eCommerce is Broken & Here’s How We Fix It

Part 1/2 – The Problems

As someone who is deeply entrenched in the eCommerce industry, I routinely witness a lot of really messed up things in facebook groups, on ads, in discussion forums, and at events. A lot of eCommerce is absolutely out of control…it is sad, it is disgusting, and we can do a lot better.

eCommerce is largely characterized by “sellers” trying to make money by pushing (usually) low-quality products that people do not need (and often cannot afford)  in a way that is destroying the planet and wasting its resources.

On one of the spectrum is the gargantuan Amazon. They control the eCommerce market in the US by a long shot (over half of every US Dollar spent online).  Their mission to own the entire eCommerce space is accomplished by undercutting every online and offline merchant they can and even ripping off their third-party sellers’ products with white-labeled solutions of their own. They do this in the name of “customer satisfaction” – lower delivery times, better pricing, etc. (which isn’t necessarily evil, it just is what it is)

This same sort of behavior is what we saw with the rise of Walmart and wiping out dozens of century-old family-owned businesses whenever they came into a new town.  Is the market better off by paying less for products? Or is it worse for having lost domestic employment opportunities in favor of minimum wage jobs and offshore products made in sweatshops?  This is one of the paradoxes built into the foundations of capitalism that we all love to debate.

On the other end of the spectrum is the rise of tens of thousands of independent sellers utilizing drop-shipping, Amazon FBA and affiliate marketing to push as many cheap products as possible, before moving onto the next profitable product niche to exploit. This end also creates a pyramid scheme dynamic that duplicates this flawed and dangerous behavior across thousands of new people.  

Many of those who have reached any relative level of success then start to teach others how to duplicate this. I often see someone sell $100,000 of questionable products in a week (sometimes with actual profit being 3% of that), take a couple of screenshots of their results, and then sell an instructional course teaching others to do the same (usually with photos of them in rented Lamborghinis and private jets). 

This is a serious problem, because not only are the worst behaviors in this system duplicated but the influx of thousands of new sellers every week is making it harder for those who are already in business. If someone tells you that “everyone can be an eCommerce entrepreneur”, they are probably trying to sell you an ecommerce course. Anyone can do it, but not everyone should. 

Look, I totally understand wanting to make money online, so I cannot blame anyone for trying to find ways to do it. I CoFounded a very successful eCommerce company that has sold tens of millions of dollars worth of unnecessary (although high-quality) products into the marketplace in the name of profit, so I too am not innocent.   

The systemic issue is that few of the seemingly thousands of new ecommerce entrepreneurs entering the market every week have any grasp of the concept that all truly successful and sustainable companies bring value to the marketplace, and don’t just look to strip it out and into their own pocket.

We can all agree that mindlessly accumulating stuff that we simply do not need is bad for us, bad the planet, and is only temporarily propping up our “healthy” market economy.  There is a lot of merit (and often many physical and psychological benefits) in truly high-quality physical products provide, the feelings that they instill, and the confidence they give. When you look at it realistically, however, the vast majority of the products being sold are simply Band-Aid solutions to supplement human health and happiness…and at the heart of the companies selling them isn’t a true desire to solve the problem and paradoxically put themselves out of business.

This lack of accountability in humans (of which I am guilty constantly) for our own happiness and health is staggering and is at the heart of what fuels mindless accumulation and the darker parts of capitalism itself.  I do, however, know that shifts in global consciousness that are already widely underway are going to cause a re-alignment towards a healthier model for capitalism, and this is a very good thing.

There are billions of people in the developing world who are all looking to accumulate and consume what the middle class in the West has.  China already boasts a middle class that is greater than the size of the entire US population. The raw materials alone required to produce everything needed (not just wanted) for our global population is already being called into question.  Exponential growth is a very dated concept – stemming from a time when nobody could conceive the level of resource consumption on a global scale by 7 billion consumers.

Let me be clear that I am a capitalist at heart, I don’t preach scarcity, and I believe that these are all problems simply waiting to be solved (and we will).  I do however want to assert that if you are willing to blindly contribute to the current system which is putting our entire species in jeopardy, you are a part of the problem and not the solution. I also vehemently maintain that there is nothing wrong with churning a profit if you are truly solving problems and adding value.

The most troubling part about all of this is that the majority of eCommerce entrepreneurs and consumers refuse to confront these realities. When you make your living selling things, it is easy to add a layer of cognitive dissonance on top to protect your psyche against the fact that you might be part of a massive paradoxical disease within global capitalism.

Moreover, I would like to (hopefully inspirationally) add that some of you reading this that are in the eCommerce space should actually be spending your time solving some of the world’s larger problems.  Unfortunately, some of the most brilliant minds of our time are sitting at desks trying to figure out how to increase conversion rates or make Instagram more addictive, rather than figuring out how to desalinate water for example. 

