How To Build an Importing Empire You Can Be Proud Of

Customer acquisition is hard! SEO is competitive. Paid acquisition is, well, paid and therefore expensive. Here is how you can build an eCommerce empire you can be proud of by building killer margins.

Ecommerce is a !#(%(#$%

Let’s face it: ecommerce is a bear.

Andy Dunn said it, Josh Hannah said it, and I think I heard the guy in the MUD truck say it to me five minutes ago. I swear.

OK so why is everybody saying it?

Because customer acquisition is hard! SEO is competitive. Paid acquisition is, well, paid and therefore expensive.

And once you’ve acquired a customer, you often have to spend up to re-acquire that same customer again!

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High acquisition costs = a high hurdle you have to overcome before you make a dime.

High acquisition costs mean you either have to do one of two things to make money:

  1. Build acquisition into your model to reduce the costs over time (eg., flash sales like Zulily, subscription commerce like Craft Coffee). Let’s call this Model A.
  2. Achieve adequate margins to allow you to spend up on acquisition in the first place (eg., vertically integrated manufacturer-retailers like Everlane). Let’s call this Model B.

Building Killer Margins

I want to talk about the second of these two options, Model B: achieving killer margins.

If a higher-margin retailer is what you aim to create, think about producing your own product. Given the realities of global commerce, this often means importing a line of product and, yes, selling that line on Amazon as well as through your own direct-to-consumer website.

Far-and-away, the people I see achieving gains quickest in ecommerce are adhering to this model. If you nail your product, ramping to $5K, $10K a month within months is not uncommon. Alibaba makes it easy to source the product; Amazon gives you a great channel through which to acquire the customers.

So where do you start? Should you log onto Alibaba now and order up a container load of skin care products shipped direct to your apartment?

No.

You learn first from people have done it before.

Leave a Comment:

Lana Angel says

Hi Drew, I misse the webinar on importing from China. Is there a way to either read the transcript or see a recording of it?
Thanks, Lana

Reply
Maxim from CrazyLister says

Drew,

You’re making a valid point about increasing margins and I would suggest going about it from a slightly different angle which has worked for us (I’ve started en e-tail business 7 years ago, been quite successful, now VP @crazylister):

Say you’re an e-tailer and want to grow your margins, but you don’t have too much cash to order a container of self-branded products.

In the eCommerce food chain looks like this:

1. Manufactures

2. Distributors

3. Dealers

4. Re-seller (that’s probably you/me/most of the readers)

4. End customers

In the last years many manufactures (especially Chinese) have disrupted this model by becoming distributors and even dealers themselves but this structure still applies to the more established brands).

As a reseller, who is getting the worst price since the distributor and the dealer already took their share, you want to move up the chain in order to get better prices and allow yourself higher margins.

Now, as anything is business, it’s not easy !

You cannot expect emailing Nike asking to be a distributor, it just doesn’t work this way.

You will have to build relationships with distributors/manufactures, and you will have to start from the smaller less known Brands.

Once you are able to get hold of this 1-2 small brands, the doors will open to some more known brands and from there you can start building relationships with the better known brands by going to expos, interacting with the representatives, getting a grip at what they ask in order to start a business relationship, some will be harsh (“buy and stock $50000 worth of goods”), some will have lesser demands (“yea we can dropship for you, no need to keep stock”).

Hope that helps
Max

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