How to succeed in the e-commerce world? Follow the 30/70 golden rule.
e-commerce, Marketing January 7th, 2008 
Image Source: Against Corporate Policy
Are you thinking to start a new online e-commerce store? Do you have great products to sell online? If so, you will need to follow the 30-70 rules.
Who invent this concept? What is the 30/70 rules?
I, Terence Chang, invented this concept. After running few online e-commerce stores for years and being an e-commerce IT consultants for years, I finally come up this concept, which will guide the store owner to a better success. There may be argument about this concept, but it does lead me to a better profit in my cases. It’s my golden rules of doing e-commerce online store. It’s also my golden rules when I deal with my manufactures and suppliers.
The golden rule is basically described as “30% quality and 70% marketing.”
What does that mean? Regardless what product you sell online, it will be either a service or physical goods. Don’t get me wrong. The quality of your services and products are very important. However, the effort to make a perfect quality product is only 30% of your total effort to make a good sale. The rest of 70% depends on your marketing strategy, which including the after-sale customer services.
If you are running an online e-commerce store like I do, marketing and branding is definitely more important than managing your inventory and find good products to sell online. It’s not saying that find a good products and managing your inventory are not important. Basically, it’s more important to market your products. In other words, a perfect product won’t be sold without a good salesman. A good salesman can sell a crappy product in stead. You can make crappy product hot items on eBay, but you can’t make a diamond shin if no one knows.
I have received the same question over and over again from many of my families, co-workers, blog readers, manufactures and suppliers. They ask me what to sell. Personally, what to sell is not important. How to sell is the key. Without a correct marketing strategy, you will end up selling a GPS device to the tennis players and selling tissue paper to taxi drivers.
Here is one of the success story. Small ugly idea makes big success. Can you be the next one?
Got the point?
When I started my fashion jewelry online store at ProFashion Jewelry, I apply this 30/70 golden rule. I have spent a lot of time finding the high quality fashion jewelry myself to ensure my products won’t fail. I am still working on my marketing strategies to get my products out to the public and to the right customers. I may have over 10000 items to sell, but they won’t sell if I don’t promote them correctly.
Do you have an e-commerce store? Make sure you follow the rule.
I am thinking to start a series posts about running e-commerce stores. I want to show people how easy to setup an e-commerce store and make good profit.
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18 Responses to “How to succeed in the e-commerce world? Follow the 30/70 golden rule.”
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January 7th, 2008 at 6:11 am
This reminds me a phrase “Even Crap Can Sell” (not the exact) from one of the author from Google. I think it is an e-book which I read few years back.
January 7th, 2008 at 6:59 am
[…] wrote on his The Internet Entrepreneur Diary: ‘Regardless what product you sell online, it will be […]
January 7th, 2008 at 7:20 am
Thanks Terence. I do think that the 30-70 ratio can be different when a large part of the marketing strategy is build on the product selling itself. In other words: ‘Crap will be less likely to sell itself’. Do you agree? Cheers, Arne
January 7th, 2008 at 7:55 am
@ChampDog:
Ha. You said what I was thinking to say, but I don’t really want to use “crap” for products. In my case, I was not doing very good sales with my high quality products. So I have learned the hard way to focus on the marketing.
@Arne:
I remembered the dot-com era. Many company makes fortune without even have a really product. They sold their proposal for million dollars before creating real working products. They really knows how to market the crap products and make a good sales. Look at BlogRush. It’s actually a crap product, but it does sell very well for a while. Now the question is how long the 30% portion will last to make your business a success. If you have crap product, it won’t less long. Even you can make a buzz with your 70% effort on marketing. It won’t last when people find out your product is bad.
I hope that answer you question.
January 7th, 2008 at 6:00 pm
I take a different view. I believe you should focus on providing a great product and service. Then you should also market what you offer to let people know. But marketing exists to support the main focus not the other way around.
January 7th, 2008 at 9:22 pm
Hi Terence - great post. I like how you coined it “30-70″ instead of “80-20″ (or 20-80), since I totally agree that marketing and getting the sale is very significant, but 20% would seem too small for the product itself.
I’m curious as to how this would work on mfrs & suppliers?
January 8th, 2008 at 1:06 am
I remember something similar when I was an IT consultant. I used to apply the 20/80 rules. 20% technical skills and 80% management skills. I don’t have to know everything that I do, but I can manage and find other people who knows about them.
