11 Lucrative Ideas For Thriving eCommerce Brands

January 6, 2016

At the end of its third year, the average ecommerce company generates $ 1.1M in revenue per month, according to research from business intelligence company RJMetrics. But the most successful ecommerce stores have a different story. “After three years, companies in the top quartile have almost 4x the number of monthly orders, resulting in 279% higher number of all-time orders,” RJMetrics writes in its 2015 Ecommerce Growth Benchmark Report. Unsurprisingly, these breakout stars have both an impressive start and a consistently strong growth trajectory. “By month six in business, top performing ecommerce companies have separated from the pack, reaching a monthly revenue over $ 600k, 329% higher than everyone else.”

For businesses to reach that inflection point though, they must apply a wide variety of growth strategies that allow them to accelerate sales, build customer loyalty and increase their overall profits. Below are 11 tactics thriving ecommerce brands may employ to outperform their peers.

Affiliate marketing

Affiliate marketing is a performance-based marketing strategy that allows brands to pay traffic sources a commission only when a referred visitor converts into a sale. For example, a t-shirt manufacturer with a 30% gross product margin can offer affiliates a 20% commission for every successful order. That would mean the brand would earn a 10% net profit on each order through an affiliate. This straightforward and risk-free approach to customer acquisition allows companies to take advantage of the unit economics of their products. But to turn affiliate marketing into a major revenue source, companies needs to offer affiliates a compelling commission. Most affiliate programs offer a 3-7% commission while others may offer anywhere between 10-25% depending on the product and industry.

Affiliate program

At scale though, stores need to factor additional costs into their affiliate economics. Those include:

  • Customer service costs (including returns and exchanges)
  • Shipping and handling costs
  • Coupon, discounts and special promotion costs

Each of these reduce your product margins. To protect themselves, stores can include commission reversals for orders that are returned.

Cross-promotional partnerships

Mouth giveaway

When likeminded businesses pool resources and share customers, the opportunities are endless. For example, ecommerce companies can partner with magazine publishers, lifestyle blogs and other brands who target the same audience but aren’t direct competitors. According to the National Federation of Independent Business, a few cross-promotional opportunities include:

  • Co-branded advertisements. To share exposure and costs.
  • Social media support. To distribute each other’s content and help grow each partner’s fan base and social following.
  • Joint mailings. To send co-branded catalogs, newsletters or postcards to their customers.
  • Partnered giveaways. To collect email addresses for remarketing purposes later.

But before you commit to a partnership, Stephanie Gruner for Inc. Magazine recommends asking yourself four questions:

  1. “Are we a natural fit?”
  2. “Do we enhance each other’s credibility?”
  3. “Do we bring different resources to the table?”
  4. “Is the sum of our parts greater than the whole?”

If the answer is yes to all, then you have a match made in heaven.

Customer education

Queork customer service

Customers make the strangest assumptions sometimes. Recently, I bought a succulent and watered it every day. It wasn’t until the petals turned color that I knew something was wrong. Lacking a green thumb, I nearly drowned the poor plant. After a bit of research, I discovered that my succulent preferred a less frequent watering schedule. So, I began watering it twice a week instead of daily. Had I known that earlier, I would have saved time, water and worry.

Post-purchase, brands have a unique opportunity to educate customers about how to best use and care for their products to ensure they get the most value from their purchase. In fact, a strong frequently asked questions (FAQs) page and other product-related resources can help stores reduce return rates too.

Email marketing

Email marketing

For every dollar spent on email, marketers generate $ 40 in ROI. Savvy ecommerce managers can employ email marketing to encourage repeat purchases, stay top-of-mind with their customers and reduce shopping cart abandonment rates. According to Campaign Monitor’s Aaron Beashel, five email campaigns ecommerce companies should send are:

  1. New arrivals notices to inform customers about inventory updates.
  2. Segmented campaigns based on gender, location and interests.
  3. Product review requests to source customer feedback.
  4. Birthday emails to celebrate their special day and share an exclusive offer.
  5. Last-ditch emails to re-engage customers who haven’t purchased from you in a while.

Discontinuing products

Discontinued product

Some products flop, and when they do, smart brands shift their focus. For manufacturers like Procter & Gamble (P&G), it’s not unusual to see product lines slashed in half. In an article for Bloomberg Business, Alexander Chernev explains, “This means P&G must put more resources into managing each brand in its portfolio. To improve its profit, the company might have to focus on brands that have scale or synergies while divesting some of its smaller, ‘orphan’ brands.”

