The 3 Phases Of An Ecommerce Business

The 3 Phases Of An Ecommerce Business

When I left IBM and set up my first business, I thought that it was going to be big.

After working for Rolls Royce, Michelin, Siemens and IBM, I figured I knew a lot about business.

I wish I could tell you it was an overnight success.

But it wasn’t.

We said yes to all projects even if it was totally outside our expertise.

Ian (brother) and I were doing print catalogues, bed and breakfast websites, point of sale, SMS whatever anyone wanted.

We didn’t really think about how this would scale, we just wanted to keep growing.

“We Needed To Focus On Something We Were Good At To Remove Some Of The Variability”

But we realised to grow we needed to focus on something we were good at to remove some of the variability.

One week we would be doing a lawyer’s website and the next a website selling farm supplements.

We knew we enjoyed selling products directly online plus that if we grew client’s sales they would keep investing with us.

After growing this agency into a high 7 figure business and helping hundreds of eCommerce businesses grow I’ve come to realise there are three key phases in any business.

Us doing everything for everyone was phase one but many people get stuck there.

“The Difference Between Thriving And Surviving”

What you focus on in each phase is the difference between thriving and surviving.

So, let’s break this down for an ecommerce store

In Phase One you’re just starting out and are getting a few sales a day or week many of the sales are coming locally and from people that know you personally.

It’s just you, your store and your dog.

You talk a lot to these first clients and you bend over backward just to be of service.

Your focus in Phase One should be finding a decent sized group of people who want to buy something but cannot find it online either

  • they cannot find it at all
  • cannot afford it at that price
  • have questions that are not being answered properly meaning they must physically go into a store

And it can be a mixture of the above.

What you are looking for is something you can arbitrage and build a business out of.

Nailing that means you’ve got something to grow.

In Phase Two you are making 30k – 50k a month in revenue with occasional spikes higher and lower.

“You Have Got Something, People Want It And You Deliver It”

You have got something, people want it and you deliver it.

Your customers come from word of mouth and the small amount of advertising you can do.

But you cannot scale your marketing because you quickly hit the point of break even on AdWords, Facebook etc and get buy more traffic.

You don’t understand how the BIG guys can buy such huge amounts of traffic and still make money.

Phase Two is about refining your value proposition, i.e. your offer, conversion rate to open the window to profitable advertising at scale.

If you can buy customers for more than your competitors and still make the same profit you win. It’s that simple.

In Phase Three everything changes.

Consistent 500k + months
Predictable customer recruitment
Predictable marketing systems to increase repeat purchase
Systems to raise average order value

Once you hit phase three and have a consistently high conversion and average order value, never has there been so much opportunity to buy traffic. You are only limited by your gross profit per visitor if that’s more than your cost per click then why would you not scale to the moon and buy all the traffic you can get?

When you’re ready I can help you grow your business watch this training where I show you one of the building blocks for phase 3 a great Google Shopping Campaign and case study here


February 18, 2018

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