An e-commerce business can be a passive form of income, a full-fledged business or a barebones offshoot of your brick-and-mortar business that you built because you were told you had to start selling online.
It can be unclear what the tipping point is for an e-commerce business. When do you start investing even more of your time and money to make to a more viable, profitable venture? Some signs are obvious. Others are not so clear, or we may interpret them as growing pains, technical difficulties, or other issues that we blame on our own mistakes, rather than a signal that it’s time to expand or improve.
These are the seven signs that your online business is ready to grow, as long as you’re ready to do the same:
You’re selling out all the time
Here’s one of those “obvious” signs: If you sell a product, but are unable to balance your inventory turnover ratio correctly and find yourself constantly out of stock, it’s time to ramp up production, streamline your supply chain, or otherwise find a way to meet the demand for your product. Not only will you miss a sale if someone comes to your site only to find you’re sold out—you might lose them as a customer for good.
You’re getting lots of returns
Here’s a good example of a sign that you might easily misinterpret. If you’re getting a lot of returns (especially on items like clothes) you might think your product is lacking. But according to TIME, “Customers return an estimated 40 percent of what they buy online, mostly because of sizing issues.” Your customers may not be getting all the information they need about a product before they buy.
To combat this, try two things: One is to rewrite your website copy to accurately reflect issues customers might be having with your product. Two is to add a virtual assistant to your page that can help with customer service questions. Virtual assistants can be people who interact with your customers in real time, or a chatbot that handles basic questions and hands off complex issues to you and/or your customer service team when necessary.
Competition is getting fierce
When you entered your space, you may have been a pioneer, a trailblazer, one-of-a-kind. Now, there are lots of similar companies that make your product, and you’ve noticed a downturn in business as customers flock to get cheaper knockoffs of your product, or one with snazzier branding.
The best way to combat this situation? Beef up your own offerings to take back your place as a leader in your space. That might mean increased production, new markets, or an engaging marketing campaign.
Your social media mentions are blowing up
Most startups understand the importance of a social media presence across all of the major platforms: Facebook, Twitter, Instagram, etc. One of the benefits of these platforms is that you can see when people are talking about you, even when they’re not talking at you (by tagging you in the conversations). Using this feedback, good or bad, can help you understand when it might be time to expand.
Using a social listening tool from HootSuite or Brandwatch, among other options, can help you see when people are clamoring for more of your product, complaining about quality issues, or commenting on other variables that are worth looking into. You can also track industry trends and buzzwords to get a jump on what your target market might be interested in purchasing.
You don’t utilize paid traffic at all
If business is going well, but not as well as you’d like, and you don’t spend any money on paid advertising, you might want to explore making this investment. Even a small spend on the right platforms can boost traffic and leads.
Understanding which platforms (Facebook or Instagram, social media or Google Ads) drives the most leads to your website will take experimenting and testing. You might find that targeting a certain market on a certain platform leads to a better conversion rate than a blanket buy across all channels.
You don’t do any email marketing
If you’ve been trying to grow your business, acquire new customers, drum up excitement for a new product, or get people to take advantage of a promotion without success—and don’t use email marketing? When it comes to expansion, email can easily be the low hanging fruit.
Email marketing (typically via a regular newsletter) is incredibly effective, and reportedly earns around $44 per dollar spent.
This ROI is based on a few factors: people like communicating with brands via email; emails are getting better and better at converting mobile users, where shoppers more consistently spent time; and people spend larger amounts, more often, when they receive email marketing materials from a brand.
Shoppers are abandoning your site at checkout
You might notice that people are often abandoning their shopping carts on your site before completing their purchase—and you might chalk that up to the nature of online shopping.
Instead, make converting a point of emphasis for your business to turn these abandoned carts into sales. Send emails about abandoned carts to customers and encourage them to finish their order—and do it quickly, before the lead goes cold. You can also try redesigning your checkout page to make things simpler and to ask less of your customer. Every field they need to fill out is another reason for them to give up.
You soon might find that you’re converting more business, and this increase in sales brings you back to issue number one: You’re selling out!
Expanding your e-commerce startup means changing the way you do business now, which is a challenge. But if you want to grow, you have to change, and that means reexamining your processes, site layout, supply chain, and your advertising and marketing funnels. An expansion might mean tweaking rather than overhauling, and it’ll be easier than you think.