-One of the companies I used to own is actually E-commerce business.
It's one of the most successful ventures that I have done in my career. And, we were doing millions and millions of dollars every year and actually won the Online Retailer of the Year Award by Canada Post. So, when it comes to E-commerce maybe you're thinking about starting an e-commerce business, you don't know where to start. Today I wanna give you three keys, kinda three lessons I've learned during that time before I sold the company.
Conversion Matters Number one, when it comes to E-commerce conversion matters a lot. Conversion matters a lot. So, you should be constantly measuring your conversion rate on different pages. Your bounce rate, meaning people hit your homepage.Where are you seeing people exiting from your site? Where are you losing people? Now, one of the things that we notice when I was running an E-commerce business that we were losing a big chunk of the customers at the checkout, right? At the checkout page, we're losing a big, so they like the product, they click the product, they add to cart by the time they get to buy, we lose a whole lot of people. So, I was saying to myself, okay, this is not good. What could we do? So, then we added a lot of different things. Example, we added actually testimonials during the checkout process. We streamlined it and simplified the checkout process. So, in the beginning, back then I didn't know, we had a multi-step process. And then, we changed all of that to make it much shorter, right. They see the product, they click, if they are add in the cart, they continue as a guest, that's fine, all right, credit card information. Instead of that many steps, we shorten it to this many steps. And, we noticed sales dramatically increased. So, conversion matters. You have to measure everything. You're looking at data, you're looking at your pages. You have to know exactly what is going on. It is not so much just about the product. It's about your customers, visitors behavior, right. And when you have got some products that are selling well, make sure you feature those on your homepage.
That's key number one. Key number two, you need to have a content strategy
Content Strategy Pay Strategy as well as a paid strategy. So, we were running a lot of ads on Google Pay-Per-Click, we were spending a lot of money, right. But, in the beginning especially no one knows
why they should come to our store, online store. So, we were just doing a lot of that. But then, later on, we also spent quite a bit of money optimizing our website for search engine traffic, just organic traffic. So, we were creating a lot of pages and rank certain key words in Google so people could find us just organically. So, in the beginning what's interesting is 90-somewhat percent of our sales were coming from paid. Pay-Per-Click, we were spending a ton of money, right, To get some traction. But later on, actually later, a few years afterwards within the company, the revenue, then it's almost 60-40. 60% of our sales were coming from organic, free traffic. Well, I wouldn't say they're entirely free because we do invest time and money creating content for them.
But, only 40% comes from paid. So, to do E-commerce I believe if you have your own store, meaning you're not selling
through Amazon 'cause Amazon already has all the traffic. But let's say you're not selling through Amazon, you have your own E-commerce store. I believe you need to have a very good organic strategy as well as a paid strategy.
Inventory Management And, last lesson I wanna share with you when it comes to E-commerce is, inventory kills. Inventory kills. What would kill you the most is you have way too much inventory of products that you don't sell. Depends on what kinda products you sell, do they expire? Assuming your products don't expire you're gonna sit on a lot of products that don't sell. And, you're sitting in a lot of cash, right? So, you've gotta be very, very careful when it comes to inventory management. Now, before I sold the E-commerce company, we were sitting on millions, millions of dollars worth of inventory. Now, I'm glad I could sell all of that, right. And get all that money back, otherwise if there's any problem, we would have been sitting on a bunch of dead inventory. So, be very, very careful, very mindful when it comes to inventory. I would rather you have fewer products in the beginning. Test it out to see what your customer, your marketplace likes, right, whoever your audience is. See what they like first, before you go crazy and have so many skew, have so many units and products. Oh, I'm gonna buy 1000 of these, 2000 of these because you'll be tempted.
Wow you know, if I order way more, my cost per unit goes way down. But, what you don't think about, you don't consider, factor in is, what if it doesn't sell? Now, you're sitting on thousands of something that it doesn't sell. It becomes a big problem, so inventory kills.
And, this is also why I stress if you're thinking of earning more money, before you go out there and start an E-commerce business.
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