– Quality of goods is important in ecommerce and should not be sacrificed for cost savings.
– Unit economics and margin on products are crucial for success in acquiring customers.
– Building an audience and understanding key audience insights are essential for separating from competitors.Evaluate brands based on their existing audience, unit economics, product quality, and production advantage to determine their potential for success in ecommerce.10 things people don’t think about in e-commerce that everyone should know about, and the 4 things I specifically look for in brands.
1. Your cost of goods is largely fixed. Try to save too much money by buying less expensive inputs, and your quality of goods reduces to a level that impacts repeat purchase.
2. ROAS improves with a good customer journey and people spending more money. It’s not dictated by simply better creative.
3. Unit economics are the biggest determiners of success. The more margin you have on a product, the more you can spend to acquire customers.
4. 99.9% of all product pages do not have all the details listed for someone to make a decision. None of them list the cons of their product or provide other product suggestions.
5. AI will and should replace most jobs that are repetitive in nature.
6. All the strategy in the world doesn’t matter if the product experience isn’t great.
7. Overreliance on paid acquisition is systemic across almost every vertical for smaller companies.
8. Of the recently successful brands in consumer goods, a lot of them have come from celebrity or celebrity backing. Their built-in audience and persona make for cost-effective advertising.
9. Most goods are completely commoditized at this point. It’s all about brand and marketing.
10. Being able to build an audience affordably while also knowing key things about the audience will be the key to separating from the pack today.
11. The vast majority of all online websites lack context as to what they are showing you, why they are showing it to you, and how that offering fits into their overall offerings.
All of the above are problem statements that require solution statements to follow them. Narrowing down, here are the main questions I use when evaluating a brand.
1. Do they have an existing audience? If not, is there a cost-effective way of acquiring one?
2. Do they have the unit economics to support aggressive acquisition? If not, what can be done to improve the unit economics without sacrificing the end result quality?
3. Do they have a product good enough to be purchased in multiples? If not, is there room for expansion that would unlock this?
4. Do they have a built-in advantage in production that allows them to maintain better margins than other brands?
That’s it. If all of these align, then there’s a lot that can be done. But at the end of the day, it’s just marketing.https://www.linkedin.com/in/jivanco