Scaling Beyond 1,000 Orders Per Month
You just started your first Shopify store, orders are pouring in, and you’ve hit almost a thousand orders a month. You are already dreaming of expanding your team, increasing marketing, and raising external funding.
But hold on there.
Getting your first 1,000 orders per month and getting your next 5,000 orders are not the same thing. The latter requires a whole new game-plan. It’s easier and cheaper to get your first 1,000 orders because you’re targeting the most engaged segment of customers—usually early adopters and shoppers likely to take a chance on a new product or service. The next 5,000 customers will be the real test of mettle.
You are also at a vulnerable moment in building the business: if you try to expand too fast, your processes could break down and you could lose customers; if you are too slow, your business could stagnate. Let’s start with the mistakes you shouldn’t make at this moment.
Assumptions to avoid
- Do not assume that there’s an infinite pool of customers with similar preferences. The first few customers who purchased from you were probably early adopters who try out a lot of stores. Just because you understand them and their preferences doesn’t mean there is an infinite supply of such customers.
- Do not assume that the tactics that got you to 1,000 orders will also get you to 10,000. Maybe you got your first users through word of mouth, maybe advertising on Facebook worked really well for you, or maybe you found a forum where your users hang out. Don’t assume the same tactics will get to 10X your order numbers.
- Do not assume that your CAC will remain the same. Getting the early-adopter user is always cheaper than getting the next wave of customers. This is because the early-adopter is likely already in the market for a product you’re selling. You have to build a more long-term relationship with everyone else to take them from awareness to consideration to action.
- Do not assume that the rest of your organization will keep up. Scale too fast and you could sell a lot more products but your customer service and order fulfillment operations could break down catastrophically.
These are just assumptions to be aware of. That doesn’t mean you’re set to fail. You can scale your sales by following a structured process instead.
Steps to scale your sales
The marketing and sales teams alone are not responsible for scaling your business. All parts of the business have an equal impact on making you go big (or bust). Here is a process that has worked well for me, while going from 1,000 orders a month to over 10,000 orders a month.
- Talk to your customers to identify your highest NPS cohort. You can’t possibly please everyone, no matter how great your products are and how well they’re priced. It’s better (and easier) to please a small sub-segment of your audience first. Talk to your customers—or survey them if you can’t talk to everyone—and figure out:
- Why do they shop with you?
- …for the wide collection?
- …for the great prices?
- …for the prompt shipping?
- …for easy returns?
- Where else do they shop?
- Is Amazon their go-to store for online purchases?
- Are there other niche stores they spend money on?
- How do they rate you on various parameters like range, pricing, shipping, etc.?
You will likely find a story emerging once you have a 100 or so responses. Maybe they like great customer service, maybe they prefer easy returns—whatever it is, you can use that to build your messaging to reach out to similar customers.
- Why do they shop with you?
- Build new audiences with customer feedback. Once you have the above information, build a Lookalike audience on Facebook from the web/app traffic you receive. However, optimize them for landing page views (or clicks) and not conversions: then set the messaging around what you learned on the previous step. What this will do is speak to the people who look similar to your current audience but care about the one thing that your top customers care about.
Why not optimize for conversions? Good question: when you don’t have a ton of traffic coming in from Facebook, you may not be able to provide enough information to teach Facebook anything about the audience that does convert. So, instead of depending on Facebook for conversions, leverage your landing page to convince the visitors to buy instead.
- Target a “no one else would…” audience. In the initial days of advertising, it is essential to target a small group that is closest to your high-NPS customers. Neil Patel does a great job of explaining this tactic here.
Analyze your store data to determine the best inventory. The best inventory isn’t always the products that sell the most. There could be hidden gems too—products that sell out the fastest, products that provide the most profits, or products that can cross-sell other products. Conversific’s Product Analytics can point you in the right direction. Or, if you prefer to do your analysis within spreadsheets, try out Airboxr. Try to answer the following questions:
- Which product categories sell out fastest, are profit centers, or lead to cross-sales?
- Which specific products sell out fastest, are profit centers, or lead to cross-sales?
- Which geographic regions provide higher number of orders? Fewer returns?
Get your organization on the same page. Just because you can sell more products doesn’t mean that you should. Your customer service team could be overwhelmed. Your operations and shipping could break down. If you outsource either of these two divisions, you need to first assess if your service provider can handle the uptick. Get everyone on the same page first. Try to answer the following questions:
- If it takes you two people to ship out 30 orders a day, how many more people will you need to ship out 100 orders a day? Do you need two ship-out times every day (e.g., orders till 12pm get shipped out by 3pm on the same day)?
- What is the average number of customer service interactions required per 100 orders? How many customer service interactions happen every day? Do you need to automate some FAQs?
- If you order goods just-in-time, can your vendors keep up with demand? If they are not all equally ready, focus on only a few vendors who can meet demand and focus your marketing on their SKUs.
Wherever you can, automate first. Do not hire staff until you are assured that the higher volume is there to last.
Getting your organization on the same page is an essential step. Don’t treat increasing sales as a sales and marketing goal alone.
The process above is obviously not the only way you can scale. Whichever way you choose, make sure to document your learnings through the process to make sure they don’t get lost as you move from experiment to experiment.