Whether you’re thinking about launching an online brand, hiring for an expanding business, or seeking a role at a multinational such as Amazon, knowing the ins and outs of e-commerce management is a must for anyone in the sector.
From business to business (B2B) to direct to consumer (DTC), there are numerous e-commerce models, all which have different pain points.
Add to this the constantly shifting landscape that is the internet and you have a job function that is hard to both characterise, and to hire for.
In this article, we’ll show you the basic breakdown of e-commerce management, including classic management challenges and how to solve them, guiding principles of how to structure and grow an e-commerce business, and vital tools and resources for the sector.
Here’s what we cover:
What is e-commerce management?
Though sometimes dependent on team size and type of e-commerce model, there are common principles at e-commerce management’s core.
A holistic view
E-commerce management is the practice of managing an online business, so it’s successfully achieving its goals of quality product, customer acquisition and customer retention.
Its primary function is the identification of your e-commerce brand’s overarching goals and achieving those goals through the management of the brand’s wider team, through direction of internal hires to management of external stakeholders.
An e-commerce manager or management team will often help to select products, develop web-specific product lines, and help craft pricing strategies, which will all involve collaboration with the sourcing manager or buying teams.
Although they are not expected to know the ins and outs of logistics, they need to help ensure the product gets from warehouse to customer quickly and at a reasonable cost, all while keeping abreast of new technologies the business may need to pivot to in the future.
Once the product is on the website, the e-commerce manager or operations team checks that it’s merchandised to the highest possible standards, classified correctly and error-free.
They must then direct and liaise with the marketing team to develop digital strategy for the product, which may involve display advertising, search engine optimisation (SEO), affiliate programmes, influencer marketing, and so on.
The strategy may cross platforms, involve budgets and be both online and offline.
The e-commerce manager must have knowledge and oversight of all of these funnels.
The e-commerce manager must also have a hand in customer retention.
From overseeing a seamless UX and checkout funnel to analysing promotional campaigns and website performance, they should be able to:
- Retain a top-line view of the customer
- Analyse trends in trading
- Make recommendations on improving performance.
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E-commerce management challenges
The industry’s relatively recent existence, as well as the sheer breadth of models it needs to cater for, means there are a variety of challenges in e-commerce management.
Here are five common pain points – and solutions – to managing an e-commerce business in 2021.
Challenge 1: Definition difficulties
The main challenge of e-commerce management is figuring out what it actually means.
Is the founder of the company automatically an e-commerce manager? Is a manager the same as a director of e-commerce, or should two separate roles be created?
What should an e-commerce manager be best versed in: shipping, marketing or IT?
The sheer breadth of retail models also poses a problem when it comes to thinking about management. A pure-play direct to consumer site will need completely different management to, say, a consumer to administration model, like an individual paying council tax.
Solution: Don’t be tied to definitive job roles
We’ve outlined the general duties of an e-commerce manager or management team, but don’t get bogged down by roles you think you your company should have.
Instead, focus on your core three principles – product, customer acquisition and customer retention – and solve for any difficulties within those principles.
Perhaps your marketing strategies are highly successful but your product has a high rate of damage on arrival.
Instead of hiring a director of e-commerce, consider ramping up your logistics team first to solve for that particular problem.
Or perhaps the heads of logistics, marketing and IT all work well enough together to be able to collectively make up a management team. You may not need a designated e-commerce manager in your team, especially if it’s small.
Challenge 2: A team of zero
Often, an e-commerce business starts with just one person with a laptop and an idea.
Growing a team can be a challenge, particularly if you have no experience with hiring. Deciding on salary, which role to fill first and whether to hire remotely, in-house or agency-side, can all be tricky.
Solution: Start slow and be flexible
As your business starts to grow, think about which areas you’re lacking in and recruit accordingly.
Perhaps you’re struggling to keep up with emails and need customer service support. Or you’ve realised you need a manufacturing agent who can help renegotiate deals as orders increase.
When you hire, it’s useful to get creative.
You might consider agencies, chatbots, and remote freelancers instead of hiring an in-house team straight out of the gate.
It’ll save time and hassle, and give you the chance to assess whether the role needs someone in-person or full time before you make a long-term commitment.
Challenge 3: Customer personalisation
Knowing your customer has been a major challenge for online retailers.
Bricks and mortar stores struggled to translate their tailored offline experience to a virtual model, whereas pure-play e-commerce brands found it hard to figure out who their customer was in the first place.
