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You are here: Home / Archives for Strategy

Top Story: Report Says Remote Employees May Work for Less

September 20, 2019 by Asif Nazeer Leave a Comment

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The virtual office isn’t just a benefit to small businesses looking to grow quickly — at least faster than they would in a physical office.

But now, we’re seeing signs that this is truly something your employees, current and future, may prefer.

This week, a new report from Owl Labs found that 34% of your employees would likely consider a pay cut to work remotely.

Yes, you read that right. Employees would take a pay cut just for the liberty of working remotely.

If you’ve got a physical office now for your business, this may give you more reason to consider allowing employees to work from home more often. And if you’ve got growth plans, you may want to look for people who are more acclimated to working remotely to help initiate that growth.

For the rest of the week in small business headlines, check out our news and information roundup below:

Economy

Vermont Small Businesses Lead the Nation for Revenue Growth

How are U.S. small businesses doing in the midst of the trade and recession talk? According to the Kabbage Small Business Revenue Index, they are experiencing double-digit gains. In fact, revenue for small businesses grew by 19.2% between January 2018 and January 2019. The number from Q2 2018 to Q2 2019 is an impressive 18.5%, and from Q1 2019 to Q2 2019 it is 7.6%.

Finance

Only 7% of Entrepreneurs In Need of Funding Actually Sought It, Survey Finds

A report from the Duke University Fuqua School of Business has revealed some interesting data. The researchers say most potential entrepreneurs give up before taking even simple steps to vet their ideas. According to the authors, the data of their research suggests guiding entrepreneurs early to vet their ideas is important.

Franchise

Chick-Fil-A Success Shows Brand’s Ability to Triumph Over PR Problems

Brooklyn residents were quick to embrace Chick-fil-A after the fast-food chain opened in the city for the first time ever. Chick-Fil-A in Brooklyn People gathered outside the location ahead of it’s opening. The line got so long that what appears to be red velvet rope was needed to organize the gatherers.

Marketing Tips

Spooktacular Tips for Marketing at Halloween

Does the thought of marketing your business at Halloween send a shiver up your spine? You don’t stand a ghost of a chance unless you prepare early.   Marketing Ideas for Halloween Whether you are interested in Halloween or the fall season in general, it’s closer than you think.

Inbound Marketing Leads to 72% More Leads for Businesses

There are now more ways for people to communicate and purchase things. This means there are also more ways to market to consumers. And inbound marketing is one of the strategies businesses are increasingly using for lead generation and conversions. And just how are small businesses using inbound marketing? This is what a new report from Visualobjects answers.

Retail Trends

7 Secrets to a Successful Pop-up Shop

Pop-up shops are a great way to test a new retail idea, expand your retail store or just increase your seasonal sales. But what does it take to make your pop-up store successful? Here are seven secrets to making your pop-up a smash hit. Pop-Up Shop Tips Have a Specific Goal Pop-up shops can accomplish a variety of goals.

Startup

68% of Entrepreneurs Not Looking for Gig Work

In the fourth edition of the Megaphone of Main Street report from SCORE, 68% of entrepreneurs say they are looking for full-time self-employment, as opposed to gig work. Even though gig workers are now classified as contractors by the Department of Labor, the fact they need to always look for the next gig doesn’t sit well with most people.

Uber and Lyft Drivers May Soon Be Employees in California – While Entrepreneurs Hotly Debate

A bill that has passed the California State Senate promises to reclassify some gig workers as full time employees. Assembly Bill 5 The consequences of Assembly Bill 5 (AB5) becoming a law could have far reaching effects on small businesses using these types of contract workers. First and foremost, business costs could skyrocket.

Technology Trends

60% of Business Leaders Would Rather Lose Revenue Than Data

A new piece of data from a study commissioned by Logically offers a great insight into the importance, value, and future of data. According to the report, 60% of business decision-makers (BDMs) would rather lose half of next year’s revenue growth than lose half their data. At first glance, this sounds a bit much.

Constant Contact Expands Marketing Suite

In most cases, the journey of the small business owner now requires a working understanding of the digital ecosystem. This includes having a website, eCommerce, social media, and even creating logos. Constant Contact Marketing Suite With that in mind, Constant Contact has created a suite of branding, eCommerce and productivity tools for small businesses.

