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Running a Small Ecommerce Business: Practical, Realworld Tips

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Title: Running a Small Ecommerce Business: Practical, Realworld Tips


1
Running a Small Ecommerce Business Practical,
Real-world Tips Tricks
  • Barney Stone, President, Stone Edge Technologies,
    Inc.
  • Julie Swatek, Owner, Scrap Your Trip

2
  • Julie Swatek, Owner
  • Scrap Your Trip

3
  • Julie Swatek, President, ScrapYourTrip.com
  • Make sure you have the capital you need to
    support your growth. Look into SBA loans, even if
    you are not profitable.
  • Make use of free resources
  • Local colleges and universities
  • Entrepreneurial support groups for women,
    minorities, etc.
  • Athena Power Link http//www.athenafoundation.org/
  • Ladies who Launch http//www.ladieswholaunch.com/
  • Make Mine A Million http//www.makemineamillion.or
    g/site/
  • SBAs Womens Network for Entrepreneurial
    Training (WNET) http//www.sba.gov/aboutsba/sbapro
    grams/onlinewbc/index.html
  • WNET Roundtables http//www.sba.gov/smallbusinessp
    lanner/manage/lead/SERV_ROUNDTABLE.html

4
  • Julie Swatek, President, ScrapYourTrip.com
  • Run your business with personality. People want
    to do business with people they like.
  • Figure out what your top 3 goals are and focus on
    just those. Everyone in your organization should
    be able to recite them.
  • If you dont know how to read financial
    statementslearn. You cant run a business
    without understanding the numbers.
  • Understand that the people who start the journey
    with you will probably not finish it. Be willing
    to make a change when the business has outgrown
    someone.
  • One day at a time!

5
  • F. Curtis Barry Co.
  • Shipping
  • All rates are negotiable. Existing contracts can
    be re-negotiated annually regardless of term.
  • Pay attention to both inbound and outbound
    shipping costs.
  • 15-20 savings are possible.
  • USPS will print logos on boxes at no charge.
  • Processing (not Handling) Charges
  • Direct labor costs are typically 4-8 of net
    sales.
  • Larger businesses look to offset some of their
    pick pack labor costs.
  • Try to get 2-3 of net sales from processing
    charges to help offset your costs.
  • Know your costs for filling orders averages
    5.80 per order!

6
  • F. Curtis Barry Co.
  • Labor
  • Use temp (temp agency) or part-time labor during
    peak periods
  • Use at-home workers for call centers hire as
    contractor, no benefits, but must be trustworthy
    and have equipment
  • Get more out of packers
  • design of workspace
  • sufficient desktop space
  • bench at good height
  • fatigue mats
  • supplies right at pack station

7
  • F. Curtis Barry Co.
  • Warehouse Picking
  • Use Hot Zones for best sellers.
  • Use Golden Zone easy to reach shelves for
    popular items.
  • Post expected performance levels 15
    improvement likely!
  • Keep 10 empty space on your shelves.
  • Track and correct items that cant be found or
    that are found in the wrong location.
  • Pick more than one order at a time.
  • Pick single-item orders first.
  • For more useful information, go to
    http//www.fcbco.com/cost-reduction.asp

8
  • McKane Davis Scrapbook Inc.
  • Pick by location.
  • Use Hot Zones.
  • Measured steps needed to fill orders.
  • Pick into carts with up to 6 orders.
  • Wireless barcode system for picking.
  • Need order management system.
  • Use barcodes as much as possible avoid packing
    shipping errors.
  • Match manufacturers SKUs whenever possible.

9
  • McKane Davis Scrapbook Inc.
  • Shipping is not a marketing expense
  • avoid free shipping
  • recover, or at least understand, total shipping
    costs after all surcharges, etc.
  • save 1,000s by shipping more via USPS
  • use free boxes when possible ask your carrier
    for them
  • Use organic and systematic approach to SEO done
    in-house.
  • build pages for users first, then search engines
  • never try to trick the search engines
  • have written best practices documentation
    anyone who works on the Web site must read them
  • apply rules to every Web page

10
  • McKane Davis Scrapbook Inc.
  • Every box has a coupon, featured product, sample,
    promotion etc. for marketing.
  • Best results with 30 day coupons.
  • Cheaper to market to existing customers than to
    acquire new customers.
  • Use free newsletters, tutorials, information,
    etc. to bring customers back to Web store.
  • Description images can make or break the sale.
  • Videos can make conversions skyrocket.
  • Good video studio can be set up for as little as
    2,500.
  • Demonstrate tools, show what products look like.
  • Simple demos are good enough. Fancy productions
    not needed.
  • Upload videos to YouTube or Brightcove, then
    imbed them into your site. Use their bandwidth!

