How to Take Your E-commerce Business from $1-$10 Million

How to take your e-commerce business from $1 to $10 million

In the early stages of a startup business, it’s extremely easy to do the things that are comfortable – the things we know how to do easily that can contribute to that early-stage growth. You feel accomplished when you start getting processes into place and the orders start rolling in.

Once you cross that first seven-figure mark, earning your first million in revenue, it’s an overwhelming feeling, like running one into the end zone. That’s cause enough for celebration as it’s a major milestone for any e-commerce business. Spike the ball, pop the cork on the champagne and even do a little post-touchdown twerk.

You earned the celebration, after all.

But like any game, or business, a single-goal achievement isn’t the end. It’s a single score in what will be a much longer game. Once you score that first $1 million, it’s time to move the goalposts and keep growing toward the next goal.

Get Better for More Cheddar

All the marketing you’ve done, which could include many of the examples provided in our article on reaching $1 million, will continue to be effective. Much of what was done previously to get you to this point will still apply, but it needs to be scaled up. You need to think about the things that have to change in order for your e-commerce business to grow.

  • Do you need more people?
  • Is it time to upgrade equipment or software?
  • Should the fulfillment model change?
  • Is it worth looking into selling through other channels or marketplaces?

Growing your e-commerce business is about more than marketing. It’s about having a willingness to pivot and an openness to change that will keep you moving forward.

Here are some examples of e-commerce companies that have grown toward the $10 million mark, and some of the tactics they used to get there.

1.BlackMilk Clothing

BlackMilk's e-commerce business

In 2009, James Lillis launched BlackMilk Clothing with absolutely no money for marketing the company. It was an unassuming launch, with Lillis selling his first set of leggings online for $10. Since the company’s launch, Lillis has teamed up with Cameron Parker to handle the marketing and has grown his company to more than 150 employees.

Today, BlackMilk Clothing has grown into a multi-million dollar company that distributes its product on a global level. It has become a respected and well-known brand in Australia, and has built a cult-like following among its fan base. The company has achieved that success without spending a dime on marketing and advertising.

What They Did:

Part of Parker’s role at the company is to travel on an annual tour meeting with the fan base. These annual gatherings get customers fired up about the products, and the company also has the opportunity to elicit feedback directly from the audience on a one-on-one basis as Parker speaks with fans.

In addition, BlackMilk Clothing has some savvy approaches to digital engagement that keep costs down:

  • Expansive but targeted social engagement, with over 80 private regional-specific Facebook groups.
  • A tribe-like community full of brand ambassadors.
  • Cutting-edge approaches, like being one of the first e-commerce brands to embed Instagram photos in product pages.

Your Takeaway:

Any e-commerce company would be envious of this kind of growth without having to spend a single nickel on marketing. The fact is, you don’t have to sit on the sidelines wishing you could nail engagement and revenue like that.

If you look at everything BlackMilk has done, it centers around developing a community that is passionate about your product.

Not only has the company built a huge community it engages with on a personal level when traveling annually, but it also has the social community it has developed. And that wasn’t just built around a single group.

You can do the same thing with social groups, ultimately creating pocket communities based on audience segmentation. In this case, BlackMilk segmented by region. You can segment your audience any way you like that fits. This makes engagement much easier because you’re not trying to appeal to everyone.

It also gives you more channels to market to those segments. Instead of only marketing to audience segments via email, you can do it through social as well. That’s a massive opportunity for direct engagement rather than passive marketing like email.

Guy Kawasaki wrote an excellent post sharing the core things to keep in mind when developing a community, emphasizing the importance of leveraging “thunderlizards,” or your avid fans and brand ambassadors.

Likewise, there’s no better source for learning to build a community than CMXHub. It’s a complete resource center for learning how to create and foster communities –  start with this article on building a new community.

And then there’s Instagram…

BlackMilk was one of the first companies to embed Instagram posts directly into its product pages, which enhanced the shopping experience for customers, and allowed BlackMilk to more easily leverage user-generated content.

It’s something you could replicate, but the big takeaway here is to pay attention to new features, apps, and technology you can leverage to better engage an audience. Know which channels and apps your audience uses the most, find ways to incorporate them into your funnel, and keep up on tech updates that you can use.

