The world of e-commerce is in a constant state of flux, with new trends and technologies reshaping the way we buy and sell online.
In this episode, Hannah Clark is joined by Jeff Orange—Product Manager at TikTok—to share his do’s and don’t’s of developing e-commerce platforms, practical tips for overcoming barriers to purchasing, and the emerging trends informing the future of ecommerce.
Interview Highlights
- Jeff’s Career Journey [01:07]
- Originally from Southern Indiana and lived there for 30 years.
- Earned an MBA and moved to Pittsburgh, Pennsylvania.
- First e-commerce job at Dick’s Sporting Goods.
- Lived in the Bay Area for 8-10 years working at various DTC e-commerce companies including Levi’s, Gap, Fanatics, and GoPro.
- Currently works at TikTok as a Product Manager.
- State of Product Management Today [02:03]
- Product management means different things at different companies.
- There’s no single definition of a product manager’s role.
- Some product managers work directly with engineering teams, while others focus on user research and data.
- The title of “product manager” can be applied to a wide range of responsibilities.
- Jeff hopes that the role will become more standardized in the future.
- Key Trends and Challenges in E-commerce [03:21]
- Social commerce is a major trend with the potential to change the shopping experience for users.
- TikTok Shop is aiming to be a leader in social commerce in the US.
- Marketplaces are becoming increasingly important for e-commerce businesses.
- D2C sites may need to shift their focus to marketing and leverage marketplaces to reach customers.
- AI is playing a bigger role in e-commerce, particularly in customer service chatbots.
- Do’s of Developing E-commerce Platforms [06:52]
- Align on goals with all decision-makers in the organization at the beginning of the project.
- Include a strong UX presence in the development process.
- Utilize a headless e-commerce approach for flexibility and faster development cycles.
- Focus on the entire customer experience, including short-term and long-term goals.
- Don’ts of Developing E-commerce Platforms [12:49]
- Don’t overlook established platforms like Shopify and WooCommerce.
- Don’t build a platform without considering extensibility for future technologies like voice commerce and AR/VR.
- Strategies to Overcome Consumer Friction Points [14:54]
- Leverage data analytics to identify true issues causing friction.
- Conduct user interviews to understand user pain points, but don’t rely solely on them due to scalability limitations.
- Use data and user research to form hypotheses and conduct A/B testing to find the best solutions.
- Be willing to test unconventional solutions based on user research and iterate based on results.
- The Role of Affiliates and Live Commerce [20:17]
- Affiliate marketing:
- Growing importance due to decreased trust in traditional celebrity endorsements.
- Consumers rely more on recommendations from peers and trusted individuals.
- Building a strong affiliate network is crucial for e-commerce success.
- Rise of social commerce:
- Shift from mass-targeted marketing to personalized, influencer-driven marketing.
- Platforms like TikTok create an environment for trust and connection between creators and users.
- Live commerce experiences like TikTok Shop allow for real-time product demonstrations and interaction with customers.
- The future of live commerce:
- Potential for features like interactive try-ons to create a more immersive shopping experience.
- Live commerce could bridge the gap between online shopping and in-person experiences.
- Success relies on authenticity and trust between creators and viewers.
Meet Our Guest
Jeff is a passionate Product Manager that focuses on delivering products that meet customer needs to grow the business strategically in the most cost efficient method possible. He prides himself on being a person that can cut through the red tape and get stuff done while maintaining excellent relationships with both business partners and his internal team. He is a master disambiguator/simplifier, and constantly pushing toward clarity and delivery.
Hannah Clark is the Editor of The Product Manager. Following six years of experience in the tech industry, she pivoted into the content space where she’s had the pleasure of working with some of the most brilliant voices in the product world. Driven by insatiable curiosity and a love of bringing people together, her mission is to foster a fun, vibrant, and inspiring community of product people.
This article originally appeared on TheProductManager.com and was syndicated by MediaFeed.org.
More from MediaFeed:
Small business money management mistakes (& how to avoid them)
In 2016, Wasp Barcode Technologies asked more than 1,100 small business owners what the biggest challenges were as it related to running their business.
Unsurprisingly, money management issues topped the list.
- 43% mentioned that growing revenue was tough
- 45% cited increasing profits as a primary challenge
- 36% pointed their finger at cash flow management
Sound familiar?
