Download: MP3 (70.8 MB)
If you’re planning on selling physical products, this episode is for you. It’s all about growing an E-commerce business. We talk about which products to start with, how many, which E-commerce platform to use, marketing, shipping, pricing and more.
One of the questions we got was, “What if people are asking for multiple products? Which one do you do?” The answer depends on three factors: profit margin, popularity, and ease-of-management.
Tune in to hear us go deeper.
Highlights, Takeaways, Quick Wins
- Find out if people are interested in your products before you manufacture something to sell it.
- Start your E-commerce business with a single product type for the first year.
- Products are a long-term investment—don’t expect to profit, or even break even, on your first product.
- Come out with a single, high-quality product that leaves a great first impression, then follow up with new products regularly.
- Marketing starts before you launch the product.
- When you own the platform, you own the customer.
- Your first product is an experience, not a moneymaker—there’s no second sale without a first experience.
- No one is going to notice your first product.
- Don’t get caught up in creating a custom infrastructure and let it keep you from shipping your first product.
- The three factors of pricing products are margin, popularity, and ease of management.
- 06:06 Sean: I asked people in the Community chat whether more of them were interested in starting an E-commerce business or growing an existing one. It was about a 10-1 ratio; people were interested in starting. You can get stuff out of today’s show even if you have a business and you want to grow it, but we’re going to focus more on starting because that’s where a lot of people are right now.
Are You Ready?
- 06:35 I’m going to give you some questions to determine if you’re ready to start an E-commerce business. A lot of people are excited, they want to sell products, but they may need to think about it first. My first question is: Have people already shown interest in the concepts, designs, or products you want to sell? You could look at this a couple different ways: are people interested in this general concept—are people buying similar products? Or, are people interested in your specific product, concept, or design?
Find out if people are interested in your products before you go through the trouble of manufacturing something.
- 07:42 Put out some designs, some concepts, and get people excited. It’s not unlike Kickstarter where they show you prototypes or behind-the-scenes footage to get you excited. See if there’s interest first. The other thing is, do you have confirmed buyers ahead of time? This could be someone who says they would be interested: “Yeah, I would buy this. I want to buy this.” Or, it could be someone who has already pre-purchased it. You could do it either way. You could pre-sell it or you could go by people saying that they would buy it. You can only expect a small percentage of the people who say they’ll buy to actually buy it.
- 08:28 It’s really easy to say that you’re going to buy something, but when it comes to pulling out your credit card and making a purchase, that’s when you know for real if someone is actually going to buy. I don’t recommend doing products as your first way of making money, because they’re a long-term investment. You have to put money in to get money out, and like we’re going to talk about later, your first product shouldn’t try to be a big money-maker.
- 08:55 It should be something that creates an experience for people and gets lifetime customers in, who will eventually buy more things from you down the line where you actually profit. If it’s your first rodeo, I wouldn’t recommend starting with products. If you have all of your bills covered and you have a day job where you’re making more money than you need and you’re putting that money into products, that could work. If you’re starting a business, you’ve got to have funds coming from somewhere. Matt, do you have any experience with selling products or using money from other businesses to fund the production of something?
- 09:44 Matt: We do that all the time. Most of our businesses are service-based. Now that we have contractors for pretty much everything, we’ll sell the materials. I’m not a distributer quite yet, though I’m sure we’ll get there and we’re talking about doing this next year. Instead of going to Home Depot, we would just be taking stuff to the contractors.
Start With a Single Product Type
- 10:28 Sean: For someone starting out, start with a single product. It might be disappointing if you have a lot of ideas and you’re feeling ambitious, but I would really recommend starting with a single product and not trying to do too much. It’s going to get overwhelming really quick. Start with a single product type for the first year, and maybe that sounds like a long time, but it’s going to take a while for your business to get traction. E-commerce businesses don’t get successful overnight.
Start your E-commerce business with a single product type for the first year.
