I want to discuss with you something important to your success in business. And that’s the top three secrets of the successful ecommerce business as touching to scaling your business.
Note: I birth this article from my speech (The Top 3 Secrets of the Successful Ecommerce Business) at the Business Owners Special Summit (BOSS 2021) themed Scaling Your Small Business to a Global Level. The article now contains a lot of knowledge that I didn’t mention at the summit because of constant updates.
What is Scaling?
Scaling is an act of enabling your business to grow faster than its actual rates. It’s the ability to grow your business without having negatives. By negatives, I mean not running at a loss because of business expenses.
Scaling condemns traditional thinking but requires critical thinking. No wonder very few business owners do it. Growing is moving at a steady pace. Scaling is moving at a quick boost pace.
If a child moves from class 1 to class 2 in the first year, you can say the child has received a promotion. When the child moves from class 2 to class 3 in the second year, you can say the child has received another promotion.
So, we it took 2 years for the child to get to class 3 from class 1.
Now look at this.
If another child moves from class 1 to class 3 in the first year, you can say the child has received double promotion. The double promotion is what I scaling.
The first child is growing while the second is scaling.
Why Scale Your Business?
The single most important reason to scale is to increase in demand and become profitable in less time. Notice the keyword in there? 1. Increase in demand 2. Profitable 3. Less Time
It’s possible your businesses increase in demand, i.e. more people using your products or services but still not profitable.
It’s possible to increase in demand and become profitable but only after long years of hard work not in less time.
The purpose of teaching is to let you know how to increase in demand and become profitable in less time using top 3 secrets of successful ecommerce business.
How Do You Scale Your Business?
To scale your ecommerce business, you need leverage. And this leverage comes in two ways. You either leverage to the masses or the classes.
What do I mean?
To scale your business, you either sell to the masses (in numbers) or the classes (in prices). To make a million, you either sell to the millions or the millionaires.
So if you have a website that serves a million people per month, you scale by numbers (masses). If you are a copywriter writing premium sales copy for top brands, you scale by price (classes).
That takes me to the scaling formula, which is;
Scale = Unit Sold X Unit Profit
If you have a goal of a million-naira scale, what it means is?
You either earn a profit of N10 from 100,000 transaction or earn a profit of N100,000 from 10 transactions.
Whichever way, you achieve scaling.
Before we continue, I would like to say that;
Scaling is not the same as promoting. Promoting fully depends on advertising. Every time you want to make sales, you spend in ads. This may be good for the short term, but bad for the long-term business.
Scaling may need advertising, especially at the beginning, but survives afterwards without it.
Now that you know what scaling is, why you need to scale and how you can scale your business, what next?
Should you spend more money on ads to reach the masses? You will soon run negative if you do so. Should you increase your prices for no justification? If you do, you will soon be out of business–the classes hate extortions.
What I noticed is that your problem is not scaling, but a faulty business model. And if it destroys the foundation of a business, what can the owners do?
The Top 3 Secret of the Successful Ecommerce Business
This works whether you choose to scale by numbers of prices. They also will help in starting or rebuilding your business.
1). Starving Crowd
Gary Halbert, one of the successful copywriter that ever lived, was in a seminar with a group of students where throw forth a challenge.
He said, “If I’m opening up a hamburger stand, what’s the most important factor to have success?”
He got a bunch of different answers:
Some said, “The secret sauce”.
Another said, “The price and quality”.
Other said, “Marketing”.
“No” Gary Halbert said. He continued, “None of these really matter if you don’t have a starving crowd.”
And I start from here.
A man in the deserts cares less about your sales pitch and products packaging as long as he gets water to drink.
I don’t care how good you are at marketing, selling coke to a diabetic patient is a waste of time and resources. Not because the coke is not tasty enough, but that’s not what he is starving for – good health.
Take the same coke to a construction site with men at work. You don’t speak too much before they ask to come with coke and add bread with it when coming.
That’s because of their job, the get hungry fast and also need substance with addictive (gas) to keep up the energy. And the coke fulfills that.
Why did they buy? The coke is same; the difference is the buyer.
The problem is not you selling but the people buying. You can sell anything, but will the people buy.
