Launching an Ecommerce Company

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The following is a transcript of the cross-conversation streaming in the enclosed media: 

Welcome ecommerce enthusiasts to Beyond the Cart, presented by Lightburn. Today we're kicking it off with episode one, You're Doing What? Where we talk about why our digital agency, Lightburn, is launching an ecommerce company and the challenges we—and you—are going to face along the way. Andy, if it's okay, I'd love to kind of set the scene. How you came to me and Scott (Lightburn Partner), and you pitched this idea that you were gonna start this ecommerce company. You could see the 'No' on our faces on this video call. We were ready to shoot it down. We were like, oh, no, another crazy idea from Andy. Then you tied it back to what Lightburn does, which is help our clients solve really complicated problems, and how we could use this as a case study for them. The minutia of starting an ecommerce company and the light bulb went off, and immediately Scott and I were on board 100%. What do you need? How do we make this happen?

Getting excited about a product

The story starts, really, 20, 22 years ago as much as I hate to admit that. Back in high school I had built an outdoor chair, an Adirondack chair, which I struggle to pronounce, but built it, brought it home from shop class, parents absolutely loved it. It sat on our front patio at the house for 15 years. About a year and a half ago I bought a house, totally gutted it, renovated the inside from top to bottom, and then COVID hit...

Not being able to go anywhere this summer, I put more urgency on that. So I went to town, tore out the deck, tore out the whole patio, completely rebuilt my outdoor living space. But I only had one of these chairs. So, put it around the fireplace, cool. Everyone that seemed to come over loved it, my parents still loved it, and they were over and they were like, "Hey, you know, we'd love to have more of these chairs," so I'm gonna build enough to go around.

And so now, here we are. My parents want a couple and somehow Scott and I started talking and he's like, "Dude, I was just looking online for a couple of those chairs, they're so freakin' expensive." I was like, "Well, I can make you a couple more." So, all of a sudden I'm like, wait a minute, you know, I could build six, seven, eight, 10 of these, so off I went. I was like, the heck with them, I'm not gonna build them one off, I'll build templates and system that I can replicate these chairs over and over again.

I've always wanted to start another ecommerce company. I loved when we had those businesses. The one problem was, I decided long ago that after we sold those, I never wanted to be involved in a retailer only ecommerce. So, if I was gonna own an ecommerce site or a business, you know, that primarily focused on ecommerce, I didn't wanna just be a middle man. The two other ecommerce companies that we had, we were essentially just middle men. We bought a product, marked it up, marketed it, sold it, did the fulfillment, blah, blah, blah. Which is great, but, you know, there's this big, huge, ginormous problem with that and ultimately that's Amazon, right?

Direct-to-consumer: More than a retailer

We got in on those businesses at the right time. There were categories that were very fragmented, not sexy. Amazon was not playing in those at all. And it worked great, but you couldn't redo that today 'cause you would just get crushed by Amazon. So, here I am thinking, okay, I'm gonna build a bunch of chairs, I've always wanted to start a new ecommerce company, but it has to be a product that I have essentially total control over, right? So, I actually wanna make this product, I wanna be able to design it, I wanna be able to tweak it — I don't wanna just be a retailer of somebody else's product.

So, I sat down and I did what we do for our clients. I started doing some market research and I almost fell off my chair when I found out how big of a market this one single product is. I was just absolutely mind blown. You know, we're talking 10's of millions of searches a year on Google alone. To me, it's the perfect product to go to market to because we can manufacturer it, we can buy the tooling — the starts aligned.

One, I had a product that I could actually really get behind, and was passionate about, because I love sitting around the fireplace. Two, there's legitimate demand and three, it's ecommerce. Holy shit, maybe this is it. And then after doing that market research and seeing how big of an opportunity I think this is, I was sold, and off we went. The outdoor furniture market just got destroyed this last summer in a good way, meaning, everyone's buying new patio furniture, everyone's investing in their homes.

Building on previous ecommerce experience

The other factor here is, with Lightburn, we're a digital agency, we help clients all over the country with ecommerce projects. One of our most valuable assets is our experience with ecommerce. So, the fact that we've owned two other ecommerce businesses allows us to go into a potential client or an existing client with experiences unlike any of our competitors because they may say they have experience with ecommerce, but they, it doesn't match our experience. 

We understand what it takes to actually get, not just to order and the marketing around attracting visitors to a site and getting them to actually buy it, but then what I refer to is beyond the cart. So, all the stuff that happens after the order is placed, tax collection, credit card processing and fulfillment and shipping and logistics and inventory, because we had to do that with the two other ecommerce businesses we have. Ecommerce has exploded in the last 15 years, especially in the last three years. This is a great opportunity for our team to continue their education, with the software, the platforms, the tactics, all the way through. All the different aspects, without having to pitch our clients on concepts.

When I started at Lightburn over 10 years ago — we still had one of those ecommerce companies. There was a warehouse that we could go to and talk about fulfillment and understand what fulfillment strategy was. And I always felt like that was our sandbox, where we got to, experiment, like you said, beyond the ecommerce site, but everything that's behind it. It's like an iceberg, and if you don't understand fulfillment and ERP systems and all of that, you can't possibly put a site up and have that be successful.

Being able to have this be something that we can, invest in and take seriously, but also it's it's sort of an experiment. It's our opportunity to have some fun with that while we really get fully immersed in ecommerce again for ourselves.

The landscape of ecommerce

What's happening right now is phase one of ecommerce, which is essentially retailers going online and selling other people's product, just like what we did. And then Amazon is essentially a middle man. That has played out, that's matured, but really the trend now and what we're seeing now is phase two ecommerce which is when business manufacturers who once relied on distributors to sell their product [go stright to the consumer]. 

