as likely to convert. This can be addressed with a strong remarketing campaign. While Facebook ads are levied on Facebook, Google also has GDN, The Google Display Network, which will allow ads to appear on other enabled websites. This means you can have another chance to get the attention of people who have visited your site already but may need a nudge in the right direction. You also want to prioritize having high conversion, if you aren’t getting many clicks the lack of conversion can lead to a lower search result. You can address this with a coupon code for traffic, so that way Google will see that your conversion rate is better.
Another side of this I found interesting is that, despite being a global search engine, localization is a vital tool in your arsenal. It’s reported that 85% of online customers are paying attention to brands on a local level; meaning they’re going to local websites, listings and search results. The strategy they recommend is within each Pay Per Click Campaign, each one has it’s own keyword, and that each campaign is composed of a geo-focused ad group. Referring back to the three step process earlier, you can have three separate campaigns for decision, consideration and awareness. Are you familiar with “near me” searches? If someone is looking for Upholstery, they will likely type in “near me” since it involves physical labor. You’re recommended to keep those ad groups separated. You can use location based SKAGs, such as Upholstery in Macon, Upholstery in Queens, etc.
There’s a rather considerable difference between Google and Facebook that, not that I need to pat myself on my back, I ordered an automatic back patter, but the information collected by Google vs what’s collected by Facebook are distinct for some obvious reasons but also for something a little less obvious. The obvious one is that Facebook is social media, google is a search engine. But the less obvious one is the difference between one having potential for public intent, and the other not. If I search something on Facebook, the odds are good that if I were to interact with it, it would be in a public way. I might like a page, I might add a friend, I might make a post. Everything I do there I do so knowing it can be seen publicly and therefore have an affect on people’s perception of me. Google on the other hand, I can search without public intent. I’m looking for personal information, I’m trying to learn something, I’m trying to hunt something down, I recognize that Google is collecting my data but I there’s no interacting with Google that reflects on a public display of who I am.
That’s it for now, are you a business owner and are in the midst of scaling? Do you have your own story to tell? Any tips or tricks we missed? Reach out to email@example.com