“Keep showing up every day and trying to get better. Don’t count yourself out.” – Ellen Chisa
Every moment is a lesson for us as entrepreneurs, and in the startup world where things move so fast, it would be a sad thing to be left behind. My team and I had quite a tough time taking off on the eCommerce runway, especially being an online marketplace for building materials. So far so good, but we are still aiming for the best. Here are some of the lessons I have learnt from running an eCommerce marketplace.
Pick your niche
Each time I mention to people that Cribpark is an eCommerce platform, they give the look of, “again? Another eCommerce platform?”
But when I add that we are an eCommerce marketplace for building materials, they go, “hh, that’s cool. A new twist to eCommerce”.
With Jumia and Konga having raised about hundreds of millions of dollars between them, you are better off picking a niche or you will just be a poor man’s Konga.com. When you pick a niche, pick one you understand quite well and be the best at it. Even Amazon started as an online bookstore.
When we started as an eCommerce for building materials we realised most of our early clients were people who were building for the first time. They knew little about construction and didn’t want to be held captive by their contractor’s advice. Since our team is dominated by civil engineers, it was easy for us to give them information about the materials they were buying that their suppliers and contractors did not know. They were not just paying for the product, they were also getting free valuable information. Picking a niche helps you to focus your best effort, and you really don’t want to be spread too thin.
Remember those days when shopping started and ended in Yaba market; if you were just shopping for jeans, you were more likely to buy from someone who only sold jeans in his/her shop, than the one who sold all types of clothes including jeans.
Create a brand
Your brand is your promise to your customer, it is what they expect from your company when they think about you. It may sound too early talking branding, but you will reap the benefits early too. You want to understand what your brand is? Well, ask your customers to leave an anonymous feedback. Last year I had a meeting with one of our B2B customers, Engineer Ken. He was referred to us by a B2B customer and had done a transaction of over ₦1 million. Towards the end of the year he had been so impressed with our performance and asked us to have a meeting. We discussed for about an hour and you’d think it was a friendly reunion even though it was our first time seeing each other. We discussed the building industry, attitude of suppliers and laughed about our first delivery.
What happened in our first delivery? The supplier supplied an inferior quality of sharp sand but Engineer Ken wasn’t on site during delivery. Normally, we only pay suppliers when customers indicate satisfaction, but since he okayed the delivery, we paid the supplier. On getting to site to see the quality of sand he was less than impressed. He called us to state his displeasure and how the supply would implicate him as a contractor. We were concerned and ordered the supplier back to the site. The supplier agreed that the quality didn’t meet the requirements he promised. The sand would have to be used for another site purpose than they intended. Instantly we paid Engineer Ken 50% back for what he paid for. We would later deduct the money from the supplier from other deliveries he made. The money couldn’t change the situation, but at least it showed we cared more about his project than our profit. That was also the last time we had such issues as we had to tighten our loose ends.
During the meeting, Engineer Ken talked about how he was impressed with how we handled the situation and always ensured the suppliers did the right thing. Through his words and other clients’, we could see they saw us as a reliable company that puts customer first ahead of every sale.
Customers are not dumb, they know when you put them first, and they return because you gave them an experience and not a product. Such mistakes may happen once in a blue moon, but it is in such cases brand promises are verified. Show what your brand is, don’t tell. Yes we lost about ₦20,000, but it is nothing compared with what we gained from him in over 8 repeat sales.
Go the extra mile
Call Cribpark at anytime and we are ready. We have received calls by 6am, 10pm, 11pm and once by 1am. When they apologised for calling us late, we were quick to let them know it was no problem for us at all. I remember a weekend I had the customer care number with me, it was a few minutes past 1 am on a Sunday morning and I received a call. I checked the time, picked the call, and didn’t act like it was unusual. The customer was on our site checking all the items he wanted to buy and I had the pleasure of running him through our value offering. It happened that he was looking for a single place he could buy all his sanitary wares and other furniture fittings for his new house. We talked for almost half an hour and sealed a deal worth millions through it.
As a startup, there is no point forming office hours except you have another guarantee of salary at the end of the month. Our office hours are anytime a customer is able to reach us, through calls, emails, or even in our dreams. As long as we can be reached, we are open. The extra mile is a huge differentiating factor for startups to break out and it could come in different ways.
We had a client who was running out of sand on the day he was constructing his German floor. He called us by 12 noon and said he needed it by 2pm. We once did same day delivery for him, but even this was a challenge. We called the supplier closest to him and were able to convince him to make the delivery out of his existing busy schedule. We called our client back to say we wouldn’t make the 2pm delivery but 3pm was possible. He was excited we could even promise to deliver as you don’t normally find it easy getting such items during the day except you ordered a day before. We delivered by 2.55pm and till today he remains one of our best customers. Word going round says we are his most reliable supplier too. Repeat purchases from him are over 17 across 9 months.
Do what works for you
If you don’t know the way, follow those who have been there, over time you will discover the path to follow. When we fully launched in June last year, we developed quite a robust infrastructure for people to visit the website, browse easily and make an order. One of our mentors was a UI/UX lead in Oracle who gave us unique insights; our interface was awesome.
