How to Scale Your Ecommerce Business Through Each Ceiling You Hit
Looking for to scale your ecommerce business and unlock that next level of growth, but hitting roadblocks along the way? You’re not alone.
Maybe you’re trying to scale your advertising to get more traffic and still generate a return but the numbers aren’t working. Maybe you’re wondering if there are even enough customers out there to help fund where you want to take your brand. Whatever the case may be, it’s not uncommon for ecommerce business owners to feel overworked, overwhelmed, and very much “over” being stuck at the stage they’re in.
Today we’re going to get you unstuck. In this article we’ll discuss 7 steps that will teach you how to scale your ecommerce business through any ceiling in a profitable way.
The Basics of Scaling an Ecommerce Business
Before we get into the tips, let’s establish a few things we have noticed from advising hundreds of ecommerce entrepreneurs of all sizes, from brand new to hundreds of millions of dollars.
First, ceilings will always be a factor, no matter what stage of growth you’re in. There is always room to grow, so there is also always potential to hit what feels like a ceiling that keeps you stuck.
Second, we’ve found there are certain skills, tactics, and mindset shifts that make up the playbook for how to break through those ceilings and how to scale your ecommerce business. But first, let’s define what scaling is.
Scaling is a buzzword, and the truth is, what you really need to be after is healthy growth.
In fact, scaling too fast or before you’re ready for it can actually be detrimental to you and your business. Scaling using growth hacks you learned from a guru on the internet typically leads to a chaotic, stressful rollercoaster that crashes and burns. The fast growth could cause you to go viral, but it’s not likely to last.
In contrast, healthy growth is strategic, consistent, and quick— but not reckless. It requires building a steady foundation and scaling using expert, proven, and thoughtful strategies that will actually set you up for long term success.
Common Growth Stages & Ceilings Ecommerce Businesses Face
In our years of advising ecommerce brands, we have found there are actually specific stages of growth almost every company follows, and common ceilings where brands get stuck. Which of these do you fall into?
Ceiling 1: $0
This is the first step you have to conquer: getting that first sale. If you’re stuck here, don’t be discouraged. Making the first sale can be quite challenging.
Ceiling 2: $300k
The next ceiling is $300,000 in revenue. This is the stage where your brand goes from an idea to a real possibility with momentum.
Ceiling 3: $3M
After that, many ecommerce entrepreneurs get stuck around $3M in sales. At this point you’re realizing this is a real business that might actually have some legs. It has potential to support your family and a team, and could maybe even unlock the kind of life you’ve dreamed of.
Ceiling 4: $10M
This stage is a great accomplishment, but take caution here. Under this ceiling is where business leaders can start to feel like they’ve “made it”. The danger is thinking you’re bulletproof here, when in reality, you could still be wiped out quickly if something goes wrong. You’ll need strategic decisions about how to get to the next level while protecting what you’ve built.
Ceiling 5: $50M
To break through $50M, you’ll need serious investment and sound strategy to grow and sustain the business properly. Pressure often increases for leaders in organizations at this stage, and if you’re the leader, your skills will certainly be challenged.
Ceiling 6: $100M
Finally, to scale past $100M, you’ll need strategic leadership that can help mature your business even further into a real, influential, national brand.
We share each of these mile markers to point out that no matter what types of products or industries are at play, or how far along you are, the psychology behind breaking through ceilings is the same for each one. That leadership mentality is the critical piece we’re about to dive into.
How to Scale Your Ecommerce Business: 7 Steps
So if you’re under a ceiling, how do you get unstuck? Let’s dive into how to scale your ecommerce business with 7 steps, no matter what stage of growth you currently find yourself in.
1. Understand Your Current Stage, and Where You Want to Go
The first step here is to identify what stage your business is in, and where you want to go next. Why? It’s important to know where you’re going so you can understand what it entails and if you’re actually ready to take that on right now.
When we talk about stages of growth, we’re referring to four stages that all businesses walk through. All the revenue ceilings we discussed above fall across these categories:
The Start-Up Stage
This is the beginning stage. Here, you’re fighting inertia and your main goal is to build momentum.
The Survival Stage
The Survival Stage is typically the longest stage, and it can also be the hardest. Believe it or not, if you’re a $10M brand, you’re still technically in the survival stage. The goal is to build so much momentum that it would be very difficult to put a stop to your brand.