If your campaigns or advertising are targeting the wrong demographic, or you’re not targeting potential repeat customers, sales and satisfaction will both lessen.
Solution: Embrace machine learning
Machine learning is not as ominous as it sounds.
Basically, it’s when computers learn from large amounts of data in order to make more personalised offerings to customers. Your Netflix recommendations are a good example of this.
It’s one way you can offer customer personalisation online. And this has been steadily improving with the advent of algorithms that can remember product choices and preferences across sectors and advertise accordingly.
Even if you don’t have vast amounts of big data for machines to ‘learn’ from, new solutions are coming on to the market for smaller businesses.
Machine learning solutions from companies such as Loop54 use a content discovery algorithm that can reads in-session intent and personal preferences, then re-sorts results to make them more accurately tailored to the user.
Challenge 4: Winning customer trust
Conversely to retail stores that went online, pure-play digital brands found building customer trust one of the hardest barriers to hurdle.
It typically takes years for a customer to build up brand loyalty. But e-tailers needed to quickly gain trust so ‘click and mortar’ stores (those with an online and physical presence) didn’t swoop in to steal market share.
Adding to this issue has been increasing knowledge around customer security and data. More than ever, customers want to know that their personal details will stay secure before they buy from a new brand.
Solution: Protect customer payments
A fast website helps with credibility, as do realistic product specs and an SSL certificate.
E-commerce management must ensure brand websites have all these attributes to compete with traditional retailers, as well as a compelling brand story.
Take note from e-tailers such as Patagonia and Asos, too. Featuring all customer reviews for your product – from positive to mediocre – shows you’re transparent and this builds trust among your audience.
Challenge 5: A transient landscape
Failing to anticipate the peaks and troughs of e-commerce could mean losing revenue and market share to your competition.
By keeping up to date with industry developments – whether that be international implications for your business such as Brexit, or a new analytics tool e-commerce businesses are rapidly adopting – brands have a chance to gain ground on their peers.
Solution: Cross-team research
This is where a reactive, adaptive e-commerce management model comes into play.
No one director can stay on top of all the changes that could affect an e-commerce business. But by combining knowledge from heads of logistics, marketing and web development, you should be able to respond and adapt to changes across your sector.
Think about hiring for this capability, and holding fortnightly or monthly meetings to chat through changes in the industry.
Guiding principles to effectively manage and structure your e-commerce business
If you’ve decided to manage and structure your own e-commerce business, keep these guiding principles in mind:
Keep defining your key aims
Remember that everyone you hire should fall under one of these three objectives: product, customer acquisition, and customer retention.
With these key directives front and centre, your hiring trajectory doesn’t need to be linear or traditional.
No successful e-commerce businesses are hiring a suite of C-level executives straight out of the gate. Instead, concentrate on your primary goals and hire adaptable staff who also have specialist skills.
As a rule of thumb, purely digital sites are typically managed by the owner or the director of the brand, whereas click and mortar sites are normally overseen by a blend of marketing and operations teams.
Don’t be afraid to hire remotely
Yes, your e-commerce manager or director should ideally be local.
But for more specialist roles that don’t need oversight into the entire brand – such as your email marketing manager or paid social specialists – consider hiring remote workers or agencies.
With clear direction, as well as access to massively improved video conferencing, remote workers don’t need to be in-house to make a mark in their roles.
WIdening the search will mean you have access to a far larger talent pool. And remote workers can still help influence your top-line objectives by way of a monthly video conference with the whole team.
Working with robots
Amazon says its robot-staffed warehouses are 10 years away. So it seems unlikely that small or mid-sized e-commerce companies will be able to fully automate their warehouses just yet.
However, if that’s something you’re keen to look into, Robots as a Service (RaaS) are available on a subscription-based model, allowing smaller companies to trial this hardware without a commitment.
One provider, Berkshire Grey, says its robots can automate e-commerce fulfilment in distribution centres.
Standardise your workflow
When it comes to structure, e-commerce companies usually involve third-party suppliers, remote workers and agencies, which can mean juggling different time zones and languages.
With so many moving parts in play, it’s crucial you have one common point of communication for your entire team.
Of course, this may not be achievable with suppliers. For example, a buying agent may need to follow up with a manufacturer via WeChat, and then relay it by email to your production team.
But in-house, don’t let one part of your team solely communicate over email, while the other is conversing on Slack.
Having one major point of communication will mean everyone has a chance to understand all parts of the business better, creating a holistic and inclusive company culture.
