eCommerce

Scale Up Your E-Commerce Startup

Scale Up, But Do It Your Way

In the world of E-Commerce, fulfillment, customer satisfaction, speed and reliability are key. You want to run your business with a customer-centric focus, deliver your products in a timely and efficient manner, while ensuring that you’re making a profit. And, after a certain point, you want to grow and scale up your business to new markets. It’s an ambitious goal, but an achievable goal, if done correctly. The challenge, however, lies in how you do it.

 

For example, there’s the Amazon model, that sources relatively cheap products, matches them with sellers that will brand them, and sells it as a Prime product. Their footprint is global, and their service is quick. But is the quality there? The attention to the customer experience? Probably not. To grow and help your business survive, you need to decide what growth looks for you. Is it an expansion route where:

  • You want to grow your business in existing markets, win more customers and improve retention to get loyal repeat customers.
  • You want to expand your business to new markets by adding additional sales channels in your home market via multi-channel, marketplaces and your own webshop, or an expansion of your business to new countries.

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Both routes require you to focus on your customer service, and your seamless online experience. This means that before you dive into growth, you need to ensure that the quality of your E-Commerce store and your products aren’t under threat of diminishing to preserve your bottom line. 

This is your chance to tell more potential customers about the great products you offer, and put them in their hands. It just takes making sure you’ve got the basics down and have a strong foundation for your rapid growth. 

Questions to Ask Yourself Before Scaling Up

Before taking your E-Commerce business and products worldwide, you first need to ask yourself some questions. As much as a global expansion sounds like the next logical step in your business plan, it’s not as easy as just clicking a few buttons and tweaking your audience demographics for your marketing funnels. In fact, exchanging your service offerings and specific products for profit across different borders invites a host of regulatory measures and technical considerations. 

Regardless of whether your business is face-to-face or online, every country has specific rules, as well as cultural differences and environments that will impact and influence how you present your business. As well, you may have a firm grasp of your omnichannel options at home, but what about in other markets? Hence, you have to make sure that you’ve got a firm handle on your current operations and what your expectations are.

These questions and considerations below should help to formulate your plan:

 

Do You Have Enough Resources? 

Before considering an expansion plan, you need to be sure that you’ve got:

  • The Technology 
  • The Products 
  • The Personnel 

You need to be sure you can serve a global customer base. These three factors are key to a successful scaled-up business. There’s no sense in growing bigger if you can’t support the weight of your new enterprise. Thus, the first step should be a period of reflection and thorough planning to solve these challenges. Within this period you’ll be forced to make decisions on several important questions.

You’ll need to consider:

  • Should you outsource your sales, marketing, design and translation services to a remote/on-location third party, or hire staff to keep it in house?
  • Is it profitable to continue your manufacturing and distribution from your existing locations through the same fulfillment channels, or should you open up additional locations that are closer to your target markets? 

All of the above will take a lot of time to answer, but the answers will help you to formulate a plan moving forward, to make your plan to scale up for viability, or postpone it until you have the resources in hand.

 

Is Your Technology Up to the Challenge?

If your technology isn’t ready to scale at the rate you want it to, you need to address that first. The success of your expansion depends on your ability to deliver a premium customer service experience, regardless of their geography. To manage the success of your startup, you need to be able to effectively launch, manage, and gather metrics on your performance in multiple markets. It should also be able to handle the additional volume of traffic and transactions, as well as offer a dynamic website that works across computers, tablets and mobile devices.

This means your website and applications need to grow and be robust enough to handle traffic spikes, and order volume. There are 4 main areas in which you’d need to strengthen your technological infrastructure to ensure that you can scale up.

 

1. Your Storefront / Shop System 

There’s no sense in going through the actions of scaling up, if your store can’t handle the additional volume. If you’re currently running your business from your own website, consider broadening your reach by expanding into multi-channel sales. If you’re on any of the platforms such as Shopify, WooCommerce, or similar, then they can offer advice and support for how to retool your existing store for your upcoming growth, as well as utilize their resources. For example, with Shopify Plus, it’s become easy to establish and run localized stores for multiple countries from one platform. 

 

2. Marketing, Analytics and CRM 

Relationship Management

When scaling it would be beneficial to invest in a Contact Relationship Management System (CRM) to grow your repeat customers. Growing the share of repeat customers (your repurchase rate) is one of the best and most cost efficient ways to scale your business. There are several great open source and CRM systems out there, such as SuiteCRMOdoo or Vtiger, which allows you the flexibility to modify the code to fit your needs. If you want a more plug-and-play and free solution, you can look into ZohoHubspot or Capsule CRM to name a few. This allows you to manage your marketing, sales, fulfillment, and customer support across multichannel, all from one dashboard.

