Gretta van Riel started her first business at the age of 22 with $24 in her bank account. It was her addiction to tea that led to her experimenting with her own detox tea blends, and ultimately her brand SkinnyMe Tea.
Within six months of creating her Shopify store, she was able to scale it to $600,000/month. No wonder she won Shopify’s Build-a-Business competition, beating tens of thousands of other ecommerce businesses from around the globe.
Later, she co-founded The 5th watches, which saw $100,000 on its launch day, and future product launches bringing in $1 million in sales. She has relied heavily on influencer marketing to scale her businesses, and her Instagram accounts have a combined following of over 16 million.
If you have ever thought about starting your online shop and selling physical products, then you will love today’s article. We’re going to offer a rundown of Gretta’s proven, six-step framework that she teaches in Foundr’s Start and Scale course. Let’s begin with a video where she talks about how to make money with an ecommerce store.
Now, let’s dive deeper into the six simple steps used by thousands of entrepreneurs to launch ecommerce businesses.
Step 1: Find a Trending Product and a Point of Difference
The first thing any ecommerce entrepreneur has to figure out is what products to sell online. For some people, an idea of what to sell is what gets them involved in business in the first place. But if you are struggling with this step, Gretta recommends starting with existing marketplaces.
One great place to start is by browsing Trend Hunter for the niches that interest you. For instance, if you want to sell cosmetics products, there’s more than a few ideas here to consider. Trend Hunter even has this handy two-minute trendspotting guide you can check out for guidance.
Another excellent starting point is scanning products that are getting financial support at Kickstarter. Here are the filters that I used to discover 391 projects.
Scanning through these results just now, I spotted this fashionable dog accessory that’s backed by 23 people pledging £2,538 (exceeding its goal of £2,500). If I were a dog lover, I might use the signature harness by Stick to get inspiration for a similar product, with a pretty good sense that this kind of product has a market.
You can also sort the products by Most Funded/Most Backed to discover more interesting ideas. Here’s a pretty cool coat that’s landed some solid backing.
Let’s say you want to take it further than just spotting trends, and you want to actually listen in on conversations about them. If you want to see what consumers are saying about popular products, check out the subreddits, Shut Up And Take My Money and Find It on Amazon. The first subreddit even tags items with “Creator” when they’re posted by the people who made them, or “1 Of A Kind” to show that they’re not mass produced.
The product idea is just the beginning. Next, you’ll need to come up with a unique value proposition (UVP). This doesn’t mean coming up with a brand new idea or some hot new intellectual property. Instead, start with an existing product, but try to change something and make it unique (and better). Here are four attributes to think about when improving upon an existing product.
Design: If you plan to sell something that’s pretty common, like T-shirts or bags, you can offer a unique design. Even if your product category is a dime a dozen, differentiate yourself by reinventing it with a stunning new look. Don’t underestimate aesthetics! Often, a product that looks simply amazing is all you need to rise above the pack. In fact, this is something that Foundr itself has always embraced as a unique value proposition in the crowded business media market.
One shortcut to unique design is offering to personalize a product. This is super common on platforms like Etsy, where monogramming and customized products are widespread. An example of a brand that used personalization to great success is The Daily Edited, which offers personalized leather phone cases (the brand is worth $30 million).
Functionality: Think about how to make an existing product more valuable than competitors’ by making it more useful or convenient. For example, the brand LoveHandle started with a vision to help “the world with a better way to operate and hold smartphones.” It solved a pain point for selfie lovers who often drop their phones while taking a picture.
Price: Are you targeting the mass market and pricing otherwise expensive products at under $100, like Warby Parker?
Alternatively, do you want to sell high-dollar luxury products for an exclusive audience, like ORO Los Angeles?
With high-end products, create a luxury experience (think of those uber-fancy jewelry boutiques), which can be more difficult to do online. But we are seeing luxury ecommerce sales on the rise as it becomes increasingly common.
Limited Availability: Create scarcity by offering a limited edition model of your product. Gretta built the 5th, her second venture around this UVP. She sold high-end luxury timepieces on the fifth of each month, for only five days. Or you can adapt the flash sale model like Gilt. Indian mobile manufacturer Xiaomi has also successfully used the weekly flash sales model to gain an edge in the Indian smartphone market.
