Stage 4 Ecommerce Business Fundamentals
Our stage 4 clients come to Clearinity with an insatiable appetite for growth. At this stage, you may feel like you have identified some fundamental working processes, but you still are having trouble with your inventory management. You know fixing this would help make scaling your business possible but don’t know where to begin.
Jason Albanse, CEO of Centric Digital, said, “scalable growth is all about pairing exponential revenue growth with incrementally increasing costs.” In other words, throwing money at solutions right now will not help you scale effortlessly or effectively. Starting with foundational knowledge and using that to guide your business decisions will ultimately help you scale in a balanced way.
Here at Clearinity, we look at the three cornerstones of business; people, processes, and technology. When in balance with each other, you have a foundation for your business that is ready to implement cloud-based technology and will be organically behind to grow.
In this first dimension of the process, we examine the core aspects such as your buying process, your selling process, and your tracking process, to name a few. When considered at this stage of business, you will find that fundamental knowledge is building from basics. We will delve deeper into the core of each of these processes. We look at these processes in this stage more with a critical eye as we identify key talent and systems that are beneficial to our business and, therefore, should focus more on.
By now, we hope you have covered legality guidelines for your business. If not, at this stage, you should be looking at business lawyers and firms to help you sustain and ensure your business is protected well into your enterprise states.
International selling and shipping are possible at this stage. Each country you decide to sell and ship to will have widely varying requirements. It is up to you to understand those requirements and consider if it is worth the cost. It will be your responsibility to absorb the cost of compliance when looking at the countries where you would like to sell. Your marketing costs will rise as each country will have different languages and cultural considerations, so each product page will need to be translated and maintained.
For more in-depth information on the legalities of international selling, we recommend looking to the Internation Trade Administration.
Purchasing your products may have been delegated to another team member. In stage 3, we talk about writing SOPs or standard operating procedures to give your employees expectations and processes from which to work. Standard Operating Procedures help your buying habits stay consistent and provide measurable metrics. What does creating a Standard Operating Procedure entail? SOPs need to have:
Your end goal
A format – steps, flowchart, or hierarchal steps
A stated, assumed audience
Creating SOPs for your staff is critical at this stage as you hire more team members and reassign tasks. SOPs will give clear guidelines to how your processes work and what the expectations are.
Consistency is also what will help you sell more of the products you buy. When you are buying from a proactive place and not a reactive mindset, you increase your sales because you can meet and anticipate demands, thus giving your customers a better buying experience.
In stage 3, your selling methods will come down to your SKU architecture, how you are separating your products, and what that means for the user experience on your website or marketplace platforms.
Your SKU architecture does not only help to track your inventory, but they also allow your customers to find like products more efficiently. If you are in an out-of-stock status out of your control, your customers will be directed to similar products and continue using your brands and products, thus remaining loyal.
In addition to your SKU architecture, using the Bill of Materials or BOMs in your product displays allows customers to see their purchasing components. Creating this visibility enables your consumer to make a smart purchase for their needs. It will enable your warehouse to acknowledge all the parts of the product (if there are multiples). This visibility will not only increase your customer’s user experience, but it also will help with customer satisfaction and service.
Reducing customer complaints allows your salespeople to focus on selling your product to the right people with excellent user experience.
You have done a few inventory counts. You even invested in a cloud-based system for accounting. But none of the data matches, and you’re not sure why. At this point, many of our stage 4 clients begin to look at their storage options as sources of problems. Some even go on to become frustrated with their accounting firms. The dirty truth of the matter is that your accounting is off because operations don’t have a workflow.
Workflow is an organization’s set of processes that need to be accomplished by a set of people or resources, and the interactions between them. When evolved, workflows achieve more goals on time that takes into account consistency, reliability, and safety. You can achieve optimization of these workflows with cloud-based infrastructure.
Inventory management system software allows us to track our inventory and communicate across departments seamlessly. They provide an invisible bridge between all established workflows. They also bring attention to workflows that aren’t working sooner. What should you be looking for in an inventory management system, and how do you make this cost-effective to keep scaling appropriately?
Although these software systems provide proven solutions, they often are built by software development teams with different assumptions on how they approach problems. Being aware of this is essential because each software system offers various features. Ultimately, the software is constructed around only a few main functions. Clearinity understands the structures in which these systems operate. We know the ins, outs, and around. We will gain a solid understanding of your business model and how it runs through the discovery process. This level of understanding allows Clearinity to find the most effective software for your business.
In the event you aren’t ready for Clearinity’s help we suggest asking these questions:
Does it fit your business needs?
Do you have clean data to implement the system to make it successful?
What assumptions was the software built on? Does it cater to one type of functionality over another?
Now more than ever, you are recruiting help and expanding your team. In stage four, you may begin to realize that you need some leadership knowledge. We know the art of managing people is difficult. That’s why at Clearinity, we offer Leadership courses for our clients. Without exceptional leaders, you may see increased absenteeism and decreased productivity. Some fundamentals to great leadership are:
Create a strong vision
Set the direction
Be a teacher
Improve the system
Although these fundamentals sound easy and straightforward, integrating them into your core strengths can be difficult. There are eight types of leadership styles, and each has its unique strengths and weaknesses. Identifying which type of leader you are vs. which kind of leader you would like to allow you to evaluate the things you can change. The eight types of leadership are:
We briefly touched upon inventory management software at the beginning of this article. We talked about how implementing a cloud-based software will bridge departments and allow for easily identifiable processes, but how does implementing technology change your business? And is it worth the hefty price tag?
An IMS system or Inventory Management Software System accurately tracks inventory in real-time from the start to the finish of your customer’s buying cycle. Ultimately, this reduces the need to check your inventory manually and avoid human errors. By implementing technology to this process, you can reduce staff costs and increase productivity time. Although a large task to perform correctly, inventory management software can benefit your business!