15/05/2015

By Paul Watson, CEO, Volo

One of the best things about the online selling community is that it is made up of people who have a genuine drive and passion for what they do. Fashion addicts, motorheads, consumer technology geeks, DIY gurus and more all share a deep love for what they do online.

This love is what inspired them to take their pastime online and share it with the world. The issue of money is secondary to these people because – at the beginning – it not there as a driver. Making a profit from their passion is just a bonus.

And then things get serious. The passion and drive lead to a first measure of success that typically, catches the fledgling entrepreneur off-guard. All of a sudden, the buzz of what they love becomes the business of their livelihood. And as part of that, the business issues come thick and fast.

Stock control, inventory, fulfilment, cost control, credit arrangements, customer service at scale and a host of other challenges loom. If these pains and opportunities of growth are not handled correctly, they can sink the company before it begins. Nafees Din, CEO of Only Global Limited, a Volo customer explains: “The bigger you get, the more people you need and the more money has to be managed. Manpower and cashflow are critical.”

The first thing to notice is these are all operational concerns. None of the above contribute directly to either more business i.e. growth, or restoring that original drive that led to the entrepreneur setting up in the first place i.e. satisfaction.

These pain points are strictly within the realm of ‘keeping the wheels turning’. They are simply cogs, but these factors could very quickly become the major focus for the entrepreneur. In the word of Volo customer Nigel Matthews, director of GamesQuest: “Someone asked me the other day whether I could advise on launching into eCommerce and I said there was four major things they needed. 1. Automation 2. Automation 3. Automation. 4 Automation.”

This is not a unique situation for the online economy. Rock stars have had to deal with it ever since there were rock stars. The passion, energy and drive of the young artist lead to their initial success and suddenly there is a world of new concerns to handle.

The usual path at this point would be to call in management that would – for a handsome fee upfront – promise to deal with issues such as image rights, copyright, tour booking, studio time and entourage personnel. This should then free the rock star to continue developing the core product that led to such success.

However there are of course problems – with an upfront fee, there is limited motivation for the management to remain committed to the artists success. And indeed, as a business itself the management may look to maximise the profit potential from the artist as opposed to for the artist.

But more than this, there is also the very real danger that the management company becomes yet another issue for the rock star to handle. Creating the music (the engine of success in the first place) is overtaken by caretaking and management.

So it is with online entrepreneurs. When things get serious, there is a plethora of outsourcing options and partnership possibilities on the horizon. Again, Nafees Din of Only Global explains: “We used outsourcing to help handle some of our back end processes and enable us to keep focused on our markets here in the UK.”

The concept of an upfront fee to provide support services is just as dangerous to an online retailer as it is to a burgeoning rock star.

It is far better to link the rewards of support partner to the improved outcomes and business that the business can generate. This may be via quicker or more simple processes within the business, lower operating costs or indeed, new revenue opportunities. This framework links the success of the outsourcing partner to the success of the entrepreneur and motivates both parties to do what they do best.

For the entrepreneur this is perfect point at which to return to the core activities: the sources that led to the business growth in the first place. In the case of Only Global, this involved realising that with more active imports they could capitalise more on seasonal trends and use tools such as Volo to handle inventory management, keeping them focused on marketing and developing new business. For GamesQuest, growth came from international marketplaces.

These are examples of how an entrepreneur can combine scale and focus, building a bigger business without sacrificing the identity, values, authenticity and most of all, passion that created the business.

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