They made a toaster oven, they weren't selling toaster ovens via a catalog, they were selling pallets of 'em to Walmart, Walmart would sell them to the user. Well, that's all changing. Every single day the size requirement of a the manufacturer to sell direct to consumers is getting smaller and smaller, and those middle men are just getting cut out. Now, is Amazon going anywhere? Is Walmart going anywhere? Absolutely not. 

But there's this whole new frontier of direct-to-consumer opportunities because the cost of developing ecommerce has come way down. The access. We're in a direct to consumer revolution. Manufacturers come to us all the time needing [help]. They know their product and they know about their end user (their end consumer) but they don't necessarily know them as an ecommerce user. And we're bridging that gap and helping them understand how to look at pricing differently, how to look at shipping, how you go from selling pallets and pallets of something to selling one or two per order... what that looks like.

I think part of what we wanna be doing with this podcast is talking about the challenges that you face when you're making that kind of transition and it's sort of the startup mentality that we would want a manufacturer to embrace. All three of us 100% were into this idea, and saw the value for our clients who are often — ecommerce, they're marketing something in a new way, [they] don't know how to get into it. This is an opportunity for us to show them as we go.

Hands on experience equals value

We've kind of been in it, you know, but the thing with our industry... I believe in my heart of hearts... the only way to truly provide our clients value and expertise is to continue to have that hands on experience. You don't read in a book how to do this, there's no code. It's still very much the Wild Wild West. Yes, there are certainly design patterns and there's good design and bad design, but it's still very subjective.

Marketing has always been this way. How do you become a good marketer? You fail a lot. How do you become good at ecommerce? You kind of fail a lot. And that's what we did with our other two ecommerce businesses and again. It's kind of bullshit to go pitch a client on a solution that you [don't have] first hand knowledge of.

I think that's, in our industry,there's a lot of people doing that. They're like, "Oh, it's a plugin for this and a plugin for that and, you know, a plugin to a WordPress site or [you can] spin up a Shopify site in a day, really. Buy a template, done. But that doesn't get you customers—it doesn't—it doesn't solve any of the problems that you actually have in getting something sold.

Yeah, and you don't learn what it's really, how painful and complicated it is, to do deal with a customer return. You actually have to take those phone calls with an unruly customers that wants to return it and they want you to pay for it and what are the logistics and do you send them a shipping label and blah, blah, blah, blah, blah, right? To me, again, we've learned all those lessons. We know what it's like to negotiate rates with shipping companies, which is not fun. It's more of an art than a science because we did it.

I'm an advocate for sharing what we know whether somebody works with us or not. I think truly there's enough opportunity out there for everyone to win. That aside, my goal, my vision, my hope is that we can answer one person's question or give them the confidence to move forward, understand what it's really like to go through [this] because I think a lot of people, especially in this direct to consumer space, are sitting, [thinking]... Should we do this, should we not do this? What's actually involved? I take these phone calls everyday.

So, in my role, in business development for the agency, I'm generally the first person to talk to prospects and I hear these questions every single day. You know, "Hey, we're thinking about doing ecommerce. We had an ad agency quote it and they wanted this price." I'm always like, "That's great, that seems in line. What are you guys doing for these five other things?" And that, when I see those [their] eyes light up and the light bulb go on...  "Oh, there's a lot to this. We don't know how we're gonna process credit cards. We actually don't know how we're gonna generate shipping labels. We don't know how we're gonna handle returns."

What I want with this product—it's two-fold. [It's to keep] our team in tip-top shape in terms of experience and education on what it's really like to run ecommerce—that's one of my goals. The other is to share with people who are thinking of building e commerce or, or possibly even struggling with e commerce, to provide them both encouragement, insight, and value in terms of, "Hey, we can do this, here's a couple tips and tricks that I learned from these guys that are doing it."

And that's why I think it's so important that we've got skin in the game. Ecommerce is here to stay. Godiva recently announced that they're closing all their brick and mortar, they're like, "Fuck it, we're done. We're gonna sell through our retail channel, our third party retailers." That was just like, holy shit—this is where we're headed. COVID only, I mean, COVID poured rocket fuel on the timeline in terms of accelerating the timeline. This is obviously happening, we all know that ecommerce is getting bigger and bigger every year. I mean, but COVID, almost overnight, just completely changed everything. 

Sharing diverse knowledge 

The number of calls that we're getting on people that are like: "Hey, we had an ecommerce, I've never really focused on it. But now we, we really wanna put the pedal to the metal." Cool, I think they can learn something from us. People are like, "Hey, we've, we've had a product site, we've sold through distributors, we've got a million questions, are you guys, could you guys help? It looks like you have some experience."

Andy, I just realized, one of the things we were talking about when we decided to do this podcast was that we had to give it a name, and I don't think this will be a revolution or anything, but I've decided what the name is, full stop. It's Beyond the Cart.

That's something that you've been saying for ages and it really does set us apart in what we can offer. It's the right way to describe what we're gonna be talking about here. Very little of what we're gonna be talking about is building a website. That's maybe one or two episodes I think on our roadmap here. So, it really is focused on everything beyond the cart. 

It's a combination of ecommerce, startup, small business... and I wanna make the best outdoor chair ever. 

The product we are making is going to create memories that last the lifetime.

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Be sure to tune in next time for episode two of Beyond the Cart, to learn about the only somewhat overwhelming subject of selecting an ecommerce platform.

Beyond the Cart is produced by Lightburn. Our episode today edited by Ryan Dembroski. Our music is the song, Let's Go Go Go by Tigerblood Jewel.

Be sure to subscribe on Apple Podcasts or wherever you consume your audio. You can always learn more about ecommerce at lightburn.co.

We'll see you next time on Beyond the Cart.