Ecommerce Mistakes | 5 Things I Wish I Knew BEFORE Starting My Online Store

Published on: December 9 2022 by MyWifeQuitHerJob Ecommerce Channel

Ecommerce Mistakes | 5 Things I Wish I Knew BEFORE Starting My Online Store

Ecommerce Mistakes | 5 Things I Wish I Knew BEFORE Starting My Online Store

Ecommerce Mistakes | 5 Things I Wish I Knew BEFORE Starting My Online Store

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00:00:00	00:00:04	in this video you'll learn about five
00:00:02	00:00:06	common mistakes that people make when
00:00:04	00:00:09	starting their first online store in
00:00:06	00:00:10	fact these five mistakes crippled our
00:00:09	00:00:12	business early on and we would have
00:00:10	00:00:14	grown a lot faster had we not made these
00:00:12	00:00:16	errors so take the lessons from this
00:00:14	00:00:18	video don't do what we did and your
00:00:16	00:00:22	ecommerce business will quickly grow to
00:00:18	00:00:22	seven figures and beyond
00:00:26	00:00:30	now it's really tough to go against your
00:00:28	00:00:32	own nature and i full on admitted when
00:00:30	00:00:34	it comes to running a small business i'm
00:00:32	00:00:36	pretty frugal and picky about the way
00:00:34	00:00:38	things are run and where money is spent
00:00:36	00:00:40	so for example you'll often see me
00:00:38	00:00:43	agonizing for days over a business
00:00:40	00:00:45	purchase before pulling the trigger the
00:00:43	00:00:47	agony is even worse if it's a recurring
00:00:45	00:00:48	business expense because i'd rather pay
00:00:47	00:00:51	a single lump sum payment rather than
00:00:48	00:00:53	get nickel and dimed on a monthly basis
00:00:51	00:00:55	now in general frugality and pickiness
00:00:53	00:00:57	are not bad character traits to have as
00:00:55	00:00:59	a small business owner but sometimes
00:00:57	00:01:01	these traits can hold you back so in
00:00:59	00:01:03	this video i'll reveal the embarrassing
00:01:01	00:01:05	small business mistakes that my wife and
00:01:03	00:01:08	i made early on that stunted our growth
00:01:05	00:01:10	back in 2007. now the good news is that
00:01:08	00:01:12	even though we screwed up majorly we
00:01:10	00:01:14	still crack the figure profit mark
00:01:12	00:01:16	within our first year and hit seven
00:01:14	00:01:18	figures several years later alright so
00:01:16	00:01:20	mistake number one we went with the
00:01:18	00:01:21	cheapest vendors and pinched pennies now
00:01:20	00:01:24	there's something about getting a great
00:01:21	00:01:26	price or a bargain that is irresistibly
00:01:24	00:01:27	attractive so early on we tried to
00:01:26	00:01:29	maximize profit by going with the
00:01:27	00:01:31	cheapest chinese vendors that we could
00:01:29	00:01:33	find to purchase our products in bulk
00:01:31	00:01:34	now before you start shaking your head
00:01:33	00:01:37	the vendors that we went with were a
00:01:34	00:01:39	good 30 cheaper than the rest and the
00:01:37	00:01:41	initial samples we were sent appeared to
00:01:39	00:01:43	be good but while the products were
00:01:41	00:01:46	cheap the service was horrible and the
00:01:43	00:01:47	products had a very high defect rate as
00:01:46	00:01:49	a result we had to devote a lot of extra
00:01:47	00:01:51	time and manpower to sort through our
00:01:49	00:01:54	shipments and separate out the sellable
00:01:51	00:01:56	goods from the junk now to give you some
00:01:54	00:01:58	perspective our defect rates for our
00:01:56	00:01:59	initial shipments were on the order of
00:01:58	00:02:01	25
00:01:59	00:02:03	which meant that we were scrapping one
00:02:01	00:02:05	out of every four products and if you
00:02:03	00:02:07	were to do the math we easily squandered
00:02:05	00:02:09	more time and money than we were saving
00:02:07	00:02:11	we also wasted a lot of time and mental
00:02:09	00:02:12	energy complaining to these vendors but
00:02:11	00:02:14	they didn't care about our business and
00:02:12	00:02:16	made no attempts to make things right
00:02:14	00:02:17	now valuable time was spent sorting
00:02:16	00:02:20	product when we could have been