- 11:11 There are a lot of complications in managing even one product, even if it’s just one variation of a product. You have to learn all kinds of things. You have to set up your store in the first place. We’re going to talk about platforms later on. You’ve got to figure out shipping and how you can automate that, packaging, storage, customer support, payment processing. There’s a lot that goes into this. You bring in something as “simple” as a t-shirt and it’s not simple at all. You’ve got sizes and colors. Maybe the price is the same across all of them, but the XXL or XXXL cost more to produce, so you’ve got to decide if you want to eat that or make it more expensive.
- 12:02 You’ve got to worry about variations and different stock. It’s not only locally, but wherever your storage area is, you’ve got to be able to separate the sizes. It’s a nightmare; it’s crazy. Say you had several different types of t-shirts and maybe some of them have different colors and each of those have different sizes, but that’s all t-shirts. If you go to posters or mugs, now you have to start all over because there’s new challenges. How do we roll up the posters? Do we wrap them? Do we use stickers? What tubes should we use? Which get damaged more than the other? There’s so much that you don’t even realize you have to learn. Don’t get in over your head. Start out simple; start with a single product, and make sure that you can actually ship it out and handle all the issues before you go adding a second product.
- 13:25 We’re assuming you’re good on money. When you’re dealing with bulk items—when you’re selling your own products, you have to have a manufacturer do these bulk runs for you—that’s a big investment. You’re going to have to purchase products in high volume and packaging in high volume. You add one print, and now you have to buy a bunch of tubes. If you go to your local office store and pay $4 a tube, that isn’t very sustainable. Realize how huge of an undertaking this is, just with one product.
Start With 1 Product or 4 Products
- 14:14 If you are starting with one product, start with one option or four variations of it. It’s either clear that this is the product, or you have these options. If it’s kind of in-between, it’s not super clear. It doesn’t feel like you have much freedom of choice, so it’s just enough to confuse things a little bit. Either keep it simple or really make it a custom offering and provide something like four options so your customers really feel like they have a choice in the matter. Maybe it’s different color variations, but people feel like they have a choice. In almost all cases, people want to come right out of the gate and seem legit.
- 15:23 They’re looking at these other brands with multiple products and they think, “I want to look like that. I want to make a good first impression.” There’s a balance here: you don’t want to make a bad impression, but:
You don’t have to sell four products right off the bat to make a good first impression.
No one is going to notice your first product.
- 15:44 That’s the sad reality. A few of your friends might, but when you just get started, no one else is going to notice. It’s about giving a great experience the first time and then consistently delivering on that. Follow up with new products over and over. People will see you show up consistently and come out with new products consistently, and that’s what’s going to build brand loyalty. That initial product or products you put out won’t get noticed. The bulk of your audience won’t discover you until years after your first product launches.
- 16:29 Matt: I know that there’s no magic number, but after you put out your first product and you’ve been sitting on it for a year developing a system efficiently, how often would you say that you would release the second, third, fourth, and so on, products?
- 16:51 Sean: Before I get into times, I would recommend that it be related somehow. If it’s related, the launch of the new product will revive sales of the old one. Maybe people will buy it together. Maybe it’s some sort of theme. It’s easy to get caught up in Shiny Object Syndrome and want to do something new. Stick with something for a while before you give up on it and decide that it wasn’t working very well. As far as timing, this depends on how long term you want to be. You could wait until you’ve broken even on your first product and then everything else after that is profit, so you reinvest the profit. That might be shortsighted.
Don’t expect to profit or even break even on your first product any time soon.
- 17:46 You probably won’t before you should be starting on your second product. That’s why I say that products are a long-term investment and you’ve got to see it that way. Put your product out. Do your due diligence with the marketing, but then go back to your revenue source, make some more money, and put it back into the business. It will probably be five years before this is a serious full time thing where you’re living off of it, everything’s going, and you’re feeling good about it. Focus more on the revenue source. Get that investment, and then go back into the second product. It’s still investing. If you do make products, put them right back in the business, as long as you want it to grow—just don’t expect to get those profits super quick.