Image source: financialexpress.com
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Step 2: Validate Your Product
Don’t just rush out there and slap your product up on your website or an ecommerce platform, and don’t go falling in love with your idea quite yet. Before you take any next steps, you need to check your product’s financial viability to determine if it can be sold online and shipped worldwide. You also need to make sure there is a market for what you are selling. Will people even like it? Beyond that, to make sure you’ve got a healthy profit margin, ensure that your product is:
- Cheap to produce
- High in perceived value
While there are different ways to survey customers, Gretta likes to go out there and talk to her target audience.
Noah compelled Andrea to call and pitch her dog powder to fellow dog owner friends. And check if these friends would like to buy it. She managed to pre-sell the powder live to a few friends as they happily sent her their discounted offered rate through Paypal.
Another example is Indian marketplace millionaire Pratik Doshi. He validated his idea by manufacturing 500 umbrellas and selling them through friends and family.
What if you don’t have a target audience just yet so you don’t know who to ask to validate your product? Use a tool like Make My Persona. It will ask you a few questions (consisting of seven steps) and give you a semi-fictional representation of your ideal customer.
Finally, you can use this product evaluator tool to review your product’s strengths and weaknesses.
Step 3: Manufacture Your Product Locally. Then, Consider Going Global.
Once you have settled on what you want to sell, don’t start out with a plan for global domination. Manufacturing your product overseas in countries like India and China might sound appealing, as it involves lower upfront costs.
However, directly dealing with international manufacturers involves cultural challenges like language, not to mention the challenge of being geographically distant. Also, you will likely need a high minimum order quantity (MOQ), and there’s an increased risk when working with a business you haven’t worked with in the past.
For example, in China, manufacturers often aren’t great at creating products from scratch. Our ecommerce business expert Gretta learned this the hard way. She put in an order for tea worth $1.3 million with a Chinese manufacturer. She even met the manufacturer multiple times before placing the order.
However, when she received her order, it was rotted and ruined. On top of the total product loss, the mistake cost her company an additional $14,000 to discard the rotten tea. Then, another $80,000 when it got held up in customs.
It makes sense to first create a prototype of your product with a local manufacturer. Once you’re confident you’ve got it nailed, you can consider manufacturing it overseas and scaling your business. You can browse through these four popular online supplier directories to scout manufacturers: Thomas Net, Maker’s Row, MFG, and Kompass.
Note that many suppliers won’t have active online presences and their websites won’t appear on Google’s first page. So you should also seek referrals from friends, family, and colleagues for potential product suppliers. If you still get stuck, then refer to this detailed guide on finding a manufacturer for your product.
Step 4: Create a Store Using Shopify
Gretta van Riel has had a lot of success with Shopify—for her business SkinnyMe Tea, Gretta won the 2013 Shopify Build-a-Business competition. She recommends Shopify as the best solution on the market. Even without technical expertise, you can print the general checklist and reference it through your setup process.
There are plenty of other examples of entrepreneurs killing it on Shopify. Nat Eliason, for example, had launched a tea blog as a case study he could use for his content marketing consultancy. After a few months of work, the Cup & Leaf blog started seeing 100,000 monthly visitors. Then, one fine day in the gym, he had the “screw it, let’s start the tea company” moment. After finding a tea supplier, he set up the skeleton of his store using Shopify.
Why Shopify? Well, for Nat, it made the whole process “extremely easy and painless.”
Another great thing about Shopify is that it’s a great place to add new functionalities to your store. For example, you can add a customer reviews feature using product reviews. You can also set up abandoned cart recovery and specialized pop-ups using apps inside the store.
For instance, Nat used the Cross-Sell app and customized it to his theme.
Step 5: Build an Audience Before You Launch
Launching a new business should never be “me focused,” meaning the world of your product and sales should never be about you and your store—everything must be about your audience’s pain points. For that reason, you don’t want to burst out of the gate and open a shop, with the assumption that this is the most important part of starting your business. Market first, then product.
