By Lisa Clift
Over the past 15 to 20 years, how many people do you know who have said, “I am going to start an online business to sell something—and make lots of money! ?” I’m betting you can count at least a few. Have any of them actually been successful? Probably not.
“According to many sources, more than 90 percent of all Internet business start-ups end in failure within the first 120 days,” noted Don Silver in a guest column on ChrisDucker.com.1 “Many don’t know the basic tenant of—‘If you fail to plan, then you plan to fail,’” he added.
“Most people seem to think that being a successful Internet marketer is as easy as getting a website built and getting their own domain name and they could not be farther from reality.”
So what is the reality? What does it actually take to start a successful e-commerce business on the web for coaching or selling products? Before you even start building that fancy website, you need to identify a unique need (product or service) and weave a compelling marketing story around it.2 Then you need to develop a comprehensive business plan that includes:
- customer base/target markets and competition,
- marketing,
- manufacturing and distribution (if applicable), and
- a SWOT analysis (strengths, weaknesses, opportunities, threats)
To chart this process, I’m going to share my own case study for The BhakTee Life, a business and brand I have been helping to build for more than two years. It’s a spiritually inspired tee shirt company that officially launches this month, July 2017. Yes, you read that correctly. I have been working on this project part-time with the brand’s founder, Christy, for two years—not two days or two weeks. We both work full-time, as I’m sure many of our readers do, and we don’t have resources to hire consultants or web designers. That said, I’m not a fan of the tutorials out there that say you can be up and running with an e-commerce business in one day. I believe in the old carpenter’s slogan, “Measure twice and cut once.”
This is especially true in the apparel industry, where I spent a good part of my career. (I have a degree in fashion design, worked in the area of computer-aided design, completed an internship with a research and development consortium, and went on to become the editor/editor-in-chief for the leading publication serving the apparel manufacturing industry.) The apparel market is competitive, over saturated and complex from an inventory standpoint.
In this case study, for example, there is only one product: tee shirts. However, for one design, there are multiple sizes and colors, and different shirt sizes and styles. Let’s multiply that out: One design times five sizes (S-2XL) times three colors. That equals 15 unique items. That one design might come in three different shirt styles. That’s 45 unique items. If a company has only five shirt designs, that’s 225 items! You get the picture.
While you might not need to deal with inventory if you are a coach or a holistic healer/practitioner, you still have to deal with a huge market that is competitive and oversaturated. And it’s become global with platforms such as Skype. That said, the need for a comprehensive business plan and good planning still applies, so read on.
The Product and the Story
In December 2014, a few months after returning from her first trip to the Himalayas in Northern India, Christy Perry received a message in a dream. She was surrounded by a circle of wise women who were repeating one word over and over: “Bhakti, bhakti, bhakti, bhakti.” She fell in love with the rhythm and the vibration of the sound, and after researching the word she found out that it is a Sanskrit term that means: intense devotion expressed by action (service), devotion to spiritual ideas, and to a personal God. In the context of expanding consciousness on our planet and humankind’s growing interest in spiritual enlightenment, bhakti can be thought of as devotion to a Higher Power or Divine Source that speaks to each individual and to the Self-realization that the Divine resides within each of us.
Looking for a way to share this message with the world and follow her bliss, as mythologist Joseph Campbell suggested we do, Christy decided to establish a tee shirt company with the registered trademark “The BhakTee Life.” (The spelling of BhakTee is a play on the word “bhakti.”) This product category allowed her to draw on more than a decade of experience as a manager for Color Inc., a U.S. company that owns a chain of retail stores specializing in tee shirts and related vacation-destination merchandise. Additionally, Christy is deeply devoted to spiritual studies, an accomplished sound and energy healer and a founding member of The Sound Sisters, a Sarasota, FL-based group of women who perform concerts and lead meditations with crystal and Tibetan singing bowls and the gong.
THE BUSINESS PLAN
Below is a synopsis of the original business plan for The BhakTee Life, which is a living document, meaning it changes continuously as we learn and grow. Also, there are more detailed marketing and product development/manufacturing plans that use this information as a foundation, and there will be more to come on those topics in future issues of Transformation Coaching, including the process we used to compare different shopping cart platforms.