51% of Americans Handle Work Calls – and More – In the Bathroom

A new study finds (51%) of Americans read, answer work calls and/or emails in the bathroom on their cell phones. Another large group of respondents (48%) spend an hour a day or more checking them for work related reasons. Scott Lucas, VP of Commercial Sales at Wilson Electronics, explained these findings as well as more cell phone at work statistics.

61% of Businesses Have Experienced a Cyber Attack Over the Past Year

The cyber threat businesses face is an evolving menace in today’s digital ecosystem. And this is why you have to continually evaluate the readiness of your organization in dealing with this threat. Because the attacks are relentless and ever-changing.

Image: Depositphotos.com

This article, “Top Story: Report Says Remote Employees May Work for Less” was first published on Small Business Trends



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Pressure points

September 20, 2019 by Asif Nazeer Leave a Comment

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In his new book Transaction Man, journalist Nicholas Lemann traces a century of ultimately unsuccessful efforts to restrain and manage corporate power.

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Creating a fairer market for capital in South Africa

September 18, 2019 by Asif Nazeer Leave a Comment

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Nicky Newton-King, the outgoing chief executive of the 132-year-old Johannesburg Stock Exchange (JSE), explains why the JSE was the first stock exchange to introduce a Socially Responsible investment index and what a social license to operate means in a country where capitalism is under attack.

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How to stand out in a crowded marketplace

September 17, 2019 by Asif Nazeer Leave a Comment

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To differentiate your brand amid a competitive cacophony, let a customer focus guide your strategy and operations.

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Uber and Lyft Drivers May Soon Be Employees in California – While Entrepreneurs Hotly Debate

September 16, 2019 by Asif Nazeer Leave a Comment

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Assembly Bill 5 Will Make Uber and Lyft Drivers Employees in California -- and it has Entrepreneurs Hotly Debating

A bill that has passed the California State Senate promises to reclassify some gig workers as full time employees.

Assembly Bill 5

The consequences of Assembly Bill 5 (AB5) becoming a law could have far reaching effects on small businesses using these types of contract workers. First and foremost, business costs could skyrocket.

As expected, entrepreneurs and others are divided debating the pros and cons. Small Business Trends took at sampling of the opinions.

Ramon Ray, founder Smart Hustle Media, started the ball rolling when he posted his thoughts on Facebook Sept. 4 shortly after the bill was introduced.

The post read in part:

“This hurts Uber and Lyft sure, but also hurts the millions of people who can make extra cash or their sole income this way. An employee (with benefits and etc) is an ENTIRELY different model than what the BENEFITS of the gig economy was designed for.”

Free Market Stance

Many of the folks who responded sided with Ray’s pro free market stance.

Small Business Trends contacted him to get some further clarification.

“Most people who responded to the post said two things,” he said. “First, we like the free market economy and second these jobs are contracts.”

According to Ray, the agreement offered by these companies is simple.

“You get paid a certain amount of dollars to do a certain amount of work. It’s an agreement.”

Gig Economy Status Quo

The bill sides with workers but threatens the gig economy status quo.  It covers millions of workers by guaranteeing them rights like minimum wage, unemployment insurance and overtime. Not surprisingly, there are other viewpoints on how the bill will shape this work going forward.

For example, Michael Zima, Chief Growth Officer, Zima Media, had a different opinion.

“The progress with this bill is paving the road for the future of work,” he writes. “On a local level, it’s essential to protect both the business and worker to retain the same quality of life a full-time employee may have.”

Jared Weitz CEO and Founder at United Capital Source Inc, brought up another interesting angle.

“Shared ride services like Uber and Lyft that now are facing billions to update their service models,” he writes. “This shift will impact consumers since they likely will incur the costs.”

Legalities?

There’s bound to be some legalities that need to be ironed out when the bill passes, which it is expected to do.  David Reischer, Esq. Attorney & CEO of LegalAdvice.com ,supplied his thoughts.

“There are multiple factors that a court will likely look towards to determine if a person is entitled to certain benefits as an employee,” he writes.  “These factors include, does the person work from the main office; resources supplied to employee/independent contractor; and direct delegation of tasks.”

