Ensure your product has good differentiation. By this, I mean, does it stand out on the screen and does it overshadow the competitors because is functions, looks or works better? Another name for this is Unique Selling Proposition, and the secret here is to have an incredible “reason” (A.K.A known as differentiation) that people buy your product over the competitors.
You need to spend money and time on creating the BEST POSSIBLE product images. People buy with their eyes online, and having incredible photos can convey brand trust and quality, which will help consumers purchase your product over others.
As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing Michael Fenech.
Michael has gained extensive business experience in both tech and e-commerce across the globe. He has successfully raised capital in the US and Australia, run successful e-commerce sites, and has partnered with some of the biggest companies in the world. Michael is also fortunate to have been mentored by some of the biggest names in tech.
His e-commerce experience has come from having over 700 SKU’s being sold in the US via Facebook and Google shopping. Michael then ventured into selling on Amazon and by using his incredible product research skills, he found products that were instant winners. Michael and his partner now have a range of products being launched under their well-respected brand.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My back story has always been connected to entrepreneurial activities. I’ve started many businesses from Real Estate companies, Real Estate technology, then moved into media tech and now heavily into eCommerce.
I’ve achieved some significant milestones in my entrepreneurial career through large funding from major USA corporations into one of my tech companies.
I’ve always looked at the world in terms of problems, and from there, my thinking shifts to “How can I solve that?”
I always look at ways of being able to use leverage or do more with less effort, and I see eCommerce as being the perfect business model for products to earn passive income while you sleep.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
I was on a business trip in LA, and late one night, I came across an article about eCommerce. The whole business model appealed to me because I felt as though I had the necessary skills to be successful.
So from there, I started doing lots of research and eventually launched my first products and had success from the start. Now I have multiple products with my partner and girlfriend, and we have plans to grow our brand.
The has all led to us starting one of our current businesses which has grown during the COVID-19 pandemic. Me and my partner and friend, who himself is a very successful eCommerce seller, decided to start a series of zoom calls every fortnight for eCommerce entrepreneurs.
We aimed to uplift them during the challenging time of lockdowns and also, share ALL our knowledge to help people succeed.
That’s when the EndGame Network was born.
The number of entrepreneurs joining our zooms was growing each fortnight, and now we regularly get between 300–700 highly engaged eCommerce sellers join our calls.
We started our private coaching program as part of this group, and we help individual eCommerce sellers grow their businesses and knowledge base.
Can you tell us a story about the hard times that you faced when you first started your journey?
There have been lots of hard times during my journey. It’s part of being an entrepreneur. Some of the most challenging times, during the growth of our tech company, came from having cash flow struggles.
Like all startups would know, especially if you’re pre-revenue, managing your runway and not running out of cash is the toughest thing to handle because there is no “quick fix”. This got me down, and I must admit I struggled because I felt there was no way out. But we got through it and came out the other side which was a massive relief.
Did you ever consider giving up?
I never considered giving up because my vision was the fuel that drove me every day. I could see it clearly and giving up wasn’t an option because I had to experience that vision in my mind. I wanted it badly.
Where did you get the drive to continue even though things were so hard?
Like I said, a clear vision is all the fuel you need to keep the drive going. If you have a strong vision, you should never give up. If you do, you aren’t passionate enough, or your dream doesn’t mean enough.
So, how are things going today?
Things are going great. Our eCommerce group has grown to over 2,100 members, and we are launching more products within our brand. We are also running a series of one day eCommerce workshops for the eCommerce sellers within our group.
It’s not all sunshine and rainbows though. One of our tech companies is going through a tough time at the moment, but that’s part of being an entrepreneur. We will improvise, adapt and overcome as best as we can.
How did your grit and resilience lead to your eventual success?
By being in the trenches and “doing battle”, you learn about what works and what doesn’t. So applying what works from a constant assessment of my actions is what led to eventual success. Had I have given up, I would not have learnt those valuable lessons.
Can you share a story about the funniest mistake you made when you were first starting?
The funniest mistake I made was assuming that every product I’d launch when I was drop shipping, would be a smash hit and I would make lots of money. I think it was just blind optimism.
