Startup Story 2: Afro Drops the Rollercoaster continues! With Luke Carthy
Luke Carthy is a well-known eCommerce CRO and SEO specialist, and now the founder of Afro Drops the new start-up we’ll be following throughout 2021.
An update from Luke
We first met Luke several months back when he talked about how he got into eCommerce.
Being an eCommerce CRO and SEO specialist with a passion for afro hair, launching Afro Drops seemed to him like the best step to take his interests to the next level.
How it has been
Luke says that the past months have been intense, and there are 2 things he hopes listeners will take away from this episode: what not to neglect, and what not to do.
He acknowledges that he specializes in tech stack, but doesn’t specialize in product selection which you need when starting an eCommerce brand.
When he first selected the products to be sold on Afro Drops, he focused on online demand and how many people were searching for these products, and having a profitable margin based on the cost of running a business.
After blindly choosing about a hundred SKUs and putting them on his site, he saw that the sales didn’t exactly come in as he was expecting. And because his strengths were conversion optimization and SEO, he went in and tried to find what was missing.
Not seeing anything significant on that side of things, he realized that the issue must be coming from somewhere else.
Buying in ranges
What Luke says he neglected is the fact that people purchase items in ranges. When he chose his SKUs based on search and demand only, he didn’t pay attention to complementary products.
For example, people buying shampoo might want to buy the matching conditioner and other items from that product line.
It wasn’t clear at first that this was the root cause of the problem, but he proceeded to test it as a theory.
After adding new products to fill range gaps, sales started picking up, average order value increased, as did browsing behavior.
He considers his discovery a real facepalm moment because after spending so much on ads and thinking he was doing the right thing with product selection, he still forgot one of the basics which is the possibility that consumers may want to buy complementary items.
Has the discovery made a difference?
While Luke’s discovery has led to better product selection, it also brought about a new challenge which was stock.
He was able to fill the gaps and cover product ranges, but there were times he wouldn’t have a specific in-demand item for weeks. So while he finally had a solution to the problem he had, he couldn’t execute it well because of stock issues.
Impact on stock and cash flow management
Having more products also meant paying more money for stock and other materials. And since his items were paid for in cash upon delivery, it affected his cash flow.
There was however a benefit to having more products which was increased traffic. With this, he maximized all opportunities in learning more about his customers and focusing on possible tweaks and refinements to make overall customer experience better.
But because they didn’t always get the stocks in a timely manner, he was also able to look at other things like merchandising, pricing and delivery.
Luke shares that success from having a full range of products hasn’t been straightforward but Afro Drops is in a good place and growth has been steady.
Concerns, such as images not loading on the product page, still arise but they are identified before they take hold.
Issues like the time a big link they had in Metro drove traffic to the site but killed it in the process, are being taken as lessons on how to handle scaling.
And then there are the special, emotional reviews from consumers that make everything worthwhile.
For Luke, incremental wins like these are important.
What’s next for Afro Drops
For the next couple of months, it’s all about continued growth and tapping into audiences that are out there.
On the other end, Afro Drops has also started to shed some products to keep their product line lean.
Then, of course, Luke will continue working on experience through effective merchandising, personalized customer journeys, and just taking what Afro Drops currently has and making it better.
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Originally published at https://ecommercemasterplan.com on May 24, 2021.