15 questions an entrepreneur in the field of e-commerce

Questions entrepreneur in the field of e-commerce.

In 2011 I saw 50 projects in the field of e-commerce in different countries (Ukraine, Russia, USA, Germany, Switzerland, Belgium) and different levels of development (from idea to the late rounds). All they wanted money from investors.

In this article I will try to bring all the questions that investors interested in such projects and the entrepreneurs who were not always answered.

After the issue, I will try to formulate answers to the investor wants to hear. I am sure that I do not have all the options, but those who claim to attention of the investor will still be able to draw correct conclusions.

What I was most surprised that the questions are obvious, but employers are not asking them to yourself before meeting with investors. E-commerce - a very tough market with high barriers and low margin. And a desire to work in it a little, in order to achieve success.
The attentive reader will make a very important conclusion of the questions and answers: Investors want to see in this business, people with experience in this market. Unfortunately, this is no place for beginners (as permissible even 2 years ago).

So, questions:.

Question number 1:.

- How well do you know this business?.
A:.
- I am X years in the industry, my experience is more in sales and marketing. I know my good customers, their needs. I personally know of suppliers ( manufacturers ) of my product.

Question number 2:.
- Tell me about your market.
A:.
- My market has an annual turnover of units xxx, xxx to non mrabotayut suppliers, the major players - 1, 2,... N ( of the ones you can find in the ... Our clients ( clients with a description of the segmentation ), they buy our products for ( some scenarios ), the average check is.... margin on the sale of approximately xx %. A typical scenario of purchase - (a description of the script). Among consumers there is a large proportion of those who would welcome to shopping online, which currently make X% and this share is growing at a rate of XX% per year for X years. The numbers I got from such and such sectoral studies and adjusted on the basis of their X- years of experience in this market. Inconsistencies (if any ), I can not explain such factors - 1, 2,..., N.

Question number 3:.
- Tell us what you 're looking for clients.
A:.
- I have worked several channels of disabilities:.
a. The long history of relationships with old customers who are willing to go to the orders over the Internet.
2. I have a good relationship with the sites visited by my CA and they are ready to place my ads ( that's protocols).
3. Last XX months I've been watching the cost and effectiveness of placing contextual advertising. Currently, the price for the transfer of such property is XX cents, I expect growth rates in the X times in the twentieth month, this growth will be associated with both my budget and from budgets of companies that will go to the same market.
4. Organic traffic from search engines. We have the world's best SEO specialist who has experience with my product category ( my category examines the goods ) for XX months. Buying links - the last thing I would do. At the same time, I am ready to face the war budgets on SEO with their competitors.
5. I have a strategy for getting traffic from social networks, and it does not provide a fangrupp low conversion, sending spam, and other such things, I understand why our users would share the links to our site, why such references will not be annoying to my friends and I .
6. We have a good strategy for PR and I am confident that we will be writing about the media.
7. We have an affiliate program that will allow our partners to make our sales. We have already held talks and have several partners who will work with us. Here is a portrait of our partner: a site with attendance HHk uniques a day, we generate x ( leads, sales) in the month, week, day, we give such a partner, our margin of XX% (including conversion), it will be $ XXX per month on average .

Question number 4:.
- Tell us about your positioning.
A:.
- Because we have extensive experience in this market, we have identified several niches, based on in-depth analysis of these niches, use cases, and the motives of our customers, we found a very good positioning, which will allow us to stand out from competitors and create effective marketing communications with our .

Question number 5:.
- What do you expect the conversion?.
A:.
- The answer to this question, we divide into two parts:.
a. targeted Traffic. We expect the conversion of X %, higher than the market average by more user-friendly interface and ease of purchase. We plan to continually work to improve this figure and we have a team in an individual with sufficient experience, which is responsible only for the option and not for anything else. His word is crucial in any disputes below the CEO, CEO, and he listens to his advice and take into account.
2. untargeted traffic. We'll work on getting any traffic (except the one that will bring us the loss of reputation ), and will track conversions on them. The main KPI in this case, the ROI will be.

Question number 6:.
- How you will be organized by user support?.
A:.
- Support for our customers, we plan to be carried out in two stages.
a. At the start we open a call-center is not more than 5 people who will be willing to answer any questions. We plan to build the project work so that as little as possible in the process of inserting a ...
2. As the applications, we plan to transfer this function to outsourcing, providing operators the maximum possible number of scripts and answers to questions. All matters requiring a decision, we plan to send ... When a contract for such services, we envisage the procedure for transfer of individual operators in the outsourcing status of ...

Question number 7:.
- How are you going to accept payments?.
A:.
- Unfortunately, the lion's share of payments nanashem market - cash on delivery, but we, on the one hand, we have been able to make all our payments in various ways, on the other hand are willing to encourage our customers to move away from Cash.

Question number 8:.
- What are your CAC and LTV?.
A:.
- We started the business with the calculation of these indicators. Estimated Here we are, we are at the start of their adjusted (that these hypotheses were not confirmed ) in the future we plan to change these parameters within the limits of such and such reasons.

Question number 9:.
- How do you decide the issues of supply?.
A:.
- Our long experience in this market and provides us with a good reputation for good relations with suppliers in the market. This is an unfair advantage to our and our suppliers are willing to work with us on terms of deferred payment or merchandise credit (amount, timing ). That's why we do not need working capital, but simply a provision for getting started with a new supplier or for a quick response to Buys. In addition, our supplies are well diversified, and none of the vendors do not have a share of more than 30 % of the total.

Question number 10:.
- What is your Burn Rate?.
A:.
- Our Burn Rate now stands at $ Xk, we are ready to increase it up to the twentieth, this parameter, we plan to keep a low primarily due to the fact that the majority plan to convert fixed costs into variable.

Question number 11:.
- How did you solved the logistics?.
A:.
- We signed a contract with the company ... They guarantee us blablabla and financially responsible. In addition, we provide a sample (preferably 100%) of the control order fulfillment and satisfaction of our customers work with the courier. His delivery, we plan to use in exceptional cases.

Question number 12:.
- How fast you are going to grow?.
A:.
- We plan to grow at a rate of XX% per month ( weekly). We understand that growth is important and dangerous. That is why we will grow at a maximum rate, which will enable us to not lower the quality of service (satisfaction ) of the client. In the early stages, when growth is planned raketoobrazny, we will reduce the number of orders ( on marketing budgets - especially in the contextual advertising ) to work efficiently all orders.

Question number 13:.
- How long have you been?.
A:.
- We have started months ago, deciding to use a startup that's an engine that has allowed us to quickly and inexpensively quick Start to test our hypotheses. Of the cost of running the project was $ XK and we are guided by a team of X people who work for little money. We are aware that this is only a model and our experience and capabilities allow us to increase sales in the hundreds of times.

Question number 14:.
- What you need money?.
A:.
- The money we need only three goals:.
a. marketing.
2. Development of design usability.
3. Support for company growth.

Question number 15:.
- What are your priorities?.
A:.
- Our main priority - customer satisfaction and repeat sales, then - EBITDA.


Dennis Dovgopol.
denny. do @ gmail. com.
dennydov. blogspot. com.
@ dennydov.

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