That’s why today we’re looking at the top 13 money management mistakes small business owners make, along with some suggestions on how to solve them.
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“You need to spend money to make money.” It’s true investing in your business is necessary.
However, investing too much too soon is often cited as one of the top reasons for business failure.
In those fragile first years, it’s more important to focus on acquiring new customers and proving your business model works than it is to over invest in your endeavor.
How to solve this money management mistake
Much like over investing in a new hobby by buying gear just to lose interest in 3 months; many new business owners overspend, buying more equipment and tools than the business can sustain.
Unfortunately, this means starting with more debt and eroding your profit margins before the business has a chance to prove itself.
Before investing too much at once, scrutinize your business model and ask, “Am I creating a sustainable plan that’ll generate profit that can be reinvested over time?”
Start small to validate the business, and scale only when necessary and sustainable.
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It’s easy for a sense of optimism to replace practicality with positivity.
But conservative sales forecasting is necessary to determining reasonable growth and profitability.
A positive outlook is important, no doubt, but you also need to be realistic with your sales projections.
How to solve this money management mistake
Get a grasp on your cost per customer acquisition.
A formula you can follow is: X money spent on generating leads divided by sales made.
For example, if a company spends $500 on marketing in a year and acquired 100 customers, the cost per customer acquisition is $5.00.
It’s important to understand this metric, because if the formula holds true, you can better estimate your future sales by saying, “If I spend X more, I should get Y more customers.” This must be constantly monitored because the law of diminishing returns is inevitable.
Your historical data, repeat customer rate, and market trends should also be considered when predicting your future sales volume.
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82% of small business failures are due to poor cash flow management.
Understanding how much money is going in and out of the business seems like a simple concept, but it becomes complicated when you don’t have solid sales projections or when several clients doesn’t pay on time.
How to solve this money management mistake
Closely monitor your accounts payable and accounts receivable, know when a client isn’t going to pay, follow up with late paying clients, cut costs where you can, and monitor your cash flow.
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Every business owner can relate to the pain of pricing their products or services.
There is an art and a science to pricing, which means you can’t rely on intuition or pull numbers out of a hat. Overprice and the customer may not buy, underprice and you wont turn a profit.
How to solve this money management mistake
You need to have a grasp on how others in your market are pricing their products in order to remain competitive.
For small retail and ecommerce businesses, this may be as simple as maintaining a spreadsheet of your competition’s inventory and prices. For larger organizations, a tool like Price2Spy will track pricing across the internet and notify you when prices drop or inventory is low.
Racing to the bottom on price is never a good idea. Look for other ways to stand apart from the competition, by striking a balance between price, value and a buying experience that makes you the best possible choice for your customer.
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One in five business owners use the same bank account for business and personal finances.
While it might not seem like a big deal to mingle those dollars, neglecting to keep your business and personal finances separate complicates your ability to track household bills, deductible business expenses, and revenue generated by the company.
How to solve this money management mistake
First, decide on whether you want to pay yourself a salary or draw.
Then, open a separate checking account for your business. A separate account comes with numerous benefits, such as the flexibility to connect different payment services (including debit and credit cards) to the business account, and a simplified bookkeeping process.
Setting boundaries forces you to view you and your business as separate entities which gives you a more accurate read on your businesses financial health.
This will come in handy later on if you ever audit your business, raise capital, or sell the equity.
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Here are two accounting terms you don’t want to confuse: profit and cash.
Believing that all cash is profit, paints an inaccurate picture of your business finances. This can lead to overinvestment in certain areas, while being unable to cover standard operational expenses.
How to solve this money management mistake
Cash is the amount of money your business has readily available at any given time, due to the influx and outflow of money.
Profit is what’s left after covering all necessary expenses.
When in doubt, keep in mind this basic calculation: Cash – Expenses = Profit
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One of the biggest perks of owning your own business is the ability to write off business expenses.
However, a surprising number of business owners overlook deductible expenses they’re entitled to.
One 2015 survey indicated that 21% of small business owners claim less than half of their small business expenses. Even more alarming, 10% said that they claimed “hardly any” or none of their expenses.
How to solve this money management mistake
This goes back to advice from earlier; open a separate business account.
A separate account will bring additional clarity around your accounts payable and business expenses during tax season, making it easier to write off the appropriate expenses.
