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Home > Amazing FBA > Vision and Goals for e-commerce with Ashley Pearce
Podcast: Amazing FBA
Episode:

Vision and Goals for e-commerce with Ashley Pearce
Category: Business
Duration: 00:30:55
Publish Date: 2019-06-11 00:00:17
Description: Vision and Goals for e-commerce It’s got to be lead by aspiration/vision and goals The aspiration was to be an employer of choice - this is a big aspiration for a small business. It sets a mindset - it’s not just about people as a resource to get a task done. If you can get them to operate within operating principles, that will be fantastic. But you need to live it, not just things on a powerpoint.   What are your goals for the next year? 3 years? And what is the time frame you plan in? Financial planning has been really good and they now have effective systems for this. Now generating organic traffic is a big active goal: using social media and publishing own content. The vision is about securing the current brand and having sustainable sales. Partly to avoid having Amazon pull the rug on them. Partly driven by the cost of Amazon sales including commission versus Off-Amazon goals One goal is to get 1 million visitors to the brand website per year. It sounds massive but it’s quite attainable when you run the numbers. At the moment, Ashley has set out goals for the next year for revenue. But the vision of really growing into an organic traffic magnet is big. 3-5 year planning is still in the works. The team is going through a planning phase now - by mid June there will be more of a 3-5 year vision. Richard Koch: Star Principle Ashley’s personal vision is driven by the Star principle. The growth rate of 50-80% makes it a star business. That puts the revenue at about $10 million dollars in 5 years! In another 5 years, that would be at $65 million! The goal is to be brand that never dies! A question Ashley loves is: “Where do you want to be in 100 years’ time?”   How does the Star Principle work in your business? Ashley read the book then realised they were doing quite a lot of the right things. The growth rate of e-commerce makes this possible for a business. You’ll never have no competitors nipping at your heels. So going out of stock can lead to losing a dominant position in the market.   They’ve also admitted in some areas that they don’t have star products. As long as they are cash cows, that’s all good as that funds the star products.   What’s your view of keeping on product lines that aren’t “stars” or cash cows? True, having products in the household gets the name out there. Sometimes, “dog” products lead on to “star products”. You can’t really do it based on Amazon data.   From the logistics perspective, the overhead management of making sure you minimise cost of container logistics is a fine balance.  By now, they are filling containers with no problem so they can be more critical of what they put into containers. There can be loss leader products that allow you to upsell or cross-sell other products. It’s harder to do on Amazon. Also, it’s hard to conceive of completely stepping away from Amazon. Organic traffic: If an average e-commerce store could convert average 3% - they did 30,000 conversions last year on Amazon. To achieve that, they would need 1 million visitors! If growing sales 50-80% on Amazon, it’s hard to achieve There are lots of people selling Chatbots , FaceBook ads etc. If you want 1 million visitors with ads, that could cost you $300-400,000! That could theoretically generate $1 million worth of sales. The concept of “Profitable variation” (from Richard Koch’s “The Star Principle”) They realised this was what they were doing with their product. You need to either sell at same price as competition at lower cost so higher profits; or sell at a higher price (premium pricing) for higher profits.   Premium positioning on Amazon The sellers going after FaceBook ads at $350 a year to drive $1 million in sales, their costs are very high. But Ashley believes he can get costs down to $30-60,000 cost for 1 million visitors a year. Plus there is cumulative benefit.
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