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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

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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

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