There’s a very real problem with women-led product businesses. We think that more stock, or more products, or more photos, or more options, will mean more sales. But it doesn’t.

This mistake breaks my heart.

The number of women I speak to who have started businesses and invested everything into it –

  • Their savings
  • Their husband’s savings
  • Their mortages
  • Their loans
  • Their lives
  • Their hearts

But have no sales to show for it, is surprisingly large.

This might even be you. You certainly wouldn’t be alone.

Unfortunately, by the time these women click on my ads and talk to me, their business is so fucked and they’re so scared about losing everything that they can barely move.

They can barely breathe.

And they sure as hell struggle to make a decision that would get them the help they need.

Out of the 100+ women I’ve spoken to that have been in this position, I’ve had the opportunity to help three of them fix the business.

Three.

Out of a hundred.

And today, I’m writing about how we’ve helped people fix those situations. Because rather than talk intangibly and conceptually, I’m going to talk to you about an actual client.

A real woman behind a product business who overcame the early-stage mistakes all women make in eCommerce.

Her name is Lexi and she’s the Founder of The Corporate Collective.

When I first met Lexi, she’d clicked on one of my ads about how hard early-stage product businesses are. We had a great sales call, she decided to come into the The Plan for 10k Customers, and as far as I knew, the business was doing pretty okay.

Not where she’d like it to be, but doing okay.

That’s when things started to unravel.

I found out just how much money she had invested into stock. Tens of thousands of dollars sitting in product, that really wasn’t selling.

“Okay, no biggie” I thought to myself as I figured out a plan of attack that would help her make cash.

The only problem is, she ran into a crisis that was created six months earlier by some of the earliest decisions she’d made in the business. Namely, the decision to buy tens of thousands of dollars of stock.

Guess what?

This is not a new business problem. It’s not even an eCommerce business problem. And no, you’re not the only person that’s made this mistake.

Plenty of people, smarter and stupider than you, have done this.

It’s actually a part of a well-known business exercise by Peter Senge, author of The Fifth Discipline: The Art & Practice of The Learning Organisation.

Let’s play The Beer Game together.

Stick with me here, this will make complete sense soon.

You are an alcohol retailer. Your current product manufacturer is your supplier. I am the factory that creates the beer.

You order one case of my beer every single week. You sell a case every week. You never sell more, you never sell less.

But then, all of a sudden, you sell out. And customers are asking you if you have the beer. You say “no” and notice how many people ask, thinking if it’s a trend you’ll order more beer, and if not? Well, no harm done.

Except next week, you notice that you sell out of the beer really quickly and more people are asking for more beer.

You think –

“Okay, I’m going to order an extra case of beer, there’s money walking out the door right now.”

So you do.

And now you have two cases of beer a week. But it’s still not enough. More and more people are coming into the store asking for the beer and you are always sold out.

You think –

“Fuck, I need to order more beer. I’m losing money here!”

So you do… and here is where the problem starts.

Because you’re not the only alcohol retailer experiencing this. Every single retailer in Australia is having the same thing happen in their store. And everyone is demanding your supplier to provide more beer.

But there’s a wait time of 4 weeks because I’m only a small fish. So, you start getting upset about the money that’s walking straight out of your door and telling your supplier to do something about it.

So they come to me and say –

“Make more beer. Now.”

Except, I can’t.

I only have a small factory. I was only a small brand who had a small amount of orders every single week. I can’t fulfil your order and I can’t fulfil every other retailer in Australia’s order.

So, I build a new factory. I spend tens of thousands of dollars I don’t really have to supply the demand from you, the retailers, and them, the consumers. And it’s amazing because the orders just keep rolling in.

By the time my factory is finished, I start shipping out cases and cases of beer to you.

Except… consumer demand has been slowing down. And that’s when you realise that it wasn’t your marketing and sales that was generating all this interest in my beer.

It was a pop star who showed my beer in their music video.

And as much as we all love a good Ariana Grande tune, her songs don’t tend to stick around for long, do they?

So the pop culture moment for my brewery and beer passes… but we’re all fucked now because we all have a cashflow crunch now.

  1. There is no more consumer demand for my beer.
  2. You stop ordering a forty cases a week.
  3. Every other retailer stops ordering forty cases a week.
  4. I stop getting purchase orders.
  5. I stop making payments on my brand new factory.
  6. I go out of business.

