IN THIS CHAPTER

Using apps to your best advantage

Managing your expectations and planning ahead

Getting your stock levels right

Going live!

In any business, it’s important to go into it with your eyes wide open. Just because things may start slow, it doesn’t mean they’ll always be slow. I can’t tell you the number of businesses that I have worked with that started from the humblest of beginnings, sometimes losing money, to eventually become household names turning over tens, if not hundreds, of millions of dollars.

In this, my final chapter, I talk about managing your expectations and preparing to go live with your online store. I remind you of some important checks you need to make so you’re sure you’ve covered all your bases. I also show you how to push the button and make your store live, setting it off into the wilderness that is cyberspace.

Failing to plan is planning to fail!

Pop Quiz: Are You Sure You’re Ready?

Take the time to make sure you’re as comfortable as you can be with all the topics in this book. After all, it’s your hard-earned money, sweat and sometimes tears that are at stake here — and so often, the difference between succeeding or not is down to the planning and research you commit to the project, which can be even more important than choosing the right product(s).

So, here’s a little quiz to see if you’re ready:

1. What does AOV stand for, what does it measure and where can you check it?
2. What does CVR stand for, what does it measure and where can you check it?
3. How can you measure if your customers are being provided with a great customer experience?
4. Can you accurately sum up the problem that your online store’s products are solving for a customer?
5. If you’re running ads on Facebook and Instagram, what do ROAS and CPO stand for?

Answers:

1. Average order value (AOV) is your total sales for a given period of time (such as one day, one week or one month) divided by the total number of orders in the same period. It measures how much on average a customer spends with your store per order. You can check your AOV at any time in your Shopify admin by going to Analytics, then Dashboards.
2. Conversion rate (CVR) is the number of orders your online store receives during a certain time period, divided by the number of visits your store receives during the same period, expressed as a percentage. If you don’t know your conversion rate, it’s almost impossible to succeed, as you won’t know how effective your marketing channels are. There’s no rule around what the right conversion rate is — it differs by industry and product, but a conversion rate of less than 2 per cent is on the low side. You should be careful not to throw too much money into traffic that doesn’t convert — you’re likely to incur a loss. You can check your CVR by going to your Shopify admin → Analytics → Dashboards.
3. Surveys certainly help. There are many ways to survey customers, but the NPS (Net Promoter Score) is regarded as a universal benchmark of overall customer experience as it factors in the entire customer journey. Check in the Shopify App Store for tools to monitor your NPS. Turn to Chapter 7 for more on measuring customer experience.
4. Honestly, there’s no real answer here! If you think you’re able to sum up the problem your products are solving, and your products give you that ‘aha!’ moment where you know you’ve nailed it, you’re on the right track. Pitch your product idea to family and friends, and ask them to honestly critique it. A good product is more than half the battle in ecommerce. Find your product niche, invest in it, and nail it.
5. ROAS stands for Return on Ad Spend, and CPO stands for Cost Per Order. The ROAS measures the sales you’ve made versus the amount spent on the ad. The CPO tells you the dollar amount you’ve paid to get each order. CPO and ROAS are both important metrics to understand before spending any money on ads (Chapter 16 looks at these metrics and ad spend in more detail).

The Price Must Be Right!

Check, double check and triple check the pricing you’ve decided on for your products.

As a rule, if you’re sourcing products directly from a manufacturer or creating your own brand (as opposed to buying from brands and re-selling) then you should be aiming for 70 per cent profit margin on the product — sometimes called the mark-up. This allows you enough wiggle room for marketing, wages, promotional activities and any other costs of running your business.

The profit (or product) margin, or mark-up, is the profit you make before any costs of sales are considered, factoring in only the cost price of your product and the sales price you are selling at. Your gross margin factors in your cost of sales (such as shipping costs and merchant fees), not just the product costs.

If you’re buying and reselling the products of established brands, a gross profit margin of 45–50 per cent can work, but remember that the lower your gross margin, the less you can spend on your operating expenses, including marketing expenditure, so the rule may change to 40 per cent gross margin, where 20 per cent covers operating expenses, leaving a 20 per cent net profit.