I laugh when I think about it now, because in reality, selling products online doesn’t work like that.
Can you tell us what lessons or ‘takeaways’ you learned from that?
I learned that when you launch a product to sell online, you can’t guess. You have to base your launch decision on data, the amount of opportunity there is as well as looking at the competitive landscape.
What do you think makes your company stand out?
What makes our company stand out is that we put our customers/group members at the forefront of our thinking. Every decision we make is based on how it can help our group become better eCommerce sellers. If we do something, it has to move the water line in our group’s businesses, or we don’t do it.
Can you share a story?
We do a thing in our group called the 5 in 5. We post into the group a zoom link and the first 5 people to jump on the zoom call in 5 minutes get to have a pop-up mastermind meeting with me and my partner.
On that call, we deep dive into people’s businesses and try to add as much value as possible.
It’s become a pretty cool thing in our group because people scramble to get on to those calls. It’s a lot of fun, but again, it’s designed to help people which is our primary goal.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Take regular breaks. I have a saying which is “You need to sharpen the axe”. So if you want to cut a tree down, to make things easier, you need to stop now and then to sharpen the axe. Imagine cutting a tree down with a blunt axe? Not having a break is the equivalent.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?
Yes there is, but it’s not just one person, a few different people have mentored me. I was very fortunate to build a really powerful team for one of our tech companies.
My team comprised of ex-Facebook executives, former VP’s of major US corporations as well as a very successful entrepreneur who had a 9 figure exit. I learned so much from each of them, which I suppose made me the entrepreneur I am today.
Can you share a story?
I remember once we had to pitch a very wealthy family office during a capital raise. And one of my mentors made the introduction and decided to come along for the pitch to help make a better connection.
The pitch went well, and the family office was excited about participating in our funding round.
I got to see how my mentor operated during this meeting, and it was inspirational to see someone at the top of their game.
But it was what happened after the meeting were I learned the most. This family office went quiet, and after wanting more information, it was quite strange that they went silent.
But I saw first-hand how to handle a situation of this nature. We needed an answer, and I was taught to conserve your time and give investors deadlines with a yes or no. It’s so hard to do, but it conveys that you aren’t desperate, which ultimately helps you move on during what is a stressful time when raising capital.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?
It’s been widely reported that where eCommerce will be as far as growth in 5 years, has been brought forward to today — that’s enormous growth. COVID-19 has changed consumer behaviour for good.
So that being said, demand for online shopping has made eCommerce businesses think about many different aspects of their businesses.
What we are seeing more of is two things:
- eCommerce businesses needing funding solutions: Because demand has picked up, to keep up with demand, eCommerce businesses have become a lot more cash-intensive. So the need for funding is on a lot of radars right now.
- There is a more significant shift towards brand building as a way of standing out from the crowd. All eCommerce sellers are looking for an edge in this current climate, and having a great brand can certainly help move the needle.
Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
I would advise having a multi-pronged approach for success. The main things to focus on, in my opinion, would be to launch products that solve problems, focus on building a brand that consumers can connect with and spend more money and time on product photography.
If your product solves a problem or makes someone’s life easier, consumers are happy to pay a premium for it, and you eliminate the “race to the bottom” in terms of pricing.
On top of this, if you wrap a beautiful brand around the product as well as excellent customer support and experience, you’ll start building an army of loyal customers.
Online products are purchased with people’s eyes, so having the best-photographed products in the market is mission-critical because good photography can instill confidence in the buyer’s mind to press that add to cart button.
What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business?
The most common mistake I’ve seen is founders choosing the wrong product to sell, which is in a saturated market, and they get their cost of goods sold figures completely wrong and make zero profit.
What can be done to avoid those errors?
Do research. Don’t just guess which products to launch. Make your launch decision based on data and opportunity. If the data stacks up and you see an opportunity go for it.
Also, founders need to realise that business is all about making a profit. They need to focus on their numbers and make sure there is a margin. A key thing here is to not fall in love with the product. If the numbers don’t stack up, move on!
In your experience, which aspect of running an eCommerce brand tends to be most underestimated?