- 18:38 Release new products seasonally. Start out a few times a year; try and do something seasonally so people don’t forget about you. You can do marketing and stuff throughout the year, but putting out those products is going to put you in the forefront of people’s minds. It’s better to come out with a single, high-quality product that leaves a great first impression, then follow up with new products regularly, rather than overwhelm people upfront to make yourself seem legit.
Marketing Physical Products
- 19:19 It’s kind of difficult, because when you put out physical products, they’re out there—how do you get people to care? Marketing starts before you launch the product in the first place. You have to build up that anticipation—build up excitement and show people behind-the-scenes stuff. Even after you’ve validated the product type or the designs, still repeat this process of Backwards Building (Related: e160 Nailing Your Product Launch the First Time). You’re putting out behind-the-scenes stuff and getting people excited. Maybe it’s a sneak-peak of the manufacturing. Come up with excuses to create new pieces of content around your product. Maybe you’ve got a print, and I use the example of my Show Up Every Day print. I made a lettering piece, a blog post on How to Show Up Every Day, and then I made a screencast of me writing the blogpost, called Watch Me Write a Blog Post.
- 20:32 All along, you see that it’s about Show Up Every Day. At the end, I say, “Hey, if you’re interested in this, you can go sign up.” We did an episode of seanwes TV about this as well (Related: tv49 Show Up Every Day for Two Years). Post it on social media, and come up with new pieces of content around the idea. You want to tell the story, and that’s how people are going to buy into it. You could just rely on the product itself and say, “I hope someone looks at that, finds it interesting, and it resonates with them.” You’ll sell some, but you have to tell the story behind the product and tell people why they should care. Breathe some life into it. Give it some meaning.
- 21:13 It’s weird, it’s like you’re fabricating this narrative around your product, but that’s what storytelling is. It’s a hook that people can grab onto. It draws people into your product and gets them to care about it. That’s not something you can overwhelm someone with. Say you launch a product, and you try and do all of these things at once, “Here’s some videos, I wrote up this big long story, so add it to your cart!” That doesn’t work as well as doing it over time. The time factor is what helps it sink in more. It’s like watching a TV show when it’s not all out on Netflix. You’re watching a new episode every week, so it’s sticking in your mind. You think, “Oh yeah, that thing.” You get another installment, another piece of the story, and that keeps it fresh for you and helps it become part of your life.
- 22:23 There’s a number of platforms. I personally use WooCommerce, which is built on WordPress. It does work out of the box, but it requires some development if you want to really customize it. The nice thing is that you own the platform, so you can control everything. No one is taking a cut of your sales, which is really nice. It does require some work. It really depends on how long term you want to be. How big do you see this going? Do you want to invest, or do you want a simpler solution?
- 23:00 Some simpler solutions would be Shopify and Squarespace. You can sell products on those. I’m going to give you a little piece of advice, a warning. Don’t get too caught up in this if you’re just getting started. It’s a tough balance. We talk so much about the importance of giving people a good first impression of your brand, and I think a lot of people take that and say, “Oh man, I have to go all out for this first product launch. I have to make everything custom.” They’re trying to build the infrastructure for a huge successful company with their very first product. You do want to work toward that, but:
Don’t get caught up in creating a custom infrastructure and let it keep you from shipping your first product.
- 23:53 My first product was just a page on my website. If you have any kind of content management system, you can create a page, add an image, type up a description, and imbed the code of a PayPal button. You’re in business now! It’s as simple as that. It’s tempting to overcomplicate stuff because we have all this infrastructure and the big guys use that. It’s the same with email marketing. You hear people talk about automation, sequences, up-sells, campaigns, and custom tagging and stuff, and you feel paralyzed even to start. Really, no one started that way. They started really simple and they got to that point. You should get your email list going, start sending valuable content to people, and when they reply, just type out a personal response. Don’t worry about automating everything when you start.
- 24:54 Yes, there are some great tools that we’re going to talk about, like ShipStation, that can integrate with things like WooCommerce and Shopify, which will take your orders and allow you to create shipping labels in bulk. It saves a ton of time, but you don’t have to start out there. I started out just using PayPal. With PayPal, you can create shipping labels. It’s not pretty and it takes a long time, but by the time I was selling enough products to where I was spending four or five ours creating PayPal labels—I had to do them one at a time—I thought, “That’s something I could automate.” If I had known about the bigger world of all of these tools back then, I could easily have gotten paralyzed.