Selling physical products online isn’t going anywhere anytime fast, but it will drastically change in the next couple of years. Within these changes are massive opportunities for you to profit by doing good things for the planet and the people on it. If you do not align with these shifts, you will not have a future in eCommerce, and quite frankly, you might want to consider your current value systems.  Frankly, some of us need to ask ourselves the question whether just because we CAN make money doing something, does that mean we SHOULD?

The failure to create truly valuable businesses and actually enjoy yourself in the process can be traced back in many cases to the tendency to chase short-term profit.  When we focus on exiting a business, for example, rather than building a really valuable business, the result ends up being lackluster 9/10 times. In order to have a high-ticket business exit, you need a business that creates a lot of value, so by focusing less on exit and more on building a great business, you get there faster and for a bigger dollar amount.

The majority of the most deplorable behavior in eCommerce is linked to the idea that you must extract as much value out of the marketplace as quickly a possible before someone else does it. What happens when an entrepreneur becomes obsessed with this path is that they either 1. Accomplish their goal, and realize that they are not fulfilled by the money the accumulated or 2. Burn out on the way to this self-perpetuating quest for external validation and become deeply depressed or unhappy.

Despite the subject matter of this article, these are merely observations of the darker side of the industry and not at all a reflection of my incredible optimism towards the future of the planet, the way we view economics, and the way that eCommerce will be transformed.

Part 2 of this article will now explore the many opportunities that eCommerce entrepreneurs have to transform our industry in extremely meaningful ways that are in alignment with the massive shifts in economic, biosphere and social consciousness that are underway. 

Part 2 / 2 – The Solutions

In part 1 we aired a lot of the dirty laundry in the eCommerce industry, and now let’s do what most people forget to do when confronted with problems: talk about the solutions instead.

Before we dive into the good stuff, I wanted to share that I do not write this from a place of judgment or with a holier-than-thou attitude. I still struggle with many of the challenges that we all do every single day. I will never claim to be an expert or to have it all figured out.  I do know that because of my experience in building an 8-figure brand, and now in advising so many others, that I can offer some helpful perspectives for us all to collectively work on.

With this in mind, the first major driver of success for us all moving forward has to be the attitude of striving to be “ a little better every day”, and not striving for perfection. So much of business and life is all about momentum, so when you give yourself an impossible moving target, you rob yourself of the ability to be more effective right now in moving forward meaningfully.  Always strive to be the best, but never tell yourself that you aren’t good enough right now.

Before we dive into further solutions, I want to bring up three important themes that you should reflect on as we go through each solution.  Looking at each solution through the lenses of these themes will allow you to see opportunities to apply each solution in unique ways to whichever vertical you operate in.

Themes

Biosphere (Environmental) Consciousness

We have entered the 6th mass extinction event in the planet’s history: The Holocene, AKA “The Anthropocene” – meaning this one is all our fault.  People are increasingly aware and increasingly angry about climate change, pollution, soil degradation, water security, animal issues and more. My generation (millennials) are extremely passionate about this, however, Gen-Z’ers are literal warriors when it comes to defending the wellbeing of our planet. 

If you want to do business moving forward with anyone under the age of 35, your business must be on a path to align with the values of these customers.  Their purchasing dollars will be casting votes for those who support the reprioritization of our biosphere as critical to our survival as a species. 

Social Consciousness

Don’t buy into what you see on social media or in the news. Although there is a growing divide in many countries between the right and the left, at the heart of it all, most people want the same things.  People decreasingly identify with politics and religion, and increasingly with being citizens of the united world. People care about other people, and they continue to do so at an accelerated rate thanks to the global connectivity of us all. 

The world is smaller now that it has ever been, and we can’t hide from the troubling realities that others experience around the world.  As we face the new challenges of the 21st century it is your responsibility as a marketer and entrepreneur to create bridges between people and not to burn them down for the sake of profit. 

Economic Restructuring

This is a controversial topic worthy of a novel, but it is worth touching on because it greatly affects the consumer marketplace we all look to sell to.  Automation & outsourcing has been eroding the middle class for decades now, and the drive for efficiency in capitalism has created the largest gap between the rich and poor since 1929…and the new wave of AI and automation going down will greatly accelerate this pace…Not to mention we in eCommerce are putting stores out of business like crazy. Prominent economists and investors (like Ray Dalio and Warren Buffet) are now pushing for reforms and introducing new ideas to hedge against a widespread system collapse, and a return to a new era of prosperity and real increases in the standard of living.  

Short of (or in addition to) a government-planned solution to these systemic issues (such as the controversial Universal Basic Income), if you do have a business that is creating jobs and treating your workers well: you will be seen in a very positive light moving forward.  Creativity and solving problems have always driven the economy forward, so rather than asking how we “create jobs”, us entrepreneurs need to look for how we can creatively solve problems and the jobs will follow.

