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Tips and tricks to scale your business from the experts in eCommerce

Common eCommerce Mistakes That Add Up

Posted by Arianna Thayer on Oct 27, 2016

commone-ecommerce-mistakes.jpgWhen a unique product idea is pulled out of the hundred other possibles, it’s easy to getcarried away. Names are developed, business plans are thrown together, and a team is assembled. Everything may seem to be coming together seamlessly, but it's important to remember the little details outside of the big picture.

As part of the Advanced eBay Sellers course, this post is going to outline common eCommerce mistakes that add up if not taken into account from the beginning. It’s all in the details.

Not Using Accurate Reporting

  • It’s common for a startup eCommerce business to input and keep track of data in an Excel spreadsheet, but that system can only be accurate for so long. Implement a WMS to manually input inventory data while the rest is automated. A WMS will transfer data across all your marketplace platform integrations so reporting is the same throughout. Accurate reporting is important because processes like picking, packing, shipping and receiving are automatically calculated and kept as an ongoing record in a WMS. Without this information, things like mis-ships and subsequent product returns could cost your company thousands of dollars in time, energy and growth.

Not Looking Ahead

  • Retail Arbitrage. RA is a common practice among online sellers. It can be a thrilling experience with high profits, but it also has a few negatives that a seller may not be thinking about. If you’re reselling a brand and it arrives damaged to a customer, that reflects negatively on you, not the brand. And if you sell too quickly without a sales history or buyer feedback, Amazon can eliminate your selling privileges. For a more in-depth look on RA and how brands are fighting it check out our previous post.
  • Not researching purchase decisions. Part of running a business is like school: if you don’t prep for the test don’t expect an A+. Take time to research the best time of year to sell certain items and read up on the upcoming trends to make the best purchase decisions for the livelihood of your business.
  • Not collecting and analyzing past data to predict future trends. If you don’t have data to collect and analyze, it will be near impossible to predict future commerce trends that could induce excessive or insufficient inventory. For more information on inventory control mistakes, read this previous blog post.
  • Working in your business and not on it. It can feel natural to assume every role when you start an eCommerce business, but after you’ve expanded it’s essential to step outside of that and have others assume those roles. Take time to oversee your business as a whole instead of trying to do everything yourself. When you step back and work on your business you will be able to scale it long-term: future integrations, partnerships, a brick-and-mortar store(s), or become a household name.. Explain why working in a business is not sustainable, and why working on the business is essential to being able to scale it long-term.

Not Maintaining Good Relationships

  • Once you have hired a team, take the time to get to know your employees. Maintaining a good relationship with employees works in everyone’s favor at every level. Employees need and want to feel part of a team as a valued member to make your company’s goals a reality. Set up fair compensation and benefits packages and give them an idea of their career path. Friendly employee relationships also decrease turnover rates which will save your company money. A study predicted that replacing a salaried employee costs a company on average 6-9 months’ salary.
  • Equally as important, having a good relationship with suppliers will take you far. After all, without them you literally don’t have goods to make a product. Maintain a mutually honest and respectful relationship with suppliers  to help keep your business alive. If you’re in good standing with suppliers they often give better prices and other benefits such as continual improvement in product development and processes and procedures.

Not Optimizing Shipping Methods

  • Using only one shipping method. Choosing one shipping method is like ordering vanilla ice cream. Why stick with one when there’s a world of possibilities? When you limit the options of shipping methods to customers you’re limiting their decision to use your service. People want choices.
  • Manually selecting shipping methods. When day-to-day operations become so busy they start to blend together, it’s important to remember automated shipping methods. Don’t opt to manually select shipping methods. Not choosing a shipping software that automatically picks the shipper for individual packages by cost and carrier will cost you time and money in the end.

Not Diversifying

  • Focusing on one marketplace. Again, why put all your eggs in one basket? Amazon, eBay, and Walmart each have a specific audience of consumers. If you expand to sell on each marketplace you will undoubtedly gain greater exposure and greater sales. Don’t limit yourself.
  • Focusing on one type of product. This is not to be confused with specialized, niche products. Those have their own successful market that works for them in that realm. If you’re selling a product that has room for accessories and alternate components, offer consumers every possible variation. If you can offer them something they may not have expected, or a better version of what they expected, it’s worth the effort to diversify.

Wasting Money

  • Avoidable returns.  It’s all in the details with avoidable returns. In 2015 eCommerce returns were estimated to reach $19.4 billion. Creating a detailed description in your listing or packing your items safely will reduce your number of returns. Give your customers as much detail as possible to reaffirm their purchasing decision, and package an item like a newborn baby. No one wants to receive a damaged item they have anxiously been awaiting. For more tips on avoidable returns read our previous post.
  • Not focusing on reducing mis-ships/mis-picks. Mis-ships and mis-picks are the quickest way to lose clients. It’s vital to hire people on your team whose sole job is to manage parts of the fulfillment and shipping process to deter incorrect shipments and picks. Most WMS systems have features in place to catch incorrect items before they are shipped out, but it doesn’t hurt to have two sets of eyes monitoring the process.

Not Automating Processes

  • Not using software like SkuVault. An Excel spreadsheet may work for a small business in the beginning, but sooner rather than later it’s time to implement an automated, easy-to-use software. SkuVault is a great example of an automated warehouse management system that can be accessed anywhere without a user’s constant managment. A WMS allows business owners to focus more attention on the brand image, employee and customer relationships, and day-to-day procedures in general while their inventory is automatically organized. WMS software also includes shipping integrations and channel management integrations to\ increase product exposure and provide a seamless pick, fulfill, and ship process.
  • Ignoring standard practices and procedures. Set up standard practices and procedures for daily tasks early on so they can be performed flawlessly everyday. Trying to think of a way to do the same task everyday instead of setting guidelines will be a huge waste of your time. Define KPI tasks, key performance indicator tasks, for each department to set up daily practices to measure at the end of each day/week/month. When you set up tasks to be performed each day it makes your business more streamlined and provides a more tangible way to measure progress, sales, and employee performance. In the end you will have data to analyze and improve processes to avoid mistakes in the future.

Highlights to Remember

When you start an eCommerce business, nail down every last detail before getting started. It’s better to anticipate problems beforehand rather than facing them in the moment without a plan set in place. Granted, some problems arise organically with no preparation. But it’s in these moments where the details come to play. Avoid common eCommerce problems like not engaging enough with your employees, writing a dull listing description, or not planning ahead for future purchases and sales. Every business hits a few bumps in the road, but it’s how you mitigate and plan for these bumps that make the business successful.

 

 

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Topics: eCommerce Businesses, eCommerce