The Initial Product: The BhakTee Life brand will produce short- and long-sleeve tee shirts infused with the energy and creative passion of people who channel love for the planet and conscious living. The primary line of tee shirts will feature spiritual messages and artwork, while a secondary line will include humorous slogans because, “Even Spirit likes a Good Laugh.” For the company launch, five spiritual designs and two humor designs will be offered.
The Goal: The BhakTee Life is focused on creating an independent, successful apparel business with a positive message. It isn’t just about selling a product—it’s about raising consciousness through inspirational slogans and phrases—and creating joy in the process.
Customer Base/Target Markets and Competition
The customer base for The BhakTee Life includes men and women who are interested in sharing spiritual messages and humor through the clothing they wear. The initial target market is adults in middle- to high-income brackets. All shirts will be manufactured using high-quality ring spun cotton and retail from $20-$40.
The spiritual community worldwide is growing, and “positioning your product as something that contributes to overall spiritual growth can attract devoted customers,” notes an article on Chron.com by Christian Fisher3. “Validating this type of marketing by delivering the highest quality possible and building community among your customers can be highly profitable.”
But with this opportunity also comes competition. A search for “spiritual clothing” on Google turns up 26.5 million entries, for example. In this arena, The BhakTee Life will focus on differentiating itself with unique must-have designs on high-quality shirts. The company cannot compete on price initially because it does not have volume buying power and does not intend to print designs outside the United States. Keeping the supply chain as local as possible is a priority for the company, which is dedicated to supporting local communities and businesses.
Marketing
Popular marketing strategies for an online business that The BhakTee life will explore include:
Content marketing: incorporating rich and engaging articles, video, photos and other information can appeal to a target audience and help drive potential customers to the website through search results. The BhakTee Life website will have a blog, meditations, and YouTube videos of Christy using the Tibetan and crystal singing bowls and the gong.
Social media: Facebook, Twitter and Instagram can be used to post meaningful and humorous content and to conduct low-cost paid advertising campaigns. Initially, the BhakTee Life will use Facebook and Instagram for posting new designs and advertising campaigns and later expand to other platforms.
Email marketing: Using email newsletters is an extension of content marketing and it can be an effective way to:
- “Promote new or upcoming products
- Offer discounts or promote sales
- Send out relevant articles from a blog
- Mix up product and non-product content so it doesn’t feel too salesy”4
The BhakTee Life will use an email newsletter to support its shopping cart website.
Public relations: press releases, local business networking and participating in events can help raise awareness about and drive traffic to an online business. The BhakTee Life will send out a news release about the launch of the business and attend local spiritual events wearing tee shirts to promote the business.
Pay-per-click advertising (Google Adwords): While it can require a large budget to be effective, pay-per-click advertising can offer excellent return on investment using targeted ads that appear at the top of searches. Initially, The BhakTee life does not have a budget for this channel, but as the company starts turning profit it will investigate using this avenue.
Affiliate marketing: allowing other websites/bloggers/companies to sell your product for a percentage of the sales can increase market share. This also can work in reverse if your website wants to expand its inventory and offer a range of products that you do not produce. Affiliate commissions can range from as little as 6 percent to as much as 50 percent depending on the type of product, and an affiliate network, such as Rakuten LinkShare or Commission Junction, also will take a fee for accessing its contacts. 4 Once the BhakTee Life starts to grow, affiliate marketing will be considered.
Manufacturing and Distribution
All of The BhakTee Life’s designs currently are conceptualized by founder Christy Perry and executed by graphic designer Lisa Cedrone using a collaborative process. The website is linked with a U.S.-based drop shipping company to print shirts on demand and mail them to customers with the company’s logo on the packaging. This method of production requires no investment in inventory but has limitations on the types of shirts offered by the drop shipper. Additionally, profit margins are lower on this process than traditional volume-based screen-printing.
The company also established a supply chain with a printer in its local market for special orders. In this case, once a design is finalized, it is sent to the printing company for either screen-printing or digital printing, depending on the design. The printer purchases blank tee shirts from wholesalers. Each tee shirt style and manufacturer brand is carefully selected to ensure the proper quality, color and cut desired for a design. Typically, it takes one to two weeks to create a design and choose the style of the shirt, and then another two to three days to get the proofs once the design is sent to the printer and a deposit payment is made. Once the proofs are accepted, it takes a week, sometimes less, to receive the finished product.
