I had coffee with my friend Denise the other day. She was very excited about her new handmade jewelry line and eager to tell me all about it. She had lots of pictures, too, and wow, everything was beautiful!
Denise thought it would be a good idea to start selling her creations on her website. Uh oh. As soon as I heard that, the early warning system in my head started ringing. Loudly.
Don’t get me wrong; selling things online is fantastic. You reach people all around the world and they can shop with you seven days a week, 24 hours a day, without your needing a physical store or a lot of up-front investment.
But an online store can also create all kinds of problems. Problems that can overwhelm you, take over your life and cost you money, which is the exact opposite of what you’re probably looking for.
The key question to keep in mind is this: “Does it scale?”
In other words, are you building a machine that gets easier to use and more efficient as it grows, or one that gets more complicated to operate, more tiring to maintain and less profitable to own?
Here are three things to consider if you want to make sure that your online business has what it takes when it comes to scalability:
1. Can your products be replicated ?
Denise is a fabulous artist. She can barely walk down the street or sit in a restaurant without someone coming over to compliment her on her creations. But everything she makes is custom and one-of-a-kind, which means that it’s impossible to build a process that streamlines her operation.
Every piece requires its own photo, its own description and its own link to a shopping cart.
On top of that, each time she sells an item it needs to be removed from her site. And quickly, too, before someone else tries to buy it.
2. Can you buy raw materials in bulk and at wholesale prices?
If you sell just a few designs, you can buy the raw materials in bulk quantity and therefore negotiate lower prices with suppliers.
Storage is simpler, too, since you’ll have just a few bins with a lot of similar materials, as opposed to the dozens and dozens that Denise requires in order to make her custom pieces. It’s also more expensive the custom way, since stockpiling a wide variety of raw materials ties up cash.
3. Can you take your hands off the wheel?
Denise has to update her web site in real time to make sure that sold items don’t stay up there. She can’t bring in a lower-skilled helper to prep some of the items because everything is custom made from start to finish. And she can’t create a backlog of completed work (inventory), since no two items are the same.
That means Denise can’t walk away. She can’t take a vacation. She can’t even go to sleep at night for fear that two people will buy the same item while she’s slumbering!
If, on the other hand, Denise standardizes a bit and makes ten copies of a particular item, she then has some breathing room. Whew.
I didn’t want to rain on Denise’s parade too much; I could see how excited she was. But I also know (from personal, grueling experience) that building an un-scalable machine can quickly become more trouble than it’s worth.
So keep these three items in mind before you charge forward with a plan to sell products online!