As well as suiting the transient, often-changing nature of e-commerce, it will avoid department silos and can often help with solving certain challenges. What is a major headache for a marketing assistant might be an easy solve for a back-end developer.
Put together a plan to get new hires up and running as quickly as possible.
Hiring remotely means acclimatising new hires to processes virtually, so make sure they have a comprehensive guide that covers all eventualities of their role, as well as clear objectives.
It’s useful here to assign numerical values to roles. For example, requesting that a new head of UX decreases bounce rate by 15% after six months.
Having exact objectives gives remote workers goals to work toward, as well as giving them – and management – a clear point of reference as to the objective of their role.
It’s tempting to imagine your e-commerce company as a vast business with buzzy offices full of chattering employees.
Make sure, though, that your hiring processes are moderate and in-line with your business plan.
Ideally you should have a rough timeline of growing your brand and the staff you predict you’ll need over the coming months and years.
Stick to that plan, start with freelancers or agencies before you commit to full-time staff, and make sure you have enough capital. Experts recommend around three to six months of cash reserves.
Often, e-commerce brands have barriers to developing a company culture.
Developing a strong company culture is one of the most vital factors in developing a successful brand. That may mean having a flat hierarchy, where each team member feels a sense of ownership in the brand and can make recommendations that are put into practice across the entire site.
Or it may involve more tangible creations such as an annual get-together, virtual coffee rooms, incentive structures or mentoring schemes.
The essential functions of e-commerce businesses – and how to staff them
Production and sourcing
Staffing for production and sourcing usually falls under two branches: production agents, which are typically freelance or remote roles, and sourcing managers, who are normally full time and based locally.
With experience non-negotiable in both roles, you should also be looking for the following characteristics:
- Communication skills: This is vital when you’re worrying about shipments late at night on a weekend. A good agent should be able to relay your concerns, as well as transmit information from the manufacturer, in a timely manner.
- Long-standing relationships: If your agent knows the market and has existing relationships with manufacturers and a supplier network, they may be able to negotiate price for you.
- Licensed: A production agent should have a business license in case of any issues.
- Degree: Though not essential, a sourcing manager may have a relevant degree in logistics or business administration.
- Analytical: A good sourcing manager should be able to leverage existing relationships to negotiate new deals.
- Finance experience: Costs of procurement should always be front and centre a sourcing manager’s mind. As well as a top-line view of the supply portfolio, a manager should be able to recommend methods of lowering expenditure, as well as undertake financial risk assessment.
- Efficiency: A sourcing manager should have experience in category management, as well as recommendations on optimising sourcing procedures.
Marketing at an e-commerce company generally has two main threads.
One is the e-commerce director or e-commerce manager, who typically has strong experience in marketing, as well as being able to hire and lead across departments.
The other is a more specialist role and can be referred to as an acquisition marketer, digital marketing director or growth marketer.
Here’s how to hire for both:
E-commerce director or manager
- Comprehensive skill set: The director must have oversight across operations, logistics, web development and merchandising.
- UX experience: Understanding the consumer’s purchase journey through the website, as well as a track record in its streamlining and optimisation, is a vital part of the director role.
- Previous campaign experience: The director or manager must have a proven track record of launching successful campaigns with quantifiable results.
- Tool knowledge: The director will have understanding of e-commerce platforms, social media platforms and their respective analytics tools, as well as web analytics tools.
Digital marketing director/growth marketer/acquisition marketer
- Tool knowledge: With new solutions and analytics tools coming on to the market at a rate of knots, a general understand of the tools used in e-commerce marketing – as well as an enthusiasm for new ways to promote product – is vital in a good digital marketing director. Look for experience in email marketing, customer relationship management (CRM), SEO, paid social strategy, lead generation and remarketing, as well as any other strategies your brand typically employs.
- Presentation savvy: A good acquisition or growth marketer should be able to put their findings into a presentation using platforms such as Keynote or Powerpoint, so that analytics are both digestible and easy to respond to.
- Visual aesthetic: A marketing director should have a strong sense of aesthetic and good working knowledge of their brand in order to brief designers and sign off on visually attractive campaigns and adverts that make sense for the product.
IT staff are vital in the running of a successful e-commerce brand.
A good IT team will be able to create a fast-running site with seamless navigational paths for consumers, as well as manage third-party APIs and plugins, and fix any problems with the site before it impacts your customers negatively.
