I was reading this Shopify article – “How to Build a Multi-Million Dollar Ecommerce Business With $0 Marketing Budget”. While I enjoyed reading the article, and I love Blackmilkclothing as a brand for many obvious reasons, I found the title of the article to be somewhat misleading. I find it misleading because of some of the contradictory statements of James Lillis in the article, Founder of Black Milk Clothing.
“Parker travels the world for an annual tour in which the company facilitates meetups for its fan base so they can talk and rave about Black Milk Clothing in person.”
“We’ve got about 80 private Facebook groups around the world and that’s all by geographic location or special hobbies and interests.”
“The whole growth has been purely organic word-of-mouth, building, I guess, a tribe of followers that basically run around the world promoting the product.”
Here is my point – Managing 80 Facebook groups, facilitating meet-ups at such level, producing top class imageries done by professional models shot by professional photographers; shouldn’t all of that be counted as a marketing expense? Yes of course, it is.
If you ask me – Can I build a Multi-Million Dollar E-commerce Business With $0 Marketing Budget? My answer would be No, you can’t! Every business requires money to be invested on marketing, and e-commerce is especially an extremely resource hungry business to run. Like all other departments of an e-commerce business, such as – HR, Logistics, Product development, etc, you will need to invest money in marketing department as well.
You see, the point is not – how to grow a business without spending money on marketing? Growing marketing budget is a sign of a healthy & growing business. You should be happy if you’re able to invest a fraction (5, 10, 15, 20% or whatever) of your revenue in marketing. But more important thing is that – how you can market your brand with good positive return on investment.
There are so many channels out there that are free to use, for example:
- Google doesn’t charges you anything for its traffic
- Social E-commerce websites like Wanelo are free
- Social Channels like Facebook, Twitter, Pinterest, Youtube etc are free
- Many bloggers & publishers won’t charge you for promoting your brand
- MailChimp is free from starters
Though you still need at least some investment to build presence even on these free channels, but the cost is still low and manageable for a company that wants to bootstrap at the initial stage. I have worked with many online fashion brands who’ve never directly invested in Paid Advertisement and are still able to build a profitable business just using the above free channels. And the return on anything they invest on their brand’s marketing has been positive.
Just imagine how many customers you can reach by using the above free channels – A few thousands? A million? But still, many start-up retailers fail to acquire the required customers to be a profitable business. So, it doesn’t work that way for everyone out there, right?
So, what kind of companies are able to thrive even on a low marketing budget and build their business sort of organically? Let’s talk about BlackMilkClothing again. BlackMilkClothing has been able to grow without any direct investment in paid advertisement (I believe that’s what James wanted to say) is because:
- They have a solid core product – unique leggings
- They’re targeting a unique niche which allowed them to build a strong community of brand followers
- They give a solid & consistent branding experience throughout all their marketing communication
- They are great at story telling
What that does is that it gives them the two biggest advantages for any business to achieve a really high ROI: repeat customers & solid word of mouth. This in turn allows them to spend more and more money on marketing, which includes hiring the best production team to produce the top class content, manage so many Facebook groups, organize meet-ups and do all those crazy things they show in their blog.
If you can develop the above 4 qualities in your business, you can also build a solid million dollar e-commerce business ‘organically’.
And without these qualities, it’s going to be a long, rough ride for you out there.
“Bonobos sold more than 12,000 pairs of pants and made more than $2 millions in its first year with a rather small marketing budget of just $20,000. That’s not much if you consider the amount the exposure they managed to produce from that money. The biggest reason why Bonobos did so well is that they were able to produce word of mouth for how well fitting and how colorful their pants were. They are one of those brands that were built newsworthy bottom-up.”