It’s time for a quick recap of March!
March has been kinda crazy.
Keep reading if you’re interested to read how my ecommerce project is going.
I will also explain how I hired my first employee to work on this project, and how she worked less than 4 hours for me.
Here’s what happened in March
On a personal level, I feel as comfortable as ever living in Manila. I live in a really nice condo in a country filled with nice and friendly people.
I decided to work from a cowork space for the time being to keep my productivity high. I’m not going to spend my day on YouTube when I’m working from an office, as opposed to when I was working from home.
I chose a new cowork space that’s only a short walk from my place. Manila is a nice place to live in as an expat, but the traffic is the worst I’ve ever seen, so having an office within walking distance from home was a no-brainer.
My experience at that first cowork space didn’t go so well. Another company that’s working there deciding to start conducting job interviews in the shared space.
I’m not talking about 1 or 2 job interviews. I’m talking about 30 job interviews per day with 3 interviews going on at the same time in different corners of the room.
It was impossible to focus on work, so I canceled my subscription and moved to another office.
What I’ve been focusing on
Among other things, I focused on developing an hiring process for my ecommerce project.
I want to be able to scale easily so I don’t want to spend hours or even days conducting job interviews.
As one of my friends told me: “hire fast, fire fast”.
So I did what everyone is doing to recruit employees in the Philippines, I turned to online jobs marketplace.
I push candidates through a “recruitment funnel” that works exactly like an offer funnel. The people who make it through the funnel are good enough for the tasks I need them to do.
I went ahead and hired my first employee.
I was a little concerned because she was living pretty far from the office so I wasn’t sure she wouldn’t be discouraged by the commute.
She assured me it was ok, so we moved forward and she came to the office for one afternoon…
Only to never come back because the commute was too long for her.
After a week, I hired a new employee and she’s been working with me in the office ever since.
She’s doing a great job so far, and I trained her so she’ll be able to teach the new recruits when we need to scale up.
Starting to build a team
A very important thing for me with this ecommerce project with Shopify is to delegate as fast as possible, as many tasks as possible.
I made the mistake before to try to do everything myself and there comes a time when you hit a ceiling and can’t go any higher because you simply don’t have enough time in your day to do more.
This has not been so easy for me to delegate everything so far because I want to learn to do things the right way before I train people to do it for me.
One aspect that quickly got out of hand is the order management side of the business.
I can’t spend my day fulfilling orders if I want to grow the business, so I hired my first employee to handle everything from fulfilling the orders, to handling the tracking of the packages.
I’ve also started to work on procedures that can be systematized for media buying, customer support, and social media management.
Customer support and social media will most likely be handled by the same employee, but at the moment it’s taking me less than 30 minutes per day to handle, so hiring a full-time employee is not necessary yet.
As for media buying, I am still trying many different things to find a strategy that I can easily duplicate when launching new products. With so much experimenting going on, an employee will be a little lost regarding what they’re supposed to do.
Still growing, no profits yet
With all that being said, I wasn’t planning to grow the business too much in March. I wanted to narrow down the advertising campaigns to increase my ROI.
But one test leading to the next one, I ended up making almost 4 times the gross revenue from last month, while spending less than 3 times the expenses from last month.
As you can see, that’s a pretty decent growth, especially considering that it’s just me plus one employee working on this at the moment.
The only problem: we’re still losing money…
The following graph presents 3 key performance indicators: AOV (average order value), CPA (cost per acquisition), and ROI (return on investment).
The AOV (how much we make on average per sale) is still lower than the CPA (how much it costs us on average to make a sale), so we’re still losing money.
But it’s interesting to see that while the AOV is somewhat constant from one month to the other, we have drastically lowered our CPA since January, as a result our ROI is improving month after month.
In January, for each $1.00 spent, we made $0.39 (so we actually lost $0.61). Then in February, for each $1.00 spent, we made $0.72 (so we actually lost $0.28). Finally in March, for each $1.00 spent, we made $0.88 (so we actually lost only $0.12).
Yes, we’re still losing money, but if we manage to keep the trend going, we should at least break even in April.
If we manage to bring that black ROI line above 0 next month, I’ll be over the moon.
What about the money?
Here is a breakdown of the money flow for my various projects.
To make this report easier to understand, I’m using a simple color code: green numbers are positive, red numbers are negative.
Please keep in mind that these figures may not be 100% accurate due to various factors such as refund requests and network adjustments. The terms for each payment may also vary. As a result these numbers may differ from the actual payments issued and received.
|Niche Sites||$1,437.09||▲ $288.38|
|Facebook Ads||-$30,458.07||▼ $17,433.44|
|Cost of Goods||-$11,995.12||▼ $8,608.61|
|PayPal Fees||-$1,431.12||▼ $1,186.57|
|Stripe Fees||-$639.64||▼ $359.24|
|Shopify Apps||-$88.71||▼ $4.73|
I didn’t write too much about my niche sites recently but it’s worth noting that the revenue went up in March compared to February.
From what I know, I would say it’s seasonal because I’m targeting a number of spring products. We’ll have to see how it does next month.
My ecommerce project is still where I’m losing money. And the fees I was talking about last month are still accounting for $3,328.91 which is about 7.27% of my expenses, and 59.35% of my losses.
As I was supposing last month, there’s definitely an economy of scale at play here, and I have a plan to at least break even next month.
The good news for this month is that even though my gross revenue and expenses have significantly increased since February, my loss actually decreased. That means that my ROI is on the right track.
What’s happening next?
Next month I need to be a lot more conservative with my money. I will probably experiment less, or with a smaller budget. It will allow my winning campaigns to cover the cost for the entire project.
April will most likely be dedicated to improving my media buying strategy so I can hire someone to handle all the advertising campaigns for this project.
Financially, my goal is not to make a profit from my store yet. I just want to break even in April.
I’ll keep you posted next month.