- 25:44 I would have felt like I couldn’t start selling my first product because if I got 20 orders, I would have to start manually, and how would I automate the 20 orders I didn’t even have yet? You start getting into the weeds here, and you’re missing the whole point. The point is to get your product out there and sell it. Maybe that looks like a PayPal button on a page. Maybe you can get something started simply with Shopify or SquareSpace. I like WooCommerce because I’ve been doing this for a while, I like having my own platform, and I like customizing the experience, but I want to encourage people to just get started.
- 26:22 James asks, “How do you feel about starting out with Amazon, eBay, etc?” He’s talking about starting on another platform. I started out my very first selling experience on eBay when I was 13. I was buying and selling PDAs, the little computers, repairing the screens and stuff. I would just go online and research how to do it. Follow the instructions step by step: here’s the screws, here’s where you buy the stuff, you can get good rates on it wholesale. My first experience was eBay, but I was a kid and I didn’t have a company or a brand. If you’re wanting to build a brand, that’s different. If you want to sell products and you don’t care about getting customers, loyalty, or brand experience, because you just want to make some money, you can do things like that and you can sell on Amazon or eBay.
Own your platform if you can, because when you own the platform, you own the customer.
- 27:51 People only think about that first sale, but that’s not how you build a sustainable business. You have to think about the lifetime value of the customer and repeat business. When you sell on Amazon, you don’t get that customer. You don’t get their email address or their data. You can’t market to them again, and that’s huge. Amazon gets this—that’s why they have free shipping and why they have all these break-even products and such low profit margins. They’re willing to sell your stuff and maybe break even or lose money because they get the lifetime customer. They get them in Prime with that one click purchase, and two day shipping.
Create an Experience
- 29:39 I like the long game, so I like getting the customer and creating an experience for them. It’s very difficult to build a brand on a place like Amazon. Most people don’t care and aren’t paying attention, and you’re not creating an experience; it’s Amazon. Most of us don’t notice the brands we’re buying from on Amazon. The packages are coming from Amazon with Amazon tape and packaged like Amazon wants them. There’s no extra goodies in there. They’re trying to preserve their margins as efficiently as possible. They’ve got to have special deals with UPS and FedEx. Amazon is losing money in a lot of cases. I don’t know how profitable they are overall, but they’re playing the super long game and they’re winning.
- 31:13 Take a page from their book; they care about the customer lifetime value. They want the customer, they get them in, they get Prime, they use one click, boom. Now, you go to Amazon. I want to buy something? Amazon. That’s what people think. You’ve got to get people to think that. I want to buy T-shirts? Who do I think? I think of you. You’ve got to be that person for them. It’s about building that loyalty and creating that experience.
Your first product is an experience, not a moneymaker.
There’s no second sale without a first experience.
- 31:50 You’ve got to have that first experience. You have to play the long game. Eric asked a relevant question here, “For your first few products, is it best to go all out with the experience, like packaging, etc, even if you are not sure if you can maintain it as you grow?” Again, start simple. Yes, create an experience, but that doesn’t mean that you have to include the kitchen sink. You’re looking at these other companies and seeing them include stickers and buttons, so you want to include four stickers and four buttons—that’s not the point. Do something unique.
- 32:42 This is an example from going to conferences and wanting to leave a nice impression for people: I had custom letterpress coasters made and nice thick business cards, letterpressed on both sides. All of that and a custom, dye-cut sticker on top. I was giving people this pack of stuff. It represented about $5 in cost every time, per person. It was significant. Now, everyone is doing the same thing. This was years ago, before everyone started doing it. I remember people said that it left a really good impression with them—“Wow, this feels premium.” That was a tangible experience with my brand that left an impression with them and they remembered it.
