How Horticulture Businesses Can Lay the Groundwork for E-Commerce

August 19, 2020 | E-Commerce

It’s overwhelming to just think about building an e-commerce platform that can track inventory, take orders, generate pick sheets, and track shipping, and create and maintain an e-commerce website, much less set objectives for that business without knowing where to start.

(Spoiler alert: You don’t have to do it all by yourself. There are powerful tools at your disposal that can make e-commerce easy.)

Fortunately, every business can find a starting point for setting e-commerce objectives, and can set realistic objectives for their business. They just need to follow a simple process.

Let’s outline that process and get you started on the road to implementing e-commerce at your business.

Step 1: Make a business plan

With e-commerce comes the need to view your business differently. Your business model has changed, and you need to make accommodations for that. This may involve creating a new business plan, a new marketing plan, and new income projections. 

If you don’t have a business plan (and it’s surprising the number of businesses that don’t), now’s the time to create one. We could spend an entire post and then some talking about the best ways of creating a business plan, but for now let’s keep it simple.

A business plan outlines:

  • What you want your business to do over the coming time period that you use for measurement (usually a year, but not necessarily a calendar year); and
  • How you plan on doing it.

The “what” usually involves sales, expenses, profit, products and business lines, and personnel counts. The “how” involves marketing, product and business lines again, and the utilization of personnel and other resources in service of the “what.”

There are many excellent resources that can help you build a business plan. We like some of the ones here.

The best business plans take their inspiration from your organization’s mission and value statements. The statements encapsulate what you’re striving to be as a business. The business plan is simply a detailed description of how you are going to get there.

Step 2: Make income projections within your business plan

This is the tricky one: Figuring out how much money you could make by adding e-commerce to your business.

Fortunately, you can approach this logically — and if that doesn’t work, you can make an educated guess. Seriously.

In its simplest form, making income projections is a four-step process.

Look at your business.

Ask these key questions: 

  • What does your business sell now? 
  • What makes you the most money? 
  • What is the current sales mix for your business? 
  • What’s the ideal mix?

You’re probably not going to exactly replicate online what you sell in person for many reasons, including shipping cost, logistics, and perishability. But you probably are going to sell a lot of things online that you currently sell now.

The reason for determining your ideal business mix is that adding e-commerce may allow you to nudge your business closer to that ideal mix. At the very least, you can market your optimal mix online and see what happens.

Look at businesses like yours online.

Moving online means having to deal with a brand-new set of competitors, including some that have been online longer, are bigger, have more resources, and generally are better at selling online than you are.

That’s not a big deal — it’s a learning opportunity. It’s a time to ask questions like:

  • What are they selling? 
  • How are they offering what they sell? 
  • What do they charge for shipping? 
  • What are their return policies, order turnaround times, etc.?

Find the things that you like about your competitors and file them away for the next step.

Determine what your business does well.

What’s your business’ sweet spot? Annuals? Perennials? Shrubs and hedges? Larger trees? Do you pride yourself on the healthiest stock, great customer service, landscape consulting, low prices, or something else?

Look at the percentage of your income that comes from you doing what you do best, and hang onto that number.

In general, your most effective online presence is going to be some combination of what you like from other online businesses and what your business does well.

Look at how much money you could make online from doing what you do well … well.

Here’s the step where you figure out actual dollar amounts. Take the amount you make from doing what you do well, and multiply it by 50. That’s your stretch goal — something you could hope to achieve in five to 10 years of dedicated e-commerce operation.

Why 50? If what you do differently is really special, and it resonates with people, and you have the entire country as your base of operations, doing 50 times the business you do now actually seems conservative. 

But remember — that’s your stretch goal, the carrot you always have out on front of you, encouraging you to do more and better.

For year one, take 25% of the income amount you currently get for doing what you well, and make that your e-commerce goal.

Want to be a little more ambitious? Make it half of what you currently realize.

Why those numbers? Establishing a foothold in e-commerce is going to be more challenging than you think. Under these circumstances, being conservative might be the same thing as being realistic. 

If you feel confident in your marketing plan, double or triple that amount for year two, and triple or quadruple that for year three. 

This is the point where many businesses plateau, and this is a good stopping point for your income projections. After 24-30 months of e-commerce, it’s helpful to reconnoiter and see where your business is, the viability of your retail/e-commerce mix, and where you want to go from there.

Step 3: Make a marketing plan

The marketing plan follows from the business plan and basically describes the strategies and tactics you’ll use to achieve the goals outlined in the business plan. 

One way to think of a marketing plan is that it’s like a blueprint — only instead of building a new greenhouse you’re building a framework to promote your business. 

In marketing, you use tools; you meet deadlines. They’re just different tools and different deadlines than you might be used to.

Marketing also needs a budget. If you’re going to promote your e-commerce operation only by adding a URL to your current marketing materials, you probably won’t have many additional marketing expenses — but your potential income may not be what it could be with some paid search and paid social ads or a printed catalog sent to a customer list.

It’s okay if your marketing budget goes into the red a little your first year — ideally, no more than 10%. There’s a sunk cost in educating the public about your e-commerce operation, and it takes money to build name and brand recognition.

As with business plans, you can create marketing plans using templates and guides. This Hubspot template is one of our favorites.

When you add e-commerce to your business and marketing plans, be conservative. Starting an e-commerce operation is not like Field of Dreams — if you build it, they may not come. You need to promote your online presence.

However, the flip side is that e-commerce can actually help with the overall marketing of your business, and can actually help it become more efficient. So think hard about how your business’ promotion will change after you add ecommerce to the mix.

On the far other side of the coin, you also need to think about how e-commerce will change your personnel utilization. If you implement the RFID-based Arbré Marketplace solution, you’ll be spending less time and resources taking inventory and verifying shipping.

You may not know how much you’ll save by adding RFID to these steps, but your Arbré Technologies representative will have a good idea. They can work with you on a revised resource-allocation plan, with time built in for training and calibration.

Free, Pre-recorded Webinars

There’s never been a better time to get started with RFID. Whether you’re just getting started or want to advance your knowledge of RFID or Lean principles, we have a webinar for that.

Fill in the form to access our video library.