A friend called me the other day to tell me about his new side project (Biijness). He was looking at an untapped space in the market and wanted to start an eCommerce venture. He knows and understands technology but has not been developing for years. His plan was to get a committed individual who he could fund who is more of a “domain expert” and knows the supply chain elements of that space.
This got us into a discussion about what a typical consumer eCommerce company’s organization chart looks like and when you hire out the team. Most companies tend to hire based on “milestones” or by “revenue metrics”. I thought I’d come up with some key milestones for an eCommerce company and break them into the team and type of people needed. The typical company is not so simple (many make a big foray into logistics; others focus on building warehouses and many others on partnering with offline vendors for demand generation. The milestones below are a case study (textbook style) example:
1. Get eCommerce site up to take transactions (Typically 3-6 months since start)
- Get website ready (either build from scratch or use a hosted shopping cart)
- Setup payment gateway
- Setup a shipping partner
- Upload and manage initial list of products
- Setup and manage initial supplier list for products to be drop shipped (or ship from own simple warehouse)
Team needed: Business (customer service, supply chain, operations, legal, etc) + Engineering (1-2 folks should suffice)
2. Get to 100 transactions / day & unit profitability (Typically 9 months to 1.5 years since start)
- Optimize website for SEO, put an affiliate marketing program, pay for SEM, social media
- Expand product list and supplier list
- Setup small warehouse (if customization is required) and manage inventory costs
Team added: Digital marketing, Procurement manager, Supply Chain and Logistics Managers and Customer Service, Increase engineering (User experience, Scalability experts, etc.)
3. Get to 500 transactions / day & scale (Typically 2-4 years from start)
- Include brand marketing efforts including TV, print and billboard advertising
- Expand into adjacent vertical products spaces, add new suppliers
- Keep refining website to include up sell, cross sell and analytics efforts
Team added: Head of brand marketing, Category manager (Merchandise Manager) for each category, Catalog manager (write product descriptions, take product photos, etc.)
4. Show gross profitability and scale beyond 1000 transactions
- Manage inventory and costs and ensure optimization of logistics and warehousing
- Recruit and manage team for growth
- Look for non-linear sources of traffic to the website, possibly add corporate sales
Team added: Finance & HR, Complete Marketing hires, Business Development
So after starting with a small team of do-it-all experts, you should at 1000 TX/day have about 200-300 people.
