Lessons Learned After Years in E-Commerce
When my wife and I started a small e-commerce business in our living room seven years ago, we could have never imagined that we would grow it into a $100 million online fashion retailer. This journey has been full of ups and downs, opportunities and missteps. I couldn’t be more grateful for what we’ve achieved — after all, we’ve remained profitable since day one, even through serious crises. But I can’t say it’s been an easy road.
Now that we’re several years past starting up, I feel it’s important to share a few of my lessons learned from the trenches of e-commerce. If I had had this information from day one, who knows how many more milestones we could have reached.
1. Invest heavily to improve the business.
One of my greatest and hardest lessons has been the sheer size of the investment needed to grow and support an e-commerce business. To create a model and processes that not only work, but thrive (in a highly competitive retail marketplace), you can’t be stingy with the financial infusions. At Pink Lily, I discovered — sometimes to my chagrin — that we had to make major investments in things like new and upgraded software systems and technology in order to sufficiently meet the growing demands of our customer base and keep up with our competitors. This wasn’t always an easy pill to swallow.
Even in a fast-growing small business, it’s natural to want to conserve funds. You never know what challenges might be coming down the line, and making a large financial commitment to a new system or tool that may or may not have a meaningful impact on revenue — well, it’s a risky venture. But as they say, no risk, no reward. I can unequivocally state that our heavy investment in new technologies and systems has been a primary factor in our record of high profitability. Without it, we could still be working out of our living room.
2. Grow your mindset with your company.
The transition from “small business” to massive e-commerce retailer was a difficult one for me to grasp at times. I know that I spent too long holding on to old thought processes and ideas. In the beginning of our journey, I felt I had a good grasp on what it took to be an entrepreneur, and I was confident in making decisions about our small, hardy little business. There’s so much advice and counsel out there for entrepreneurs — it felt like we were traveling a well-worn path as we began to grow. But then our growth picked up a lot of steam and began to really soar, and I found myself out of my depths and making some ill-informed decisions.
For example, I would still be heavily involved in tedious tasks and hesitate to delegate because I was used to “doing it myself.” Or I wouldn’t consider a rock star candidate because his or her salary was slightly outside our budget. It took a great deal of self-education, research, and trial and error to discover all that I didn’t know about leading a successful e-commerce company. But now I’m proud to say that I’ve grown my mindset and attitude to fit the growth of our company, and I now see myself and behave as what I truly am: the co-founder and president of a multimillion dollar player in the e-commerce space.
3. Reward your team generously.
This lesson is one that many e-commerce leaders think they understand, but too few actually put into practice in their day-to-day management. The reasoning behind team engagement is simple: without your team’s buy-in, your business simply cannot reach its full potential. Yet I see so many small and medium-sized business owners making the same foolish decisions and functioning in the same limited way — cutting corners, pushing their employees to extremes, and being very tight with salaries and perks. It’s no wonder that these businesses fail to take off or grow the way they should. Team members’ engagement or disengagement can make or break a business, and genuine appreciation is, in my view, the single most effective key to creating that engagement.
At Pink Lily we try to go above and beyond to reward and celebrate our amazing team members on a regular basis. Here’s an example: we make a point to provide a delicious catered lunch for all our employees every Friday. As a result, we rarely (if ever) have a team member call in sick on Fridays, and our production and productivity levels that day are always sky-high. This example is a perfect microcosm of how a simple reward — a nice lunch — can catalyze efficacy and spur employees to want to work extra hard for your business.
Transitioning a business from an early-stage startup to a multimillion company is sure to come with growing pains. However, with a mindset that rewards employees, looks for growth, and supports the improvement of operations procedures, there's so much that can be achieved.
Chris Gerbig is co-founder, president and COO of Pink Lily, one of the fastest-growing online retailers of women's clothing in the U.S.
Related story: Your Growth Checklist: 5 Dimensions of Scalability