Avoiding the $1.7M Mistake of Starting with Tech in Ecommerce

"Do not begin with software development if your core business is selling products or services!" This is one of the most crucial reminders when launching a new idea. Many entrepreneurs mistakenly believe that the visual aspects of a business—the polished website or app—are its most important elements. But consider this: is Airbnb just a polished website and app, or is Amazon merely its website and product pages? If your answer is no, then you must realize that focusing solely on designing landing pages and product pages at the outset means you're only scratching the surface.

Why do entrepreneurs often start with tech?

As a tech entrepreneur who began writing code at nine years old and sold my first software at twelve, I’ve spent over 25 years immersed in software and hardware development. Writing code and designing systems are my passions. I can tell you from experience that focusing on tangible aspects of a business—like building a shiny, intuitive website or an iOS app with fancy animations and a great user experience—can be immensely satisfying. It's natural to focus on these visible outputs, as they provide a sense of immediate accomplishment.

Why shouldn’t you start with the facade of your business?

You should focus on the immediate problems in front of you, not on what your business might look like when it has 10 million users. While it's important to have a clear vision of your business's future, you shouldn’t start by building it from that perspective. It’s like constructing a house—you wouldn’t start with the facade. If you launch an eCommerce business and are fortunate enough to reach 100 orders per day, the last thing you’ll worry about is the animations on your landing page! Instead, you’ll be confronted with operational challenges—managing inventory, processing orders, handling customer support, and more.

Before you reach that level, there’s plenty of time to think about fancy animations, text sizes on your homepage, automated shipping services, custom web development, and even selling in the Metaverse. But don’t let these distractions take precedence over the core operations that will actually sustain your business.

The brutal truth no one tells you—no SaaS, no Dev Shops!

But hold on for a moment! Here’s an honest truth: You can’t expect to create an application like Airbnb or the Amazon marketplace, not even 10% of it, right from the start. These companies have spent billions—between $10 and $100 billion—over the course of 10 to 20 years developing their platforms. Most of the complex software that powers these giants is invisible to the end users. Sure, I can code a website or app that looks just like theirs, and so can many website builders, app builders, and development agencies. But what they offer is just a thin veneer of the technical complexity behind these platforms. So, what happens if you choose this path?

The outcome is often one of these scenarios:

1- You spend a lot of time on fancy website builders, browsing through countless templates, only to end up with a site that looks nothing like you originally imagined. Parts of it break, and you finally settle on a template that’s "beautiful" but low in functionality. Once you start customizing it, the design might even turn "ugly." After months of work, if you manage to create a visually appealing website or app, you’ll soon realize that the surface doesn’t matter much because you still need robust eCommerce functionality—which is like the tip of an iceberg. The result? Frustration and a lot of wasted time.

2- If you have a budget, say around $100K-$200K, you might think, "I'll hire someone to build my dream website." They’ll likely promise they can do it. If they’re honest, they’ll advise you to build on an eCommerce platform. But if not, they might suggest custom code for the core, a fancy website builder for the landing page, and ten high-tier plugins. The outcome will often be something like a WooCommerce site with a landing page cluttered with plugins that nobody knows how to integrate properly. For that price, you might get the landing page of your dreams but a broken back office—the panel to manage orders, customers, and business operations—because they understand you’re focused on the visual appeal, not the critical infrastructure.

3- If you have a substantial budget and can spend freely, a different issue arises. This happened with one of our clients at Selldone, my startup. They had an exciting idea to build a local marketplace, starting with a niche market and then expanding across the US. They spent $1.7M and hired an in-house team of developers for 16 months. The team was talented and built a beautiful website, focusing most of their time on developing the storefront with the UI/UX of a popular online grocery marketplace. The result was a gorgeous website with intuitive UI, amazing animations, embedded Webflow pages for internal content, and a custom panel for vendors to add products. However, after months of hard work, when their budget started to dwindle, they decided to launch. They onboarded dozens of vendors, and everything seemed great—until no one came to buy! Their customer acquisition cost was more than three times their average cart margin. Within a short time, vendors stopped checking their panels, and bugs began to emerge. We often hear similar stories from new users sharing their past failures.

When I speak with new users who want to start a marketplace, my pitch goes something like this: "I’m not here to talk about features right now. What I want to tell you is that you can test your idea, onboard vendors and customers, get your first order, and receive your first payment through Stripe within the next 24 hours—all for just $3.5K for the first year! If everything goes well, I’ll then introduce you to the features you’ll need at scale, and you can start thinking about our 0.5% transaction fees! It’s much better than spend millions of dollars to find out your idea works or not. But until then, save your money for branding, marketing, PR, and growing your business!"

But what’s the reality of selling things online?

Imagine you have a fully functional website with the exact design you envisioned. The real challenge begins when you start looking for your first customers. If you already have an audience on YouTube or Instagram, you can simply share your link and promote your new business within your content—your audience already trusts you. But if you don’t have that built-in audience, you’ll need to rely on advertising through Google and Facebook. If you have a network, you can start with PR, especially if you’re launching a new brand.

However, this still isn’t enough. Potential customers need a compelling reason to checkout and pay, so you’ll need solid incentive programs, like discount codes, coupons, and special offers. But soon, you might realize that the cart size is too low to cover your acquisition costs. This will lead you to consider two strategies: 1) incentivize existing customers to return with "Cashback programs" and "Email marketing" to offer new deals, and 2) set up cross-selling with additional discounts when customers buy a collection of items to increase the average cart size.