Before a failing product is completely sold out, many companies decide to stop marketing it entirely. Because customers will only browse through so many products and because websites only offer so much real estate for goods to be featured, prudent brands have three options:

  1. To completely abandon their worst products (and donate them to charity).
  2. To give them away to customers as a free add-on with purchase.
  3. To deeply discount the product, offering it at “clearance” prices to recoup some of their investment.

The sooner an ecommerce business ditches its underperforming products, the faster it can focus its efforts on improving and marketing its best selling products, and researching and developing new items all of their customers may love.

Offline marketing

LL Bean catalog

Contrary to popular belief, direct mail marketing is not dead. Among leading ecommerce brands, cataloging is wildly popular. For PracticalEcommerce, Charles Nicholls found that nine out of 10 of the top converting websites had a catalog. The conversion leaders include Schwan’s, ProFlowers, Vitacost.com, and Lands’ End. With online conversion rates ranging from 41.7% to 18.3%.

…and if you thought billboards and posters were a dying business, in NYC, mattress company Casper advertises its product in taxis and subways as an economical alternative to Facebook ads, which have tripled in cost over the past year.

Profit-driven couponing

Clever couponing

With coupons, brands have full control over their offer. Yet, many make the mistake of providing customers with a deal that eats into their profits. Instead, they should focus on sharing coupons in a conservative manner to not only drive revenue but profits. To do that, small business expert Daniel Kehrer suggests eight things:

  1. Measure your marginal cost to guarantee profits on bulk orders.
  2. Commit to converting first-time buyers into returning customers.
  3. Prevent coupon abuse by ensuring customers may only use a certain discount once.
  4. Track order history for each customer to share different coupons for first-time customers and returning shoppers.
  5. Factor in fees from coupon portals like Groupon or affiliates.
  6. Collect contact information for remarketing purposes.
  7. Cross-sell and upsell to increase order totals.
  8. Ruthlessly track performance to shut down profit-losing offers and aggressively promote profit-generating coupons.

Receipt marketing

Amazon receipt marketing

Receipts are an underappreciated marketing medium.

Jack Dorsey, CEO of Square and co-founder of Twitter, believes the digital receipt to be a product that people actually want to interact with. For clever business owners, the email receipt can be used to:

  1. Offer customers discounts on their next purchase.
  2. Gather responses from customer satisfaction surveys and get product feedback.
  3. Highlight answers to commonly asked questions and address product misconceptions.
  4. Eliminate buyer’s remorse with positive product testimonials.
  5. Increase referral program participation.
  6. Upsell related products and recommended items.

Selective advertising

Facebook advertising

Every small business owner loves the idea of having his or her brand featured on prime time television and on the biggest billboards around the city. But that sort of exposure costs companies an arm and a leg. This year, businesses spent $ 4.5 million on just one 30-second spot during Super Bowl XLIX.

For ecommerce brands with a far more limited budget, there are smarter and more cost-effective ways of doing marketing that will generate better ROI. Those include:

  1. Targeted display and search advertising
  2. Sponsored email newsletters
  3. Native advertising
  4. YouTube product placements

That said, any paid media should be bought with scrutiny. Ads should be targeted to a store’s ideal customer with priority towards audiences that have purchase intent.

Smart inventory management

Gilt sold out

Ever since companies began mass producing product, they’ve made every effort to forecast sales so they may place one large bulk order with their manufacturer and later sell out of inventory. But companies pay a huge price when their products eventually do sell out.

According to business consultant Ian Johnson, companies with poor inventory management lose profits, customers and market share. To combat that risk, stores should arrange to have safety stock. But savvy ecommerce entrepreneurs also make it a priority to partner with agile manufacturers to produce product in an almost on-demand manner and ensure inventory replenishment is never an issue.

Support brand ambassadors

Brand ambassadors

In 2013, a survey from Nielsen on consumer trust in advertising revealed, “Word-of-mouth recommendations from friends and family, often referred to as earned advertising, are still the most influential, as 84 percent of global respondents across 58 countries to the Nielsen online survey said this source was the most trustworthy.” What this means for brands is that customers can be a powerful marketing asset. In fact, some of the most popular and influential people around the world already tell their friends and family members about your company. To encourage positive word-of-mouth, ecommerce shops should create a program that supports their biggest brand ambassadors. Three things every ecommerce business should do with their biggest brand advocates are:

  1. Share exclusive product
  2. Invite them to VIP events and opportunities
  3. Give them product to give away to their fans, followers and friends


To build an ecommerce business that can go from $ 0 to $ 10 million in sales in just a few years, store owners must be open to collaboration with other companies, clever and careful with their marketing, proactive about customer education and service, and willing to prune their product portfolio. By making the right choices — and sacrifices — ecommerce brands can thrive in even the most competitive environments.

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