Finally, a small business owner puts his two cents in.

“There needs to be a balance between what is good for business and what is good for employees,”  writes Mike Falahee, Owner and CEO of Marygrove Awning Co. “This may be an important social experiment.  But if gig employees are put against the same requirements as full-time employees, will they be hired for the job? People are drawn to freelance opportunities for specific reasons and this bill may not take into consideration those reasons.”

Assembly Bill 5 has been sent back to the state Assembly where it is expected to get final approval.

Image: Depositphotos.com

This article, “Uber and Lyft Drivers May Soon Be Employees in California – While Entrepreneurs Hotly Debate” was first published on Small Business Trends



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Difficult, uncomfortable, and courageous conversations

September 13, 2019 by Asif Nazeer Leave a Comment

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At the yearly meeting of CEO Action for Diversity & Inclusion, three chief executives — from a watch company, a hedge fund, and a professional-services firm — talk about the challenge of reducing bias in their companies and industries. Progress remains slow; for instance, only 33 of the Fortune 500 CEOs are women. Challenges to diversity and inclusion include getting the board involved, helping employees get out of their comfort zone long enough to change their habitual practices, and thinking clearly about immigration.

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How Do I Handle Embezzlement and Employee Theft?

September 12, 2019 by Asif Nazeer Leave a Comment

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How Do I Handle Embezzlement and Employee Theft?

A reader from Georgia asks:

“I suspect one of my employees is stealing from my company. This is someone I’ve known and trusted for over 10 years. She has a family and I’ve been to her home many times for barbeques and birthday parties. I am sick over this situation. What should I do about this employee theft? Do I call the police? Confront her? Give her a chance to resign?”  

  –  Aaron W. from Atlanta, Georgia

Aaron, you didn’t say what the person was stealing or the amount involved. We’ve had some experience dealing with embezzlement and employee theft issues. So we’ll offer some guidance based on various circumstances and explain how to handle it.

Every theft by an employee requires a response of some kind.  Left unchecked, even a small instance of employee theft may get worse. It becomes a habit. And it may become contagious, meaning other employees become emboldened figuring they can get away with theft, too. They may assume you don’t pay attention — or that you simply don’t care.

That said, how you respond depends on the seriousness of the theft and how much proof you have.

How to Handle Embezzlement and Employee Theft

Gather the Facts

The first step is always to get the facts in order.  What you need is proof. Good proof might consist of catching an employee on a security camera stealing money.

However, most of the time the evidence won’t be that clear. You may have to gather documents, get cancelled checks from your bank, or examine accounting records. An important part of investigating is to question employees.

In the investigation stage, ask — don’t accuse.

Because what if you’re wrong? If you falsely accuse an employee of theft, you will irreparably harm the employer-employee relationship. And you could do real damage to someone’s career with a false accusation.

Call employees into your office one by one for confidential interviews.

Here are two examples of how to handle a theft interview. Ask the employee questions about the situation. Start out like the following:

  • “I’ve discovered the cash register was short by $200 this month. Do you have any idea what may be going on, Susie?”
  • “A lot of our supplies have gone missing. In the last two months we’ve gone through 20 times the amount of coffee K-pods we normally use. Do you know anything about that, Susie?”

What you do next depends on the employee’s response. Watch facial expressions and body language. And see what they say.

The employee may just have a legitimate explanation for whatever you’re investigating. For instance, perhaps she moved something from one place to another, or created different data entries that explain where funds are, without telling you.  This is why you should ask before accusing. And be open minded to the response.

She might also offer some kind of excuse, which you will have to weigh.

If the Employee Admits it or You Have Solid Proof

In my experience, guilty employees often admit to theft when questioned — without much pressure. It’s as if they feel tremendous stress and are relieved it’s over.

So let’s say the employee admits to the embezzlement or theft.

Or you have reached the point in the investigation where you have solid proof.

Now it’s time to switch to confronting the employee and taking action.

Confront the Employee With Disciplinary Action

Depending on the seriousness and nature of the offense, you could take one or more of the following actions in a confidential meeting.