SWOT Analysis
Strengths
Both founder Christy Perry and graphic designer Lisa Cedrone have extensive knowledge of the retail/apparel sectors: Christy with more than a decade in retail and Lisa with a degree in fashion design and a position as the editor in chief of the leading magazine for the apparel manufacturing industry in the United States. Lisa’s areas of knowledge include supply chain management, manufacturing methods and computer-aided design.
Christy and Lisa are not just serving “a market”—they are both active members of the spiritual and conscious communities targeted by The BhakTee Life. People who fall into this market segment typically are intuitive and can discern if products and services are truly holistic or are just riding a wave of marketing hype. This works to The BhakTee Life’s benefit.
The BhakTee Life is a registered trademark.
Awesome designs and slogans.
Weaknesses
The BhakTee Life is a small startup company without major financing for website development, inventory or advertising.
There is no capability to source shirts directly from manufacturers; The BhakTee Life must buy shirts wholesale through its printer or use a drop shipper, which adds cost to the supply chain.
There is no warehousing facility, so inventory printed locally is limited to Christy’s house capacity.
No full-time dedicated staff.
Limited financial resources for the foreseeable future.
No bricks-and-mortar locations to drive business to an online storefront.
Opportunities
BhakTee can create products with meaningful intention and mindfulness. Big companies cannot operate from this perspective.
Combined knowledge of Christy and Lisa will make it possible to expand into other categories of apparel.
The United States is the largest apparel market in the world, and in 2015 U.S. websites sold an estimated $80 billion in apparel, up 19.7 percent from 2014, according to Internet Retailer.5
Online apparel and accessories sales in the United States could grow 20 percent from 2016 to 2020, according to research by Goldman Sachs released in June 2016.6
There is a trend of people wanting to buy from local supply chains and companies vs. large national and international companies.
Threats
Knockoffs and counterfeit goods are always a problem in the apparel industry. Of all counterfeit goods in 2016, apparel and accessories represented the largest single piece of the pie at 20 percent, or $887.5 million if the goods had been genuine.7
There are many online apparel companies currently offering “spiritually inspired apparel” so there are likely to be copycat companies looking at the BhakTee Life’s designs and trying to adopt them in some way (See competition section above for statistics).
Inventory risk is high for holding inventory.
Stay tuned for next month’s installments, which will evaluate online shopping cart platforms.
Lisa Cedrone is the editor of Transformation Magazine and a freelance editor, writer, and graphic designer working primarily in the spiritual and alternative healing communities. Prior to establishing her Sarasota, FL-based freelance business in 2008, Lisa spent 20 years as an editor/editor-in-chief for two of the Top 10 business-to-business publishers in the United States, serving the apparel manufacturing and residential construction/building markets. Her company, DragonFly Nation, offers a wide range of creative services, with an emphasis on cost-effective, turnkey editorial and design projects for both print and web. Contact her at lisa@suncoasttransformation.com or visit DragonFlyNation.com.
References
1. “Why Are So Many Internet Start-Up’s Failing Today?” by Don Silver, ChrisDucker.com, online article at: http://www.chrisducker.com/internet-business-failures/
2. “How to Start an Online Business,” by Allen Moon, Entrepreneur Magazine, online article at: https://www.entrepreneur.com/article/175242
3. “Spiritual Marketing Ideas,” by Christian Fisher, Chron.com, online article at: http://smallbusiness.chron.com/spiritual-marketing-ideas-43847.html
4. “6 Proven marketing strategies for e-commerce companies,” WeMakeWebsites.com, blog article online at: https://wemakewebsites.com/blog/6-proven-marketing-strategies-for-e-commerce-companies
5. “Behind the online apparel boom,” by Jack Love, Internet Retailer, July 1, 2016, online article at: https://www.internetretailer.com/2016/07/01/behind-online-apparel-boom
6. “Report: Online apparel sales will rise 20% over next four years,” by Daphne Howland, Dive Retail, June 10, 2016, online article at: http://www.retaildive.com/news/report-online-apparel-sales-will-rise-20-over-next-four-years/420725/
7. “US Government Seized Record Amount of Counterfeit Fashion in 2016,” by Caletha Crawford, January 18, 2017, Sourcing Journal, online article at: https://sourcingjournalonline.com/u-s-government-seized-record-amount-counterfeit-fashion-2016/