- 33:42 Now, everyone’s doing the same thing, so it’s less special. When I was doing it, it was cool and unique. Everyone else had flimsy Vistaprint business cards, and we all started there. Now, everyone is throwing in buttons, custom stickers, and duplex letterpress business cards. That’s the standard now. Stop copying everyone; do something different. Get the point of what I’m saying here and don’t take it literally and go add stickers. I’m not going to give you an idea, because that defeats the point. Think, “How can I make my business different? How can I create an experience for people? How can I make this memorable when they buy a print/mug/shirt from me? How can I make this special?”
- 35:02 I also want you to be creative. I want you to make this your own. Come up with something, create an experience, and start simple. Referring to Eric’s question, make sure you can maintain it! You’re setting a precedent, an expectation. Don’t get to a point where you can’t deliver on that expectation and the next time they buy from you, they won’t get cool stuff.
Be creative within your means and give your customers something unique that surprises them.
- 35:58 Matt: When I’m at real estate meetings, I give people what looks like a Monopoly Properties card. On one side, it has the property, and on the other side it says ML, and then my number. That’s it. It leaves an impression on people. They say, “It’s the monopoly kid!” I’ve had people call me at random times saying, “Dude, I thought about you because you always talk about how life is like Monopoly.” It triggers something. Be creative. Someone had asked me, “If you could pick anything, Matt, what would represent you?” At that time, I was thinking Monopoly. Be creative. Find something that reminds people of you. Whenever I got letterpress anything, it made me think of Sean, even if it wasn’t his letterpress coaster or business card.
Free Shipping or No?
- 37:46 Sean: I’ve done it both ways. Obviously, I know your preference as a customer; Amazon spoiled everyone. We expect free shipping now. I’ve calculated shipping based on region, and I’ve done it free. I’ll tell you the results. First of all, if you’re competing with other cheap products, then you should make that initial price really good. You may want to hide the shipping until later because you want your product to appear cheap to people. I don’t prefer to go that way. I go premium. If you’re positioning yourself as a premium, quality brand, that allows you to put a price on your product that reflects it’s quality. It might be a higher price, but the bonus is that when they go to buy it, you tell them that it’s free shipping.
- 38:51 Then they’re thinking, “Wow, that’s included.” Extra costs are a big reason for cart abandonment. If you give them free shipping and bake it into the price, they’ll feel like it’s awesome. I switched to free shipping and I split the difference. I used to charge $5 for shipping, and rather than just inflate the price $5 and say, “Free shipping,” I inflated it only $3—I ate some of the cost. The $5 wasn’t inflated, it really does cost that. I’m not profiting on that. I took away shipping charges for domestic shipping, though I do still charge full for international. Unfortunately, it’s just expensive to ship internationally. I don’t have real percentages for you, but my sales went up noticeably, to the point where I was making more money.
- 40:14 The point was, I was moving more products. I ate into my margins a little, but not by much at all. It was totally worth it. Amazon has ruined everyone, so they all expect free shipping. When you see a price, you see it as the final price and you want to buy. If you see that price on another site and it adds shipping to be $7 more, you’re frustrated.
Ship free for domestic sales; bake the cost into your product and eat some of the cost if you have to.
- 40:53 Make it a no-brainer and you’ll move some more products. Eric’s following up here, “Thanks for the advice. For me it’s easy to go crazy with the packaging and forget how long it’s going to take in the future when I’m getting dozens of orders each day. Good to step back and take a gut-check about how much or how long it takes to execute.”
Choosing & Pricing Your Product
- 41:17 Bryan says, “If in an ideal scenario people are asking for multiple products with your designs (‘I’d have that on a mug/t-shirt/print’), how do you determine which product you should begin with between them?” It comes down to margin, popularity, and ease of management. It’s not a simple answer. Mugs are the worst because the margin isn’t great, they’re medium popular, and they’re a pain all around to store and ship, and they break in transit all the time. With mugs, you get decent margins, so you might as well have it because it makes people happy, but don’t expect to make a bunch of money on it. Think about these things: where are you in your game plan? Are you trying to build a little bit of money? Stick with something with good margin.