If it’s a relatively minor situation, you might:

  • Express your disappointment and that your trust has been violated.
  • Give a stern warning and ask the employee to repay or replace what they took.
  • When it comes to office and cafeteria supplies, employees sometimes think they have the right to take items home. So you may have to educate the employee about company policies and values.
  • If you are so inclined, suggest that in the future the employee ask up front if they need something. Perhaps you’d be willing to offer a salary advance if they need funds. Or give them supplies if they truly are in need. But only if they ask first.
  • Document the action such as in a confidential email or memo to the employee.

If it’s a serious matter (complex embezzlement fraud scheme, high dollar amount), your  response is more likely to be:

  • Terminate the employee on the spot.
  • Or ask the employee to leave the building immediately on unpaid leave. The employee should leave all company property behind including keys, laptop or company issued phone or car. Putting the employee on leave will give you time to consult with your attorney or think clearly about next steps such as termination and calling the police.
  • If you put the employee on unpaid leave, you will have to terminate the person officially through some kind of followup communication, either through a letter or another meeting.

If the employee belongs to a union, follow the union’s contract process.

Cut Off Access

Be sure to immediately cut off access to all company systems, data, premises and financial accounts for anyone you place on leave.  And of course do the same if you terminate an employee.

Contact Your Attorney

Involve your attorney early for advice, especially in serious cases. Your attorney can guide you as to how to conduct an investigation, how to preserve evidence, when to call in the police, how to handle the employee, and how to notify third parties.

If you suspect embezzlement of large sums of money or a significant pattern of fraud, calling your attorney is essential!  White collar crimes like check forgery or fraud schemes can be complex. Dishonest employees get good at covering their tracks – sometimes for years. It can take a trained forensic investigator to trace the full scope of a fraud.

Not only that, but serious embezzlements and thefts often kick off a chain of legal ramifications. Your small business may need to navigate a legal minefield including:

  • Insurance claims:

    A crime insurance policy may cover your losses, and you will need to file a claim. Your attorney can help protect your claim rights.

  • Third parties that may be liable:

    Third parties such as banks may be liable for your losses, and you should put them on notice. But be careful what you say. Third parties will seize on any reason not to pay, including casual comments that could be interpreted as admissions against your interests.

  • Government authorities:

    You may be in jeopardy from unpaid tax money that a dishonest employee embezzled unbeknownst to you. You may need to protect against IRS seizures, liens and other actions that could wreck your credit score and sink your business.

  • Employee lawsuits:

    Employees may sue you for defamation or wrongful termination if evidence is weak or if you bungle the investigation.

The more serious the matter, the more crucial it is to get legal advice early.

Report Embezzlement to the Police

Many employers, especially small businesses, don’t report embezzlement fraud and theft. But that is a mistake.

If you’re talking about a few missing supplies worth $20, it doesn’t warrant calling in law enforcement.

However, you should report all serious embezzlement situations and any theft involving high value to the police, for several reasons:

  • It may be the only way to get restitution.
  • Your other employees need to know you take this seriously. You don’t want anyone else to assume they can get away with it.
  • If you have insurance to make a claim against, or plan to try to hold another party such as a bank responsible, you will need to press charges.
  • You don’t want the embezzler to move on to some unsuspecting future employer because there’s no public record.
  • A thorough investigation may help reveal how a fraud scheme occurred. This may help you take steps to avoid similar situations in the future.

Don’t Wait!

The faster you act, the better you can protect your business and the faster you cut your losses.  Besides, workplace theft can throw a business into incredible turmoil and put crushing pressure on you as the owner.

Put Control Systems in Place

One of the most important things you can do is make sure the same thing doesn’t happen again.

Change internal procedures to minimize access and avoid temptation. Put checks and balances in place. For instance, if equipment or inventory is missing, do a better job of using software to track items and security cameras to tighten up security.

Also, require separation of functions.  Never allow one employee to have complete control. Assign one person to process transactions, and another to reconcile the bank account and make accounting entries. Or do one of the functions yourself if your organization is small.

Also bring up the topic of being frugal and emphasize the trust you are placing in everyone, in team meetings.

When you put proper checks and balances in place, you limit the opportunity for temptation and access to do harm.

Find Someone to Talk With

Last but not least, take care of yourself. If the embezzlement involves large sums, you will be upset and perhaps in shock. You may have a mix of emotions roiling around.