Marketing Channels 

Another key way to engineer your scale up is by increasing your marketing. You can get relatively far with free advertising channels to acquire customers, but at some point, it’s best if you start exploring paid media such as Facebook AdsInstagram Ads and improving/optimizing your web presence to improve your search results. Then, it’d be best to invest in Google Analytics to manage and improve your ad spend. By collecting data and analytics, you can better understand where your marketing efforts would be best served and which customers are receptive to your messaging.

Customer Acquisition and Conversion

A key metric to pay attention to is your Customer Acquisition Cost (CAC), which is the cost of convincing someone to buy your product. Over the past few years, the CAC on paid marketing channels for E-Commerce has been continuously rising. Given the high cost to acquire customers from paid channels, it's essential to manage conversion and retention to get your ROI on Marketing. Make sure you understand where your non-converting customers drop off in the order journey. And invest time to understand retention: What makes your customers come back, what are they happy about, and what are points of friction that lead to customer churn? It costs less to retain your customers than it does to find new ones. 

Ideally, you want to optimise your conversion funnel all the way to, and including, your checkout process and work on removing any disturbance that could cost you a sale at the last minute. 

 

3. Payment and Shipping

Aside from your webstore design and simple checkout flow, there are two key factors that drive store abandonment on the checkout Page: payment and shipping.

Ensure you have integrated best-in-class payment gateways, especially in the markets you’re targeting. There’s no sense in exclusively mentioning Dragonpay or eNets and not calling out that both support PayPal, for example. Considering that 57% of online shoppers who are considering a purchase from an SME would have chosen not to, had PayPal not been a Payment option.  

Shipping is another key checkout conversion driver that is often overlooked. This breaks down into two key considerations:

  • Shipping Lead Time: 
    1. A study by Arvato found that 25% of customers will abandon a purchase if shipping lead time is too long. Lack of clear info on shipping time is another conversion problem.
    2. 53% of shoppers stated that the speed of delivery was an important factor when ordering online.
    3. Finally, 17% of customers said they liked to be offered multiple delivery options.
  • Shipping Cost: 
    1. According to the same study above, 83% of shoppers stated that free delivery was an important factor when it comes to online fulfillment. 
    2. In 2019, over 69% of shoppers said they’d abandon their carts if shipping, taxes, and other fees were too high.

 

4. Inventory and Order Management

As you scale your E-Commerce business, effective inventory management becomes a key success factor. Even if you were to implement all the other considerations we’ve outlined in this blog, it would be for nothing if you can't manage your product numbers effectively. Consider this: according to a study, 26% of consumers said that if the product they had been interested in had been out of stock and, with no indication of when it would be available, they wouldn’t proceed with their purchase or wait for it to become available. They’d shop with another retailer.

Hence, there are some key questions to ask yourself:

  • Do you have full visibility of your inventory?
    • Need to be able to monitor stock turn and sell through.
    • Need to monitor OOS/low stock SKUs for Reorder. 
    • Manage non moving products. 
  • Is your inventory always up to date? 
    • Avoid Out of Stock Cancellations 
  • Are you planning to sell across multiple sales channels? 
  • Are you selling in multiple geographies?
    • Do you have a connected inventory pool across multiple countries or are you segregating? 
    • Do you sell from one stock pool or multiple? Does your system support future expansion?
  • Order Management: Get visibility on the status of customer orders, any exceptions you need to address, etc

 

Once you have these things squared away, you can focus on some other considerations:

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Do You Understand Your Future Customers’ Journey?

Depending on your product and your target audience, will determine what marketing and social channels you use to feed your sales funnel. How does your ideal customer discover products they want to buy? What compels them to click to learn more and purchase? Not every advertising channel, local online marketplace, or social media site is the same. How people behave and buy differs across platforms and regions. You'd be best served to have a strong grasp of this before scaling up.

 

Are You Following The Local Regulations And Laws?

Most markets don’t have a problem with goods getting sold across borders, unless it’s apparel, cosmetics, electronics, health products, nutritional supplements, or safety equipment. These specific items are subject to restrictions on materials, ingredients, or safety regulations. You should also know the restrictions around how products can be stored and transported, and have any certifications/licenses/fees that are required of a distributor in any given market, as they vary. 

Neglecting to do your due diligence here, can cause very serious problems for your company’s growth.