- 42:33 Prints have excellent margin. Do a couple hundred prints, and they’re $3 or $4 a piece. If you have a good brand, you can easily sell that for $20 or even $30 in some cases. That’s insane margin. We’re talking hundreds or thousands of percent. People are asking, what’s the sweet spot for pricing? For a small business, 100% markup is decent. Your costs for a high quality, premium, multi-color shirt might be $15, so you could charge $30 for that if your brand is premium. Try and hit that 100% markup if you can, though you can’t do it in all cases. Sometimes it’s 20%, sometimes it’s 1,000%. 100% is just a ballpark number for you.
- 43:58 You have to think about the margin—prints have excellent margin. T-shirts don’t have a great margin most of the time, thought it’s okay. In our case, because we’re a premium brand, we can have $30 T-shirts, but that’s on the high end. I used to charge $28, and that was nice, but then you add $5 of shipping. You’ve got decent margin, but say you’re spending $15 on a shirt—it depends on how many you’re doing, because when you’re doing hundreds it gets cheaper. If you are doing stickers and buttons, you’ve got packaging, and you’re including shipping, your margin isn’t going to be so great. However, T-shirts are very popular.
The three factors of pricing products are margin, popularity, and ease of management.
- 45:01 T-shirts are a good choice for getting started because people like them. I would recommend starting with a print, however, because they have great margins, giving you extra money to reinvest so that you can play the longer game with the next product, and they have very easy management. Prints take no storage space because they’re flat, unlike mugs, which can be hard to stack. The variations for T-shirts can be a nightmare. Prints are easy to start with. Start selling T-shirts and you’ll understand what I’m talking about. Once you get a system, you’ll forget how hard it is, but if you remember the early days, it’s tough.
Distinguish Yourself From the Market
Market prices are relevant only if you’re competing with the market.
- 46:49 If you’re offering something different from the market and you can effectively communicate that difference to your customer, then you can charge more. Maybe you need to look at the market if you don’t have a unique product with unique value, or if that unique value isn’t being communicated to the customer. Matt, you have a service business I want to use for an analogy. Why should I hire you instead of going online and looking up “my city flooring”?
- 48:03 Matt: All my businesses have perfect reviews, and usually when we go talk to whoever the sales person is, they’re excellent at communicating why we’re the best option for them. Our prices are really competitive, we’re willing to work with the customer, and because we have so many businesses, the customer doesn’t have to be done with us. They could become a lifetime customer, because basically whatever they need, we have. That’s one of our selling points. Also, all of our products and materials are high quality and come from great distributers. We’ve spent tons of time researching for the best materials, and we get a discount because we do such volume. We pass that discount along to the customer.
- 48:59 Sean: I’ve had a bad experience with flooring in the past. What if I have a bad experience here? How would you resolve that, Matt? I noticed that things were crooked in a particular room.
- 49:18 Matt: Then we’ll redo the whole room for free. We’ve had people come up with stupid excuses, like, “I don’t like the color.” Then we say, “We showed you a sample before, that is in the contract so I can’t help you with that. If you would like to redo the carpet, it would be a separate contract.” If for whatever reason there’s a stain, like if we’ve had painting people there like we have in the past, we’ll replace whatever flooring it is. If there’s a product or material defect, then we’ll replace that, too. We quality guarantee our work. With painting, for instance, if the customer doesn’t like the way it looks, we’ll strip it all and put new painting. We’ve done jobs where we’ve added texturing, and the customer doesn’t like it, then we’ve actually scraped off a layer of texturing. If they change their mind, no problem, we don’t charge extra.
When you distinguish yourself from other people in your market, you get to make your own prices.
- 50:54 Sean: You could go either route. You could go the market route, if you’re offering something similar, and have competitive prices. This is a good deal for the customer but you’re still going to do a good job. Or, you throw in something extra, like, “We’ll walk your pet for you, too.”