- Front and back-end development: Developers should have front and back-end experience in order to understand the customer journey holistically and to be able to work with UX designers to create the best e-commerce experiences.
- Platform experience: Look for someone with experience in the platform you are running on. It’s no good having someone with 10 years of experience on WordPress when your brand is operational on Wix.
- Mobile-first: A good web developer will spend as much time concentrating on how the website looks on mobile as it does on desktop. According to Internet Retailing, mobile retailing grew by 57% in the UK across the first coronavirus lockdown in 2020, proving online shopping habits are shifting channels.
- High quality layouts: A front-end developer should be able to show previous experience of building responsive layouts with smooth interactions and transitions.
- Web performance: A good developer should also be aware and interested in web performance best practice, as well as previous experience developing for accessibility and SEO.
- Adaptive: A good UX designer should be excited by identifying new product opportunities and experiences across both web and mobile.
- Mapping expertise: Designers must be able to create wireframes and storyboards, as well as mapping user flows.
A good finance manager needn’t necessarily have previous e-commerce experience. Instead, look for relevant certifications, as well a track record of budget allocation and reporting.
- Reporting: A finance manager must ensure that processes are in place across the business, from the marketing to IT departments, in order to be able to report correctly to external auditors, as well as internally.
- Handling VAT: Finance managers must ensure all VAT obligations are met across geographies.
- Planning: A holistic view of budget will help the manager allocate finances to different departments, depending on need. A good track record of Excel should be on display here.
Head of logistics/logistics manager
A head of logistics for an e-commerce team, also known as a logistics manager, will be able to confidently develop and execute shipping strategies and operations.
Experience is a must here, as is flexibility and adaptability should supply chains break down.
- Experience/relationships: A head of logistics will have previous relationships and experience working with couriers, 3PL and warehouses. They will also be familiar with transportation concepts such as forecasting, inventory management and optimisation, delivery performance and negotiating with carriers.
- Cost-effective: Managers will have knowledge for cost-effective shipping practices such as less than truckload (LTL) shipping, as well as recommendations for multi-party shipping solutions that combine freight, brokerage and last-mile courier partners.
- Organisation: A head of logistics will have strong organisational skills and attention to detail, as well as the ability to manage all parts of the supply chain.
Tools and resources for e-commerce management
Whether you’re hiring for a fast-growing brand or looking to take on the management of your own brand, knowledge of the different types of e-commerce management will prove vital in developing your understanding of the hierarchy of the sector and creating your own best practices.
Look around for case studies on e-commerce management.
Bernhart Associates has some useful, real-life flowcharts of successful e-commerce businesses. Use them to develop a hierarchy that makes sense for your brand or team.
We have a guide on hiring staff, and it’s also worth checking job sites if you’re struggling with creating descriptions for roles, as well as clueing yourself up on tools that a digital marker or head of UX might use.
A lot of finance resources available on the web are US-based, so remember to narrow your search down to avoid taking in unnecessary information.
FAQs on e-commerce management
What is e-commerce management?
E-commerce management involves the holistic oversight of an e-commerce department or brand.
An e-commerce manager has an overarching view across key company sectors including logistics, IT, customer service and marketing, and helps all of these sectors to run smoothly with the end goal of quality product, customer acquisition and customer retention.
What are the 3 main types of e-commerce?
1. Business to consumer (B2C)
B2C is the main model that comes to mind when people think of e-commerce. Basically, it’s a business that sells products to a consumer over the internet.
The model typically attracts a more spontaneous consumer who is, on the whole, purchasing lower-cost items than in a B2B model.
2. Business to business (B2B)
B2B e-commerce is where one business sells online to another business. This is typically prevalent in industries such as food or construction, where one business is buying wholesale from another business.
3. Consumer to consumer (C2C)
C2C business is the model whereby one consumer sells to another consumer, through sites such as Etsy, eBay, or Depop.
What does an e-commerce department do?
These are some of the key functions of an e-commerce department:
- Overseeing buying of the product
- Management of e-commerce stock and product
- Overseeing shipping of the product
- Creating product information and photography for the website
- Overseeing the design, front and back-end development and UX experience of the website
- Monitoring and reporting of web analytics
- Creating marketing, SEO and pay per click (PPC) campaigns to sell the product.
Final thoughts on e-commerce management
So, now you should have a clearer understanding of e-commerce management and the elements you need to put in place to see success within your business.
Having the right people and processes in place will help you to achieve your business goals and continue to grow your e-commerce company.
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