If you’re still unsure about how to price your products or check your margin, I suggest re-reading Chapter 14, as you won’t be able to make good decisions on where to spend your money without understanding the profit that each product generates.

After you go live, you can check your profit margin in the Profit by Product report (refer to Chapter 11 for more on this). If you see anything with too low a profit, consider increasing the price or removing it from your product range after it sells out.

Manage Your Expectations

Humans are curious things, online shoppers even more so. The average customer browses a website multiple times before eventually deciding to purchase. It’s totally reasonable to expect that a customer won’t make a purchase on their first day visiting your online store, and so your first day can be very slow.

So, before you panic and decide to pack it in, remember that it’s important to manage your expectations. In your business plan, you may assume that you’ll have very little organic (free) traffic at first, as you’ll have no word of mouth and no SEO traction — both of these things take time to generate.

Imagine you’re aiming for a conversion rate of 1.5 per cent (which is on the low side, but it’s always best to budget cautiously). If you’re relying heavily on paid media at first, you may be paying $1 to generate each click through to your website (an estimate, but probably not too far off the money). If you spent $1,000 for the week on a combination of Facebook Ads and Google Ads, your efforts may have driven 1,000 visitors to your website — add in another 200 ‘free’ visitors from your email database and your social media pages, and you have a total of 1,200 visitors. If these visitors convert at 1.5 per cent, you calculate your order number as follows:

1,200 × 1.5 = 18 orders

If your AOV (average order value) is $100, that’s $1,800 in sales! However, if you subtract tax at 10 per cent you’re left with $1,620, and if you subtract the cost of goods sold (COGS) for your products, assuming a product margin of 65 per cent (65 per cent of $1,620 is $1,053, which gives you a COGS figure of $567), you’re left with $1,053 in net sales — a profit! But profit or not, it’s not enough to pay your wages, your rent or yourself!

This example highlights three important points:

1. Don’t depend heavily on paid media. You want a product than generates buzz and gets people talking; that way, you’re likely to get more free traffic and generate revenue from organic sources. If you’re targeting a product that’s not unique, or that other big retailers are selling, it’s going to be harder to get that organic traffic, and more expensive to try and outrank bigger businesses on keywords in your search engine marketing.

   Paying for more traffic to a low-converting website is a recipe for losing money. Scale your marketing spend up when your conversion rate rises to a profitable level.

2. Be patient. Amazon took ten years to turn a profit; you can get there much faster if you’re clever. In my experience, you can generate a good income within a year if you do things properly. Plenty of my clients have started a small business and turned it into a fully fledged, successful online store within their first 12 months.

3. Be prepared. Make sure your business plan tells you how much money you need to breathe life into your new venture, and try and avoid going into your new business half-baked. Planning is the key!

   I recommend holding three months’ worth of your forecasted operating expenses in ready cash — if your business model predicts a cash burn (the amount of money a business spends and loses until it becomes profitable — because new businesses often initially spend money to penetrate a market before they become profitable), then you’ll be comfortable that you have the cash to weather the storm. For example, if your forecast requires your business to spend $10,000 per month for three months, then always hold $30,000 in the bank. This takes the pressure off when sales are slow to begin with.

Be prepared to play the long game — one year at least. If you’re prepared to go for a year with minimal expectations, I feel confident that if you follow the guiding principles of the book, you can make it a roaring success.

You Can’t Be All Things to All People

You don’t need to sell every product in the world, and you don’t need to compete with every Tom, Dick or Bezos in the world to sell a product. Do your research, find a product and look out for the ‘aha!’ moment that suggests your product is a good one.

Don’t be afraid to pivot. If your product isn’t working, there’s no point in throwing good money after bad; your job is to keep on top of product trends and constantly try to match supply to demand.

The same applies when you’re finding an audience to sell to. Who you want your customer to be, and who they really are, can be two very different things.