11
  • Pavel Shvartsman, President, Optics Planet (235
    in 2007 IRC Top 500)
  • Start on automation sooner rather than later
  • Create procedures and documents that let you
    delegate and protect yourself from employees
    leaving, etc.

12
  • Pavel Shvartsman, President, Optics Planet
  • Common Red Flags for Fraud Detection
  • Order total is over 300
  • High street value items (Digital cameras, Night
    Vision, MP3 Player, High End Sight or Scope,
    Metal Detectors)
  • Different Ship To/Bill To address - Check if the
    last name is the same on Bill to/Ship to
  • CVV (Card Verification Value) failure
  • AVS (Address Verification System) failure
  • If either address or zip is bad, the customer may
    have mistyped the address.  Go to Stone Edge
    Order Manager and validate the address. If it
    changes, that may have been the reason for AVS
    failure.  If the order is still suspicious, send
    fraud prevention email and put the order on hold.
  • If both address and zip code are bad, send email.
    There are two templates to choose from based on
    likelihood of order being fraudulent.

13
  • Pavel Shvartsman, President, Optics Planet
  • Common Red Flags for Fraud Detection (continued)
  • Free e-mail account (Yahoo, Hotmail, Gmail, etc.)
  • E-mail name doesnt match customers name
  • Ordering multiple identical items
  • Express shipping
  • High end items going to poor or gateway areas,
    particularly in New York,  South Florida (Doral,
    Hialeah and NW Miami are popular points of
    departure for the Caribbean and Latin America)
    and South Texas border towns like Laredo, El Paso
    or Brownsville should also be double checked.
  • On all online orders check the MaxMind Score.
    Orders with a score higher than 5.0 must be
    reviewed.
  • Phone number given doesnt match the Bill-To
    State (see Area Code by Region list).
  • Multiple orders for the same customer with
    different IP addresses

14
  • Timothy B. Levine, Marketing Director/IT
    Manager,Earth Sun Moon Trading Company
  • Proof-reading is cheap. _at_'ing up a marketing
    campaign is REALLY expensive!
  • Use USPS Priority Mail for shipping when
    appropriate.
  • Old fashioned direct mail is still an effective
    selling tool for some companies.
  • But if you use a mailing house, keep a close
    watch to make sure they are not cheating you by
    padding your postage costs.
  • Hardware is cheap, especially when compared to
    labor costs. Dont skimp on it.

15
  • Lisa Judson, FeelPretty.com
  • There will never be enough time to do everything
    you want to do. 
  • Prioritize. 
  • Automate repetitive tasks. 
  • Accept that some things just wont get done. 
  • Think about what information you need to capture
    to make decisions for your business.  Then be
    sure to set up your systems to capture the level
    of detail you need.
  • Maintain control over your companys cash.
  • Your bookkeeper should never be a signer on your
    bank account! 

16
  • Bob Adjemian, Vedanta Press Catalog
  • Just because the big guys do it, doesn't mean
    you should.
  • Consider these two popular ways to increase
    sales
  • SPACE ADS
  • - Bob finds that for him, most space ads are a
    waste of money.
  • - The main results I get from space ads are
    space ad salesman trying to sell me more space
    ads.
  • CONVENTIONS
  • - The cost of renting a booth at conventions is
    so high it may not be worth it. Consider skipping
    some years and/or limiting the number of shows
    you participate in each year.
  • - I think a lot of money is wasted in
    advertising and promotion. On the other hand,
    money invested in our Web site shows tangible
    results.

17
  • Mitch Kranes, MediChest.com
  • Chose your niche carefully
  • Do as much research as you can into your
    potential market.
  • Look at the best in the particular field and see
    where they are missing the boat.
  • Find the forgotten segment of the market.
  • Be tech-savvy or prepare to spend a lot of your
    operating budget on outsourcing technical work.
  • Be prepared for constant changes in technology.
  • Prepare for the worst.
  • Take a fully analyzed and engaged operating
    budget and add a minimum of 15 for we should
    have thought of those expenses.
  • Borrowing is virtually essential for a start-up
    Ecommerce business, but never borrow more than
    25 of your first two years projected gross
    sales.
  • Find the best hosting service you can afford.
    There is a reason that better hosting services
    charge more, but more expensive does not always
    mean better. Do your homework!