To our surprise we realised that most users would visit the platform, browse through the products and rather than click “add to cart” would prefer to call our customer care. After the first transaction, most repeat orders from these customers would continue on Whatsapp. Infact most users asked if they could chat with us on Whatsapp. They completely bypassed our designed order process. Chat might just be key in the future of eCommerce customer relations because people want a more personal experience. Overtime, when we realised people liked to have the phone numbers more than “adding to cart” we simply made our phone numbers more visible on the site and same thing applied to our marketing efforts.
We started using Facebook and Twitter and SEOs. Great tools. Facebook helped us reach a lot of people and had a decent conversion while twitter got more engagements but with little or no conversion. Overtime we were running out of money and we had to look for other ways of gaining new audiences without costs. We tried Nairaland as the posts were free anyway, we secured a partnership with a major classified Ads site, and also did some on-ground marketing. It worked! We had new customers and more sales. Sometimes not having what you want makes you more creative. Now we explore more of content marketing as we have realised that it creates a bond with the target customer and also helps break down trust barriers. If you are running on a low budget and are quite creative, you should try a mix of different platforms and strategies. The world is not a plain surface; don’t stick to the status quo, for it is your duty to create your audience.
Be the marketplace please!
It was February last year when we had just decided to pivot into building materials and be a marketplace. The following week Cristina Stenbeck, the chairwoman of Kinnevik was in Rwanda. Kinnevik owned Millicom which owned our incubator in Rwanda then, so Ms. Stenbeck decided to pop-in and have a discussion with the innovators. It was an opportunity to learn from someone who had invested over $2 billion in eCommerce. We told her about our initial foray into home furniture and services and our decision to focus on being a hyper-local marketplace for building materials. She was impressed to hear we would be a marketplace and explained from her experience that the eCommerce marketplaces was easier for startups than the traditional eCommerce model as there was very little or no inventory and logistics to worry about. For someone with huge experience in eCommerce, validating the marketplace and business model meant a lot to us and in reality it turned out the right path to tread.
Focus on the right metrics
There are many metrics that matter to a startup, but focus on the most important. For me, I believe beyond the GMVs, LTVs, and CACs, the customer success is the most important. Why? Because we might be in business to make money, but since we are not robbing people, we have to make money by making customers happy. It makes no sense to acquire 100 customers in January and 99 don’t bother to buy from you again.
How many customers have you had? How many have come back to buy? How many of those who came back have referred you to other customers? Customer retention is very important and to achieve it, don’t just focus on selling but give your customers an experience they can’t get on other platforms. Give them a reason to come back. Don’t let your customers feel they clicked the wrong link again. Most times people only come back when they have been well served or you are solving more of their problems.
In our first 6 months of eCommerce operations, we focused on furniture, interior decor and home services. We made just $1,000 in revenue and then we got seed investment of $15,000 from our incubator. We pivoted to building materials and now that we are in our 9th month as eCommerce marketplace for building materials, we have had sales transactions of about $150,000, and spent just about $5,000 running the business. We are currently a team of 3 working full-time and we have spent less than $500 on marketing. Having team members with diverse competencies has been a huge benefit as it lowered our cost of personnel.
Running lean is important because funding may not come as expected, market demand may fluctuate and some assumptions might be painfully unreal, but the reality is that if you run lean you will have a low burn rate and a high run way. This gives you enough time to test your model, make several iterations and be prepared for scaling up. Running lean simply means looking out for the most, in a less costly but highly effective way to run your business so that you don’t quickly run out of money. There are a limited number of times you can lean on friends and family for financial support, so if you don’t run lean and grow the right numbers, you may have a good product but you would have had to close down long before striking gold is in view.
Warning: By the time you are done running lean, you may end up looking like a fashion model, but at least you have a sound business model. FAIL FAST, SCALE
I didn’t quite understand what failing fast meant though I was using to the word. It is this simple: As entrepreneurs we think we know our industry quite well and understand the pain points, so we design a solution. Overtime we realise that in most cases though the need is there, but customers are just not buying into us. Then we sit down to understand the customer better and design a process that follows the customer’s footprint. This often means trying different things most of which will fail, but you only have to get it right a few times. Since you are going to fail in most features anyway, why not fail fast so you quickly know what doesn’t work and then focus on what works. At the beginning it is also important to do what works even if it doesn’t scale, as that may quickly differentiate you from others and make you unique. Those little things like extra attention you give the customer may not all be doable when you scale, but at least you will get the numbers that makes scaling the next logical step.
Am I sharing these business experiences and tips like someone who has finally arrived? Capital NO!. In this part of the world, we tend to think that writing a book, giving tips and talking at seminars to eager audiences is only a duty for those who have ‘made it big’ and have gotten it all perfected. Well, I do not belong to that school of thought. There is need for shared peer experiences.
My experiences till date as CEO and co-founder of this unique eCommerce business niche have been filled with an almost balanced share of ups and downs. The simple truth is that success has no silver bullet. What has worked for me and my team is the fact that we have a vision to cause a great change in a very active and viable business industry and we are committed to it. So, we stick it out and keep celebrating our successes and learning from our failures.
If you are into eCommerce business in Nigeria today, I say, may the odds favour you. Cheers to more successes ahead!
Oludare Pius is CEO and co-founder, www.cribpark.com.ng, an online marketplace for building materials.
Nigerian startups raised $55.4m in Q1 2020; over 99% of which came from foreign sources. Find out more when you download the full report.
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CEO and Co-Founder Cribpark, Nigeria’s first online housing marketplace. You can contact me at [email protected] Join our Facebook community: Housing and Homes Community – Nigeria.