When you address these challenges, make smart decisions, and get a bit of luck, people will start sharing your business and story with their friends. They’ll return to buy more, and gradually, you’ll see an increase in customers and orders. At this point, you’ll encounter new operational barriers. You’ll need to manage inventory, add trackable labels, and assign SKUs throughout your warehouse. Implementing a straightforward sorting and management system becomes essential.

This is when you realize the importance of a seamlessly integrated warehouse management system—something that’s as simple as possible, rather than a complex ERP system with an outdated interface running on old PCs filled with endless buttons and fields. Why? Because your employees are likely young and accustomed to working with apps on their smartphones, so they need a system that matches their expectations for usability.

What you will learn if you’ve done everything right

Through this journey, you’ll discover that people come to your website to purchase a product or service—not to admire your skills in designing a fancy webpage with complex, mathematically animated elements. What they truly need are clear, informative product listings—not something flashy or distracting. They don’t want tiny “Buy” buttons or endless carousels of images with hundreds of other products on the page.

You’ll also learn that operations are far more likely to make or break your business than the design of your homepage. As your business scales, you’ll realize that the backoffice—the systems for managing incentives, cashback programs, finances, inventory, product management, and order fulfillment—is far more critical than the font sizes on your landing page. Yet, SaaS companies that offer website builders often try to sell you on the idea of “Designing professional-looking websites!” or “Design like a pro with our no-code tools,” which can divert your attention from what really matters.

If you’re looking to design a personal website or a basic company site, I suggest using tools like Webflow, Elementor, or WordPress. There are plenty of materials and templates available to help you build landing pages. However, if you plan to sell something online and expect more than 100 orders per day, you’ll need to use a serious, focused eCommerce platform like ours—Selldone or Shopify.

The Truth No One Talks About

So, why isn’t there more discussion about these operational challenges? The first reason is that very few businesses even reach the point of getting regular orders. Most spend all their budget and time on designing a homepage or setting up a complex platform with multiple plugins. The second reason is that building a page builder is 100 times simpler than creating complex eCommerce functionality at the core, and making it user-friendly for the average person in the back-end.

At Selldone, we do have a page builder—one that’s as powerful as the best website builders, with a totally new interface and an intuitive user experience. We even made it open-source! But let’s be honest—building a page builder is the easy part. It’s the eCommerce functionality that’s truly challenging.

What I’ve Learned About Winners and Losers in eCommerce

In the past six years, deeply involved in eCommerce and speaking with countless business owners while pitching my startup, I’ve learned that there are many ways to lose! The quickest way to lose is by focusing too much on technical, fancy design, launching an app, and pouring time and money into the wrong aspects of the business—mainly tech.

On a smaller scale, winners often take a more straightforward approach. They make decisions based on the resources they have, start by building a channel to attract an audience, like on YouTube or Instagram, and create a minimal but engaged audience base. They secure their first orders through direct messaging and then quickly focus on simplifying operations—managing inventory, processing orders, and creating a user database. They also tend to start in a niche market. Managing 40-50 products is much easier and more feasible than trying to handle 2,000 products.

On a larger scale, winners also begin by focusing on a niche! They have experience in selling and understand that managing inventory and operations becomes exponentially harder as the number of products grows. They also recognize that it’s much easier to bring in a few vendors and keep them satisfied than to manage a large number of vendors.

Moreover, they avoid the pitfall of over-investing in tech, knowing that it’s nearly impossible to build an in-house website with comprehensive eCommerce functionality without spending years and millions of dollars on top-tier talents. They understand that the biggest challenge in running a successful marketplace is the classic chicken-and-egg problem—acquiring both customers and vendors. In large-scale eCommerce, this is particularly tough, as the acquisition of each side depends on the size of the other.

However, by starting in a niche market, winners create a different dynamic. Customers expect a more curated selection of hand-picked vendors, which they see as a positive. Meanwhile, vendors appreciate that this marketplace is different from others because of its specialization and focus on their specific vertical.

What’s the Recipe for Starting?

I realize that what I’m about to say might challenge the entire SaaS industry related to eCommerce—including my own—but I want to share my thoughts and hands-on experience with you. Here’s my suggested recipe for starting an eCommerce business:

1. Plan, but don’t start with tech.
2. Choose an eCommerce platform—one that supports your business model today and can scale with you tomorrow.
3. Build an audience if you don’t have a huge budget for paid ads or influencers.
4. Start with a small number of products, focusing on maximum quantity and higher margins. You won’t know the final costs until you sell your first items.
5. Establish your brand within a niche! Start narrow. If you sell books, specialize in a specific series or genre. If you sell mugs, target a specific theme, like laser-focused Kitty Mugs!
6. If you have a budget, spend it wisely. Invest in the product, PR, advertising, brand awareness, networking, and operations—not on designing fancy landing pages. At the end of the day, users come to your website to find the product they want, not to marvel at animations or tech skills.
7. Be persistent! Building trust takes time.
8. Play the game outside of the giants! Don’t start by competing with Amazon. Instead, offer a unique brand, super-special products, or new packaging that allows you to play in a different arena. For instance, if I were selling cat food, I’d create a subscription box with different colors for each cat, including a month’s worth of consumables and a postcard featuring the buyer’s cat’s image and name. That’s something Amazon won’t do!

This is like a combination of by Rob Fitzpatrick and by Eric Ries, but tailored specifically for business owners and online sellers.