I discover that businesses that solve hunger (Not limited to food) wins. Business that provides values wins.
But how can you win or provide value if the people are not hungry? And even if they are hungry, are there many that are hungry?
That’s why I used the words “starving crowd”. Starving is a deep state of hunger (beyond foods) and crowd quantifies the number of people in this state (starving).
Think about it, why are you in business? To fulfill your selfish desire? To satisfy your craving for wealth. You attract money and scale faster when you stop being selfish and turn to the needs of the crowd.
The world is starving. Feed them and they feed you not only with their money but also scale your business with their words of mouth.
The problem I see with most business owners today is that they start before getting customers. Such businesses become difficult to scale. You ought to have a pool of existing customers before you begin.
Before you start any business ask, “Are there starving crowd for what I want to offer?”
- People are starving of shelter
- People are starving of security
- People are starving of knowledge
- People are starving of the need to look better
- People are starving of selling online
- People are starving to satisfy their appetite (food and sexual desire).
How can your business feed these starving crowds?
2). Be the First
I call this the law of leadership. Leaders know that to be the head, you need to be ahead. And successful business owners understood that it’s better to be the first than wait to be the best.
It’s much easier to get into the people’s mind first than trying to convince them you are a better option than what they have been using.
A study shows that 87% of buyers returned to their first products in the first three months of using a new one.
What do you understand here?
That when a man decides on what he wants, it’s a rare to change. You can edit and even delete an existing material is a computer, but not so easy with the man’s mind.
Also, you don’t have the resources to compete, so it’s better to be the first in a new category.
Without stress, you and I remember the first but struggle to remember the second and afterwards?
If I ask, “Who was the first man to land on the moon?’ You will say, “Neil Armstrong”.
Who was the second? I doubt you know. If you do, you don’t know the third. I don’t know apart from the first.
I asked a group of persons what’s the name of the leading bank in Nigeria. The answer was Firstbank.
You may say, “That’s not true. Firstbank is not the best. There are banks better than them.”
While there may be other better banks, I want you to understand that people confuse leading with first. They believe the whatever has made you the first; you are the best (leading).
Winning the people’s heart (marketing) is not a battle of best products; but of perception.” This perception is reality.
Haven’t you realized that it’s not the best (good-hearted) politician that wins but the one who sells the perception of him being the best”
It’s easy to sell this belief of being the best when you are the first. And the people seeing you as the leader become loyal to you.
We see this is Firstbank. Aside from being the first, people see them to be more secured (perception) than any other banks.
It’s said, “First Impressions Matters” not “Best Impressions Matters”.
We build most businesses today on benchmarking. Benchmarking is when you test your products or services against first in the industry.
Benchmarking is a classic marketing thinking. It doesn’t work anymore.
You can win in business with having the best products as your only advantage.
When the customers’ mind is made up, it’s hard to change. Also, they become loyal to the brand.
The first in the industry can always return to clone your best products. But you can’t clone the position of being the first in the industry. That position is forever taken.
What should you do if you are not the first in a new business category?
Set up a new category and be the first.
What do I mean?
When I say create a new business category, I don’t mean to create a new business that has never existed before or have a new idea no else has. Those will be business–wise, impossible in this century.
By new business category, I mean leverage on the Ps of business. The Ps of business are:
People (Youth, Women Only) – Customers before business
Process, (Manufacturing, Delivery) – Business operation
Products. (Physical or digital products, services) – What is it you sell
Let’s me assume you sell shoe (products). You probably won’t be the first to sell shoes. That means the first is not available in terms of products.
You can decide to be the first in terms of people. You sell only to females (first in people) in a particular location.
Example 2: You own a logistics company. You won’t be the first logistics company (products taken). What if you could be the first in process? Since most logistics company operates at day, you could choose to operate only at night (process).
So when I need to send urgent documents to someone who will write an exam next morning, I will remember your company.
Example 3: If you are a web designer, you are probably not the first in designing website (Products). But you can be the first in process.
How? Since most designers charge a onetime fee, you can decide to spread that same amount into 12 months and charge per month.
Others charge N100,000 one time. You can charge N10,000 per month which makes N120,000 per year–you earn extra N20,000.