You’re not selling to an identical twin version of yourself, so research the heck out of your customer, find out what motivates them, and show them the products that they want to buy, not the products you wish they would buy. When you strip back ecommerce to its roots, it’s simply providing products and services to people who need or want them. The chapters in Part 3 provide guidance on getting to know your customer and making their shopping experience a positive one.

Also, know your own strengths and weaknesses. You can’t be good at everything, so use the Shopify Experts marketplace when you need to. Being thrifty has merit, but not at the expense of quality.

There’s an App for That!

The Shopify App Store is your friend, so make sure you use it. When I started out in ecommerce all those years ago, unless you were a developer, the features that apps can now bring you were unheard of!

Browsing the Shopify App Store, or asking other Shopify merchants what good new apps they’ve seen, is one of my favorite things to do in Shopify. I find something new every time!

In Chapter 18 I share my top ten favorite Shopify apps. See if any of these apps can help you along your ecommerce journey.

Believe the Hype (Phase)

At least a month before you launch your store, you should be launching a ‘hype phase’, which is when you start building momentum so that when your store eventually goes live, you have as much organic traction as possible.

A hype phase can include drip-feeding content across your socials, collecting as many email addresses as possible, and simply spreading the word through friends, family and anyone who will listen.

It always surprises me when someone opens an online store and doesn’t shout it from the rooftops. You need to do that!

Chapters 15, 16 and 17 take you through marketing your store so you can build a buzz around your products.

Not Too Heavy, Not Too Light: Getting Ordering Just Right

Getting your product mix and inventory levels right can be the difference between a raging success and a fizzling failure. Before you go live, take a look at your product mix alongside that of your nearest competitor. If your competitor is selling something similar but has ten, 20 or 30 times the range size, you’re going to find it very difficult to take a customer away from them — which is essentially what you’re trying to do.

The fewer products you have in your product range, the less likely you are to make a sale due to the lack of options. The way to combat this is to invest properly in inventory and make sure you’re holding just as much variety as your genuine competitors. I’m not talking about department stores with millions of visits each day, but medium-sized competitors who you know your target market shops with, and who you know to be successful — or at least popular.

Don’t skimp on product — going into a new online business with three varieties of socks, T-shirts or backpacks is unlikely to be a life-changer for you, so get busy sourcing products!

On the inventory front, don’t bend to the whim of pushy suppliers. Order what is right for you and try not to be tempted into reaching supplier MOQs (minimum order quantities) that you know aren’t possible.

If you’re selling apparel, make sure you know what sizes or variants are most popular. If you sell out of your bestselling sizes but have too much of the other sizes, the chances are you won’t have enough money generated from profits to repeat an order of the best sizes only, which puts a huge strain on your cash resources. What’s the point of reordering your best sizes if all your profits are tied up in the less popular sizes on your shelves?

Chapter 11 tackles inventory in more detail.

Shopify Reports to Watch

One of the great assets that Shopify provides its sellers is its suite of reporting and analytics tools that can be found in the Shopify admin (go to Analytics → Reports).

Here are my top three reports to keep an eye on:

• Sales: Who doesn’t love a Sales report? Shopify has a range of out-of-the-box sales reports sitting under the Sales menu of the Reports section. This is a great place for your bookkeeper to come and do their end-of-month financials, or to simply check how sales are progressing from month to month, week to week, or day to day.

  For extra insight on sales, click into the Sales Over Time report.

• Profit by Product: Given I’ve gone on and on about protecting your profit margin, it seems only fitting to include this profit margin report in my top three! Use this report to ensure your profit margins remain on track.

  The Profit by Product report relies on you having input your cost prices when you created products. It then calculates your profit margin, so that you can check if your actual profit margin is the same as what you had planned. I cover this report in detail in Chapter 11.

• ABC Analysis by Product: I’m a big believer in analyzing inventory as a means to grow your business. Knowing your ABC inventory status is imperative for determining whether or not your buying and replenishment is satisfactory.

