The realities of running a product business - by Catherine Erdly
Written by Catherine Erdly, founder of The Resilient Retail Club.
Credit: www.resilientretailclub.com
The story of the retail industry is often told through the lens of the larger chains, and their high-profile troubles. This narrative ignores the reality that the retail industry is increasingly made up of small and independent retailers and brands, many of which are flourishing. Last year alone saw an estimated 26 thousand eCommerce product businesses launching in the UK.
To help paint a clear picture of what to expect when starting or growing a product business, I surveyed over 300 founders. They gave me anonymous answers to more than 30 questions, delving into everything from how much it cost them to get going, to how many hours they spent on marketing, how much they paid themselves, what their turnover was, and so much more.
Here are a few of my key takeaways:
The pandemic has, in fact, been a catalyst for starting or growing businesses. 58% of non-bricks and mortar businesses surveyed have experienced growth during the last 12 months. Despite extremely challenging circumstances, 43% of bricks and mortar stores saw either neutral or positive growth.
Many businesses have maximised their digital presence during this time with 88% selling through their own website, and 97% having an Instagram profile. 94% of businesses still found that the established platforms of Instagram and Facebook were the marketing channels driving the most sales.
Despite this incredible time of innovation and growth, there is still so much potential. 73% of those surveyed had a turnover of under £50k, and 50% of businesses were processing under 10 orders per week.
The ability to pay themselves from the business remained challenging for many, with 80.7% of founders paying themselves less than £1000 a month.
There’s so much potential for small businesses to grow their sales through a whole variety of methods, not least the opportunity to focus on growing their average order value which for many was well below industry averages.
Email marketing remains underutilized. 75% of businesses had an email list, but nearly 40% of business owners not sending any emails at all to their customers.
Getting to grips with pricing and stock management sooner rather than later will set businesses up for success - not grappling with this sooner was one of the biggest regrets that small businesses had.
Continuing to focus sales efforts on more than just social media is crucial, with so many opportunities, from wholesale to PR, to name just a few. In fact, PR and free exposure - whether from an influencer, a larger social media account or a publication was the most commonly mentioned factor when it came to listing what had positively impacted a business’ sales.
Do not underestimate the importance of time - whenever you feel like you want to give up, remember that this is the day that one of your competitors gives up, but you will keep going! Time is such an important, and underappreciated, part of how businesses succeed.
Above all, the report highlighted that product businesses have the potential to be life-changing, rewarding and exciting adventures - with the right mix of time, determination, perseverance and most importantly, great product!
For much more detail, including answers to questions such as:
- How much do product businesses sell?
- How much are founders paying themselves?
- What impact has COVID-19 had?
- What is the most effective form of marketing?
- What are the biggest wins, and the biggest learnings?
To get the answers to these questions and the opportunity to benchmark your business, download the report right now!
www.resilientretailclub.com/survey
Want to know how to start, grow and scale a profitable product business? The Resilient Retail Club will give you the essential training, advice and supportive community that you need.
For more retail tips, information and insights, head over to The Resilient Retail Club blog here.