00:02:17	00:02:22	concentrating on business development so
00:02:20	00:02:25	don't fall into the same trap as we did
00:02:22	00:02:26	low prices always come with a catch if
00:02:25	00:02:28	we were to do things all over again
00:02:26	00:02:30	here's what we would have done
00:02:28	00:02:31	ignore the vendors with the cheapest
00:02:30	00:02:34	prices if you're getting a price quote
00:02:31	00:02:35	that seems abnormally low it usually
00:02:34	00:02:38	means that the vendor is cutting corners
00:02:35	00:02:40	somehow there's no such thing as a
00:02:38	00:02:42	ridiculously good deal also consider
00:02:40	00:02:44	hiring an inspection company to go
00:02:42	00:02:46	through the goods at the factory by the
00:02:44	00:02:47	time your shipment reaches the u.s it's
00:02:46	00:02:49	already too late it will be too
00:02:47	00:02:51	expensive to ship your goods back to
00:02:49	00:02:52	china and the vendors are not obligated
00:02:51	00:02:54	to do anything
00:02:52	00:02:56	so put together a quality control
00:02:54	00:02:58	checklist specifying every last detail
00:02:56	00:03:00	about the quality you expect to see in
00:02:58	00:03:02	your products and then attach this to
00:03:00	00:03:05	your po when you place a bulk order
00:03:02	00:03:07	mistake number two we misjudged our true
00:03:05	00:03:10	product costs now early on we didn't do
00:03:07	00:03:11	much competitive analysis nor do we do a
00:03:10	00:03:14	good job of figuring out the true
00:03:11	00:03:16	landing cost of our products as a result
00:03:14	00:03:18	we made many mistakes with our pricing
00:03:16	00:03:20	certain items are priced too low and
00:03:18	00:03:22	other items are priced way over market
00:03:20	00:03:25	value we also didn't do a good job of
00:03:22	00:03:27	correctly calculating our overhead costs
00:03:25	00:03:28	as a result we didn't charge enough for
00:03:27	00:03:30	certain products and we ended up close
00:03:28	00:03:33	to break even or even taking a bit of a
00:03:30	00:03:35	loss on several of our products so here
00:03:33	00:03:37	were the key mistakes that we made first
00:03:35	00:03:39	off we didn't factor in the cost of
00:03:37	00:03:41	import and custom duties in our cost of
00:03:39	00:03:43	good calculations when you get a quote
00:03:41	00:03:46	from a vendor in china the price you are
00:03:43	00:03:47	quoted is not the entire story in
00:03:46	00:03:49	addition to what you pay the vendor you
00:03:47	00:03:51	also have to account for the cost of
00:03:49	00:03:53	shipping to your local port from asia
00:03:51	00:03:54	the cost of customs duties which vary
00:03:53	00:03:56	depending on the type of item you're
00:03:54	00:03:59	selling the cost of hiring a customs
00:03:56	00:04:01	broker the cost of delivering your goods
00:03:59	00:04:02	from the port to your warehouse which
00:04:01	00:04:03	can often cost more than the shipping
00:04:02	00:04:05	itself
00:04:03	00:04:07	all told you should expect to pay up to
00:04:05	00:04:09	30 percent more to have your goods sent
00:04:07	00:04:11	to your home country on top of what
00:04:09	00:04:12	you're paying the vendor in other words
00:04:11	00:04:14	if you source your products for 10 bucks
00:04:12	00:04:17	then expect your true landing cost to be
00:04:14	00:04:19	13 or more depending on volume also
00:04:17	00:04:22	don't be so quick to jump on the free
00:04:19	00:04:23	shipping bandwagon unless you truly
00:04:22	00:04:25	understand how much it costs to ship
00:04:23	00:04:27	your goods to the end customer so you
00:04:25	00:04:28	got two options you can offer free
00:04:27	00:04:30	shipping and rolling the cost of
00:04:28	00:04:32	shipping into your prices however the
00:04:30	00:04:34	disadvantage of increasing prices is
00:04:32	00:04:36	that people will be less inclined to put
00:04:34	00:04:37	your products in their carts the other
00:04:36	00:04:40	alternative is to charge for shipping
00:04:37	00:04:41	and keep your prices low now personally
00:04:40	00:04:43	i prefer this method because there's a
00:04:41	00:04:45	higher likelihood of a customer going
00:04:43	00:04:46	through checkout and once a customer
