The vital e-commerce step that everyone skips
Fans all the way down from the cheap seats to the front row have been asking Dean and I for a solo episode of Just the Tips for a while now, and finally we’re giving the people what they want. Unfortunately, that does mean that Dean is also here, but we have a great topic we’re diving into this week. Even though both of us have built successful e-commerce businesses, we never actually talk about e-commerce! So today we’re dipping into our personal experience to provide just tips for listeners of Just the Tips.
Entrepreneurs should marry Dean
Dean told me about the e-commerce business he’s been building with his wife. She was working a job that she hated, and so he wrote her a resignation letter and told her she should turn it in the next day. And she did! Then they started building a business online around makeup tutorials, eventually offering products and informational products. And as Dean says, it has taken a while for it to grow, but in the last four or five months it’s really taken off. His story is a great case study for Just the Tips listeners.
Narrow the scope of your market
When Dean and his wife started her business, they just thought their clientele would be women. Women who use makeup. And the business did okay, but it never really took off. And then they decided to look at it and say “Who are we truly serving here? Is it every woman, or is there a slice of the market we could target?” And they discovered that if they changed all of their messaging and marketing to women with skin conditions, they could really hone in on a specific target market. And so that’s what they did eight weeks ago, and it’s really taken off since.
The mechanics of e-commerce
The profit margins on a lot of what you’re going to sell in e-commerce are going to be slim. And so it can be difficult to scale, because you want to do everything yourself in order to not outsource-away those profits. Dean and his wife faced that problem specifically, until fulfillment got to be so much work that it had to be outsourced. And a lot of times when people build e-commerce sites they may build a great front end but not a great back end. And it’s so important to have both in place. You need to be able to get your customer cost down low, so the profit margins are manageable.
Go deeper to figure out what you’re selling
As Dean says, you’re not selling a product, you’re selling a solution. So Dean and his wife aren’t selling makeup brushes, they’re selling confidence. In Dean’s information products, he’s not selling a way to make money, he’s selling financial freedom. That doesn’t mean you tell your customer that, but you need to know your why, so the person you’re selling to feels why they need what you’re selling.
Outline of This Episode
- [4:50] What has Dean been building?
- [8:21] How they lost money early on
- [11:00] Dean segments the market
- [18:08] What is the reticular activating system?
- [21:04] E-Commerce mechanics
- [25:00] How the membership program fits in Dean’s business
- [29:56] The big tip
- [39:30] If you haven’t nailed it, it may not be the product
Music for “Just The Tips” is titled, “Happy Happy Game Show” by Kevin MacLeod (http://incompetech.com) Licensed under Creative Commons: By Attribution 3.0 License