 

Are You in Line With Local Pricing?

There’s no sense in pricing yourself out of a market, because you maintain the same relative price point as you do at home. There are substantial differences between income levels, currency values, and economics in any given territory. You’d be best served to familiarize yourself with the financial climate in your target markets, and let that dictate how you price your products. 

Also, ensure that the pricing is in the local currency, and integrate their favorite gateways, as we mentioned earlier. Highlight how you’re making their purchase process easier with multiple ways to pay. 

 

Can You Handle The Language Challenges?

There’s a good chance that the languages you’re currently using to market your products won’t be the same as your new target markets. Yes, you could default to English, as most have this as a primary or secondary language but there’s a benefit to going local. Having marketing collateral and a website in the market’s native tongue is a savvy business decision. It shows your attention to detail and your dedication to customer service.

Whether you create specific websites for each target market, or just keep the same one with language options is based on how many channels you can successfully manage without dropping anything. Be mindful, however, of your translations. If done incorrectly, you can come across as too informal, too vague, or even offensive.

 

Are You Being Sensitive to the Local Culture And Demographics?

Outside of the government mandated restrictions, there are also cultural and demographic considerations that need to remain top of mind in new markets. On one hand, you need to know your cultural nuances. The last thing you want to do is engage a customer in the wrong environment, or with an inappropriate message. Be intimately familiar with your target market’s cultural sensitivities and tailor your sales and marketing to be mindful of how to best engage to their preferences.

The other side of the spectrum is to understand who you’re targeting. For example, 70% of all B2B purchases in 2019 were by millenials. They’ve grown up with technology, take to social media if something is wrong, and are concerned with sustainability and online self-service over a physical bricks-and-mortar sales experience. You’d need to tailor your plan to engage your specific target audience in a new market.

 

What’s The Competitor's Presence?

Market research is a must when looking to scale up. Whether it’s a new market, product, or service, you need to understand the playing field, and who’s claiming your prospect’s time and attention. In some cases, you might be up against a very established competitor, or a family-owned business that has close personal relationships with local consumers. This then would prove a fair bit, but not insurmountable, challenge.

The key is to understand your competition and the market, better than you understand your own business. Competition is healthy - it means there is a demand for the product you offer, and local consumers are eager to buy.

 

What Are your Fulfillment and Distribution Channels? 

While all of the questions above are incredibly important, there’s no sense in scaling up your marketing and product inventory, if you can’t distribute it. This isn’t the most glamorous aspect of your business, but it is the most vital part of an E-Commerce business. As mentioned earlier in our section on shipping, fulfillment and distribution can be a huge source of churn for a potential customer. If things take too long, cost too much, or are too hard to pay for, customers will walk away. 

We know you’ve already mastered your market, but now that you’re looking to expand outside of your existing footprint, you need to understand what the new look of your supply chain will be - where you’ll receive your inventory, store it, and ship it to your new customers. As mentioned earlier, will you fulfill in-house, or use a third party in-market? What about returns? 

A good fulfillment solution for your scaled-up business requires adept planning to secure the infrastructure, systems, processes, and team you’ll need to be successful. 

Locad is here to help with that.

 

Scale Up With Locad

There are a lot of considerations that you need to take into account when scaling up. While you’re working out the front-end details, let us worry about the fulfillment. Locad offers supply chain as a service as a platform for multi-channel fulfillment, on-demand warehousing, and distribution. Our product is a holistic and simple technology platform to manage the backend infrastructure of your E-Commerce. 

Once you’ve settled on the shape of your growing business, we can work across your multiple sales channels and consolidate your inventory pool, so you can have a birds-eye view of your stock. You’ll have real-time visibility of sales, inventory, and your KPIs. Then, our distributed fulfillment network brings stock closer to customers, shortening that last mile, making your delivery faster and more cost effective. Finally, our on-demand fulfillment capacity makes it easier to expand your business and explore international markets. 

Whether you're just selling on your own website, a shop system such as Shopify or Woo, or a marketplace such as Amazon or Lazada; we can offer the efficient tools to deliver a best-in-class customer experience across the globe. Managing inventory and omnichannel distribution is a challenge in itself when you’re just selling in your existing markets. Moving beyond your borders requires a partner who has the experience in multi-platform E-Commerce and logistics. This is your business, and it warrants a partner who can offer you special attention and facilitate your growth. Locad is that partner.

While you’re contemplating your growth and refining your value proposition in new markets, let us handle the transportation of your products to your new global customers.

Contact us to learn more. 


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