00:04:45	00:04:49	goes to checkout you at least have their
00:04:46	00:04:50	email address and can often salvage the
00:04:49	00:04:51	sale
00:04:50	00:04:53	now if the customer never ends up
00:04:51	00:04:55	checking out you get nothing
00:04:53	00:04:57	mistake number three we waited way too
00:04:55	00:04:59	long to hire help now we wanted to
00:04:57	00:05:01	maximize our profits and keep all the
00:04:59	00:05:03	money to ourselves so we never hired
00:05:01	00:05:05	anyone to help early on as a result my
00:05:03	00:05:07	wife and i did everything and by
00:05:05	00:05:09	everything i mean even the most menial
00:05:07	00:05:11	of tasks for example my wife and i did
00:05:09	00:05:13	all of our own packing shipping and
00:05:11	00:05:15	ironing of our products for quite a long
00:05:13	00:05:17	time now were these activities utilizing
00:05:15	00:05:19	my bachelor's and master's degree from
00:05:17	00:05:21	stanford to its full potential did i go
00:05:19	00:05:24	through all that schooling just to iron
00:05:21	00:05:26	linens probably not now looking back i
00:05:24	00:05:28	don't think we saved any money at all by
00:05:26	00:05:29	doing these things ourselves by hiring
00:05:28	00:05:32	someone to help out with the easy but
00:05:29	00:05:34	tedious tasks we could have spent our
00:05:32	00:05:35	time on work that only we could do we
00:05:34	00:05:37	could have been building the business
00:05:35	00:05:38	thinking of new ideas and products to
00:05:37	00:05:40	span into
00:05:38	00:05:43	instead we wasted our time going through
00:05:40	00:05:45	product ironing and packaging our goods
00:05:43	00:05:46	now your brain is the most important
00:05:45	00:05:48	part of your business and the sooner you
00:05:46	00:05:50	realize that your time is valuable the
00:05:48	00:05:51	sooner that your store will become
00:05:50	00:05:53	successful
00:05:51	00:05:56	mistake number four we didn't invest in
00:05:53	00:05:57	infrastructure now my wife and i didn't
00:05:56	00:05:59	have too much faith in the business when
00:05:57	00:06:01	we first started so we didn't invest too
00:05:59	00:06:03	much time or money on the proper
00:06:01	00:06:05	infrastructure as a result we didn't
00:06:03	00:06:07	take the time to establish an efficient
00:06:05	00:06:08	flow to pack or deliver our goods to the
00:06:07	00:06:09	end customer
00:06:08	00:06:11	we also didn't purchase necessary
00:06:09	00:06:13	equipment and software that could have
00:06:11	00:06:15	saved us a lot of time when prepping our
00:06:13	00:06:18	products for sale because it required an
00:06:15	00:06:20	upfront investment our main rationale
00:06:18	00:06:21	for thinking this way was that we would
00:06:20	00:06:24	solve our own infrastructure problems on
00:06:21	00:06:26	the fly once business started to pick up
00:06:24	00:06:28	now this was a big mistake once orders
00:06:26	00:06:30	started coming in we found ourselves
00:06:28	00:06:31	scrambling just to keep up we pulled
00:06:30	00:06:33	many long hours and wasted a lot of time
00:06:31	00:06:35	trying to do things manually when we
00:06:33	00:06:37	could have saved a ton of time had we
00:06:35	00:06:39	been prepared for the deluge of orders
00:06:37	00:06:41	now if we were to do everything all over
00:06:39	00:06:43	again here are a few things that we'd
00:06:41	00:06:45	have done the right way sign up for a
00:06:43	00:06:47	shipping service today we use shipping
00:06:45	00:06:48	easy for all of our shipping needs and
00:06:47	00:06:50	it's free for up to 50 packages per
00:06:48	00:06:52	month saves a ton of time
00:06:50	00:06:54	embarrassing fact i used to personally
00:06:52	00:06:56	drop off all my packages at the post
00:06:54	00:06:57	office and every postal worker knew me
00:06:56	00:07:00	by name
00:06:57	00:07:01	get a laser or thermal printer now if
00:07:00	00:07:04	you think that you can print labels on
00:07:01	00:07:06	an inkjet printer forget about it go out
00:07:04	00:07:07	and buy yourself a half decent printer
00:07:06	00:07:10	and some labels
00:07:07	00:07:11	get boxes for free from usps now did you
