- Author By Miva |
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Once you’ve got your ecommerce business up and running, it can seem like the safest strategy is to keep growing: hiking marketing spend, increasing your product line, adding promotions, renting new space. But before you invest more in anything, take some time to assess your current situation. Answering an honest “no” to these questions doesn’t mean you have to kill your expansion plans – but it may be smart to address some needed changes in your current system and situation first.
Questions to help you determine whether or not you should grow your online ecommerce business.
1 | Is my revenue increasing?
- No. Reality check: Why? Are you sure you have a viable business idea? Have you put in place basic marketing tactics, such as SEO? Is there too much competition? Before you start making the extra investment in your time and capital, make sure it’s worth it.
2 | Are my profits are increasing?
- No… Whoa! Slow down. Revenue growth without profit growth is a bad sign. Dialing up your marketing spend may result in losing more money faster, rather than taking you from the red to the black. Look at your pricing and your expenses. How will they change with more growth?
3 | Are all my customers happy? Do I have positive reviews that will inspire others to shop?
- Not as many as I would like… Be brave and look at that negative feedback. First, identify where the problems are occurring: Is it the product, shipping, or customer service? Fix the issues before you grow the business. Adding more customers will likely make problems worse rather than better. (If you have to, slow your business down to catch up and address back issues.
4 |Are my customers referring friends?
- Not that I know of… A customer referral program is one of the most cost-effective forms of marketing you can do. Offering coupons that give incentives to both the referrer and the referee helps grow your customer base and create loyalty. Incorporate a referral program before you just sign off on increases to your advertising spend.
5 | Is your market sector—including competitors—on the upswing?
- Not really… There will always be exceptions (Amazon started out selling books!), but in general, you’re likely to find success faster if your sector is expanding. If not – and you’re keen to stay in it – look for an angle or a specialty that will help you thrive. Maybe it’s honing in on an underserved product niche, but it may be offering customization, improving customer service, or widening your product line.
6 | Are you automating repeatable tasks?
- No, I’m too busy to try… Save yourself money and headaches by looking for ways to make your life easier. Turn to technology tools to cut down on data entry and other time-sucking chores. Upload SKU data in bulk to your inventory system. Build up a schedule and templates for marketing emails. Look at upgrading your ecommerce platform to one that offers more options. Ask business partners or employees for ideas, too.
7 | Is your fulfillment system ready to scale?
- I’m not sure. Prepare for success or failure will follow. Ensure your warehouse has the capacity. Check that your accounting system is ready for higher volume.
8 | Can you staff up during peak periods? Is your ecommerce system reliable?
- Not always… If you’re experiencing hosting issues such as downtime or plugins breaking, you may need to upgrade your website before going after more customers. You don’t want to spend marketing money only to lose shoppers who can’t check out efficiently. If you’ve been stumbling along with a cheap ecommerce website, you’ll want to upgrade to a reliable ecommerce platform to rev up your business.
9 | Does your team have the capacity to work on new projects?
- Nope. My chief technology officer is heading off to college in the Fall and my fulfillment chief wants to focus on her babysitting business. Many ecommerce businesses get by with a skeleton staff, but wearing them out can lead to high turnover which is an expensive drain on your business. If your staff can’t take on new projects, consider hiring part-time during busy periods or look to consultants who can add expertise without a long-term commitment.
10 | Do you have a detailed plan for growth?
- I don’t know where to start. A growth plan should be as detailed as your original business plan. Look at scenarios to the see cost and benefits of adding new sales channels, spending more on ads, adding new product lines, procuring items in higher volume, etc. Only by running the numbers will you see if the growth will pay off.
Don’t be discouraged if you can’t answer an honest yes to each of these questions. If you take the time to analyze your weaknesses, your business will be stronger down the line. And consider upgrading your ecommerce platform to Miva. The added functionality, easy integration, and solid reliability will support the grown of your business for years to come.
About The Author
Elisa Williams is a journalist and communications strategist who combines storytelling with solid research and analysis. A contributing author to the Miva Blog, Elisa has written for a wide array of consumer, business and technology publications, including Newsweek, Real Simple, Computer Life and Inc. Her marketing and content development work includes supporting technology companies that specialize in ecommerce, financial services and big data.