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How To Start An E-Commerce Business - YouTube
Channel: Dan Lok
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- One of the companies I used to own
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is actually E-commerce business.
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It's one of the most successful ventures
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that I have done in my career.
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And, we were doing millions and millions
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of dollars every year and actually won
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the Online Retailer of the
Year Award by Canada Post.
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So, when it comes to E-commerce
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maybe you're thinking about starting
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an e-commerce business, you
don't know where to start.
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Today I wanna give you three
keys, kinda three lessons
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I've learned during that time
before I sold the company.
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Number one, when it comes
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to E-commerce conversion matters a lot.
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Conversion matters a lot.
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So, you should be constantly measuring
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your conversion rate on different pages.
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Your bounce rate, meaning
people hit your homepage.
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Where are you seeing people
exiting from your site?
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Where are you losing people?
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Now, one of the things that we notice
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when I was running an E-commerce business
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that we were losing a big chunk
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of the customers at the checkout, right?
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At the checkout page, we're losing a big,
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so they like the product,
they click the product,
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they add to cart by the
time they get to buy,
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we lose a whole lot of people.
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So, I was saying to myself,
okay, this is not good.
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What could we do?
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So, then we added a lot
of different things.
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Example, we added actually testimonials
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during the checkout process.
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We streamlined it and
simplified the checkout process.
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So, in the beginning,
back then I didn't know,
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we had a multi-step process.
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And then, we changed all of that
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to make it much shorter, right.
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They see the product, they click,
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if they are add in the cart,
they continue as a guest,
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that's fine, all right,
credit card information.
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Instead of that many steps,
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we shorten it to this many steps.
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And, we noticed sales
dramatically increased.
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So, conversion matters.
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You have to measure everything.
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You're looking at data,
you're looking at your pages.
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You have to know exactly what is going on.
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It is not so much just about the product.
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It's about your customers,
visitors behavior, right.
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And when you have got some
products that are selling well,
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make sure you feature
those on your homepage.
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That's key number one.
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Key number two, you need
to have a content strategy
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as well as a paid strategy.
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So, we were running a
lot of ads on Google,
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Pay-Per-Click, we were
spending a lot of money, right.
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But, in the beginning
especially no one knows
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why they should come to
our store, online store.
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So, we were just doing a lot of that.
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But then, later on, we also
spent quite a bit of money
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optimizing our website
for search engine traffic,
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just organic traffic.
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So, we were creating a lot of pages
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and rank certain key words in Google
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so people could find us just organically.
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So, in the beginning what's interesting
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is 90-somewhat percent of our
sales were coming from paid.
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Pay-Per-Click, we were
spending a ton of money, right,
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To get some traction. But later on,
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actually later, a few years afterwards
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within the company, the
revenue, then it's almost 60-40.
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60% of our sales were coming
from organic, free traffic.
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Well, I wouldn't say they're
entirely free because we
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do invest time and money
creating content for them.
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But, only 40% comes from paid.
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So, to do E-commerce I believe
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if you have your own store,
meaning you're not selling
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through Amazon 'cause Amazon
already has all the traffic.
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But let's say you're not
selling through Amazon,
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you have your own E-commerce store.
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I believe you need to have
a very good organic strategy
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as well as a paid strategy.
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And, last lesson I wanna share with you
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when it comes to E-commerce
is, inventory kills.
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Inventory kills.
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What would kill you the most is you
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have way too much inventory of
products that you don't sell.
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Depends on what kinda products
you sell, do they expire?
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Assuming your products don't expire
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you're gonna sit on a lot
of products that don't sell.
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And, you're sitting in
a lot of cash, right?
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So, you've gotta be very, very careful
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when it comes to inventory management.
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Now, before I sold the E-commerce company,
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we were sitting on millions,
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millions of dollars worth of inventory.
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Now, I'm glad I could
sell all of that, right.
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And get all that money back, otherwise
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if there's any problem,
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we would have been sitting
on a bunch of dead inventory.
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So, be very, very careful,
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very mindful when it comes to inventory.
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I would rather you have fewer
products in the beginning.
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Test it out to see what your customer,
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your marketplace likes, right,
whoever your audience is.
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See what they like first,
before you go crazy
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and have so many skew, have
so many units and products.
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Oh, I'm gonna buy 1000
of these, 2000 of these
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because you'll be tempted.
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Wow you know, if I order way more,
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my cost per unit goes way down.
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But, what you don't think
about, you don't consider,
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factor in is, what if it doesn't sell?
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Now, you're sitting on
thousands of something
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that it doesn't sell.
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It becomes a big problem,
so inventory kills.
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And, this is also why I
stress if you're thinking
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of earning more money,
before you go out there
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and start an E-commerce business, I talk
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about that through my wealth triangle.
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You should develop your
high income skill first.
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You can go watch my
high income skill video.
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I talk about why it's so critical
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to develop your high income skill first
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before you go out there and
start that scalable business,
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before you start that E-commerce business.
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So, go watch that video.
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