When it comes to ecommerce or retail, Revenues are Ego, Margin is Intellect. I owe this key insight to my former partner Tom Stemberg, who founded Staples and built it from scratch to a $17B company. Ecommerce businesses, by and large, are relatively easy to start but difficult to scale. Its relatively easy for aspiring ecommerce entrepreneurs to come up with a flashy, snazzy website – with outsourced web development and customer service and drop-shipped orders, getting started has become easier and easier.
The best ecommerce businesses start with a nifty front end but always have a robust strategy towards building a back end for scale. These businesses realize that ‘Front End is Revenue, Back End is Profit.’ Continue reading