August 9, 2015

Lessons learned from my failed e-commerce startup

When Jenna and I were living in Pennsylvania, we frequented the oddball grocery stores in the Philly suburbs always looking for something new. One of the more interesting spots was the West Norriton Farmers Market. More of a grocery store than a farmers market with a geographic layout, this place has an interesting selection to say the least. I’ve always been into hot peppers, and the Caribbean and African section of the store had some tempting/daring products to offer. One of these was the best dried pepper product I’ve ever tasted.

That product (2 cases of which are still in my closet) became the template for an e-commerce shop called I had the site for a tad over a year and figured I’d post about what I did wrong, what I think I did right, and just some overall lessons learned from the experience.

What I did wrong

  • Not striking when the iron was hot. I was paranoid about sales & local tax in PA. I didn’t want to start a business in Pennsylvania because of sales taxes and filing for a business license in Chester County. Those things forced me to step outside of my comfort zone, a good thing. I let the state scare me out of starting this project because I’d lived in Oregon before and knew I was moving back in a years time. I was comfortable with the business climate in Oregon and had great contacts in e-commerce based there, so what did I do? Wait. This was the initial throttle in and retrospectively the reason it failed.
  • Getting into the resale of food products business with no prior history or doing the proper research. This is a big one and the come to Jesus story that made pulling the plug on easy. I spent a LOT of time researching additional products to add to the site. At the time of launch until the time of closure, the site only had one product, the inspiration. I spent a ton of time here in Oregon looking how to package my own spices, rent space in a commercial kitchen, talking with repackaging companies and setting up wholesale accounts for an industry I had NO background in and didn’t understand the competition within.
  • Deviating from the inception story. The idea for the site was to sell unique, hard to source spices from Africa and the Caribbean. What did I do? Start shopping anything hot and spicy just to expand my product catalog. It took a bit of time before I realized that I had no chance of competing on what in the end were generic pepper products that could be bought on Amazon and I’d have 0 margin. landing page landing page

What I think I did right

  • Conceived the idea and ran with it at a low cost. The product was interesting to me, it was and is still not sold on Amazon. Getting in touch with the importer took about a month and a half of unanswered emails and voicemail’s. Once I was in contact with the importer from Ghana, product acquisition was a breeze and I was able to acquire the product at a nice price point ($2.77 per unit delivered with a minimum 2 case order; $165.96 delivered total) At least I’ll never need to buy dried hot peppers ever again.
  • Launched on Shopify Basic. At the time Shopify offered a 5 sku plan for 14 bucks a month. I had to do very little server side to get this going, it was no harder than WordPress to install on my ftp server.
  • Bought a slick template. Aside from product costs, this was the most expensive endeavor related to The theme I bought was called “Editions” and it was 140.00, they don’t seem to sell it anymore otherwise I’d link. It looked better than anything my CSS skills could have delivered on OS Commerce and my shop looked great right away.
  • Leveraged my existing work-space/materials to fulfill orders (all 2 of them). One thing I learned a long time ago when I was at was that once you “know what you’re doing” you can expand. My existing thermal printer, scale, shipping workstation and experience with Paypal put me in a place to launch and fulfill orders quickly without logistical overhead.

In the end, I had 2 non-friend/family orders come in. The first was extremely exciting, coming in within 1 week of installing the Editions theme. I thought I was onto something but quickly was sidetracked by the lack of product catalog and the sense of urgency that ONE order gave me to expand. That’s where I really got into the weeds with and began falling back on my traditional ebay based resale business as a comfort. I’m not proud of losing the cash on the idea, I’m not proud to be writing this post but wanted to deliver something from the experience.

All and all, the project cost $475.96. What taught me is that if you have a good idea, are persistent as hell, not afraid of working extremely hard and are only willing to deviate from the objective when you know your profitability/competition in that expansion space, you have a pretty OK chance of making it work, otherwise plan on clicking the “close my store” button. Thanks for reading, hopefully this can help you avoid some of the mistakes I made on this e-commerce startup.


Leave a Reply

Your email address will not be published.