Try to control your own emotions and reaction, not just toward the guilty employee but toward everyone else in the business. They are depending on you to be as calm and collected as possible, and not fall apart emotionally. This is another reason to discuss the situation with your attorney.  It buys you time to cool down. Talking with a skilled advisor will help you sort out your options with a level head.

Find a friend or talk with your spouse. You might also want to talk with a spiritual advisor or a mentor.  Or you might pray as a form of talking with a higher being.

Embezzlement and theft is never easy to confront and deal with.  But your business survival and your employees’ livelihoods may depend on the tough decisions you make.

Good luck!

Get more employment advice.

All answers to reader questions come from the Small Business Trends Editorial Board, with more than 50 years of combined business experience. If you would like to submit a question, please submit it here.

Image: Depositphotos.com

This article, “How Do I Handle Embezzlement and Employee Theft?” was first published on Small Business Trends



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How conglomerates can do better in emerging markets

September 12, 2019 by Asif Nazeer Leave a Comment

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Although the conglomerate model has come under increasing scrutiny in some quarters, it still has a great future in emerging markets, particularly if business leaders are prepared to streamline their conglomerate’s focus and identity.

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Can Your Small Business Keep Up with Faster Shipping Demands?

September 10, 2019 by Asif Nazeer Leave a Comment

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What will the impact of faster delivery demands have on your small business?

When you are competing with the likes of Amazon, it is hard for a small business to deliver on customer expectations. This is especially the case with shipping.

A new survey and report from Clutch looks to find out, “How Consumer Hunger for Two-Day Delivery Impacts Small Businesses.” As more small businesses introduce online commerce with their brick and mortar operations, shipping plays an important role.

Riley Panko, who wrote the report, explains the challenges small businesses face as more consumers order online.

Panko says, “Deliveries must move fast in the age of online shopping. Customers may not understand what exactly goes into getting a package to their doorstep in 2 to 3 days, though – and that their expectations for faster shipping have consequences, including pricing out smaller, local retailers that cannot offer fast shipping on the scale of major online retailers.”

According to Panko, the goal of the report is to help:

  • Consumers understand the real-world impact of their expectations for faster shipping
  • Small businesses learn strategies for adapting to faster delivery timelines

In order to find out how Clutch surveyed 528 online shoppers. The participants in the survey revealed how quickly they typically get their package. They also shared their opinions on shipping times.

Data of Online Shoppers

According to this survey, 48% of online shoppers say they get their packages within 2-3 days. Another 42% say it takes 4-7 days to get their online orders, but overall consumers now expect faster shipping.

When do shoppers typically receive packages after ordering online?

image: ClutchWhen it comes to getting a package within one day, only one in 20 customers or 5% say this is the case for them. So, even though customers expect faster shipping, the vast majority are willing to wait. This, however, doesn’t mean their patience is without limits.

Almost half or 45% will not order from a company again if the delivery is late. Panko gives small businesses great advice on this very data point. She goes on to say don’t promise quick delivery timelines if you can’t execute.

How likely are you to order from a company again after a late package delivery?

image: ClutchCustomers are willing to wait, but not for it to get there late. So, if they are willing to wait a bit longer, make sure it gets there on time. Otherwise, it might be the last time you hear from them.

Impact of Faster Delivery Demands

No matter what percentage of your business is made up of online commerce, you have to prioritize faster delivery. Because if your customers can count on you and you meet their demands, you will retain them longer.

How can you do this?

You start by adjusting your shipping strategy so you can compete with other small businesses or even large eCommerce companies.

These are the recommendations from the report:

  • Reconsider the popularity of their current product offerings and consider streamlining products that are less popular but more difficult to ship
  • Understand the benefits of shipping from certain geographic locations
  • Communicate constantly with customers about the progress of deliveries
  • Be realistic about their shipping capabilities and not over-promise on delivery timelines
  • Seek outside help from third-party logistics providers if they can’t keep up with consumer expectations

Conclusion

Last but not least, talk to your customers. An advantage your small business has over a multi-national is you can deliver a more personalized service. With this relationship, your customers probably won’t mind waiting another day or two to get their package.

The key is not to overpromise and deliver the packages late. If the package is going to arrive late, call the customer and explain why. Again, personalizing your connection with the customer is important.