Michael Zsigmond, founder of Fanbase Media, wrote this excellent piece for Kissmetrics on how to tap into Instagram to boost e-commerce revenue.

2. Common Projects

Common Projects e-commerce business

Common Projects is a sneaker company, launched in 2004, that took a slow and steady approach to reach $10 million. While it seems like you should be making a crazy rush for the goal, sometimes a nice chill walk with a confident swagger is all you need to grow.

One thing that has helped the company stand apart was entering the market with high-quality, uniquely branded shoes at a fraction of the cost of other brands. The company did exceptionally well with consistent growth until it was challenged by the economic downturn in 2008. That’s when business growth flatlined.
As the economy started to recover, it was the growth of blogs and men’s websites featuring the brand, along with social media, that got Common Projects back on a forward growth trend and helped it reach the $10 million mark.

What They Did:

  • Worked with influencers to build visibility.
  • Focused entirely on men’s products during a growing period for the market and didn’t invest in women’s products like many other brands.
  • Had creative collaborations with well-known designers.
  • Funded completely by steadily-growing revenue.

Your Takeaway:

Once you hit a growth peak, it can be tempting to start kicking the heels of passing venture capitalists and rattling your cup in their direction. A lot of business owners feel that in order to grow their revenue, they need to rapidly expand – and expansion requires capital investment.

That’s not necessarily untrue, but hunting the wilds of Silicon Valley for investors isn’t the only course of action, either.

Common Projects proved that it’s possible to reach that $10 million mark by continually investing in your own company, rather than seeking out a sugar daddy. Granted, it took longer for the company to bootstrap its way to $10 million, but in the end it didn’t owe anything to anyone.

That success is also attributed to Common Projects’ ability to stay focused. Rather than adding women’s products to the line in hopes of generating more revenue, it focused on the product that helped it reach success in the first place.

If something is working for you, find ways to make it work better. In Common Projects’ case, that was collaborations with designers and targeting key influencers. For your e-commerce store, you need to find new ways to promote and leverage what you have. That could mean training and educational content, collaboration with other brands, or positioning the product with a new audience through influencers, based on a different way to use what you’re selling.

Remember that the solution is what’s important. People don’t buy your products; they buy into a better version of themselves. They buy a solution. Think about how you can present your product to new audiences – either through collaboration or with influencers – to make that new audience see themselves with your product.

Influencer marketing is a highly lucrative tactic but it can be tough to crack without a solid plan. Thankfully, Buffer has created an amazing and comprehensive guide to finding and working with influencers.

3.5.11 Tactical

5.11 Tactical e-commerce business

5.11 Tactical is a clothing and gear manufacturer with a highly-targeted audience – specifically, it sells products tailored and designed for law enforcement, fire, and EMS workers. While its primary business model is focused on supplying dealer networks on a wholesale level, they decided to expand into e-commerce and sell directly to the consumer.

Despite being limited to an audience made up of people who can legally break the speed limit, its approach to marketing and consumer engagement has allowed 5.11 to grow its e-commerce revenue to more than $10 million.

What They Did:

  • Targeted direct mail campaigns, sending over one million catalogs out to targeted audiences including public safety organizations and service responders.
  • Extensive email marketing on a weekly basis, totaling over 600,000 emails per month to various list segments. Emails are based on customer behavior with 90% of emails driven by information and education.
  • Affiliate programs to drive traffic, rewarding customers for new business generation.
  • Focused conversion optimization on PPC ads to lift conversions by 150%.

Your Takeaway:

5.11’s tactical approach to growing the e-commerce side of the business is proof that when you know your audience, no matter how laser-focused or small those segments are, you can find success. All it takes is getting your product in front of them, and 5.11 did that through a few key channels.

Content marketing is the biggest takeaway here, and even a print catalog can be considered a form of content marketing. While a costly approach, it’s one that puts the shopping experience and products into the hands of the target audience.

That was supplemented by how the tremendous email marketing campaigns performed as 5.11 grew its list. The important takeaway here is that 5.11 didn’t just throw flash-bang email blasts to promote sales. The majority of its content was educational, intended to build relationships and educate the audience.