The Health Stage
By the Health Stage, you’ve built so much momentum that it would be hard to disrupt or stop your brand. If you reach this point, you will most likely stay here for a long time. Most businesses don’t grow beyond this phase.
The Influence Stage
By the Influence Stage, your business is a well-oiled machine. It’s profitable, sustainable, and has been successful for a while. So successful in fact, that it means something to the world, and customers depend on your products. (Think Apple here— if they went out of business, a lot of customers would be in trouble!)
2. Be Prepared to Be a Real Leader
The second step to getting unstuck is looking at yourself, because the truth is, it’s all about the leader. You can look for all the tactics in the world, but if you want to know how to scale your ecommerce business, it really starts with the leader’s mindset.
It might feel like roadblocks are the reason you’re not able to scale your brand. But you have to ask yourself, “What do I need to do to remove those roadblocks? Am I doing something to keep them here?”
With this in mind, a lot of this is a mental battle you actually need to suit up and fight for. It’s never easy. You might have to change people on your team. You might need more training personally. And most likely, you’ll need to increase your capacity for what you’re willing to invest.
For example, think about your ecommerce store experience or product design. If you’re stuck under a ceiling, look at aspirational brands that you want to be like. How much did they invest in their store experience? How much do they allocate for R&D? If you want to be like that brand, you’ll need to be willing to invest like that brand.
A brand’s ceiling is only as high as its leader’s ceiling — so do everything you can to get out of your own way. This is the real thing that’s keeping you stuck!
3. Leverage the Four Golden Multipliers
If you’re wondering how to scale your ecommerce business from a tactical point of view, it really comes down to four golden multipliers: leads, conversions, average order value, and lifetime value.
We call these the golden multipliers because if you can increase these factors, you can scale any business. If you find yourself stuck, one of those elements is not working how it should. We’ll get into the details of these levers in the next steps below.
4. Become a Product Ecosystem
You might start out just selling one product, but in order to build your ecommerce company, you’ll need to develop an ecosystem. This is the only way to leverage two of the golden multipliers we mentioned above: average order value and lifetime value. Increasing that cart value and the amount customers spend with you over time begins with having a system for your customer to buy into.
A great example of this is Apple’s suite of products. Once someone buys an iPhone, they’ll soon want a watch, a laptop, an iPad, Air Pods, and more.
Another would be Groove Life. While they started with a silicone ring, they quickly evolved into a full product line of many types of silicone rings for different interests and styles. They eventually expanded their ecosystem even further by developing the Groove Belt and the Groove Wallet.
5. Acquire More Leads
To grow your ecommerce business, you need more potential customers coming into your circle. To do that, you must become a real brand, growing to the point where people are intrigued enough to come in and learn more about what you do.
The key to this is knowing and communicating who you are, what your purpose is, and why people should care. You also need to have a deep understanding of who your customers are. This combination is how you increase leads.
6. Increase Conversions
Of course increasing conversions will be necessary for growth, but how? Before you start throwing more money on Facebook ads, let’s get back to the basics.
People buy for one reason: because they feel like it. So to create an environment where people feel like buying (and to increase conversions as a result), you need to present customers with a great offer they can’t refuse. You’ll also need an amazing customer journey and store experience.
If you’re not willing to invest in designing and building out that experience, along with the psychology behind your value stack, you won’t be able to see more purchases (no matter how much you spend on catchy ads).
7. Ensure a Sound Business Model & Reassess at Every Stage
This last step for how to scale your ecommerce business has less to do with the function of scale and more to do with the sustainability and profitability of scale. We have seen so many ecommerce brands go out of business, and very few were looking at their business model at the beginning, let alone at each stage.
Before you do anything else, dial in your business model at the very start so it’s truly profitable, you have the right margins in place, and the four golden multipliers are working to your advantage. Take a hard look at your product line strategy, your pricing model, how much you can spend to acquire a customer, and all other costs.
As you grow, be sure to stop and reassess all of these factors in every stage to ensure long-term sustainability and to be proactive about anything that needs to adapt.
How to Scale Your Ecommerce Business: Final Thoughts
Follow these seven steps, and you will be better equipped with strategies for how to scale your ecommerce business in healthy ways. If you’re looking for an expert team to advise you on your path to growth and increase your company’s value, get in touch with us below to apply for one of our programs.