18
  • Mitch Kranes, MediChest.com
  • Obtain a quality back-office system.
  • Avoid online back-office programs.
  • Learn your customers.
  • Dont pretend to understand them. Their needs and
    wants will change.
  • Invest in quality employees and remind them of
    their value every day.
  • Encourage them to give you advice and share their
    ideas with you.
  • Unless you talk to every customer, your employees
    will know your clients better than you do.
  • Let your employees help you learn your market and
    its consumer.
  • Lastly, prepare to work very, very hard.
  • If phasing into Ecommerce from another venture or
    career, do it slowly but correctly.
  • Luck is the only factor in success, and I have
    found that the harder I work, the more luck I
    have. - Thomas Jefferson

19
  • Sean Welch, Dir. Information Services, XRLLC.com
  • Automate redundant processes. 
  • The development cost will be an instant savings
    over man hours to complete repetitive tasks. 
  • Smart work is always a better payoff than hard
    work.
  • Always have a backup of your backups. 
  • Let your business rules dictate your systems, not
    the other way around. 
  • Develop thorough Process and Procedure manuals. 
  • You cannot rely on any one employee staying with
    you. 
  • Detailed lists of job duties with step-by-step
    instructions make training replacements easier.
  • Give everyone the benefit of the doubt the first
    time, but don't hesitate to let bad apples and
    repeat offenders go. 
  • Give your employees a set of clear and defined
    work expectations. 

20
  • Barney Stone, President, Stone Edge Technologies,
    Inc.
  • The Not Com Rule Any company that thinks SMBs
    have 1,000 to 1,500 employees will never really
    understand your business.
  • The Law of Great Expectations Dont expect to
    run your ecommerce business from a beach chair.
  • The Can you hear me now? Rule Answer your
    phone and talk to your customers and potential
    customers. It will pay off!
  • Corollary The Law of Missed-Communications Try
    calling your own business number once in a while.
    You may be shocked at how bad your voicemail
    system is!

21
  • Barney Stone, President, Stone Edge Technologies,
    Inc.
  • The My, what a big inventory you have! Rule
    You dont have to be big to look big.
  • Corollary 1 - The Lean, Mean, Ecommerce Machine
    Rule To compete with the big guys, you have to
    be really efficient
  • Streamline and automate your operations.
  • Minimize your personnel expenses.
  • Eliminate duplicate data entry save time
    money, eliminate expensive errors.
  • Centralize management and data.
  • Encourage customer self-help.

22
  • Barney Stone, President, Stone Edge Technologies,
    Inc.
  • Corollary 2 Location, Location and Location
  • Your Web presence is your retail location. Think
    carefully about whether you just want to sell on
    eBay and Amazon, or whether you want to have your
    own Website and shopping cart. Then pick the
    right shopping cart system and Web host. Which
    leads to .
  • Corollary 3 - The Other Goldilocks Rule
  • Pick the right size tools for your current
    operations, including reasonable growth for the
    next 2 to 3 years. If and when you outgrow them,
    you will be able to afford to replace them, and
    you will have more options and a much better idea
    of what to replace them with.
  • Example Dont get talked into a really
    expensive shopping cart system if you dont
    really need it. On the other hand, if a cart
    comes free with your Web hosting account, is it
    really going to have the features you want and
    good support when you need it?

23
  • Barney Stone, President, Stone Edge Technologies,
    Inc.
  • The Dont Reinvent the Wheel Rule Dont let
    anyone talk you into creating a custom shopping
    cart or order management system for you!
  • Corollary - The Ecommerce Aptitude Test What do
    you want to be when you grow up a retailer or a
    computer programmer? If you are spending all of
    your time writing PHP and PEARL scripts, who is
    running your business?
  • Are you smarter than a 5th grader? (Barneys Pet
    Peeve Rule) Cmon folks. The English language is
    dying here. Remember what your 5th grade teacher
    said
  • Yes, spelling and grammar count!
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