Solutions

Focus on Building a Great Brand

Building a brand is the only strategy for survival moving forward in eCommerce because dropshipping & brandless amazon businesses will be unable to compete in 2-3 years time. The only people telling you that dropshipping is not dead are selling you dropshipping courses, or simply can’t see the writing on the wall.  The good news is that you can start to transition to building a real brand today with very, very useful experience.

So, how do you build a real brand? Everyone seems to have their own answer to this question. I believe that the simplest explanation of brand building in ecommerce is having a clear answer to WHY this company exists. What is the actual problem you are trying to solve?  The questions of who it is for, and what the solution actually is are asked to support accomplishing the “Why”. Why is the most important question, but this progression is not linear, it is a cycle (see below)

Simply put, your brand needs to be on a mission (i.e. curing obesity, enting stigma’s, inspiring unity).  This mission is what makes it easy to participate in the lives of your prospective customers in more ways than telling them to buy things from you.

What are the things about the world that you want to change? What are the things that excite you most to solve or to work with? When looking at the solutions presented below through the lenses of the three themes above, you can start to identify which of these make sense for you to align with for success in the new eCommerce. You then start connecting with the profile of who these solutions are best suited for, how to connect with them in meaningful ways, and how to provide them with the solution to this problem.

Don’t Chase Money

I know – super cliche hippie stuff.  There is absolutely nothing wrong with making money, and in fact, you can do so much good in the world with money so it is silly not to make a LOT of money if you have sound intentions.  The reality though is that at the heart of every single widely successful brand is that the reason why they exist is far beyond generating cash for the owner. Financial success will follow value creation fueled by the passion of an entrepreneur every single time.

Here’s a really basic example of what I mean…“Follow your passion” isn’t practical advice for most of us, but the concept of pursuing business opportunities and incremental changes and pivots towards things you find stimulating is of the utmost importance.  Maybe you sell women’s fashion products but don’t really have a passion for the industry. I would then challenge you to find a global cause that you really care about contributing to, and from here you can start to think of ways to transition your brand to support this cause and to have stories to tell about it.

Become an Evolved Enterprise ™

One of the books that have had the greatest impact on my life is Evolved Enterprise ™ by Yanik Silver. At the heart of this work is that at a certain point everyone will realize that all the money in the world alone will not make them happy.  That chasing accolades and success means nothing if you aren’t making an impact along the way. Maslow’s Hierarchy of Needs puts self-actualization at the very top, and money can’t buy you self-actualization.

Yanik dives much deeper in his book to prove that due to all of the shifts in customer perception discussed in this book, purpose-driven brands are outperforming S&P500 by 1400%. This is no longer just a do-good theory, but a tactical line in the sand which allows your business to profit even more (all while doing good). There are several practical models for evolving your enterprise so that it caters to the evolutions in consciousness.

Harness Your Residual Influence ™ 

Residual influence is the ability to win the attention, trust and eventually loyalty of your customer community over time. I created this term to describe the “art” of playing the long game.  Nobody has ever built a great business or a great brand focusing on short term cash grabbing, it just doesn’t happen. Get excited about making the world a better place in a practical way; a little better every day.  When you seek to create a real solution to a problem and to truly enrich the lives of the people you serve, employ and market to, you are on the path to true enterprise value.  Always play the long game.

Better and More Effective and Innovative Products

At the core of any good business is a good product or service, so if that does not exist in your business then there will be no true scalability to your business.  What products can you create that do not simply add a feature, but make the entire industry level up? Can you create something twice as effective which requires half of the environmental impact to produce and consume?  Can you redesign something that is typically made out of toxic ingredients and raw materials for human beings or for our bioshphere?

Inventing new products isn’t always the easiest thing, but some of the most successful products and brands on the market are a result of the founders solving their own needs.  What do you use in your everyday life that could be better at what it does, or be made in ways that don’t put the bioshopere under further strain? 

If you can’t invent anything, then simply find someone out there who is solving a problem that can’t seem to market it well.  Most product people can’t market, while most marketers can’t create world changing products… Which is perfect, because you shouldn’t need to do it all yourself.

It Takes a Team

The most successful brands are built by great teams, and great founders understand that they can’t do it alone, nor should you even want to.  Our core team at Beard Club carried us through absolute nightmares when we hit hypergrowth, and each of us had specific skills that contributed to the big picture. Without our team, we would have imploded a couple of weeks in. Having a killer team that is devoted to a common goal is paramount to your success.  Treat your people well, and they will move mountains with you. 