Create a system for keeping receipts. Some tools simplify expense tracking by allowing you to attach a picture of your receipts to the corresponding transaction.
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Intentionally or not, many business owners forget to pay their estimated quarterly taxes.
Neglecting to do so can wreck your financial projections, saddle you with penalties and fees, and further complicates filing taxes at the end of the year.
How to solve this money management mistake
Calculate and pay your quarterly taxes.
Paying your taxes quarterly helps set manageable tax savings targets, and minimizes the temptation to tap into a tax savings account.
Plus, by staying on top of your quarterly taxes, you minimizing the risk of losing deductions along the way, helping you stay on top of your overall cash flow.
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We’ve discussed the dangers of overspending early in you business life cycle. That doesn’t mean that you shouldn’t invest money back into your operation. Reinvesting funds will be key to your growth and success.
It’s wise to commit some dollars to improvement for your business—whether that’s additional employees, new equipment, or whatever else you need to keep your business moving forward.
How to solve this money management mistake
Determine what percentage of your profits you’ll set aside every month to re-invest in your business.
Set benchmarks and savings goals to start investing in new tools, equipment, marketing… or anything else that helps you reach the next milestone.
To make this even easier, set up a separate savings account with an automatic transfer of that percentage every day, week, or month depending on how often you get paid.
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Not only does shorting yourself have a negative impact on your personal finances, it also gives you an unrealistic understanding of your profitability.
Obviously, your company will appear more successful on paper if you aren’t paying yourself a reasonable salary.
The problem is, underpaying yourself warps your perspective on your business finances, and undermines your ability to improve your quality of life.
How to solve this money management mistake
How much money do you want to make?
Pay yourself first, then cover the expenses. According to this article on Entrepreneur.com, after your salary and expenses, you should also pay yourself an additional 3 to 4 cents for every dollar your business earns.
This may seem uncomfortable at first, it’s important to remember that your business is supposed to pay you a living wage. If it isn’t currently, you need to figure out why and adjust your models accordingly.
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Predictability is the dream for most business owners, but that can be hard to come by in the world of entrepreneurship. With so many ups and downs, many business owners take more of a “fly by the seat of your pants” approach to money management.
A budget is the financial road map for your month, quarter and year. Without a clear understanding of your financial responsibilities you may end up making a wrong turn into a financial pitfall. A detailed budget is the best tool for understanding the destination of every dollar.
How to solve this money management mistake
Dissect a dollar.
For every dollar you make, know where every penny is going, Each dollar coming into your business needs to be accounted for. Determine ahead of time what needs to be set aside for accounts payable, savings and taxes. A clear budget will help you understand your profits and let you know when cuts need to be made to avoid losses.
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The world of business ownership can be fickle. Which is why you need a safety net. Yet, far too many business owners neglect to build a financial buffer for themselves.
Having a reserve will help you address any unexpected expenses, while also giving you the peace of mind that you aren’t running your business so close to the bone.
How to solve this money management mistake
This goes back to the previous advice of budgeting and dissecting a dollar. You should also consider what to do when you come into unaccounted for cash.
Whether it comes from beating your sales targets, increasing profit margins or reducing operational cost. You should have a plan for saving a percentage of this unbudgeted money.
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Here’s a rude awakening: One third of entrepreneurs don’t have a retirement savings plan. Many blame insufficient income for the lack of a nest egg.
Not planning for your own financial future inevitably leads to the realization that you will either work forever or be forced to sell everything you have worked for.
How to solve this money management mistake
When mapping out your budget, make sure you have a plan in place to set aside funds for retirement.
If you’re self-employed without employees, you may choose to contribute to an Individual 401(k), Traditional or Roth IRA, or SEP IRA. With or without employees you should consult a financial advisor to determine what plans best me your long term goals and those of your company.
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There are plenty of challenges that come along with business ownership, and managing your finances is definitely one of them. That makes it easy to fall victim to many of the common money pitfalls we outlined above.
Fortunately, awareness is the first step to effectively overseeing your business finances. Keep an eye out for these frequent traps, and you’re far less likely to become another statistic.
This article was produced by the QuickBooks Resource Center and syndicated by MediaFeed.org.
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Featured Image Credit: DepositPhotos.com.