  The ABC Analysis by Product report gives your inventory a grade based on the sales that those products drive. I cover this report in detail in Chapter 11.

Last-Minute Checks Before You Go Live

As you round the final bend, ready to launch your Shopify store into cyberspace, give your store a last-minute once-over.

Here’s a checklist to tick off:

• Have you connected your domain to your Shopify store? If not, turn to Chapter 2.
• Have you registered all your social media accounts, including Facebook, Instagram, Twitter, TikTok, Snapchat and Pinterest? If not, turn to Chapter 17.
• Have you got a plan to beef up your product reviews? A lonely looking product page with zero reviews is having the opposite of the desired result. Ask your family and friends to try your products, and then, if they’re happy to, leave you reviews when you go live, detailing their genuine experience and thoughts on your product. Part 3 is all about the customer, and Chapter 8 dives deeper into reviews.

• Have you placed a test order? Go through your website and place a test order or three. Ask your friends to do the same, with a fresh set of eyes, and look out for anything that doesn’t work as it should. It’s better to fix these things before you send traffic to your online store.

  To place a test order, enable test mode by following the below steps:

  1. From your Shopify admin, go to Settings → Payments.
  2. In the Shopify Payments section, click on Edit.
  3. Check Use Test Mode.
  4. Click on Save.

  After you place your test order, turn off test mode following the same instructions.

• Within two clicks from your homepage, can you locate the following pages?

  • About Us
  • Shipping Info
  • Returns Policy
  • All your product categories

  If not, turn to chapters 4 and 5 and adjust your menus.

• Are your product descriptions optimized for SEO and addressing the problem your product solves for a potential customer? It’s important to get the basics right from the start, and the quality of your product descriptions are a key influence on your customer’s decision-making progress. If you haven’t nailed your product descriptions, turn to chapters 5 and 16.

• Have you set an intended target for any paid ads you may be doing, such as Facebook Ads? How will you measure the success of your campaigns after the first week?

  How much a business can spend on things like paid media goes back to its business’s marketing plan, and how to measure the impact of your marketing channels is an essential part of knowing whether or not your marketing is working. If you’re not sure how to measure the impact of your marketing campaigns, turn to Part 5.

• Have you got live chat turned on? Live chat is a great, cheap way to see what your early visitors think of you.

  As an ecommerce business owner, never stop asking questions of your customers and getting to know them better. If you haven’t turned on live chat, turn to Chapter 7.

• Have you familiarized yourself with Shopify’s Help Centre pages and support? They’re full of useful information and tips.

• Have you managed your own expectations? Launching your Shopify store is an incredibly fun and fulfilling experience, so enjoy it and don’t let a few slow days get you down. Many of the best businesses I work with had zero sale days for weeks at the start.

  Expecting high sales from day one almost never happens — it’s usually a slow and steady build.

Ready, Set, Go: Time to Go Live!

If you’ve tested, prodded and poked your Shopify store, and then tested it some more, and you’re confident that it’s ready to go live, then it’s time to remove the password from your online store, which then publishes your store to real visitors.

The password you need to remove here is not the same password that you use to login to Shopify; instead, it’s the password that you have the option to set up to keep your site private until you’re ready to launch. Pre-launch, nobody can see your website unless they have the password — which is useful when you’re in the designing and building phase. Refer to Chapter 2 for how to set up this password.

To remove the password from your store, follow these steps:

1. From your Shopify admin, go to Online Store → Preferences.

   The Preferences page appears.

2. In the Password Protection section, uncheck the Enable Password option.
3. Click on Save.

Congratulations, you’re now a Shopify merchant!

It takes time to be the next Jeff Bezos, so don’t be too hard on yourself. A successful online retailer is a patient person, so enjoy the ride and don’t forget to tell me how you go! I get a real thrill from seeing people succeed on Shopify, so I’d love to hear about your online stores when they go live.

Until then, crawl till you can walk, walk till you can jog, and jog till you can sprint. However fast or slow you go, keep moving forward because will always beats skill.