How to build a brand and E-commerce business

How to build a brand and E-commerce business

What is required to build a brand and distribute it to the world through your own channels. More specifically a D2C, direct to consumer, brand that sells online.

In this blog post we will go through all the nuts and bolts that makes a brand, and cover how you can succeed in putting it all together. 

Table of contents

  1. Concept and brand definition
  2. Product development and production
  3. Logistics & warehouse
  4. Marketing
  5. Website & sales channels
  6. Accounting & finance

 

 Concept and brand definition

Most brands are limited in what type of products they offer. Nike is sportswear, Renault is a car-brand and Coca-cola sell beverages which will ruin your teeth. 

Before deciding on a brand name you should think about what type of products want to sell under that brand, and to what kind of people you want to sell to. The shorter, the better. And if it is easy to pronounce and  remember that is a good thing. 

Example of good brand names:

  • Famme - sportswear for women. Easy to pronounce and also means women in french
  • Purete - cosmetics. Meaning purity in french, and being short 
  • Antifragile - sportswear for men. Antifragile, things that "gain from disorder", for example bones becoming stronger under external load

But the brand name does obviously not need to mean much either. Apple produces electronics and Samsung does not mean anything relevant for the products either. 

When the brand name is decided, the next step is to create a logo, often the brand logos are made up of the initials of the brand name, that is the case for Famme which uses the first letter as logomark. The logotype, or text logo, is just a fancy "text image" of the brand name. 

 

Logomark:  logo antifragile - sportswear for men
Logotype: antifragile text logo
When the logo has been made, there are other brand identity considerations to make, just some of them:
  • Fonts
  • Packaging
  • Models 
  • Target audience
  • USP's Unique Selling Points
  • Slogan

It can also be useful to make a list of competitor brands as references of "what you want to become" and moodboards for your brand communication on different channels. Everything that defines the brand can be part of your "brand guidelines" which should be followed by marketeres, designers etc. A simple spreadsheet / table can be used for this:

brand guidelines example

 

Product development and production

Product development can be everything from kindergarten easy to really hard. New clothing brands usually start with ODM, which means that they apply a logo to existing products, and not doing any design on their own. While companies like Remarkable are doing OEM, which means they specify design and a lot of other details to manufacturers.

There is not strict separation between just applying a logo and specifying "everything" to the factories. Some things that more "advanced" brands do:

  1. Logo position and sizes
  2. Seam placement
  3. Change the size chart 
  4. Change grading between sizes
  5. Choose custom colors (not just choosing between available), but specifying a specific pantone color code for example
  6. Making tech packs which defines a garment and it's production parts in detail. 

To find the factories that produces ODM/OEM, there are multiple ways:

  1. Using the open supplier list of a competitor and contact the suppliers on the list
  2. Supplier platforms like Alibaba or Foursource which are specialised on textiles for example
  3. Google "private label cosmetics" for example

When a brand grows in size, suppliers will also start contacting you. 

For new brands with limited resources, you need to find a factory with low MOQ, minimum order quantity. You cannot order large volume when the brand has no sales channels with high volume. What is positive is that for a lot of product categories you can find factories with decent quality and low MOQ to help you get started. But that also means that you will not start working with the best in class factories with the best prices and terms. 

For very many categories getting your products is as easy as:

1. Search <sourcing platform> for product X

2. Negotiate with supplier to get a sample. Often they can be received for free, especially if your brand is established

3. Receive sample and verify quality

 

 

sample testing of clothing from factory
4. Discuss where to place logo, MOQ, packaging and shipping details with the supplier and then place an order. When placing an order you choose a reasonable size breakdown and color for the products. Or other attributes depending upon product type, but size and color is most relevant for apparel. 
5. Receive products and start selling 

Read more about product development here

Logistics and warehouse

Logistics and warehouse consists of many things:

1. Shipping products from the supplier. You should be familiar with incoterms and choose the best freight option given requirements. 

2. Warehouse operations like receiving, fulfillment and returns handling

3. Customs. Concepts like HS codes, EUR1, form A and all the customs agreements between the relevant exporter/importer countries

To get started receiving products, you can piggy back on the supplier's shipping agreements. But you should from the start try to make agreements with carriers to build a history as a customer and to be able to negotiate better prices longterm.

