It’s really tough to go against your own nature. I admit it. When it comes to running a business, I’m extremely frugal and very anal about the way things are run. In general, frugality and anality are good character traits when it comes to running a business, but sometimes these traits can hold you back. In this article, I’d like to discuss some mistakes that we made early on that probably stunted our growth a little bit.

We Used Cheap Vendors

There’s something about getting a great price or bargain that is irresistibly attractive. Early on, we tried to maximize profit by looking for the cheapest possible vendors we could find to purchase our products from in bulk. While the products were cheap, the service was absolutely atrocious and the products had a very high defect rate. As a result, we wasted a lot of time having to sort through our products to make sure that they were in sellable condition.

We also wasted a lot of time trying to get ahold of these vendors to complain but they were always extremely hard to track down. Valuable time was spent sorting product when we could have been concentrating on business development. Don’t fall into the same trap as we did. Low prices always come with a catch.

We Didn’t Hire Any Help

We wanted to maximize our profits and keep all of the money to ourselves so we never hired anyone to help out early on. As a result, my wife and I did everything. By everything, I mean even the most menial of tasks. Looking back, I don’t think we saved any money at all by doing this. By hiring someone to help out with the easy but tedious tasks, we could have spent our time on work that only we could do. We could have been building the business, thinking of new ideas and products to expand into. Instead we wasted our time going through product, ironing, and packing our goods. Your brain is the most important part of your business. The sooner you realize that your time is valuable, the sooner that your store will become successful.

We Didn’t Have The Necessary Infrastructure

I must admit that I didn’t have too much faith in the business when we first started so I didn’t invest too much of my time or money on a proper infrastructure. As a result, we didn’t really take the time to establish our flow to efficiently pack and deliver our goods to the end customer. We didn’t purchase the necessary equipment that could have saved us a lot of time when prepping our products for sale because it was a really expensive up front investment. Our main rational for thinking this way was that we would solve our infrastructure problems on the fly once business started to pick up.

This was a big mistake. Once orders started coming in, we found ourselves scrambling just to keep up. We pulled many long hours and wasted a lot of time trying to do things manually when we could have saved a ton of time had we been prepared for the deluge of orders.

We Didn’t Do Our Research

Early on, we didn’t really do any sort of competitive analysis. As a result, we made many mistakes with our pricing. Certain items were priced too low and other items were priced way over the market value. We also didn’t do a good job of correctly calculating our overhead costs. As a result, we didn’t charge enough for our products and we ended up close to break even or even taking a bit of a loss on many of our sales. Take the time to know your market. Sounds like a no brainer, but we didn’t do a good job early on because we were so anxious to launch the store.

We Misjudged Demand

This was really a case of poor judgement on our part. We didn’t recognize the seasonality of our products or the times of year of the highest demand. As a result, we ran out of product to sell during our peak selling season. To compensate, we ended up buying a lot of product during the times of year when sales were slow. Our poor inventory management probably cost us tens of thousands of dollars during our first year of opening.

We should have taken the time to research the peak seasons for our category of products and stocked up on the proper items accordingly.

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