How to Scale Your Ecommerce Business Efficiently & Effectively

The world of ecommerce is a fickle one. At times, it seems completely random which sites survive, and which do not. In reality, however, it is the sites that plan ahead and take steps to keep up with the growth of their business that are the most likely to succeed.

The primary goal of any business is to grow, though there are certainly smaller goals you want to meet along the way. In the very beginning, for example, your first goal might be to break even – to start seeing positive cash flow after covering startup costs. From there, you want to see steady growth on a month-to-month basis and over the course of the year.

‍Ecommerce sales totaled $1.3 trillion in 2014 and are expected to grow by nearly 250% to a total of $4.5 trillion by 2021. If you hope to capture a slice of that pie for yourself, you need to set a strong foundation, build momentum, and prepare for future challenges. In this article, we’ll go into depth about the best ways to scale your ecommerce business both efficiently and effectively.

Start Strong with a Firm Foundation

Though most ecommerce businesses start out small, you should always be thinking and planning ahead. With each business decision you make, ask yourself, “Is this strategy scalable?” This is particularly important when it comes to things like choosing your inventory and with creating and implementing a digital marketing strategy.

Here are some other tips to follow in the early days of your ecommerce business to ensure that you have a solid foundation on which to build:

• Set goals for 1, 3, 5, and 10 years. As your shop grows, you’ll find yourself making decisions that will impact the future of your business – having specific goals set at different intervals can act as a guide to help you make the decision that is best for your business.
• Determine how you will measure your company’s progress. Annual revenue is a good measure of sales, but it doesn’t reflect profit or progress. Take the time to identify your Key Performance Indicators (KPIs) so you can track your business’s progress month-over-month and evaluate how different growth strategies pan out.
• Write a solid business plan. You’ll need a business plan in order to guide the success of the business within the first year. This plan is not only key for starting any new business but also projecting what hurdles you’ll have to overcome in the future as well as keeping you accountable.
• Run the numbers before you commit. Before you start buying or manufacturing inventory, you need to know that your sales will be enough to cover your costs. Create a cash flow spreadsheet and run the numbers to see how much revenue you can expect, what your monthly fixed costs will be, how much you’ll be spending on inventory, etc.
• Identify your target audience and build your brand. Gather information about your demographic and develop your brand to appeal to that audience. Having a strong brand identity will help guide you in future endeavors such as implementing a digital marketing strategy and choosing where to expand in the future.
• Build a strong website. Your website is going to be the mode that drives your sales, but it is also a tool for driving traffic. In addition to creating your sales pages and landing pages for any outbound marketing, you’ll also need content to help drive search engine traffic (inbound marketing).

First Steps to Build and Retain Momentum

Building your initial website can end up being easier than you might think. Particularly with the multitude of tools at your fingertips, such as Shopify. What is not so easy is turning that website into a successful, profitable, and scalable business. Though annual worldwide ecommerce sales are in the trillions, many new shops close their doors within the first few years. In order to scale your business for long-term growth, you’ll need to start out by taking certain steps to build and retain momentum. Here are 3 things you need to do:

1. Create a Strong Digital Marketing Campaign

Your website is the infrastructure for your online business, but you’ll never make any sales if no one sees your page. A strong digital marketing campaign is the key to building your online presence, driving traffic to your site, and converting visitors into paying customers. Here are some simple online marketing tips to get you started:

• Do some keyword research. Before you start marketing, you need to do some research to identify the strongest keywords to reach your target audience. Ubersuggest is a great free tool that can help guide your research.
• Create an automated email campaign. Not only is email one of the easiest ways to communicate with customers, it also provides ecommerce businesses with the highest return on investment. According to a study by Campaign Monitor, for every dollar spent on email marketing $44 is made in return.
• Personalize it. The internet is continually becoming a dynamic place where it reacts to our actions. For example, the ads you see on your social feeds from websites you just visited. Make your ecommerce store a personal experience for customers and they’ll be more likely to convert. This can be as simple as adding a “click to chat” bubble on the homepage or as advanced as sending them a reminder email when they leave something in their shopping cart.
• Implement a loyalty program. Depending on what industry you're in, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. Consider implementing a loyalty program to keep your customers engaged and give them a reason to shop with you again.
• Optimize your site for mobile devices. You may not be surprised to learn that mobile internet traffic has outpaced desktop traffic. However, what is surprising is the fact that the search results for the same queries on mobile versus desktop searches are often different. This comes down to whether your website is mobile optimized or not. Get the upper hand for your ecommerce business in the search results by making sure your website is optimized for all mobile devices (phones, tablets, etc).
• Create content and build authority. One of the best ways to build trust with your customers is to establish your business as an authority in the industry. You can build trust by offering high-quality, informative, and relevant content on your site. Don’t limit yourself to print content either, use photos and videos as well. The process of using content to market your business is called Content Marketing.
• Connect with your target audience. The power in digital marketing comes from being able to connect with your target audience in a more personal way. No other form of marketing does this better than social media. Social channels like Facebook, Instagram, and Twitter give you the ability to connect, engage, and grow your business in a more personalized matter. Whether you’re simply building a following on social channels or using their ad platforms to connect with your demographic, you should invest time and energy into your social media strategy.

