E-Commerce Lessons From A Lemonade Stand

Remember your first entrepreneurial effort? Maybe it really was a lemonade stand, or a Kool-Aid sales operation, or Girl Scout cookies, or a magnificent (in memory at least) theatrical performance in the basement at home for which you charged admission.

I got to thinking about that recently in the context of my little (read micro) eBay orchid business and I concluded that some of the lessons I learned way back then are still good guiding principles today. At least they seem to be working for us, because our online sales keep growing.

The context has changed because the Internet is a more impersonal medium, but let’s face it, your customers are people and they want to be treated right.

So with that as preamble, here is a list of Lemonade Stand Lessons, updated for the modern age.

  1. Be nice to people: That sounds deceptively simple, but it’s easy to let your irritations show, whether in an e-mail or on the phone, especially if you’re working on Hour 14 of a 16-hour day. Be nice to your partner(s). Be nice to your employees. Be nice to your suppliers. Cultivate relationships with customers and suppliers. Nobody ever sold much of anything with a frown on their face — and believe it or not, your attitude can come across in your e-mails.
  2. Answer your e-mails: And answer them promptly. One of the things that we are doing in our eBay operation is to answer each e-mail personally and in a timely fashion. Many businesses can’t take the time or just won’t respond to e-mail inquiries; many others use canned auto responders that often miss the mark. One of the things that we do is to tell each of our customers via e-mail when their purchase goes in the mail. That simple courtesy helps to get us some rave reviews. We know that it will be hard to keep that up as we grow, but we plan to work hard at staying helpful and friendly.
  3. Sell the sizzle, not the steak: Whether you have an eBay store or an Internet storefront, you should put some thought into your item descriptions. It will pay you back in the long run. One of our best sellers online is an orchid called “The Barefoot Mailman,” and our description on this item starts out: “We think the name alone is worth five bucks.” It shows we have a sense of humor, that we have put some effort into making the descriptions appealing. Of course, it goes on to include some technical information about the plant, too.
  4. Take some time to get good quality pictures: Your customers can’t touch the goods online, so make sure the pictures they see are well focused, clear, without a lot of background clutter. Don’t use handout pictures from manufacturers — take your own. So many pictures I see online, especially on eBay, are just awful. You don’t need to spend a fortune on a digital camera, either. We found out that a standard 2.0 megapixel camera takes great pictures of our flowers, and we didn’t need to buy the latest and greatest model.
  5. Think about your margins: As a start-up micro entrepreneur, it’s easy to get carried away by cash flow. Especially when your customers are paying for shipping (it can appear to inflate revenues), it’s not hard to get a mind-set that has you thinking you’re making more money than you are. That can happen off-line, too. We have done more than one real-world sales event at which we thought we were making a killing, only to find that by the time we added in travel expenses, cost of goods sold, show entry fees, etc, we had worked hard all weekend and basically broke even. Unless you are Amazon.com, I think one of the secrets to profitability for small operators is to keep your margins up. The more pure profit per sale, obviously, the better off you are. Make sure you’re not just churning money.
  6. Track your sales weekly: Okay, I admit that I was pretty stupid about this, but I don’t have great online sales records from day one. That’s because when I started our online effort, it was very much as an adjunct to the main, real-world business. Now that it has grown up a bit I wish I had better records from the early months, because I’d love to be able to show my banker a steady pattern of e-commerce sales growth.
  7. Focus on what you know: It’s easy to get too spread out, to stray from your primary focus. And that goes double on eBay, where it’s so easy to get the auction fever and persuade yourself that you can sell anything. Yet you will sell best what you know the most about. I once thought about selling laptops on line, but quickly realized that there is more to success than buying low and selling high. I know some things about orchids. I know next to nothing about the used laptop market.
  8. Ignore the competition — sometimes: You likely will be tempted to spend a lot of time checking out the prices and deals being offered by the competition, and then spending even more time trying to devise your own pricing strategy. My advice is to keep an eye on the competition, but don’t obsess about it. If you develop a reputation for quality merchandise and great service at fair prices, it will pay off in the end. That’s why I have been a Lands End shopper for so many years.
  9. Take money the old fashioned way: Yes, I mean checks and money orders. It’s easy enough to tell yourself that in this day and age, everyone ought to pay for everything electronically. But if you opt not to take more conventional methods of payment, you’ll be losing business from customers who are less than comfortable with putting a lot of sensitive financial information such as credit card numbers out on the Internet. I’ve been amazed at how many money orders we get — perhaps some folks don’t want to let their spouses know what they are buying, I don’t know. But we have increased our revenues a bit by accepting more old-fashioned methods of payment.
  10. Offer a guarantee — and mean it: Our policy is “no unhappy customers.” We strive to make everyone a satisfied customer, even if we have to refund a purchase. Repeat customers are one of the keys to e-commerce success. And by going out of our way to make potentially unhappy customers happy, it really has cost us very little. Often you can do it not by giving someone a refund, but by giving them additional merchandise. It’s frequently cheaper. When we shipped the wrong plant to one of our first online customers, we said simply: “Keep it. We’ll get the right one out to you today.” And of course, we still have that person as a customer.

Some of the best lessons in life come from running the smallest businesses. Rekindle your entrepreneurial spirit by remembering why you went into business for yourself in the first place.

Adpated from ecommerce-guide.com.

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