Once upon a time, $100,000 a month in sales was just a pipedream.
But against all odds, you did it. And now, you’re looking at the next mountain peak: $1 million a month in sales.
What got you to $100,000 won’t carry you to your first million (and beyond). The path to $1 million is a long, windy road that many eCommerce businesses struggle to navigate. However, with the right resources, strategy, and grit, you can accelerate your eCommerce growth and add that extra zero to your monthly sales.
Let’s dig a little deeper and see what the journey entails.
$100,000 a month vs. $1 million a month
To start, let’s see how a business earning $100,000 a month compares to a one earning $1 million a month.
At $100,000, your business has a solid foundation. You’ve built a user-friendly site, invested in SEO, launched ads, and started collecting customer info to retarget with promotional emails. You probably have a handful of best-selling products on your own site or other channels (resellers, retailers, 3P marketplaces).
- Common successes: An engaging, organized website, proven product-market fit, and satisfactory customer service.
- Common hurdles: Finding the right suppliers, managing inventory, understanding (and maximizing) profit margins, and deciding whether to outsource fulfillment and other processes.
At $1 million, your business is a recognized brand with a strong, loyal following. You’ve grown your team significantly to support the high volume of customers, as well as to perform more R&D, marketing, and other supporting functions. You work with many more suppliers and sales channels, even opening yourself up to international sales.
- Common successes: Catalog expansion and diversification, sales channel expansion, new resellers and distributors, an expanded in-house team, and greater investment in marketing and advertising.
- Common hurdles: Scaling customer service, quality control, prioritizing tasks and channels (for both sales and marketing purposes), and finding the right team members.
The path to breaking 7 figures a month: 6 Expert tips
What does it take to hit that $1 million mark? Below are six steps we’ve seen most sellers follow to shatter sales records and build a resilient business.
1. Build a brand
It’s hard to overstate the power of a brand. It outlives any founder, employee, product, or viral campaign. It etches itself into your customers’ minds after they’ve done business with your team, and reappears when they need to decide whether to do so again (and again and again).
“A brand is the set of expectations, memories, stories, and relationships that, taken together, account for a consumer’s decision to choose one product or service over another,” Seth Godin said.
However, brands aren’t built overnight. You need to have a vision and define steps to realize it. A great place to start is your current branding. Analyze what part of your strategy is outdated, what’s still relevant, and what needs amplification.
While aesthetics are important, remember that a brand is a representation of your business’s entire identity. Establish core values your team can stand behind, your mission, and your differentiators — then ensure any packaging, customer conversations, or other representations of your brand continuously reinforce them.
With all that said, it’s possible to go overboard branding. Many merchants make the mistake of putting branding principles first, and direct-response principles second. They become so fixated on becoming the next Nike that they spend more time beautifying their webpages rather than perfecting their products. While you don’t want to neglect your branding, it shouldn’t be your first and only priority.
2. Eliminate inefficiencies in your operations
Inefficiencies can set your business back to the tune of thousands — if not millions — of dollars. Target, for example, lost more than $2 billion (and killed their entry into the Canadian market) due to mismatched inventory. This catastrophic error involved a pileup of pink Barbie SUVs whose barcodes didn’t match the numbers in the computer system — showing the retailer was trying to grow too quickly without the proper precautions.
Avoid business disasters by identifying gaps in your operations. Find a way to centrally manage all of your sales channels, inventory, purchase orders, and more so that no channel is disconnected. Consider as well a solution that can automate redundant, error-prone tasks, such as keying in product data or inventory numbers across multiple systems. Note that “small” errors are prone to explode into much larger issues as you scale, so you’ll want to address them right away.
As you audit your operations, you may discover the root of inefficiency is that you spread your business too thin. In the case of Target, the retailer decided to shave down the number of brands and products on its shelves to help simplify its supply chain.
The key takeaway: know when you’re exhausting your resources in the wrong places, and don’t turn a blind eye to any existing obstacles in your workflow.
3. Optimize the user experience
As a growing business, it’s important to test and test repeatedly. Don’t grow complacent or overconfident in any existing tactic, because what worked at $100,000 a month may not necessarily work at $1 million a month.
For instance, as your catalog and audience expand, you may need to revisit the navigation on your site. Visitors could be flowing in from multiple points of entry — ad campaigns, partner sites, newsletters — expecting to find your products within a few clicks. You’ll need to make it easy for them to locate the products advertised to them and discover related products while they’re on your site.
