Running a Small Ecommerce Business: Practical, Realworld Tips

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Running a Small Ecommerce Business Practical,
Real-world Tips Tricks

• Barney Stone, President, Stone Edge Technologies,
  Inc.
• Julie Swatek, Owner, Scrap Your Trip

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• Julie Swatek, Owner
• Scrap Your Trip

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• 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

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• 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!

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• 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!

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• 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

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• 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

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• 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.

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• 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

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• 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!

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• 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.

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• 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.

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• 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

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• 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.

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• 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! 

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• 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.

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• 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!

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• 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

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• 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. 

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• 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!

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• 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.

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• 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?

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• 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!