Even if 45% of customers will not order again if shipping is late, the fact that you called to explain the reason might give you another chance.

You can read the full report here.

Image: Depositphotos.com

This article, “Can Your Small Business Keep Up with Faster Shipping Demands?” was first published on Small Business Trends



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Burned by a Marketing Agency? You’re Not Alone

September 8, 2019 by Asif Nazeer Leave a Comment

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Burned by a Marketing Agency? You're Not Alone

Should a Small Business Owner Independently Learn SEO and Digital Marketing?

Do you like business horror stories where the good guy wins in the end? Then this story is for you. With a population of 31,000, Juneau, Alaska is the biggest city in its region. But physical roads to the outside world are practically non-existent. When you think of “global reach”, it’s not a city you would name. Then how did one small B2C business in Juneau ramp up and expand beyond domestic success?

New technologies allowed the brand, named Invisible World, to collaborate better. It let them import from Bolivia and Peru. And source in other countries. But technology didn’t automatically mean smooth sailing. Sometimes technology was a gateway to the company being exploited.

Still Thriving After 34 Years and Several Costly Blunders

Small Business Trends connected with Invisible World’s owner, Stuart Archer Cohen, to take a look back on what they did to grow, and to hear about what they wish they’d done differently. He also shared some raw thoughts about selling through Amazon. Founded in 1985, it wasn’t until 2003 that Invisible World started leveraging ecommerce to sell items.

In 2017, they closed the Juneau storefront to concentrate exclusively on the internet. Invisible World now produces in five countries and sells in eight others. While the company headquarters are still in Juneau, only 23 percent of their merchandise ever actually passes through Alaska.

According to Cohen, costly business mistakes were made in Invisible World’s early online days. Some of those mistakes stemmed from how they didn’t put in the necessary time and effort to understand digital marketing and SEO themselves.

Unfortunately they believed if they threw enough money at a problem, it would get solved. And we all know: Those roads don’t lead to success. But thankfully, Cohen says the success of Invisible World in 2019 has been directly proportionate to the effort they’ve made to understand the big picture.

Stuart Archer Cohen

image: Invisible World Stuart Archer Cohen is the owner of Invisible World, an apparel company that began as a small retail store. Invisible World now sources alpaca, cashmere and silk clothing in South American and Asian countries, and sells in North America, Europe and Australia. Cohen is also the author of four novels.

* * * * *

In the Apparel Industry, Many Traditional Rules of Business Etiquette Still Reign

Small Business Trends: Hi Stuart, I’ll start with a curveball ask. Can you give some business advice that’s ‘not heard enough’ in the textiles industry, but still advice you live by?

Stuart Archer Cohen: My business is 100 percent dependent on my suppliers, and I never forget it. It’s often assumed in ecommerce that this ancient relationship of buyer and seller is as automated as everything else, but, in fact, your supplier can make you money or cost you money.

Suppliers can prioritize your shipment or someone else’s, they can let you experiment with products or require a high minimum order. I go to South America and Asia every year, sometimes simply to have dinner with my suppliers.

Mutual respect will preserve relationships when problems arise, as they always do. We started Invisible World before fax machines, and I am still dealing with some of the same suppliers. Treat suppliers with courtesy and interest and you’ll probably end up with some lasting friends that enrich your life. Conversely, I rarely buy from anyone I don’t like.

Invisible World

image: Invisible World Small Business Trends: Do you notice a lot of online struggles among apparel startups? What areas are they having trouble understanding?

Stuart Archer Cohen: You can’t hire someone to understand something for you. Internet concepts are not difficult, but there are a lot of them. The best information is all online and free and if you put in the time, you will do a better job than almost anyone you hire. Focus on one area at a time or you’ll be overwhelmed. Do the basics well.

Don’t get caught up in sophisticated techniques used by big-budget experts. Do your basic SEO, a couple of simple advertising tactics and perhaps one social media platform, and see what works. Have professional-grade photos and manage your email campaigns well, and you’ll survive long enough to get to the next level.

Burned by a Marketing Agency

Small Business Trends: But not everyone’s willing to do DIY. So are you saying to beware of marketing agencies?