Along the same lines, you should test everything from your product messaging and images, to packaging and pricing. You never know what could move the needle, especially when you work with a more diverse audience.
Outside of your own site, consider how you can take full advantage of third-party marketplaces like Amazon. Marketplaces are search engines in and of themselves that are trusted by a vast majority of consumers. See how you can optimize your product listings to reach the top of rankings, and how you can create a uniform buyer experience across channels.
4. Keep an eye out for secondary audiences and alternative uses
As you tend to your primary customer base, keep your eyes peeled for secondary audience and alternative uses of your product that could convert into loyal buyers or champions of your brand. Here are some examples to explain what secondary audiences and alternative uses of your product are.
A secondary audience is someone who isn’t your direct audience, but you should still market to. Consider the holiday season. When you advertise to parents, friends, colleagues, or others who are purchasing your product(s) for their loved ones, you’re essentially advertising to a secondary audience.
Another example of this is gel nail polish, which was initially intended for professional nail technicians. Today, many consumers are purchasing at-home gel nail kits. As a result, many beauty brands are creating their own at-home solutions to cater to this new, emerging customer base.
An alternative audience comes up when the market discovers a use for your product or service that you didn’t realize. For example, consider a pillow manufacturer that created a neck pillow for toddlers. Pet parents may discover that these neck pillows could also be used instead of the common Elizabethan collar (AKA “cone of shame”) to prevent their dogs from licking or biting stitches after a surgery.
The baking soda manufacturer Arm & Hammer switched from selling “baking soda” to “deodorizer,” focusing on the benefits versus the product. They began selling baking soda in special boxes designed to keep in your fridge or bathroom, and switch out every month. As a result, they now have an alternative audience that goes through an entire box of baking soda in a month — much more than they would have if they were using it for cooking.
You’ll want to look out for similar opportunities to expand your reach and stretch your sales potential beyond traditional limits.
5. Nurture brand advocates
Ads and traditional marketing campaigns can take you far, but some of the most fruitful programs involve turning your customers into brand advocates. After all, your top customers can already vouch for the quality and trustworthiness of your brand.
A referral program taps into the power of word-of-mouth marketing and earned media, which reportedly drives four times more brand lift as paid media. Similarly, an influencer marketing program can broadcast your message to new, established audiences.
Note that influencers should be treated like any other customer in that they should receive access to your product(s) and genuinely appreciate your brand before promoting it. This will enable them to produce top-quality, believable content (be it through video, blogs, and/or social media) and boost the virality of your brand.
Beware of influencer fraud, though. Thirty-eight percent of brands claim to have experienced influencer fraud, but managed to mitigate it using fraud detection tools.
Other initiatives worth considering are loyalty and affiliate programs. Each of these further incentivize repeat purchases and foster a relationship with your brand.
6. Know the difference between investment and expense
This tip comes from the E-Commerce Times, which intelligently points out the difference between wasted money and money well spent on growing your venture. Too many business owners are quick to throw in the towel when, for example, their online ads fail to yield the results they expected. They view their losses as wasted money and give up after a few failed attempts.
In reality, ads rarely work the first, second, or third time you launch them. In fact, some owners burn through hundreds of ad creatives, copy angles, and ad types just to find the one or two that work.
The saying “fail fast, fail often” couldn’t be truer here, where finding a million-dollar idea requires months of experimentation.
To figure out what’s actually worth your time and investment, draw up criteria or SOPs for your team to follow before launching a new test. Your criteria could look something like this:
- Explain your hypothesis and how the test can drive your company goals.
- Define the expected results and which KPIs you’ll measure to track performance.
- State the maximum amount of time the experiment should run and who will monitor it.
- Describe the A/B tests you plan on running and when.
Your criteria may be different from this list, but the bottom line is you should be ready to “gamble” some money on healthy experiments. Those tests must be properly managed with the aim of serving the company in the long run.
Wrapping up: Aim high for eCommerce growth, but keep your eyes forward
No single tactic is enough to grow your eCommerce company into an empire. Besides strategy, you have to buckle down and apply plenty of elbow grease. Check off the basics, audit your current operations, then establish processes to decide what other tasks are worth your time. With discipline and strategy in place, you can turn $1 million a month from wishful thinking into a reality.