By Ezra Firestone | January 31, 2020
As soon as you start thinking you have nothing left to learn, your business is in trouble.
That’s why I always want to be a student of the game.
So when I spoke at the Shopify Mastermind in Atlanta, GA — surrounded by 100s of super talented marketers — you better believe that as soon as I walked off the stage, I started chatting folks up to find out what’s working for them right now.
In this post, I ask 6 successful brand builders:
“What’s the one thing most ecommerce business owners should know, but don’t?”
Here are their answers.
1. “Know Your Numbers” – Tommie Powers
“What I do know from working with a lot of [business owners] is they don’t know their numbers. They don’t know their LCV which cripples their ability to use paid advertising and really grow and scale their business. If you’re an ecommerce business owner you really need to know the numbers… everything from what it costs to support your product, what it costs, what is the value of a customer [in terms of] what they spend in a lifetime… you really need to know that stuff.”
Money comes up a lot here, because accounting tends to be a skill that most entrepreneurs lack (myself included!). That’s why this year I released a series of blog posts called “Money Talks” that cover some basic money management skills and explain why most entrepreneurs go broke at least once in their career.
If you want to improve how you think about money in your brand, watch Money Talks (Part 2): Investigating My Financial Reports.
2. “Know Your LCV” – Maxwell Finn
“Most ecommerce business owners don’t understand lifetime customer value. Everybody right now is so focused on making as much money as possible on the first sale. They’re losing massive opportunity to scale and make a lot more money, because they need to break even or be profitable to acquire that customer instead of focusing on, ‘Okay, maybe I break even when acquiring the customer, but the lifetime value is 2, 3, 4, 5 times that initial order value.’ And the businesses that understand that are the ones that are killing it right now.”
Your lifetime customer value is one of the most important metrics in your business, and my LCV is why I can compete with billion-dollar brands like Revlon and L’Oreal. Everything I do in my $60+ million store — from my email strategy to how I build my sales funnels — is to increase my LCV.
If you want to learn how I use Facebook ads to increase my lifetime customer value, enroll in my free Shopify course – Facebook Ads for Beginners: Loyalty & Retention.
3. “Know Your Story” – Reese Evans
“Story is a huge thing. You need to be able to share the story behind who you are. And even if you’re not the face of your brand, share a story about why that product is so important in people’s lives.”
The nameless, faceless brands are dying (or they’re only on Amazon). Understanding how to leverage mission, story and purpose to engage an audience is now fundamental to building a scalable brand. Without a story, you’re just another anonymous internet store selling an anonymous product.
If you want to learn how to add mission, story and purpose to your brand, watch this blog video: 3 Ways to Add Purpose to Your Products and Protect Your Brand.
4. “Know Your Margins” – Anton Kraly
“Focus on selling expensive products. You meet a lot of people that are selling these little trinkets, and it’s hard to make money when there’s not that much profit left over at the end of the day. So focus on something where you have a healthy margin but also a big margin because the product is more expensive. That way you can actually invest into ads, a team, web design — everything you actually need if you want a business that’s going to scale over the years.”
While dropshipping is how many retailers get their start, it’s not a sustainable business model. If you want to scale, you need to start developing your own products and putting some energy toward building a brand and expanding your product catalog. I took this strategy straight from fast-growing companies like Dr. Axe and Orginfy who understand that launching new products is one of the most reliable ways to grow your business.
If you want to learn how I launch new products in my 8-figure brand, watch this free training: How to Sell Out Your Next Product Launch.
5. “Know Your Factory” – Charles Ngo
“I think everyone knows you can negotiate to get your costs lower… the problem is if you don’t have a relationship or [the factories] don’t really know you, it’s very hard to negotiate through cultural differences. One hack around this is to work with someone in China who can do the negotiation on your behalf. These guys are called sourcing agents… and they can negotiate to get a cheaper rate much, much lower than you possibly could. And something else they can do is they can actually visit the factory and inspect the product themselves for quality control.”
Relationships are at the core of your business, whether it’s between your customers or the people who support your product. Being transparent about what you sell and how it’s made doesn’t just affect your profit margin, it can be a major differentiator in why your customers choose you over the competition. Just look at one of my favorite ecommerce brands, Everlane, and their model of radical transparency.
If you want to learn how to use content to build customer relationships, watch this free training: How to Build a Real Ecommerce Brand.
6. “Know the Long Game” – Nick Peroni
“The long game. A lot of times these courses (or what we see) give us this flash idea like you can just do something and make a lot of money. But really it’s this long game that you’re setting up that’s creating a lot of the success that you see.”
The metaphor I use a lot is Farming vs. Hunting: In business, you can either be a hunter who tries to spear a pig that will feed your family for a week; or you can be a farmer planting mango trees that provide fruit for generations. Building strong, lasting ecommerce brands take time. If you fall into the trap of short-term thinking you might lose a $100 million idea before you even knew you had it.
If you want to see why the long game matters, watch my interview with Russ Izzo: Russ Izzo’s Journey from Down-and-Out to a $3 Million Day.