00:07:10	00:07:13	know that usps will send you free
00:07:11	00:07:15	priority mail boxes directly to your
00:07:13	00:07:16	home so there's no reason not to stok
00:07:15	00:07:18	up
00:07:16	00:07:20	you should also invest in software to
00:07:18	00:07:21	keep traffic expenses today we use a
00:07:20	00:07:23	special app to keep track of all of our
00:07:21	00:07:25	receipts which are automatikally
00:07:23	00:07:27	archived for accounting purposes
00:07:25	00:07:29	have a nice packing station set up
00:07:27	00:07:32	here's another embarrassing fact we used
00:07:29	00:07:34	to pack all of our orders in bed when we
00:07:32	00:07:35	first started out and i vaguely remember
00:07:34	00:07:38	rolling over at night and stabbing
00:07:35	00:07:40	myself with a tape dispenser
00:07:38	00:07:42	okay mistake number five we grossly
00:07:40	00:07:44	misjudged demand now misjudging demand
00:07:42	00:07:46	was really a case of poor preparation on
00:07:44	00:07:48	our part we didn't recognize the
00:07:46	00:07:50	seasonality of our products or the times
00:07:48	00:07:52	a year with the highest demand as a
00:07:50	00:07:54	result we often ran out of stok during
00:07:52	00:07:56	the peak selling season now to
00:07:54	00:07:57	compensate we ended up buying a lot of
00:07:56	00:07:59	product when sales were brisk which
00:07:57	00:08:02	didn't get delivered until sales were
00:07:59	00:08:04	slow and we had a lot of excess product
00:08:02	00:08:05	our poor inventory management probably
00:08:04	00:08:07	cost us tens of thousands of dollars
00:08:05	00:08:09	during our first year of opening
00:08:07	00:08:11	now ideally we should have taken the
00:08:09	00:08:13	time to research the peak seasons for
00:08:11	00:08:15	our category products and stoked up on
00:08:13	00:08:17	the proper items accordingly now today
00:08:15	00:08:19	we know that the holiday season often
00:08:17	00:08:21	results in three to four x our normal
00:08:19	00:08:23	sales volume so we plan accordingly we
00:08:21	00:08:25	also know that when our b2b customers
00:08:23	00:08:27	are likely to order as well so we set
00:08:25	00:08:28	aside inventory just for them
00:08:27	00:08:30	now in general if you have a product
00:08:28	00:08:32	that is selling well then it pays the
00:08:30	00:08:34	stok way more than you think that you
00:08:32	00:08:36	can sell especially during the holidays
00:08:34	00:08:38	otherwise you'll leave lots of money on
00:08:36	00:08:40	the table when you run out of stok if
00:08:38	00:08:42	you have chosen your niche carefully the
00:08:40	00:08:44	upside of having extra inventory grossly
00:08:42	00:08:46	outweighs the downside of not having
00:08:44	00:08:48	enough product for sale
00:08:46	00:08:50	now in the grand scheme of things you
00:08:48	00:08:52	can make a ton of mistakes and still be
00:08:50	00:08:54	successful so don't fret the small stuff
00:08:52	00:08:57	in business and in life common sense
00:08:54	00:08:59	often prevails so if something seems too
00:08:57	00:09:00	good to be true it usually is and the
00:08:59	00:09:03	best business advice that i can possibly
00:09:00	00:09:05	give is to put your best foot forward
00:09:03	00:09:07	try to plan for as many contingencies as
00:09:05	00:09:09	possible and just let things ride
00:09:07	00:09:11	even if things don't go as planned at
00:09:09	00:09:13	least you know that you tried your best
00:09:11	00:09:14	good luck and hopefully this video will
00:09:13	00:09:16	prevent you from making the same
00:09:14	00:09:17	mistakes that we did
00:09:16	00:09:19	hope you enjoyed this video now if you
00:09:17	00:09:21	like what you saw there's actually a lot
00:09:19	00:09:23	more where that came from if you
00:09:21	00:09:24	subscribe to my channel below and if you
00:09:23	00:09:26	are interested in learning how to sell
00:09:24	00:09:28	physical products online then click over
00:09:26	00:09:29	here and take my free six day mini
00:09:28	00:09:31	course where i'll walk you through
00:09:29	00:09:33	everything that you need to know to get
00:09:31	00:09:35	started in e-commerce thanks for
00:09:33	00:09:35	watching