These are your options for freight:

1. Air. This is used for samples and small orders

2. boat. Large orders from "far away"

3. Train. A faster but often more expensive option than boat

4. Car/Truck. Cheap and fast option when the prouct's origin is not too far away, for example Turkey or Portugal if you import to Europe. 

In the start you can just store your products at home, since orders will not magically appear, but after growing you should either look at:

1. Inhouse warehouse

2. 3PL

3PL will make sense for a lot of brands to start as owning the infrastructure for an efficient warehouse and the fulfillment team is a huge liability. But it gives up a lot of control, and for brands that have significant volume, new automated solutions to streamline warehouse operations has become more mainstream. PIO being the best example of a robot warehouse that is affordable for SMB E-commerce brands

We also do fullfilment for other stores through our automated robot warehouse. 

This is true in general: Rely on partners that have scale in an area, either fulfillment, purchasing, shipping and then when you have enough volume yourself take take it inhouse. 

Some of the carriers to partner with:

1. DHL for worldwide shipping. Samples and small orders

2. Fedex. Same as DHL

3. Schenker, Kuehne + Nagel and similar for boat

3. Local carriers for B2C like Bring, Helthjem in Norway for example.

You should always work to negotiate the prices as the list prices are "ridiculous". 

If you are part of the E-commerce incubator, this part of the business is taken care for you. 

 

Marketing  

Marketing and actually getting your products sold is one of the hardest parts of the business, it is a reason the sales / marketing department often are a sizeable portion of a business. One of the big problems in marketing is attribution and analytics, it is really hard once the business grows to know what really works and what is just Vodoo "I believe the customer bought due to this influencer or TV commercial". 

 

Marketing "platforms" / channels

  • Facebook ads ecosystem, which also includes instagram and whatsapp (owned by Facebook)
  • Snapchat ads and snapchat account, for example @fammesportswear
  • Google ads, Google search, shopping and display. We use Kelkoo as CSS (comparison shopping partner) for Google shopping
  • Microsoft ads, Bing search
  • Adtraction, affiliate marketing. Connecting us to publishers. CJ is another larger player here also.
  • Instagram account
  • Facebook groups, try to create groups where you give value to your potentional customers. For one brand we have a product development group and a secondhand group.
  • Email marketing, for most brands we use Klaviyo as it plays well with Shopify
  • Push notifications, for Shopify there is an app called "Push owl" 
  • Blogging, example: Famme product blog
  • Youtube, which both can be used for marketing as part of the "Google ads", and also to host video content. Google usually favours sites that use video hosted on YT. 

Marketing types

Inbound marketing

Through blogs we do inbound marketing by driving potential customers to our website. You should monitor bounce rates and conversions for visitors landing on these blogs. 

What type of content should you write? A rule of thumb can be that if we cannot link to a relevant product / collection in our store, the article is probably not worth writing. In this case relevant to the user’s search. The aim is to actually help people find what they need.

Search engine marketing

PPC - pay per click

Google and Bing ads are some of the largest player’s offering PPC marketing. Advertisers pay per click on the search ads, it is thus crucial that we send visitors to a page that is most likely to convert the customer.

Some examples:

  • A customer searching for jeans should be sent to a jeans collection or article explaining the benefits of our jeans.
  • Search for leggings -> Leggings collection
  • Person searching for similar brand (brandjacking) -> Show products of similar items + introduce our brand and the benefits

The more relevant your website is to a search term, the less you pay per click. This is related to ad quality.

Bidding on your own brand term is recommended by some advertisers to “protect” your brand. But it is not an undisputed advise, and there are disadvantages to bidding on own brand term. In addition to the extra cost, it can screw up statistics. Google and agencies also have a “perverse” incentive to recommend it, as it looks like you earn a lot, without necessarily earning “anything” if the customers had bought from you anyways.

One of the most important metrics is CPC = cost per click:

img.png

SEO

SEO is a marathon, i.e a longterm game. Writing quality articles over time relevant to your product/services is key.

