Selling On The Web: What I’ve Learnt About Websites, Social Media……


Share on LinkedIn

I was first involved in e-commerce over 14 years ago. At the time I was working for a Venture Capitalist / Accelerator who had invested in an online advertising aggregation site. I am sure you can imagine the pitch, “There are millions of small businesses out there and it is impossible to reach all of them but if we created a portal …..”. Anyway it was hugely enjoyable, a massive learning experience and I got to be a part of the whole boom and bust. As an FYI to those who are interested in the true nature of the bust, when we were raising our second round of finance our revenue model predicated a US$400 million annual gross revenue when the site did not even have the ability to take a credit card. Good times 🙂

Fast forward 14 years and I thought I would summarise a couple of recurring points I see time and time again.
1 – It is not easy.
Forget the hype about how you can get an e-commerce website for $1 per day. That is the easy part. However scaling up to a serious business model takes hard work. Anyone can get a website but can you get anyone to come and buy your product.
I have lost count of the times that people say to me that they built a website but are disappointed with the income generated.
2 – Not all traffic is created equally.
Anyone can get traffic. With focus, SEO effort, new content etc your traffic will grow. So what! Do you want a million visitors with 10 buyers or 50 visitors with 15 buyers. If your target market is not coming to the site then who is?
It is critical you focus on building you traffic based on you genuine target audience and not simply the desire to increase your Google rankings.
3 – Google is GOD!
Here is some sobering data:
Search Market Share
That’s right, 2 out of every 3 of your customers, who use search, are coming through one company.
Which brings me to the next piece of data from said company:
So basically even when you spend money advertising with Google, almost half (2*.72=1.44 of the original 3) of your customers are being driven by a search algorithm rather than the advertising.
In summary, it pays to go to the church of Google as almost half your customers who use search as part of their purchasing decision, are coming through this all powerful single entity.
4 – Conversion vs Traffic (Content)
One of the best internal web teams I saw set up was a very large retailer that had separate teams as part of their web strategy.
At this organisation the Traffic Team is responsible for bringing customers to the site.  The Conversion Team is responsible for converting the visitors to sales. The beauty of this model is it means that the teams were highly specialised in their fields and not distracted by metrics outside of their control. For example the Conversion team does not every worry about the number of visits as this was outside their control however the conversion rate of those that visited is a measure that is always top of mind.
I am sure there are countless methods of team set-up’s that exist however I found the simplicity and rifle shot focus of this model particularly interesting.
5 – Cowboys
Every industry has its fair share of cowboys but without any data and only my gut instinct I am certain that the e-commerce industry is home to more cowboys per capita of “specialists” than any other industry. How many companies (I use the term companies loosely here as who knows if the websites purporting to be companies truly are) promise:
  • we promise to get you on page 1 of Google
  • double your income
  • 100% ROI GAURANTEED !!!!!
I am not an expert at sifting out the pros versus the cowboys. I am the first to admit that a number of cowboys have made off with more of my money than the ROI that was promised. Do your best to do reference checks etc. Make sure you read the contract thoroughly. Beware of the cancellation periods of the contract. Make sure you can walk away on your terms.
6 – Experts
Having just written that the industry if full of cowboys, I have had the pleasure of working with genuine experts who do add value to the given e-commerce strategy. If you find a good expert listen, learn and pay….
7 – It’s Expensive
That’s right pay. Yes you can get a website for free. Yes you can buy a domain name for next nothing but the reality is that if you want to scale up to a million dollar e-commerce offering then you will end up spend a considerable amount of money.
The following articles are worth reading for the reality of e-commerce spending
‘How Much Does An E-commerce Website Cost?” – provides a great insight into e-commerce website costs and includes the opening statement,”We cut our teeth on e-commerce design back in 1996 while working on an online store for Footlocker. The project budget was approximately $500,000 and although I’m not involved anymore, the site continues to require upwards of $1,000,000 a year in maintenance and enhancements.
‘E-commerce: I’ve never heard so much bullshit talked about a business model,’ says Razorfish boss”-
“spin and bullshit” – note this is a guy who has built a $5 Billion business.
8 – Investing in social media
Is social media important? Yes. Is it the answer to all your prays to grow revenue? No. A little while ago a wrote an article titled “The Fundamental Problem With Social Media“. As I have written previously on this area I am not going to say much more except reiterate my firm belief that Social Media is a marketing medium like TV, radio, direct mail, pr etc. You would not believe it with all the hype surrounding social  media but it is a medium and as such like all marketing expenses requires an investment to generate revenue.
So those are some very high level findings along my e-commerce learning voyage. Remember you always hear / read about the minority i.e. those few who built Amazon, Facebook, etc etc but you never read about hundreds of thousands (as at August 2013 there were over 700 million websites world wide – source  who have also tried but not been as lucky and or successful. Why? See point 1.

Republished with author's permission from original post.

Craig Padoa
Having been exposed to a multitude of consultancies, spreadsheet jockeys, strategic models and technologies, I subscribe to the quote by Sir Winston Churchill, "However beautiful the strategy, one should occasionally look at the results."


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here