F**k E-commerce. Why I won’t design or develop another e-commerce store
I took a free trial of Amazon Prime last summer to watch the Man In The High Castle.
I continued the trial after 30 days and thought “£7.99 a month; cool”.
Without even realising it, I was eligible for free next day Amazon delivery.
Not a big deal I thought.
At the same time, I had a client selling online complaining why they weren’t selling much.
He sold a winter product and it was summer.
He was charging £50 to deliver to customers 20 miles away.
Amazon offer free delivery.
And hespent no money on any form of marketing.
A referral from a prospect cancelled a meeting
A client in London refers me business from time to time.
Most referrals become customers.
So I got fairly excited.
We jumped on Skype.
They told me their business situation.
They told me the top 3 problems they wanted to solve.
They told me they had budget.
So I suggested they pay for a consulting and discovery session.
They agreed and we agreed a fee.
I booked my flight to London.
Then the day before we were due to meet, they cancelled.
Who ever cancels a meeting the day before when they know someone is flying in?
They had to do a stock check.
I got my flight cost refund.
But that was last straw in e-commerce for me.
But I guess over time other issues had been bubbling away.
I picked the wrong e-commerce platform 10 years ago — today Shopify and Magento rule.
When Shopify first started I was doing business development and account management for an e-commerce agency.
We were pitching and selling 50k to 100k e-commerce stores.
We received a lot of enquiries from clients who didn’t have that kind of budget.
So I suggested to the business owner; use Shopify, put small clients on it; one day design, one day development; will pay for someone’s monthly wage.
He didn’t buy my pitch.
And so my marriage with Shopify never happened.
I went down the Business Catalyst route instead.
Great for the first 4 years.
Then Adobe bought it.
Today, in 2017, they struggle to compete with the attention and functionality Shopify has.
My son and I were shopping in Perth and went into a skateboard clothing shop.
The owner had a laptop, Shopify epos system and an online store.
I said I’d buy my son a jacket if he showed me the front and back end.
He did this all himself.
“Man; I’m f**ked in e-commerce”, I thought to myself.
So I set up an e-commerce site for myself with Shopify.
I bought a cool design template for 50 bucks.
I added my Stripe account.
I merchandised the products with images and descriptions.
Shopify has the following features built in by default.
- Abandoned orders
- Take card details manually in the admin section
- Have an online store and Facebook store.
- Customising the basket to checkout process.
- Better discount codes
- Better gift voucher management
- Easier to add and edit products
- Thousands of apps to bolt on if required
In Business Catalyst you have to spend development time and hours creating these.
In addition, Shopify sell an ePOS till for small shop retailers that connects with their online shop.
I once spent 3 months liaising with a retailer’s epos system provider and my web developers trying to connect till, stock levels and online store together.
Most e-commerce owners think they can do it themselves
Like I said previously, the retailer in Perth set things up himself.
He does NOT need a completely bespoke design.
- Buy a proven design template
- Upload to Shopify
- Add logo
- Add products and photos
- Add delivery options
- Add Stripe and PayPal
He does not really need me.
And if he does need me it’s not for design or development.
It’s fixing small issues or marketing.
Most e-commerce owners are start ups with little money
So that takes me onto marketing.
I had a client with 4 retail stores.
The rent and rates they pay is their marketing budget.
Someone starting out online gets distracted running a real store and their online store.
Guaranteed, they prioritise the real store.
Most retailers don’t spend money on marketing; their money is tied up in renting rental space.
Let’s say I do get a retailer to spend money on marketing with me.
Say I charge a 15% fee on top of their monthly ad spend.
That dude needs to be spending £30,000 a month in online advertising for it to be worth my while.
Anyone spending that amount has an in house marketer or a media buyer.
Search engine competition
Any one with keyword research experience will tell you that most fashion search terms are highly competitive.
And most new to e-commerce are generally selling fashion related product.
Trying to rank a new fashion site on Google to get enough traffic with near to zero budget is almost impossible.
That’s why fashion brands invested in PR.
In 8 years I’ve got involved with about 2 really unique products.
But they were mad inventors.
Amazon offer free same and next day delivery
I was out drinking with mates on December 30th.
At around 8pm I was texting my son from the pub and ended up asking him if he wanted a vinyl album from Amazon.
I (drunk) purchased the vinyl LP (Led Zep III) around 8pm on a Friday night.
Saturday afternoon it was delivered to my son.
What small business can compete on Amazon pricing and delivery?
Fashion E-commerce owners are into social media not SEO
I think because it’s so hard to rank in Google for fashion companies, they resort to social media.
I just can’t be arsed with the kind of social media fashion people do.
To me it’s fake and not authentic.
If you’ve established a fashion brand over the years, then fine I can see how social media would help.
But time investment versus return in social media for e-commerce companies; no I just can’t see it.
So I think when I’m personally at odds with fashion marketing’s authenticity, it’s my business problem and not theirs.
They have fashion sense and less business sense
Generally speaking those in fashion or starting e-commerce don’t have the business sense of the people and circles I work in.
And I’m getting too old to educate someone.
I’ve a 15 year old son that understands margins and markups and the differences better than most.
I don’t want to have conversation with someone telling me this is one pixel out or asking for a image to be edited again in Photoshop because of a shadow issue.
E-commerce ROI takes longer
Let’s do some maths.
The last e-commerce prospect to approach me had an average order value of £40.
They told me they had big issues with their basket to checkout process.
You ever worked with a developer to customise Magento’s basket to checkout process?
A good shop will convert 2% of traffic to buyers.
To make the average monthly salary from an online shop, say £3000 gross profit a month.
The online store need about 11,250 visits a month.
£3k gross profit
£40 average order value
To get to that level of traffic organically takes months and years.
To pay Google for that traffic will burn a hole in your credit card.
V A f**king T (VAT and Tax in UK and EU)
Even the accountants don’t know what the f**k is going on.
Think about the variables.
Different VAT levels for different types of products.
Some merchants are VAT registered.
Some business are under the VAT threshold.
Then you have physical goods and digital goods.
Different VAT rates apply.
You have the traditional selling business to consumer.
You have the VAT included within the product price.
But if you sell from UK to a USA customers, they don’t want to be charged VAT.
Then you have selling business to business.
If you sell from UK to an EU business and they have a VAT number then your store needs to knock off the VAT.
If you sell from UK to another UK business you should add the VAT to the price.
Then there’s digital goods.
In the UK, the place of taxation will be determined by the location of the consumer.
I could be sitting in a hotel room in Germany and add a product to my cart.
Next day I could drive across the border to Switzerland, get on my laptop to buy the product in my basket and be charged a higher price because I’ve moved my location to a non EU country.
So what’s the alternative to designing, developing and selling e-commerce websites ?
Service businesses that sell their services for over £1000.
If you are a web designer or developer and this story resonates with you, I have a free 6 part course to charging more.