- 51:34 Matt: Because we have the lawn business, carpet cleaning business, and the pressure washing business, we’ll say, “I notice that your driveway has a bunch of oil spots. We’ll get that out for free.” We do that just because we like to give our customers something for free. Recently, we were doing a customer’s roof, and we had extra mulch and grass from another job just sitting there. I offered to put the extra mulch around his trees. Another selling point is that I’m young and I have multiple businesses, so a lot of people want to support and work with me because they like the principal behind the Lambo Goal.
- 53:24 They think, “You’re not just out being a bum or getting a dead-end job, you’re trying to go above and beyond.” Lots of times, that’s a huge selling point. Other people don’t care, and that’s when I’ll send in somebody older. Some people feel uncomfortable with younger people. Lots of times, I’ll throw in free stuff from my other businesses because I can. That’s huge. They say, “Wow, you’ll put new wood flooring on my stairs and then you’re going to clean all my carpets in my rooms? Heck yeah I’ll go with you, even if you are $1,200 more.” Some people are blinded by the free stuff. It’s like Amazon with free shipping.
- 54:47 Sean: As much as Amazon is usually competitive on prices, sometimes you could get it cheaper somewhere else. I’ll see it, but I’ll still buy it. The shipping is free and there’s brand loyalty. I’ve bought from them, I’ve had good experiences with them, their return policy is great, and they have my information. Hopefully some of that gave you ideas of things you could throw in and ways you can distinguish yourself from competitors.
Be Cautious of Negative Social Proof
- 55:45 Robert asks, “I know you don’t allow comments on your blog posts. Is there value in having customer ratings or comments on an e-commerce platform–social proof, etc?” I’ve found that the people who take the time to comment usually have something negative to say. Most people are silent admirers. When you’re happy with a product, how many times to you call them up and say, “Hey, can I speak with your manager? I just want to say that this was great.” That’s so rare. Anyone who works in service knows that it’s rare for someone to go out of their way to leave a comment that’s purely positive. That’s why it’s so hard to get iTunes reviews. They love the show, they say, but they’re silent admirers. They can’t be bothered.
- 56:49 It tends to be that, most often, the people who voice their opinion say something negative, so I’ve decided not to have comments on my blogpost or podcast on the site. That’s what I have to say, so if they want to email me, they can do that. A lot of people want to use your platform to broadcast a negative message because they have an audience. If they want to get in touch, they can email me. That’s how I prefer things. Robert knows this, so my answer to his question is this:
Start out manually accepting and displaying ratings and comments.
- 57:36 Once people are constantly sending in reviews and you feel like it could be automated, then I would consider doing it. Before that, negative social proof can be hurtful, and I don’t just mean the bad words. If it’s clear that anyone can type a review and there are none, that’s also negative social proof. No one even cares about this product and there’s no reviews on this? That looks bad. All the time, I’ll look for reviews on Amazon, and if it has two or zero reviews, it makes me skeptical. It’s better to have no social proof than to have negative social proof. Start manually accepting comments, stars, etc, and then think about automating it.
Helpful Features For Your E-Commerce Site
- 59:03 Robert had another question, “Can you talk about some of the functions or features that truly enhance an e-commerce site vs. the unnecessary bells and whistles?” I love to nerd out on the advanced stuff. I want to bring in stuff to help people grow their E-commerce business, but so many people in the chat said they were interested in the getting-started stuff, and we only have so much time. Maybe we could do another part or a series or something. Robert gave some good examples, “Some good ones that have worked well for us: automated follow-up for abandoned carts and link-up to our inventory. Some that were useless or even counter-productive: loyalty points programs and integration with social media. Some that we couldn’t tell: up-sell at checkout.”
- 1:00:16 Let’s explain what “abandoned cart sequences” are. If someone gets to the point where they’ve filled in their information and they’re at the checkout but they haven’t bought yet, you can use that information to follow up and say, “Hey, I noticed that you were about to check out, but you didn’t. Did you have any trouble? Can we help with anything?” You can find out if they don’t want to pay shipping. There are a ton of people that abandon their carts, 75% or 80% on average in most industries. Think about that.