But, worse still –

  1. You have ordered forty cases every week for a long time.
  2. You had to wait for those cases to come because I didn’t have a factory that could take care of your demand and your customer’s demands.
  3. By the time my beer gets to your store, the customers don’t want it anymore.
  4. Each week, more of my beer arrives.
  5. Now you have weeks and weeks (and weeks) worth of beer orders arriving, sitting in the backroom of your store.
  6. In fact, you have two years worth of beer that no one wants to buy.
  7. You stop ordering, because you’re not selling.
  8. Your projections around your sales of my beer were wrong.
  9. You’re not selling enough of my beer.
  10. You’re not making enough money.

See, how we’re both fucked?

How does this relate to your eCommerce business?

The Beer Game example has everything to do with the way you started your product business.

Because instead of waiting for customer demand for your stock (or learning to create it with sales), you short-circuited the system.

Here’s what happened in your eCommerce business –

  • You saw a problem in the market.
  • You created a solution (a business/product).
  • You imagined demand that wasn’t there (and that you didn’t know how to create).
  • You ordered huge amounts of stock that you imagined you could sell.
  • The stock landed, costing you huge amounts of money.
  • You don’t know how to sell it.
  • There’s no consumer demand for it.
  • And now, it sits in the backroom of your business losing value by the second.

Can you see?

You’re stuck in a business system that is almost impossible to get out of without very clever sales strategy, cashflow management and business expertise.

When I realised that Lexi had made this mistake, I immediately told her where she had gone wrong.

Initially, spend the minimum amount of money you can on stock, but spend the most amount of money on selling.

Any dollar amount of stock you purchase should at the very least be matched with the same dollar amount for sales.

Unfortunately, most women who start eCommerce businesses don’t do this.

Most women will usually take all of their cash – $20k, $40k, $80k, $100k plus – and throw it all into stock.

Sounds familiar, right?

Now, inventory is actually a pretty safe investment of cash when you know how to sell product.

When my high-level clients (those who’ll hit $1m in revenue in their first year with me) freak out about their first big chunk of investment into inventory, I always say the same thing.

You’re swapping money for more money.

It’s a good move…

But it’s not a good move when you have no fucking idea what you’re doing, there’s no consumer demand and you don’t know how to create it. 

Because what happens is you take all your working capital (and/or debt) and put it into an inanimate object that won’t sell itself, no matter how pretty you brand it or package it.

Which means you have money literally lying on the floor, losing value with each passing second.

And you don’t know how to sell it.

And you’re doing everything you can to not sell it, because branding, PR and brand awareness… right?

I get it. I’ve been there.

This is not a shaming post.

This is a “I see you exactly because I’ve been you and now I help women like you fix this exact same problem” post.

Because what happens next makes it incredibly difficult for you to fix the problems in your business.

You spent all your working capital on stock, right? Then you made more mistakes. Mistakes that you could have avoided with an eCommerce coach or by having the experience to know they were mistakes.

You didn’t have a coach or the experience, so you made them.

Businesses don’t die from one fell swoop of a sword. It’s death by a thousand cuts (aka mistakes).

Let’s go back to Lexi’s business, because this is going to be the easiest way to describe what happens in almost all product businesses in this situation.

You buy more product, because you think more product = more sales

The fashion industry is something that requires regular repurchasing, right?

So while Lexi had invested a significant number of money upfront on the initial batch of stock, each month she purchased more stock.

And more stock.

And more stock.

So that the cashflow she did generate with the business (which, to be honest with you, was pretty good for an early-stage product business), was immediately sucked into more debt, on more stock.

Then, she did what we all do with sales –

She hired the nearest Paid Advertising agency she could find and outsourced the most important part of business.

Let’s look at this from a top-down perspective and use your business as an example:

  • You have invested a significant amount of money into the business (minimum $20k).
  • You continue to buy more and more stock that doesn’t necessarily equal more sales
  • You take on weekly risk by outsourcing sales to someone who “is an expert”
  • You start spending more money on paid advertising
  • You wind yourself into a tighter and tighter hole that you can’t get out of
  • Then, you’re so overwhelmed that you can’t see past your current situation, you don’t know how to fix it and you finally realise that you are in way over your head.

What does this lead you to?

A huge, fucking messy cashflow crunch.

Cashflow crunches suck. Most of the time, it’s pretty easy to believe you’re on the verge of insanity in these business situations. There’s actually a physiological reason for that.