January 8th, 2008 at 2:47 am
@John Hunter:
Don’t get me wrong. I am not going to sell crappy products. Let’s put this way. No one wants to put up crappy product for sale. When you have something to sale, you believe that you have the best one to offer. Now you only spent 30% off your effort to monitor your product quality. You make sure it keeps the same high standard. You spend 70% of your effort to promote your product and make sure your customer services support your marketing efforts and products.
@Al at 7P
I invent these 30/70 based totally on my personal experience. I have once sold consulting services without even have a product. However, I spent 30% off my time to create the proposal of the services and spent 70% of my time to marketing it. In IT consulting business, you usually don’t have any products. Your consultants are your products. Your sales spent a lot of time to provide a solution that is not even exist.
To my manufacture and suppliers, I apply the same strategy. My product to my suppliers is that I have the resource to get their products sold. I spend 30% of my time negotiate with them to make sure I got the good products and support from them. I spend 70% of time communicate with them and social with them and make connections to their partners or even their competitors. This is to ensure that more people know about my business.
Every year, there are many trade shows strictly for wholesaler or retailer only. You get the best chance to social and make connection with your potential suppliers. You get your name out there without even buying anything. Especially for manufactures in China, if you have the selling power, manufactures will find you and offer you some good deals.
@JennyHow:
You are correct. Management skill is sometime more critical than your technical skill. You can be the genius of something, but you are just a smart individual. You will not be able to work as a team. You will eventually fail if you don’t have management skill.
January 8th, 2008 at 3:34 am
I don’t know about the 30 / 70 ratio, i would have thought that quality would be a lot more important that 30%. say at least 50%. After all, as they say, a good product will sell itself!
January 8th, 2008 at 4:55 am
@Recliners:
There is no doubt, that good product will sell. It only goes so far in certain degree. People will forget how good that products is. Is iPhone that good as it is reported? Would you come back to talk about iPhone in three year, if no one knows iPhone is still in production?
Companies seem to put more effort on marketing than pay attention on the product.
January 8th, 2008 at 8:14 am
I quite see what you are trying to say and completely endorse it.
The way you describe the 3/70 principle, it is nothing but a formula for success for any business. In today’s world, most product quality and quality of service can be taken for granted as there is fierce competition in almost every field. What will make the difference, is in the 70 which in the mix will have a heavy dose of relationship marketing.
January 8th, 2008 at 8:51 am
How to succeed in the e-commerce world? Follow the 30/70 golden rule….
Start a successful online business with 30/70 golden rule. Focus on product quality and marketing to promote your web store or online business. f you are running an online e-commerce store like I do, marketing and branding is definitely more important …
January 9th, 2008 at 1:37 am
@Dining Tables:
Your statement just won my heart. That’s exactly I was trying to phrase. Very well done!
PS. What’s going on with your IP or email. You are always in my spam comment list.
January 9th, 2008 at 6:44 am
Thanks. I have no idea why I get into your spam list! Do I sound like a spammer? May be you are using Defensio. Some time ago, some friends suggested that this was causing some problems. They went back to Captcha and Akismet and everything went back to normal for them. Please do keep retrieving my comments till you can fix the problem. Thank you again.
January 9th, 2008 at 7:20 am
@Dining Table:
No. I only use Akismet. You are actually the second readers that have this problem. The other reader is having problem with many blog that runs Akismet due to the IP being records as spam source. You can read more about his post at How do you feel when your comment is caught by a spam protector plugin ??
I am waiting for his response about the solutions. I am sure that I will be monitoring the comment carefully.
March 17th, 2008 at 8:49 am
Hi. I think your 70/30 idea is really interesting - I just wondered what exactly you class as the ‘marketing’? Is it the website itself, as well as all the other stuff (advertising, SEO etc?). If so I agree with your theory - a great site can make such a difference in selling your products to people/creating a brand that people will want to buy from.
March 17th, 2008 at 3:17 pm
@anna:
Yes. I did not explain my theory very well. Did I? The 70% of your business effort are all related to marketing. I am still learning all those tips and tricks about marketing. So I know I am not ripped off when I hire a marketing consultant.
June 3rd, 2008 at 12:30 am
[…] I have been misled by so-call marketing experts. They promised to generate traffic and increase SERP, but none of them can actually bring me the good conversion rate. Of course, there are many facts that will make your conversion rate up and down. So I decided to do lean it the hard way. I truly believe that an e-commerce store can sell anything and still become success, if you know how to find your customers and make them pay. You can read my E-Commerce Golden Rules. […]