Gretta also strongly believes in creating a “market-product” fit, as opposed to product-market fit. This means before trying to sell your product, it’s useful to build an audience in your niche. A great place to begin doing this is a social media platform like Instagram. It allows you to gather your tribe at a minimal budget. In the past six years, for example, Gretta has built her combined Instagram following to over 16 million followers across 25 different Instagram accounts.
To give you a few more examples, Emily Weiss started the blog Into The Gloss in 2010. As her blogging became profitable and her audience grew, she took the leap from content to commerce, and in 2014, she launched Glossier. Based on the feedback of her audience, she produced a line of moisturizers and cosmetics.
There’s a huge benefit to building a community through content. They will offer up invaluable information on the products they use. For example, here’s a comment from her guide on skin type at Into The Gloss. There are 92 more such comments on the article.
In 2013, Glossier got a seed funding of $2 million. Soon, it attracted more than $86 million in venture funding, and the company is now entering “phase two.”
The guys at Young Love House also moved from building an audience with content to commerce. The founders, John and Sherry Petersik, have 3,000 DIY and home projects for their audience to explore.
Don’t get me wrong—it’s not essential to create content for years before you launch. It’s possible to use Kickstarter and do a $350,000 launch without paid traffic. Or you might go viral like Dollar Shave Club. You can also rely on pre-launch campaigns using referral marketing and collecting emails on a landing page (we get into this more in the next step).
Step 6: Launch and Scale
In 2012, one fine day, Gretta saw a customer from Tasmania purchase from SkinnyMe Tea and post about it on Instagram. It resulted in $1,000 in sales and the best day the brand had experienced yet. She saw a huge opportunity. Gretta offered to send free tea to Instagram influencers (back then, it meant merely possessing 1,000 followers) that fit her target demographic. Her efforts yielded a staggering 90 to 95% response rate owing to the novelty of influencer strategy and low competition. The technique alone has helped Gretta scale her store to a multimillion-dollar company.
If you have a following on social media, you should try to collect emails from your audience before launching. A simple strategy is incentivizing them with early bird discounts for your products. For launching her second store, The 5TH, Gretta sent 30 sample watches. The unpaid campaign was built on existing relationships with 10 influencers that had over 100,000 followers and 20 influencers that had under 50,000 followers. The result was an email list of 8,000 qualified leads before launch. On the launch day, The 5TH saw $100,000 in sales.
You can also launch a referral campaign like the Harry’s did.
They put up a two-page microsite and launched a one-week, pre-launch campaign. Their founders talked with about 200 fellow entrepreneurs and people interested in their offerings. Before their ecommerce website was live, they were able to collect 100,000 emails.
Once your store is live, what’s next? You have two main options:
1. Sell more to your existing customers: This involves upselling and cross-selling to increase your average order value, or focusing on abandoned cart recovery. Growth Everywhere tested a new widget and offered tiered discounts to their customers thereby increasing their average order value (AOV) by 15.41%.
2. Find new customers: You can keep finding new customers via social media marketing (preferably Instagram), influencer marketing (you can try Gretta’s service agency Hey Influencers), content marketing, growing your email list, and the like. Experiment with various channels and evaluate the cost of acquiring (CPA) a new customer to find out what works for you.
We talk about growing an online business by relying on the above two metrics in more detail here.
Want to Learn How to Start & Grow a Profitable Online Store in 12 Weeks? Sign Up for Our FREE Masterclass!
How to Make Money With an Ecommerce Store
The ecommerce industry is bursting with sales, and expected to double in the next three years alone. Making money with ecommerce might seem daunting. However, using Gretta’s proven framework that I walked you through here, and that we outline in the Foundr course that she leads, has produced numerous success stories. We’ve had students make $270,000 in eight weeks without any prior audience and traffic.
It’s not easy, and will require a lot of hard work, creativity, and trial and error. But with the right guidance and perseverance, the sky’s the limit when it comes to success in ecommerce.
When do you plan to launch your first ecommerce store? And do you have any questions on the six steps of the framework? Let me know in the comments below.