Practical ecommerce interviewed Kathy Seigler, CEO and president of Ecommerce Superstores.

This Bowling Green, Ky.-based online retail brand has six niche online shops: CoolComputerBags.com — which was launched in 2007 — and five other specialty retail shops all launched in 2010.

They are: BackpacksSuperstore.com, TheLuggageExperts.com, YummiHandbags.com, DiaperBagsOnly.com, and WeKnowWallets.com.

From Neuropsychology to Ecommerce

Seigler started her retail business on eBay in 2006. With no previous ecommerce experience a background as a neuropsychologist. After about 6 months of selling on eBay, she identified a marketplace niche for laptop bags and launched CoolComputerBags.com in late 2007. In 2010, CoolComputerBags.com recorded gross revenues of roughly $815,000.

“Each of our now six sites specialize in a single product category,” Seigler says. “And all of the sites share the same navigation, functionality and shopping cart. The sites are also color coded, which differentiates each one, but all with the same template. We are still experimenting with our design and testing to see which converts best.”

Biggest Mistakes

“Where to begin? My first mistake was not being educated enough about the ecommerce industry as a whole. I didn’t know what I was getting into, but sometimes that’s the best way to start. Experience is the only way to learn.

“My second biggest mistake was trying to grow too fast too soon. Grow gradually and make sure spending is in line with revenue.

“Which brings me to my third biggest mistake: return on investment. Do not do things because they are ‘industry standard.’ Unless you see a measurable return on your investment, whether it is in marketing or staffing or inventory management — make sure it is paying for itself.

“Another big mistake I made was not having a fool-proof methodology for product upload. This is probably the single most costly error you can make in ecommerce. In the past 4 years I’ve made more mistakes than not. But I keep trying and my persistence will hopefully pay off. If not, I’ll write a bestseller about what to do when starting an online business.”

Biggest Successes

“Our biggest success is having a number one ranking in Google for the most relevant terms related to CoolComputerBags.com. I’m also very proud of being selected as one of the ‘Hot 100 Best Retail Websites’ by Internet Retailer.”

Best Advice

“Watch every single penny and be careful not to get sold on the latest thing that is promised to increase sales, traffic or conversion. Also, surround yourself with excellent people who lift you up every day professionally and personally. Life’s too short not to.”

Orders, