When we first learned about the book Ecom Hell: How to Make Money in Ecommerce Without Getting Burned through The eCommerce Group on Facebook, we were curious, but deadlines forced us to move on to other things. But when Brandon Dupsky, one of the e-merchants we most admire, posted a picture of himself reading the book on a sunny beach, we had to see for ourselves what the fuss was about.
The book's author, Shirley Tan, has 20-plus years' experience in retail and e-commerce. In 2004, she founded AmericanBridal.com and then sold the business only five years later to a NASDAQ-listed corporation. She's now a consultant and e-commerce strategist, who is typically brought in when a business isn't performing to its full potential.
In Part 1 of our interview, Tan discusses the uniqueness of her book, some of her own bad experiences as a merchant, the importance of focusing on niche markets, and one of the top reasons e-commerce businesses fail (and how to avoid the same trap). In Part 2, she further explores challenges e-commerce businesses face, "hidden" revenue sources and how to keep your sanity while running an e-commerce business.
Ecom Hell may be a purposely provocative title, but few e-merchants would admit they haven't spent some time there.
Before people invest their life's savings, cash in their 401(k), or quit their 'hated corporate jobs,' I want them to know what they are getting themselves into
Schepp: There are many books now about succeeding as an e-commerce merchant. What's unique about yours?
Tan: There are many good books on e-commerce, and I have read some of them. My book focuses on the real work that begins after the order button has been clicked. Everything leading up to the sale is important and necessary, but at the end of the day, it's what is behind the scenes—like the customer services, shipping out the goods, and taking care of the customer post sale—that is just as important, if not more so. Customers don't complain about how your marketing wasn't that good. They complain heavily when their order wasn't properly handled.
My book includes checklists and tips on what you need to consider to run your business. It's what we don't know that gets us in the end. If there are subjects I touch on briefly, I encourage entrepreneurs to do further research to learn more about specific areas that may affect how they operate their businesses.
Also, if I manage to talk someone out of getting into e-commerce, I consider that to be a success. E-commerce is not a get-rich-quick scheme. There is a lot of work; there will be lots of headaches, and even heartaches. So before people invest their entire life's savings, or cash in their 401(k), or quit their "hated corporate jobs," I want them to know what they are getting themselves into.
Schepp: Based on the provocative title, it would seem you've had some bad experiences yourself.
Tan: I learned the hard way, for sure. I'm no different from most entrepreneurs who usually just dive in and just want to get it done. When we didn't have documented processes, my business really took a hit. It was highly stressful; the employees were on edge. Sometimes with the seemingly easy stuff, where we might say, "Isn't that just common sense," we expected our employees to be mind readers.
We felt they should know what we wanted them to do. But they were not mind readers; they didn't always know what we wanted them to do, so we needed to spell everything out. Checklists are a good way to ensure that things get done in the manner that best serves your customers.
The hardest part for us wasn't marketing, it was the operations. We had a weak backend, and while our store's frontend was sufficient, we needed many third-party tools to make it do what we really needed it to do.
If you sell a product that everyone else sells, then you need to distinguish yourself. One way is to really project your personality and passion for the business
Schepp: In your book you talk a lot about the importance of focusing on a niche market. Please explain why.
Tan: The e-commerce industry is so competitive these days. The only way to get in and do well is to be a specialist. Amazon is almost all things to all people, but just like a department store, they still can't always have stock and/or develop everything themselves. They are trying really hard though the marketplace to let other merchants fill the gaps until they get around to bringing the products in-house.
When everyone is trying to move along the same path, you need to do something different. There has to be a differentiator; a niche category allows your company to be the premier expert in a particular category, while others who dabble in the space are just generalists. Be in a category that perhaps no one wants to be in. If it's a category that requires extra work, extra steps, perhaps that is what's going to capture and win a particular customer segment and build lifetime customers.
Schepp: You also say a "weak unique selling proposition" is one of the top reasons e-commerce businesses fail. What do you mean by that phrase, and how can merchants avoid that?
Tan: The weakness is the "me too" component of e-commerce. If there is nothing unique about the business, then there is nothing unique about the business' relationship to its customers, there is nothing there tying the customer to your company, emotionally. If you still end up selling a commodity product that everyone else sells, then you need to find a different way to distinguish yourself. One way is to really project your personality and passion for the business.
There are many successful companies that did exactly this and are extremely successful. They may not appeal to everyone's taste, but to their core consumer base, their message resonates and it's ingrained in their psyches. Companies like Ranger Up, Nasty Gal and Gun Dog Supply—all these are selling commodity items, but with a twist, and their customers love them and keep buying from them, over and over again.
Stay tuned for Part 2 of this interview, in which author Tan talks more about challenges e-commerce merchants face, "hidden" revenue sources, and remaining sane while running your e-commerce business.