Ecommerce

Amazon hasn’t killed ecommerce but using Amazon before your branding and value propositions build a following is a brand killer. Amazon feels easy and seductive, but its algorithm watches like a hawk sitting on a branch looking for a meal. As a result, hot products get knocked off or experience frequent algorithmic price manipulations.

Amazon likes to eat growing brands, brands with velocity, word-of-mouth, and social shares. The goal is to relocate your brand’s popularity and momentum to Amazon. Amazon’s strategy isn’t a mystery. Yes, the Big A may be the big bad wolf capable of huffing, puffing, and blowing your house down, but you can build profitable online commerce by avoiding these traps.

• Protect Your Core Brands
  Never put your core brands on Amazon or let the most extensive warehouse operation in the world ship your core brands.

• Create Amazon Niche Brands
  Once your brands have the following and you're profitably selling more than a million in annual sales, we might recommend developing Amazon-only niche sub-brands. But, again, we recommend selling these brands ONLY on Amazon, not your website, via your distribution network or other core-brand channels.

• Amazon Niche Brands Awareness
  Find ways your Amazon niche brands can help build awareness for your core brands. Use packaging, inserts, and other tricks, so every Amazon Niche sale increases awareness of your core brands. Yes, we recommend you do to Amazon what they do to everyone else – move attention from them (Amazon) to you. Amazon isn't stupid, so some tactics won't be available (package inserts when Amazon fulfills, for example). Look at Amazon as awareness building first and profits second – that's why your core brands must be well established BEFORE testing ways Amazon can help instead of hurting your brands.

• Found or Created an Ownable Niche
  As shared in Start with Why, people buy who you are, not what you do. They grant loyalty and patronage to why you do what you do, and Simon Sinek's point is even more important for niche retailers from dog treats to rugged laptops.

• Growth Categories
  The categories in our examples, from pets to pot, are hot growth categories except for board games. Hunt A Killer is more fun online than a typical board game, and creating fun online communities is a hot category. You can still create successful ecommerce websites in categories that aren't growing, but you'll need to create an ownable niche to overcome slow growth.

• Creative Teams
  Don't buy the lone-wolf business tycoon stories because they are rare. Instead, teams build the most successful ecom businesses.

• Owners and Founders Matter 
  Teams are essential, but founders with vision, courage, and creativity matter too.

• Focus
  Using the web's ability to track and test everything to rapidly adjust and tune your 80/20 Rules to create flexible focus is a common characteristic.

Successful ecommerce examples range from Warby Parker's glasses to ColourPop's makeup. Here are a few of our favorite multi-million dollar ecom sites.

• Diesel Laptops
  Diesel's rugged laptops built to live on rough and tumble building sites where large machines sculpt the earth.

• Colourpop
  Colourpop knows what their incredible goth-y customers want in their makeup - color and even more color.

• Warby Parker 
  Neil Blumenthal and Dave Gilboa started their billion-dollar eyeglasses company after losing a $700 pair of glasses in Thailand. They refused to buy another pair because eyeglass frames were tedious and too expensive, but not so much anymore, thanks to Warby Parker.

• Simply Gum
  Simply Gum isn't just Gum anymore because they've added mints, but they've stayed true to their mission to make "simply flavorful gum" from healthier ingredients.

Notice the uncontested market space created by each of these successful ecom brands? Online success requires going to extremes like Diesel Laptops and knowing what your customers want and don't like, such as ColourPop's brightly colored "bunny safe" makeup. But, as Warby Parker proves, building on the web's direct-to-consumer benefits can make expensive intermediaries feel pain. Keeping it simple stupid works when dominant players such as Mars/Wrigley don't see simplification coming.

Secrets Help

Nowadays, everyone with a few hundred bucks and a Shopify site can sell online, but only a few online stores will win customer hearts and minds like our four examples. However, hard-won secrets learned over twenty years, thousands of transactions, and millions in online revenue help. We share two of our secrets in our next section - 80/20 Rules and doubling down on winners while leaving losers. 

The Pareto principle, named after an Italian turn of the century economist, says that for many outcomes, roughly 80% of the consequences come from 20% of causes. Every successful ecommerce website sees examples of the Pareto principle:

• Traffic Sources
  Did you know most website traffic usually comes from a small set of sources such as links from other sites, organic and paid searches, and loyal customers typing your web address or "direct" traffic.

• ​Content
  Twenty percent of your content usually earns 80% (or more) of your site's engagement.

• Profits
  Most of a successful website's profits will come from a subset of products (see the 80/20 Rule above).

Learning, knowing, and using a website's 80/20 Rules is one common strategy for ecom success.

Double Winners Leave Losers

Things your website can do is always an infinite list, but when we use a website's 80/20 Rules, what an ecommerce site should do, always a much smaller set, is more apparent. Another hard ecommerce lesson is to invest in winners and leave losers. Many new to ecommerce want to create rising tides to lift all boats, but thanks to an Italian economist, we know tides don't lift all boats. It is more accurate to say the effort needed to generate a rising tide will never pay off. It is better to double down on winners than attempt to make moderate successes blockbusters because time and resources aren't infinite.

Over twenty-five years, we've helped our customers' ecom websites make tens of millions. So can Shopify, SquareSpace, or WordPress break into the million-dollar ecommerce club? Yes, you can develop a successful online store on other people's platforms (OPP), but we don't recommend using canned tools for anything after a proof of concept.

Ecommerce has many moving parts, from credit card gateways to Content Delivery Networks (CDNs). Since time is arguably the most significant Critical Success Factor (CSF) in building a successful online store, why squander time learning the hundreds of ecommerce tricks and tips someone else has already paid to know? Instead, wouldn't it be better to find a website development team willing to put their money and expertise beside yours?

That's how WTE does ecommerce – we invest our time, expertise, and capital. But we're flexible because not every ecommerce entrepreneur wants or needs capital. We're picky, too, because while we can always make more money, time comes only once.

Ecommerce Communities

Creating an online community isn't easy, as we share in content marketing. Tips shared in content marketing focus on asking for help and how to build trust, so visitors become contributors and your website does more and more while your marketing team does less and less. Ecommerce sites have an online community advantage thanks to product reviews. 

WTE's partnership with PowerReviews taught a valuable ecommerce community lesson. "Why would someone add the 301st product review," we asked not long after PowerReviews launched. "Someone writing the 301st review isn't trying to add feature and benefit clarification," Robert Chea, one of the PowerReviews brilliant founders, explained, "they are signaling their desire to join the product's tribe." A tribe is another word for an online community.

PowerReviews demonstrates another ecom and content marketing truth - software and algorithms beat any human alternative. How your ecommerce website manages, values, and rewards product reviews determine your website's ability to earn more. We recommend PowerReviews because they've created world-class product review management, analytics, and curation tools. 

Using tips shared in content marketing to ask for help and promote content contributions are good ideas, but Reviews convert visitors to buyers on ecom websites. If you can only add one thing to your online retail store, PowerReviews would be our recommendation.

Resources

• Million dollar ecommerce stores StarterStory.

• Global retail sales on Statista

Successful E-com Examples

• Diesel Laptops

• ColourPop Cosmetics

• Warby Parker eyeglasses

• Simply Gum