Can you explain or give an example?
When we do our research, we always find that the product making the most sales in a particular niche always has the best product photos. Time and again we see that excellent product photos correlate to good sales volume.
Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?
For Amazon FBA eCommerce sellers, I would recommend keyword research tools such as Zon Guru or Helium 10. These tools help you identify which keywords to target and also help you determine which niches present good opportunities.
For drop shippers, a great tool to use is Oberlo. This tool can help automate your fulfillments via Ali Express. The press of a button fills in all the relevant customer fields and saves lots of time.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?
When you look at the US market, it’s in peoples DNA to go straight to Amazon if they want to buy something online. That’s the biggest challenge here, especially if you have your own Shopify or eCommerce store.
The best strategies to use are first, building trust. When someone lands on your site, they don’t know you and most probably won’t know your brand. With Amazon, they have complete confidence. So the best ways we found to build trust was to have a 24/7 hour support phone number clearly shown at the top of our site which gives the consumer comfort knowing that if something went wrong, they had a direct line to contact the store.
Secondly, you should consider having a no questions asked return policy. That, combined with the 24-hour support line, will help the consumer trust a little more, which then may result in a conversion.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?
I believe the way you build a trusted brand is by having a customer-first focus. Everything you do should be aimed towards improving the customer’s life. If you make every decision based on this, a brand will be born.
A brand is not just a logo, but it’s how you make the customer feel. So a great way to affect how the customer feels is by making the experience of them receiving your product a memorable one. Have a great product insert, convey that their happiness is your priority. Post receiving your product, follow the customer up to make sure that everything is ok and if need be rectify any issues.
The key is, if you can make the customer feel as though they are cared for and are looked after, a beloved brand is born.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews?
I think the best way to tackle poor reviews is to take ownership of it and be completely honest and apologetic. When other consumers read your response, they will see how genuine you are, and you’ll come across as a real and ethical business.
Customers love dealing with genuine businesses. On top of this, you have a fantastic opportunity to show the world how good your customer service is by responding to the negative review and showing the customer how you plan to make this right. So, in essence, you can highlight your incredible customer service and try and turn a negative into a positive.
How about other unfair things said online about a brand?
Same as above, I think you should be honest and if it’s something unfairly said, professionally stand your ground. It’s a very delicate thing to deal with, and each unfair thing said online needs to be handled on an individual basis.
If you are honest and politely point out that what is said is not right, it will be received well, and everyone can move on.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful e-commerce business? Please share a story or an example for each.
- Choose your product based on data and opportunity. Don’t just “pick” a product. Each product should have a business case wrapped around it to help with the “yes” or “no” decision as to whether you launch.
- If you have found your product, you need to make sure the COGS (Cost of goods sold) stacks up so you can make a profit. The COGS needs to include packaging costs, shipping fees etc. The amount of times I’ve seen people launch products with ZERO profit or what we call “leftover” is astounding!
- Ensure your product has good differentiation. By this, I mean, does it stand out on the screen and does it overshadow the competitors because is functions, looks or works better? Another name for this is Unique Selling Proposition, and the secret here is to have an incredible “reason” (A.K.A known as differentiation) that people buy your product over the competitors.
- You need to spend money and time on creating the BEST POSSIBLE product images. People buy with their eyes online, and having incredible photos can convey brand trust and quality, which will help consumers purchase your product over others.
- You have to optimize your packaging as best as you can to reduce shipping and storage fees. Usually, the suppliers dictate the package sizes, but we teach our students to create the packaging sizes themselves to maximize efficiency to save money.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would start a movement which would involve teaching people how to become entrepreneurs, how to look for ideas, how to solve problems and build businesses.
The reason I would do this is that everyone would win. The entrepreneur would win by having the tools to start a successful business and the customers win because they are having their problems solved.
How can our readers further follow you online?
You can follow me on Instagram — @michaelfenech. Each day, I provide tips to help people become better entrepreneurs.
You can join our Facebook group if you’re interested in selling on Amazon — https://www.facebook.com/groups/504614040204958/?ref=share
This was very inspiring. Thank you so much for the time you spent with this!