For many ecommerce start-ups, the biggest challenge is finding the balance between being hands-on and knowing when to call in the experts. In the first 1000 days, carefully managing cash flow doesn’t always mean taking the cheapest route available. Brendon Williamson, head of sales and marketing at DPO South Africa shares six pitfalls to avoid when bootstrapping your ecommerce startup.
According to the Online Retail in South Africa 2019 research study by World Wide Worx and Platinum Seed, online retail is now growing at almost twice the pace of traditional retail. For many entrepreneurs, it is now the preferred method to reach their market.
However, these six common mistakes can stand in the way of your future success:
1. If you build it, they will come… Sometimes. Maybe.
At the very outset, be sure you have done adequate research. Answer the questions: Will my offering solve a real problem for my customers? Does anyone actually want it? What is my value proposition?
Not only will this save you a world of pain over time, but having decent market research will help you secure both financing and partners, should you need them. It will also help you position your offering more effectively within your marketplace. Spend time finding out how to meet the demands of you target market, create the right offering, and find ways to add value to your product. A weak business concept is the number one killer of e-commerce start-ups.
2. Not everything has to be unique
The lure of building everything from scratch so it can be entirely yours is a strong one. Don’t fall for it. Unless it absolutely has to be custom-built/designed, don’t waste your precious resources – most of all time – creating things from scratch. Because digital commerce is still so young in South Africa, many folks still don’t fully trust it. What’s more, people like what they know. For this reason, many successful e-commerce sites have a very similar look and feel. This has been done on purpose. If your customer has had a great, safe experience on a large e-commerce site, giving them the same feeling when they are on your site can help get that shopping cart over the line.
From a practical point of view, designing websites and user experiences may not be your speciality, work with a professional. This goes for your shopping carts, your shipping fulfilment, and virtually every other piece of your business. If it’s not your selling point, let somebody who specialises handle it. For example, a payment services provider can make it very easy for you to add new payment methods, rather than integrating each new one yourself.
3. Buy cheap, buy twice
When you are bootstrapping your start-up business every entrepreneur will try and make their capital runway go as far as possible. And this is a good thing. However, they should be wary of over-economising, especially when it comes to choosing e-commerce platforms and ensuring great user experience.
Futureproofing your architecture means your business can quickly and easily scale up, and even operate in other regions, without too much difficulty. It is also good to be wary of some payment gateways that appeal to cash-strapped start-ups by forgoing a set-up fee, only to make their money by charging higher rates on each of your transactions afterwards.
4. Do you really want to DIY?
A common mistake is to believe you can do everything just as well as the professionals. Many entrepreneurs think they will save money on services like photography and product copy, only to find they really don’t have an artistic eye and are not consummate wordsmiths. More than an odd grammatical oopsie, Google has a very complex way of rating sites. Duplication is an absolute no-no and ensuring your website is properly optimised for search engines really does require the oversight of a professional.
5. Don’t be afraid to muck in
The flipside of the same coin is making sure you know each aspect of your business and how it is done. This by no means requires you to do every function full time. But a good manager knows what they can do and when they need help. The only way to find this out is to have a good idea of the job at hand. After all, the very phrase ‘bootstrapping’ speaks to the self-betterment based on your own merit. If you can do a job well, then jump into the fray and do it.
6. No-one to hold up the mirror
Many entrepreneurs make the leap into their own businesses because they are fed up with answering to others. And while being your own boss can be great, there are times when it is a very lonely, very scary job indeed. Managing expansion and growth can make or break a business and an e-commerce business is no different. In these times, you need a supportive, but honest external resource who can help you navigate tough decisions. Finding a good mentor can make all the difference and, apart from checking you on your more rash ideas, they can also make your journey a little less lonely.
With online retail expected to nett R14 billion this year, there is most certainly money to be made. But getting over that first 1000-day hurdle will often depend on who you choose for your partners. Take your time and do your homework.