It’s not just in your head (but let’s face it, even thinking that sentence is embedded misogyny).

So, what happens in a cashflow crunch?

The emotional information processing system overloads your brain with imagery and stories driven by fear and anxiety. Because of the intensity of the fear, your emotional processing system takes over and you actually have difficulty physically seeing because the visual imagery within your brain is stronger than what your eyes see.

It’s like you’re in the world, but also not.

I bet you’re nodding your head right now.

“Yes, I’ve felt that”.

When you’re in the trenches of an early-stage business, you’ve made the early-stage mistakes that lead you to the cash situation you are in, it is fucking terrifying.

And to be honest with you, the reason 97 out of 100 women in this exact same situation get off the phone with me when I speak to them is because they are so scared, they can’t see a way out.

That’s when they run and quit.

It’s not fun to be in that situation. It’s hard. It’s painful. It feels like it will never end.

But the truth is, there are two types of women in this world and the way they handle this situation differs hugely.

The way women deal with immense stress is the way women lead

  1. The first type will bury their head in the sand, hoping and praying it will get better, lying to their partners about the business until the situation is so bad that they really can’t fix it and the business needs to be shut down. Then, they lose all the money from the stock and are in significant amounts of debt for a business that flopped. But more concerningly, their sense of self is shattered, their belief in themselves is shattered and maybe they come back and start another business… but to be honest with you most of them don’t.
  2. The second type will feel their back against the wall and instead of sinking to their knees, will claw, scratch, fight their way out. No matter how bad, how scary, how stressful, how painful, they will not surrender until the ATO drags their business out of their cold, clammy hands.

Guess which woman Lexi from The Corporate Collective is?

That’s right, the second type.

Lexi went through everything you’re going through. But because she actually had someone (me) that’s not only been through the same situation multiple times but has also fixed the same situation multiple times, she had help to navigate out of the situation.

  • She wasn’t alone in her house trying to fix it on her own.
  • She wasn’t reading free articles on Facebook Ads.
  • She wasn’t posting in a free group on Facebook asking other new business owners, who have no experience to draw on and help her, for advice

She did the right thing. She also did the hard thing.

And as you can probably tell, I’m incredibly proud of her.

I’ve learnt so much from coaching Lexi through this about the delayed result of decisions and how you must broaden your decision-making horizon in order to be successful in business.

What do I mean by that?

The decisions you make today are not the results you get tomorrow.

And this has everything to do with decision-making horizons, right?

Because if you believe that your actions today affect your results tomorrow, that means you make decisions which you hope will play out like that.

Sometimes they do… sometimes you get a bunch of sales because you did something today.

But honestly, 9/10 times you won’t get sales from today’s work.

And with each passing day, where there are no sales despite you hustling, grinding and working your butt off on “fixing the issue”, you become more and more disheartened. Because no sales are coming in.

What you don’t realise is that it takes 3-6 months for today’s decisions and actions to play out.

This was, by and far, the biggest breakthrough for Lexi.

Every weekend she would kill herself trying to generate a tonne of cash to fix her cashflow problems TODAY, which were caused by decisions she made six months ago.

But you can’t do that. It won’t work. Sorry, I’ve tried for you all and almost killed myself in doing it.

100% doesn’t work.

So, the second important lesson for you is this –

You can’t fix today what you made six months ago.

The way that Lexi has fixed it (and is still in the process of fixing) is very, very different to how most people handle these situations. It’s something I’ve developed through my own experiences of being in cashflow crunches with Trefiel and even 10,000 Customers.

It’s strategy, pace, consistency and internal state management.

Now, what does “strategy, pace, consistency and internal management” actually mean?

That’s a great question.

  • Strategy is the work you do to fix the problem.
  • Pace is the speed and intensity at which you work.
  • Consistency is how regularly you show up.
  • Internal state management is how you manage yourself.

All of these are key components to overcoming a cashflow crunch and Lexi’s implentation of the four pillars are the reason she’s –

  1. Still in business
  2. Working her way out of the cashflow crunch
  3. Will go on to make hundreds and thousands of dollars in the next 12 months.

I want this for every woman who’s in the same position now. But the only problem is, I can’t help you when I can’t speak to you.

So, would you like some help fixing your failing eCommerce business?

Or would you like to stay where you are?

Your choice.