Stuart Archer Cohen: I definitely caution against internet shysters. The right contractor, sourced through a reliable platform such as Freeeup, can be an incredible blessing for your business, but keep in mind that the internet is full of liars, charlatans and incompetents.

I know that because I’ve been fleeced by many of them. Imagine this situation. You’ve read about SEO, or Adwords, or social media, or whatever’s the latest “can’t-miss ecommerce strategy”, but you don’t understand it, plus you’re too busy running your business to become an expert on it. Along comes someone with all the right techy buzzwords, and you give them carte blanche to manage your SEO or Adwords or social. Six months and thousands of dollars later you realize sales are roughly the same despite all this and on top of that you notice Adwords has an average cost of $200 a sale when you’re selling $50 items.

And why do these situations happen? Perhaps the person you hired knew more than you, but was simply not very good at it, or else farmed it out to another contractor, or just didn’t care as long as you were willing to keep making those monthly management payments.

Small Business Trends: Yeah, that angers me, but quacks exist who are more horrible than that, sadly.

Stuart Archer Cohen: A cut below that are the various get-rich-quick internet schemes where fast-talking twenty-somethings pose in front of Lamborghinis while working four hours a week from a beach in Thailand. For just a few thousand dollars, they can introduce you to their secret 9-step formula for success on Amazon, even if you have no product and no business experience. Avoid these shysters and their high-pressure sales techniques. They’re ‘experts’ at identifying your pain points and playing to them, but their careful attention will end once you fork over the money.

“The mistake we don’t make is thinking someone else holds the magic key to success.”

Small Business Trends: It sounds like marketing agencies aren’t your favorite method of getting help.

Stuart Archer Cohen: If you have a big budget and are already making lots of sales, you can probably find a good agency. I have worked with three agencies and each one has been an expensive failure. Agencies like to bill you on a monthly basis, with no tracking of how many hours they spent or who did the work. In that situation, your interests in how many hours are spent on your account are in direct opposition to theirs.

I have found most agency work to be very standard versions of a Facebook or Google Adwords campaign, while most creativity was devoted to their attempts to convince me it was profitable. Excuses for failure always come back to you. You didn’t spend enough money. You didn’t wait long enough, etc. And just because a service is high-cost doesn’t mean it’s high quality.

Small Business Trends: Apart from the importance of avoiding charlatans, what advice do you emphasize when a startup’s new?

Stuart Archer Cohen: Ecommerce is full of hidden costs — shipping costs, subscription services, credit card fees, return fees. If you’re not on top of them, they will definitely get on top of you! Begin by controlling your cost with a detailed small business strategy. When you’re building a business, you tend to focus on the top line and its steady advance. However, most ecommerce entrepreneurs have a day of reckoning when they have to face the fact that their profits are a lot smaller than they thought. And not all survive.

Amazon is the worst offender when it comes to hidden costs. Access to top-line sales is instantaneous and fluid, but getting a handle on the 20 or so other costs that Amazon dings you with is almost impossible without deep digging or third-party software such as ManageByStats. For example, Amazon not only makes you pay for postage on returned items, they also keep part of their commission.

Beware of Opaque Fees and Costs

We discovered we were losing 7% just on items that were returned, and that’s just one example. Additionally, Amazon is extremely opaque in how they name and display fees, making it hard to understand what the fee was for. We pay commission of 17 percent. We discovered that other fees and returns brought our actual payout on gross sales down to about 60 percent. Always keep your eye fixed on the bottom line.

For businesses that haven’t yet built their website and are reading this, it’s been my experience that ecommerce requires a specialized website type which has many needs unrelated to other types of sites. It is not just things like a shopping cart — it also needs to function well as a sales platform. Platforms like Shopify, Volusion and BigCommerce are already optimized for ecommerce and for a single monthly fee will take care of everything. I say don’t build your site from the ground up; I recommend that companies or startups use a simple template and go for a clean design without too many added frills. Whatever you think you need, it will change as you learn more. We still make mistakes, but they are thoughtful mistakes and we learn from them. The mistake we don’t make is thinking someone else holds the magic key to success.

Images: Invisible World

This article, “Burned by a Marketing Agency? You’re Not Alone” was first published on Small Business Trends



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