It’s hard to stand out in today’s world – especially considering how easily we are distracted. The seven- and eight figure marks are important milestones for measuring the success of a startup, but they also reveal that many changes need to be made to both processes and strategy to continue to grow and sustain success.
Paul Waddy has first-hand experience of this as an e-commerce expert, coach, investor, and advisor for some of the biggest brands in the country.
Waddy says that despite the economic turmoil and cost of living crisis, ecommerce has benefited from the inflation not only in Australia but also in other parts of the globe, including Europe. So, even though some brands have a troubling outlook, there are still opportunities to scale up. E-commerce has fallen to its pre-pandemic levels, with only 20% of retail. Online storefronts, which are still in their infancy and offer a lot of opportunities for brands to grab a piece of the pie, are still in their infancy. All it takes is finding a new way to innovate, show value, and solve a product problem.
Paul’s Tips for Building an 8 Figure Brand :
Understanding The Numbers
If you cannot tell me what your gross profit margin is, you will not know how much you should spend on marketing. This means that you are not in control of the growth. Online retailers often fail because creative types want great brands, but neglect to realize that they need great businesses. I say that we should be as well-known for our business acumen as we are as a brand.
The 50/30/20 Ecommerce Finance Rule
You should aim for a gross margin of 50%, and spend no more than 30% on running your business. This will result in a net profit of 20%. It is a benchmark that all e-commerce companies, big or small, should aim to achieve. If you find that you have to spend more, then you are probably not getting enough traction for your product. Many businesses, from small start-ups up to those making $50M per year, are operating at 40 percent margins. They hope that the scale will help them fix their numbers. The scale does not fix the margin. I would say to go back and redraw your design until your margin is where you want it.
The Product
As a business owner, it is important to know that you can win or lose the game on the backend. The average order value and repeat purchases are more important than selling a single product. You need to increase repeat purchases if you want to scale up to 8 figures. The best way to achieve this is by expanding your product line and offering cross-sells and upsells.
It’s also important to ensure that your product is trending or in high demand. The best online businesses are driven by great products, followed by well thought-out operations, excellent people, and effective marketing. I advise you to avoid jumping into a product just because you believe will work. Instead, focus on one that you already know will work. My favourite phrase is “Fishing where the fish are”. You should dangle products in front people who are interested, rather than converting cold leads.
Build for Mobile
Why do we still design in desktop view when mobile is so much more popular? According to my data, mobile sessions account for more than 50% (closer 75%) of all sessions. Apps are underused as well. Businesses that have apps convert up to 20% higher than those on desktops or mobiles. Push notifications are also used in apps, which means less marketing costs. Paying with mobile devices is much more convenient. Apple Pay is a great option, and you should focus on it more. Mobile commerce sales in the USA will reach $360 billion by 2021, an increase of 15% over the previous year.
Being Aware Of Trends
To be a successful business owner, you must stay abreast of the latest trends. To be the first, you need to move fast. The faster you can enter new markets, the more you will grow. When you are the first to enter a new market, there are fewer obstacles. You can easily establish a stronghold in a new market without having to worry about the costs of establishing your business in an overcrowded sector.
How to collect the right big data
Knowledge is power. To engage your customers and optimise performance, it is vital to gather data about them. Continue to communicate with your website visitors over time to prove that you are a trustworthy company. It may be your best advertising investment, if you don’t have a strategy to generate referrals from your customers. When designing your strategy and communication, it is important to keep in mind that customers are never as excited as when they visit your website for the first time. Retargeting lets you keep the excitement level high by revealing new information over time.