When it comes to ecommerce, digital marketing is not a one-and-done strategy – you’ll need to keep at it if you want your business to grow. There is no harm in starting out small but, as your business grows, you’ll want to start expanding your marketing strategy with it.

2. Switch to Third-Party Logistics (3PL)

In the early stages of your business, you might be able to handle order fulfillment yourself or with a limited staff. As you start scaling your business, however, you’ll need to decide whether you want to invest in your own warehouse space or if you want to outsource the order fulfillment process to a 3PL provider.

A 3PL is a third-party logistics provider who takes over one, some, or all of the aspects of your order fulfillment processes. Hiring a 3PL means that you will no longer be responsible for storing your inventory, picking and packing your orders, arranging shipment with different carriers, and handling returns. This will free you up to focus on the other things that will help you scale your business.If you do choose to run your own warehouse, it is critical to choose the right warehouse management software.

3. Develop Excellent Customer Service

When it comes to running a successful ecommerce business, the quality of your product matters greatly. What matters even more, however, is customer satisfaction. When it comes to the scalability of an ecommerce business, word of mouth marketing is gold. This all comes down to the ecommerce buying cycle. The buying cycle looks like this:

Since ecommerce products are not tangible, like they are in brick-and-mortar retail stores, the cycle is often time more drawn out. Consumers spend more time making a buying decision because they cannot see the product in person and because there are some many choices available to them. The way you can tackle both of these obstacles is by offering customers supreme customer service.

Take for example Zappos, the world’s biggest online shoe store. In 1999, before ecommerce really became mainstream, they were able to convince people to buy shoes online. How? Through incredible customer service. In fact, Zappos encourages their customer support team to make a connection with all customers. To put this in perspective, their longest customer support call clocked in at a whopping 10 hours and 51 minutes.

Every business is unique, so the steps you need to take to build your initial momentum may be different than the steps another company needs to take. Keep reading to learn some simple ways to start scaling your business in order to retain that momentum.

6 Ways to Scale Your Ecommerce Business

As we mentioned in the beginning, building and implementing a strong digital marketing campaign is the best way to establish an online presence and to start obtaining customers. As your business grows, you’ll need to think about logistics and how best to maximize efficiency while minimizing costs.Here are a 5 ways to do it:

1. Evolve your marketing strategy. Over time, your business is going to grow and with that growth comes change. Upon achieving certain milestones, you should take a closer look at your current customer base and check to make sure that your marketing strategy is finely tuned to targeted that audience.
2. Optimize your order fulfillment strategy. Whether you’re filling orders in-house or you’ve hired a 3PL, make sure that your order fulfillment strategy is designed for cost-effectiveness as well as efficiency. If you do have a 3PL partner, set aside time each year to talk to them about things such as your growth and how they can work to help.
3. Consider expanding into a new market. If you are already working with a 3PL, expanding to new markets could be a fairly straightforward process.
4. Upgrade your technology. As your business grows, that could mean potentially hundreds, if not thousands, of new SKUs. Your initial ecommerce platform might not cut it at a certain point. Invest in technology that helps automate your business — whether that means upgrading from SquareSpace to Magento or simply finding a new project management app.
5. Keep an eye on your competitors. One of the best ways to scale your business is to fill a niche that your competitors have left open. Study your competition to understand what they’re doing right and, more importantly, what they’re doing wrong. Look for unmet needs by reading their customer reviews to get a sense of how you can fill in the gaps they’re missing.

Don’t feel like you have to implement all of these ideas at once. In fact, some of the ideas on this list might not work for your business at all. It is your job to know your business and to understand its potential – only you can decide how best to achieve your long-term goals and what tools and strategies to use along the way.

There are no guarantees in the world of ecommerce – a business that is thriving one day could tank the next. Though you cannot possibly predict every little thing that could affect your business, it pays to be thorough in the planning process if you hope to scale your operations down the road. Think carefully about building a strong foundation to create momentum in the early days of your business and always keep working to maintain that forward progress. Good luck!

ShipHero is one of the top providers of warehouse management software for ecommerce companies. See how we can help you here.