The people that buy from you represent 20% of all the people who have gone through the check out process or have added something to their cart.
- 1:01:06 Maybe you send these follow up emails and you think it’s silly because they left the cart for a reason. Number one, you don’t know that reason. Number two, you might find out that reason and help an individual person make the sale, or fix your system. “There wasn’t a box for the credit card so I couldn’t do it.” Maybe you hid it with your last CSS update. You can find out things like that. Even if they’re not interested, and say you only convert 5%, that’s huge. If 80% represents 80 people, that’s four more sales. 5% of 80 is four sales. How would you like four more sales?
- 1:01:54 These little optimizations can be really big. You can get really sophisticated with this, where if you have their information for what they have in their cart, you can integrate that into the email and present their cart to them again. You can say, “Hey, you had these two items,” and give them a button that takes them to the check out. This is sophisticated stuff that we can’t get into because it’s dependent on the system you’re using, whatever the platform is. All of this stuff requires custom integration and possibly custom development to integrate with your email service provider.
- 1:02:33 If you want branded emails, which I would recommend, there are probably off the shelf solutions you can use, maybe a plugin that will send it’s own emails. It requires some work, but it’s definitely worth it. For me, free shipping is big. Prominently featuring free shipping increased our volume. Another significant feature is video. Video is really big. Cory, do you like it when you go to a product, and not only do they have pictures, but they have videos?
- 1:03:35 Cory: Yes. That sells me. It works so well. Amazon even has video product reviews now and that’s smart.
- 1:03:59 Sean: I’ll give you a little bonus here, Robert. If you use Wistia, this is premium video hosting, they have custom call to actions that you can do. It could be, “Re-watch the video,” “Enter your email,” or “Text/HTML.” Here’s something I do, a little secret. Check out the Wistia video on this product. At the end of the video, I have custom HTML that is creating a box that I fill with a color that matches my Add To Cart button. It creates this green box with white text that says Add To Cart, and I give that button an Add To Cart url. Someone’s looking at the product and watches the video all the way to the end, boom, right in front of you, there’s an Add To Cart button. It’s immediate. You don’t have to scroll to find it. You’re engaged, it goes right to the cart, boom.
- 1:05:41 I haven’t even thought to go back and track that. It’s a no-brainer. I know that’s giving us more sales. Duncan asks, “How many payment solutions are needed? Should I just use PayPal, or setup a merchant account, or Amazon Pay, or Google Checkout
at minimum, CC and Paypal?” At minimum, have a credit card processor and PayPal. You could have your own merchant account, Stripe, or whatever. When I added credit cards after just doing PayPal, my sales went up 40%. You could go to PayPal without an account, continue as a guest, enter your information, and pay with a credit card, but people don’t do it. Maybe they don’t know. There are plenty of people who say, “I don’t have PayPal,” and they leave if that’s the only payment option.
- 1:07:10 I had my own merchant account and sales went up 40%. You don’t want to drop PayPal. I don’t like PayPal. It kind of sucks, honestly. I don’t like a lot of things they do, but a lot of international people will use this because they don’t have credit cards or they can’t fill in the same forms. You’ll miss out on a ton of international sales if you drop PayPal.
- 1:07:43 Matt: A lot of people are more than willing to pay through PayPal because they feel it’s more secure than some other merchant they don’t know about. I know at our snowcone business at one point we were using Intuit, and a lot of people didn’t know what it was, so they didn’t want to pay by credit card. Then we started doing PayPal, and everyone wanted to use it.
- 1:08:13 Sean: I don’t like PayPal, but if you keep it alongside the credit card option, it will benefit especially international customers. In conclusion, I’m going to make a blanket statement here: if you have not run and grown an E-commerce business for at least several years, you almost certainly shouldn’t be worrying about things like rewards and loyalty programs, analytics and conversion rates. Those things can make a big difference on small percentage points, like a 1% increase in conversions. Cool! When you’re doing six figures a month, that’s great. In the beginning, that can be a big distraction, though. Complicated product variations, different types, and shipping can all be big distractions. Start simple with a single product and just make some sales.