In addition to creating content, there are other technical aspects of your site that Google evaluates when ranking pages:

  • Speed
  • Accessibility
  • Mobile friendliness (responsive website)

With regards to the content, it must:

  • Be well structured
  • Have logical internal linking
  • Include relevant keywords

More about SEO in our SEO blog post

Email marketing

Klaviyo, our email marketing system, integrates with Shopify in several ways. Data is synced between the two systems:

  • Orders
  • Customer data

We use forms from Klaviyo, both embedded and popup.

Two tracking snippets have been added to our Theme code:

  • We use Klaviyo back in stock javascript to support back in stock messages
  • We have a javascript tracking on our product pages to send browse abandonment emails

Flows

Flows are automatic emails based on conditions:

  • Send an email if 90 days has passed since the last order
  • Send an email if the cart is abandoned etc.

Segments

You do not want to send the same email to everyone. Segmenting allows you to create a list of people from your total subscriber list based on rules. Common segments:

  • Segment by country: Norwegian customers
  • Segment by sales data: Customers that have placed two orders
  • Segment by activity: Customers that have been active on site for the last 3 days

img.png

Campaigns

Campaigns are sent out to segments.

Benchmarks

As always, attribution is hard, but email is definitely something we earn money on:

img.png

Influencer marketing

Influencers should be used for sales and content, more about influencers here.

Affiliate marketing

Reaching out to a lot of publishers can be tiresome, thus a lot of businesses use affiliate networks like Adtraction to handle the collaboration with publishers.

Here you can see an example of the affiliate studentkortet.no being attributed the sale of order 110093:

img.png

Word of mouth marketing

If you have one of the best quality/price you can find on the market, word of mouth is probably something that drives a lot of traffic, people are definitely talking all the time about good products to buy / stores / experiences to buy.

Reviews

Read more about collecting reviews here.

 

Websites and channels

We use Shopify for all our brands, and the open source Dawn theme. You should make yourself familiar with how to customize the theme for simple edits, and then for coding customizations use freelancers on Storetasker and similar platforms. 

Shopify serves several purposes:

1. Front-end for the store. Shopify uses liquid as templating language

2. PIM / product management

3. Order management. We use Webshipper for integrating with carriers and Pio for WMS and fulfillment.

Shopify's core is limited, but the app ecosystem makes it easy to extend the functionality of the store. Some platforms that integrate with Shopify that we use:

  • Klaviyo
  • Gorgias for customer service
  • Push owl for push notifications
  • Inventory planner for purchase orders and replenishment
  • Webshipper for carrier integrations
  • Okendo for reviews
  • Datafeedwatch for product feeds (prisjakt, google merchant center etc.)

 Shopify's advantage over other platforms is thus not that their core product is better than say Bigcommerce. But that it is more "plug and play" with all other platforms. 

Accounting and finance

Our "economy stack" consisting of banks, payment processors and accounting systems:

  • DnB for national transfers
  • Tripletex as accounting system
  • Wise for international transfers and currency accounts. OFX is a bit cheaper for really large transfers
  • Vipps
  • Klarna
  • Quickpay (integrates with Mobilepay for Denmark among others)
  • Stripe / Shopify payments for cards

You should regularly negotiate rates when your volume grows. 

 

Internationalization 

To sell in international markets there are several things to consider, but some of the most important are: 

1. Translation

2. Shipping

3. Local payments

 

Translation

In Shopify you can natively translate most text with an app like Langify or "Translate my store". For instance famme.no and fammestore.dk are the same Shopify backend, just translated. 

Shipping

Shipping is one of the most expensive parts of E-commerce, and international shipping is even more expensive than domestic, if there are custom costs related to the export, the cost is probably too much to handle for most businesses, and you are better of looking for a 3PL in the region you want to focus on. 

For example you can use a 3PL in Netherlands to sell to EU. 

Local payments

In some countries, a majority of customers prefer other payment types than cards:

1. Vipps in Norway

2. MobilePay in Denmark

3. Ideal in Netherlands

Even if you manage to have a:

1. Translated site

2. Good shipping options

3. Local payment methods

It will be an uphill battle trying to compete in foreign markets, as you are at a disadvantage over local players. 

 

 

 

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