I run an E-commerce store. I bought the business and brand one year ago.
I pack and ship the orders — as well as manage every other aspect of the business, just like the previous owner. It is a small single-person operation.
The bullet points below are a mix of lessons I’ve learned or truths I’ve come to respect so far. None of these tidbits are new information, and many just expose my own ignorance. I like those types of posts the most though. There’s no particular ordering — just the order I thought of them.
- Free shipping is just raising the price of everything by the average shipping cost.
- Inventory management is broad, important and annoying. I have a tiered setup where hot products are in a closer location to me, which reduces how long it takes to pack orders. Relatedly, I appreciate caching much more now.
- Marketing is more complicated than I gave it credit for. I didn’t understand the scientific aspects of marketing before this and I was wrong. I thought it was funny billboards and “correlation doesn’t imply causation” memes.
- Social media is super important. I used to think it was silly. I was wrong about this too.
- Tax accounting and bookkeeping is dreadful. Next March, say cost of goods sold to your mean friend. If they get angry, double-down and ask them if they have an accountant.
- Design is magic. I knew this before, but didn’t fully appreciate how much it matters in nearly every aspect of the world.
- Taking over someone’s business is like inserting yourself into someone else’s family. “Why do you keep calling it ‘supper’?” It shouldn’t feel like this in the ideal scenario, but this leads me to the next point.
- Process. It doesn’t happen. I don’t know what to say here except that time is short. I read the stupid E-myth book. I love getting processes in place, and I wish I got more established business processes from the last owner. I’m trying to make more, but then there’s the next point (this is flowing now).
- Prioritization is the most important thing. The day I took it over, I knew exactly how I was going to improve the business and make it really sing. But instead, I did the things that actually mattered. If I’ve done any of those original ideas, it’s mainly because I am stubborn and not because the time was right.
- Being a generalist for a small business is really hard. In the tech industry, you’re considered a generalist if you know both Apache and Nginx. In real life, nobody knows either of those things. When I think of what I’ve needed to learn to run everything, I can only think of the phrase “I have approximate knowledge of many things”. At work, being a generalist is like being a flashlight in a room of laser pointers. For this, it’s like being a lamp.
- You can pay to not generalize and you can mostly pay away every problem. Every problem I encounter can be fixed with someone’s product as a service. I could pay for it all and focus on what I add the most value to here. Sometimes I think about this, as if I was my own VC investing in myself. The business doesn’t make enough money to take this route. There is a tension here that flows into the next point.
- Risk tolerance is important to recognize. Taking this on has made me realize that I’m actually more risk averse than I thought. Before, I associated a high tolerance of risk with bravery and then assumed I was brave. I still am, I just don’t like losing. Neither side is bad as long as you understand yourself. I use this knowledge to help me embrace safe calls and push myself past scary moves.
- It is as easy as it sounds. I had trouble understanding how exactly most e-commerce stores worked. I learned and knew the information but didn’t believe it. Now I believe it. It is a lot of work but there’s no magic element involved or secret trick needed to start. If I really believed this before, I would have just started my own thing from scratch and saved.
- Trust but verify. I have learned multiple times now that holding people accountable is the best thing you can do, and that it’s not wrong to expect what you’ve been promised. I’m holding myself back here under some variant of the thumper rule.
- People mostly don’t care. Outside of the initial discussion, people mainly don’t care or understand (or care to understand). Long conversations based on “Why don’t you just do X?” after I explain a problem happens more than I expected. I’ve been told that I’ve experienced stansplaining, which is my favorite description so far.
- You get out what you put in. When I work really hard at this, I generally get more sales, and the opposite is true as well. I like this more aspect much more than a salaried job. It’s like business school, but the reward for doing your homework is money.
- I’ve met a lot of people through this. I love this part of it. I love sending a package somewhere and having the recipient be excited and get feedback. I like the weird situations trying to figure out orders and all the bizarre B2B interactions.
- Close friends matter: related to the “people mostly don’t care” point, I am very lucky to have a small group of friends I can share details with and talk to about issues. It’s good to have a place to vent and trust without turning your whole social circle into a small business conference. This is super crucial.
As for my progress so far, the business is doing better than it was one year ago and I finally feel comfortable in this new role. And to be clear, the doublespeak “better than it was one year ago” means “it’s nowhere near where I hoped”.
But there’s a lot more work to do, and so far I’m still excited to do it.
Hi Yin, I completely understand and I had the same issue. I did buy through a broker. I thought it would protect me a little more and make it easier to understand what kinds of proof and documentation I would want to ask for. I’m happy I chose it, but in the future I would press harder for more information. The broker is working more for the seller than the buyer.
For me, I had initially analyzed the business and thought that the weaknesses I saw were skills I had, so I’d be able to improve it cheaply and easily. It was in my price range and I understood the business model and felt comfortable with how it made money. In hindsight, I would have perhaps chosen a business with smaller items to lower the cost of shipping!
Thank you for sharing your lessons and experiences!
I am currently in the process of researching buying ecommerce businesses via a broker and also, researching particular niches if I wanted to start on my own. In short, analysis paralysis :\
If you don’t mind, can you share if you bought this ecommerce business through a broker or directly from the previous owner?
And also, what attracted you to buying that business and brand?