- Facebook was the first known social network.
- Instagram didn’t compete with Facebook but set up a new category of being the first known image-focused social network.
- Twitter didn’t compete with Facebook but set up a new category of being the first known text-focused social network.
- WhatsApp didn’t compete with Facebook but set up a new category of being the first known direct messaging social network.
- Vimeo didn’t compete with YouTube but set up a new category of being the first known marketing video social network.
- Etsy didn’t compete with Amazon but set up a new category of being the first handmade and vintage items marketplace.
People think first in categories, then brand. You think phone before you think Apple, Samsung and more. Facebook Marketplace competing with Amazon is a dead end. We have categorized Facebook as social network and Amazon as a marketplace.
- Jumia was the first known marketplace
- Konga competed with Jumia and almost closed down. Though people see them as second as the time of writing.
- Payporte competed and people placed next after Konga–third position.
- Habari (by GTB) competed and closed down.
- Jiji didn’t compete with Jumia as a full-fledged marketplace, but set up a new category of being the first known classified marketplace in Nigeria.
Another advantage of being the first is that your business name easily become generic. By generic, it becomes an everyday name.
Haven’t you realise?
- People ask for OMO instead of detergent
- People ask for Maclean instead of toothpaste
- People ask for Mr Biggs instead of eatery
- People ask of Indomie instead of noodles.
Ps: If you can’t be the first either in people, products or process, don’t go beyond the third. Remember, people hardly remember past the third list.
3). Be Specific
I believe it’s easier to scale when you do one thing that doing many things. One thing is needful.
Let me tell you a story of the old man with the hammer.
One fine sunny day, the owner of a large ship discovered that the ship’s engine is no longer working. He called all the engineers on board, but none could make the engine work again.
He then sent forth the messenger to get him someone who could do the job. In hours, the messenger returned with an old man with a hammer.
On getting to the ship, the old man went straight to the engine room. The owner of the ship went with him to see what the old man will do.
The old man removed a hammer from his bag and started hitting a particular spot of the engine. After sometime, he stopped and asked them to start the engine. Lo-and-behold, the engine worked.
The owner of the engine asked the old man, “What’s the bill?” The old man replied “N100,000”
The owner frowned and said,” Why N100,000? When the only thing you did was to hit with a hammer. And all took less than a minute. Okay, send me an itemized bill. Let me see what you bought”
A day after, the owner received an itemized bill from the old man. The invoice contained only two lists.
- Tapping with a hammer–N1,000
- Knowing where to tap–N99,000
As a writer, when will you have the courage to say;
- Writing with a pen – N1000.
- Knowing what to write – N199,000.
A lifetime of experience will make you an expert at solving problems in your field (as it is with old man and the ship) and you have every right to charge like one.
Specializing down position you as the go-to person in your field, allowing you to charge more and increase in demand.
Specializing lets you:
- Look less for clients instead, they come looking for you.
- Demand higher price than generalist
- Own your brand words in the marketplace.
Also, people love those who do what they do. No wonder smokers love their fellow smokers.
A real estate agent you have worked for finds it easy to introduce you to fellow realtor since you only offer service in the real estate industry.
And don’t forget, a million-naira buyer attracts another million-naira buyer.
Push out your credibility and help people perceive you as an expert by choosing one thing and doing it well.
Just because you can do not mean you should. I will rather be strong somewhere than be weak everywhere.
The store that sells only female shoes will scale faster and sell better than another that sells all forms of fashion items.
The more products and the more markets you pursue; the less money you make.
Look at this example.
If you are lawyer seeking to hire a web designer agency for your firm and you came across these two websites, which will you choose?
We are professional website designers offering custom web design, SEO, and online marketing services. Let’s get your business online in style.
We are law firm website designers offering law firm web design, SEO, and online marketing services. 1500+ Law firms helped since 2001.
Let’s have a breakdown of which agency will be profitable in the long term.
Which agency is profitable? Which has more time for other things? Which is the expert?
It’s definitely the second agency.
Scale your business today by choosing one thing and doing it well.
The top 3 secrets of the successful ecommerce business are:
- Starving crowd
- Be the First
- Be Specific
These are fundamentals you need to scale your business.