Etsy announced its second round of layoffs as it plans to cut 15% of its workforce. After a recent poor stock performance and a $400,000 loss in Q1, Etsy is looking for strategic solutions. Amazon’s Handmade marketplace, launched back in October 2015, is now seen as a serious competitor that is driving Etsy to focus on increasing repeat customers and driving more sales. You can read more about how Etsy is sharpening focus on key growth initiatives.
If your business is also going through a rough patch, it might be worth looking into alternative options to make a comeback. In an article by Rahul Varshneya, Co-founder of Arkenea, called, “Is Your Startup Dying? This Could Be Your Last Chance For A Comeback,” Rahul includes selling your business as an option and recommends FE International as the go-to online brokerage. Make sure you give the article a read on Inc.com. You could also consider reorganizing your branding strategy, from a quick tip by Founder Thomas Smale in a short article on Personal Branding Blog.
In a couple of weeks, FE will be sponsoring Midwest E-Commerce Conference in Minneapolis on July 21-22. Let us know if you want to meet with Thomas who will be attending and speaking at the event.
Continue reading for more information on how to acquire 10 year customers, Prime Wardrobe and Google’s move towards mobile-first indexing.
Deal Highlights
New:
B2B SaaS – Social Media Content Automation – $840 net/mo
- Strong traffic with over 755,000 page views in the last 12 months
- High margins of c.91%
- Growing user base
- Strong presence in a growing niche
- Low owner involvement
Yearly net profit: $10,100
Asking price: $30,000
E-Commerce – Cell Phone/Smartphone Parts and Equipment – $42K gross/mo
- Strong earnings, grossing over $500,000 in the last 12 months
- Revenues diversified over 150+ SKUs, with no single SKU accounting for more than 5% of sales
- Strong traffic profile, with c.1,000,000 page views from c.250,000 unique users in the last 12 months
- High visitor conversion rates of 5.37%
- Almost two decades of operations, leading to a well-known and trustworthy brand
Yearly net profit: $118,000
Asking price: $280,000
E-Commerce – Cell Phone Accessories – $73K gross/mo
- Diversified sales across multiple channels, including strong sales via a branded website
- Rapid CAGR reaching 136% for the period 2015-2016
- Sales diversified across 23 SKUs
- Heavy brand investment leading to a defensible market position
- Strong website traffic profile with over 500K sessions and 1.2M page views in the last 12 months
Yearly net profit: $174,000
Asking price: $433,000
Sold:
Software – Image Conversion – $1.1K gross/mo
In the News…
Google’s Mobile-First Index
Back in November 2016, Google announced mobile-first indexing, which favors mobile sites over desktop versions with no mobile version. This is not expected to roll-out until 2018. Currently, Google has a desktop-first index and doesn’t index “m-dot” domains, just makes note that the main website is mobile-friendly. Google suggests that you should migrate your m-dot domain to a fully responsive website before this transition. After the transition, migrating your m-dot URLs and content will be a longer and extensive process.
What should you be including on your mobile sites? The same content as your full desktop version. If you show less content on your mobile site than your desktop, this may result in ranking changes after the mobile-first index is implemented. It has been rumored that Google will most likely roll this out on a site-by site basis or in batches.
Before the roll-out Google will let everyone know how your websites should best prepare for this mobile-first index.
Amazon Prime Wardrobe
Amazon announced this week that it is launching Prime Wardrobe, a program that will let Prime customers try on clothes before they buy them. Programs like TrunkClub and StitchFix are similar in that they provide a box subscription service of clothes, where a customer can try on and then send back anything they do not want. The clothes in these programs are chosen from personal shoppers and based off algorithms.
With Prime Wardrobe, customers will be give seven days to decide what they want to purchase and then send back the box (free shipping both ways). It also allows customers to choose their own items and receive a 10% discount if they decide to keep two or three items. For customers who choose to keep four or all items, they will receive a 20% discount. There are only select clothing items that are eligible for Prime Wardrobe which is currently around one million items that are eligible.
If you are an Amazon seller in the clothing space, this is a program you should look into. By continuously improving the customer experience, more consumers are turning to e-commerce options, especially Amazon, over retail stores.
The 10 Year Customer
Jason Lemkin of SaaStr looks back on how he has been able to retain customers for 10+ years. Jason explains some takeaways that he’s learned since his company launched in 2006. Some of them can be considered unconventional, but have worked for him.
If you have net negative churn and a high net promoter score, Jason says that any reasonable customer acquisition cost is worth that for a 10 year customer. If a customer wants to do a “rip-and-replace deal”, where an organization starts its core technology infrastructure all over again, then it is worth it for those 10 years. If you’ve lost a big client before, try to get them back. It may take a long time, but sometimes they will come back to you. If you’ve lost a customer to a competitor, don’t consider them lost forever. Put investment into your biggest customers because they will be worth 10 times what they are worth today. Other points Jason included were to meet customers one-on-one, over-deliver, make sure your VPs of Sales, Customer Success and Product Engineering is the best, measure your net promoter score and make sure your customers are happy, and think of your customers as ten year relationships.
To read more on his lessons learned, check out his post.