If you want to grow your revenue beyond that $1 million mark, you have to understand the impact of lead nurturing. You’ll get a lot of opt-ins to your list, especially from abandoned carts. How you treat those contacts will significantly impact your revenue.79% of marketing leads never convert into sales, and in many cases, a lack of lead nurturing is to blame.

There’s no better source for understanding lead nurturing than a lead-based CRM platform. Marketo published a deep-dive guide into lead nurturing that takes you through building lead nurture campaigns to see results like 5.11 Tactical.

Another approach to convert those leads outside of educational campaigns and visual product marketing is to create a referral program. 5.11 attributed much of its success to the affiliate programs it created, which rewarded existing customers for bringing in new business. Tactical gear and clothing wears out, so 5.11 knew that once it got a customer in the door, they would likely come back again, thanks to the quality. For 5.11’s business model, new acquisition was a smart focus. If you have a similar business model, you should implement a referral marketing or affiliate system as well.

4. Seismic Audio

Seismic Audio e-commerce business

CEO Steve Acree has had a rather meteoric rise with Seismic Audio since it launched. He grew his e-commerce store by starting out on eBay where he sold DVDs. Over time, he turned it into a full-time job as he grew his revenue to $120,000 in 2004 through eBay alone. With a desire to expand, he added audio products, which later became the focus of his business. Seismic Audio didn’t expand out from eBay until 2007, at which point he opted to take advantage of the increasingly-popular Amazon marketplace.

By 2009, Seismic Audio had reached $3 million, and continued to grow to hit $10 million in 2015.

What They Did:

  • Focused on a single channel to build a strong customer base before expanding.
  • Embraced multi-channel sales with eBay, Amazon, and eventually expanded to online stores.
  • Targeted SEO and AdWords with modest budgets to master the system.
  • Existing customer marketing via email, including product upsells after order completion.
  • Invested in the right resources to automate multi-channel marketing.
  • Leveraged partnerships – became a supplier for Amazon.

Your Takeaway:

You could call a ten-year run at a major goal like $10 million a slow climb, but that strategic approach has repeatedly shown to be effective for the brands we’ve featured here. In Steve Acree’s case, he didn’t rapidly try to sell in multiple channels – he stuck with the one channel that continued to deliver.

While he did expand into a multi-channel approach to selling products, he didn’t turn it into a race. If you’re planning to expand into other marketplaces like Amazon, you want to make sure you have your process down to a science. Acree mastered eBay well before creating his own site or launching on Amazon.

When you do eventually make the switch to multi-channel sales, invest in tools that will help automate that process. Those include:

  • Inventory management and product synchronization across channels.
  • A single platform for order fulfillment.
  • Sales and merchandising reports that incorporate all selling channels.
  • Email automation effectively communicating uniformly with customers regardless of channel source.
  • Integrated accounting software to track revenue.

A key item to point out from Seismic’s tactics is the modest investment in PPC advertising. It is incredibly easy to waste money on paid search marketing and social ads. They’re complex platforms and you need to really know your audience for them to be effective. Take a cue from Seismic and run campaigns with modest budgets. Test your copy, refine your audience, and you’ll see your campaigns become more effective over time.

Before dropping a dime on PPC or expanding advertising on Facebook, start with Wordstream’s 5-part series on pay-per-click campaigns. It’s a priceless, in-depth tutorial on setting up PPC campaigns for any online business.

Another tactic Seismic employed when growing its business was upsells. You don’t just have to focus on new customer acquisition in order to grow. Adding upsells and targeted promotion within your cart can improve the average order value in your store. This can generate a consistent lift in your revenue without investing in any kind of retention or acquisition strategies.

ConversionXL can always be trusted to provide high-value tactical advice on conversion optimization, and its guide on boosting revenue through upsells is a must-read. It’s full of rich examples to help you boost the average value of your online orders in no time.

Chase Paper to the Next Goal

If you break down the tactics used by these companies in order to reach that next goal, you can see that many of them fall into one of three categories:

  • Customer Acquisition
  • Customer Retention
  • Improving Order Value/Volume

You don’t have to limit your strategies and tactics to just one of the three. If you have the resources available, you could execute strategies that touch on all three. It comes down to what will be the most effective based on your audience, how they shop online, and how you engage with them. Find the right collection of tactics, and you can run that money ball right down to the next goal.

Leave a Reply

Your email address will not be published.