Craft Your Vision

Taking the time to craft a Vivid Vision ™ (buy this book by Cameron Herald) will pay unimaginable dividends. Having a clearly defined vision will allow you to negotiate better terms with suppliers, secure strategic partnerships, recruit the best team, attract press attention, and more.

Hearing a passionate founder talk about the vision for their company is one of my favorite things in the world.  Everyone is dealing with limited resources, so painting a vivid picture of where you are going instead of where you are now can help you overcome a LOT of the obstacles in your way pertaining to key relationships and opportunities.  Look no farther than Elon Musk if you want to see the incredible power of vision at work…you can literally do the impossible and reinvent entire industries. 

Being More Sustainable & Share the Story

Brands that focus on sustainability are going to explode in the next couple of years to the point of eventually being the absolute minimum standard. Get ahead of the game by starting with one step today.  I get that sometimes its really difficult to be sustainable when you have very limited resources or margins, but nobody expects perfection. The move towards sustainability also opens up a ton of new categories and opportunities, for example, did you think that reusable straws would be a viable product to sell 3 years ago?

Wherever possible, consider localizing production for your products. Not only is this beneficial in reducing supply chain complexity and environmental footprints, but it also creates a great opportunity to build a brand story around sustainability and job creation. Worth noting is also that in the not-so-distant future, we will be 3D printing many of our own products at home using recycled material and renewable energy. Until this is our reality it is definitely worth building a bridge with localized production opportunities to maintain your brand-story advantage.

Perfection right out of the gates is not necessary. Incrementally reach for sustainability today and document your journey as a part of your brand story.  Talk about why it is important to you, and why you have prioritized building a sustainable business. You can even talk about why you need to raise your prices by $1 in order to ensure your business can operate with all of the new inputs that make it sustainable. 

Be Mindful of Your Messages

Persuasion and sales don’t need to be dirty deeds. You don’t need to tell someone that they aren’t good enough in order to seek your solution to their problem. As marketers, we need to be far more mindful of the messages that we are putting out into the world because many of us touch millions of people every single day with our content.  Marketers won the 2016 US election, and that says something about the power we wield, so I implore that you wield it consciously.

Does your marketing try and break someone down and divide them against one another, or does it build people up and bring them together? I am not saying you have to always tell people they are all perfect the way they are, but I know that building real relationships and playing the long game is far more important than getting sales, and it’s hard to build relationships when you are breaking people down instead of building them up.

Prioritize Relationships & Take Care of Customers

This is perhaps the biggest key to lasting success in business in any industry.  It sounds simple, and it is. Even the smallest reduction in customer churn or bump in repeat business from existing customers creates a massive increase in actual profit. Taking this another step further into the realm of creating advocates from customers is where the game is changed and exponential growth starts happening.

Prioritizing customer experience with every touchpoint needs to be a part of all brands’ DNA.  These touchpoints can include the product itself, delivery timelines, gifting, customer service, and even the language you use. Striving for excellence in each of these areas allows you to build lasting connections at scale with your customers.

Build a Real Business

Every company needs to make sales, but real brands have built a real business with structures and systems that support continued growth and evolution. If you aren’t building your business the right way, you open the door to chaos and disarray which will then distract you from creating positive momentum in the most critical areas.

Understand the big picture in your business so you can see how the pieces fit together is critical to making sure that the right hats get on the right people. When you don’t understand the big picture and build a real business with proper structure, you’ll end up fighting fires and wearing too many hats at once, handcuffing your full potential. 

 

Everything you do in your business is a process, and some of them are conscious and some are unconscious. You want to move as many repetitive actions into the realm of conscious and optimized processes as possible. How many of your processes within your company have you documented and looked to optimize? This is a HUGE key to finding more hours in your day, scaling your team, being more happy with your daily life overall, and creating pathways for incredible efficiency within your business

Enjoy the Journey

This is again fairly cliche sounding but needs to be said. If you aren’t taking time to enjoy the journey, to trust the process and to embrace the growth and learning curves you face, then what is the point of even doing it all? 

When you focus too much on fictional dates in time where your business is doing $X million/ month as a measure of happiness or success, you often miss out on the opportunities that will actually get you there that happen right now. 

Get outside of your business and clear your head. Forgive yourself for your mistakes. Acknowledge your victories. Spend time with the people who have helped to get you there. When you invest in these things the ideas to solve your biggest problems or opportunities to find your biggest breaks will naturally flow into you.

It’s not worth doing if you can’t have fun doing it and make a difference.  When you’ve made it, make sure you give back and help people avoid all the same mistakes that you did…Join us in creating the future of eCommerce, and create the brand you can brag to your grandchildren about. 

Alex Brown

P.S. 

If this resonates with you in any way, please share it and/or add your thoughts.  If you are interested in working with me to build the next generation of eCommerce brands, hit me up – alex@ecommercerockstars.co

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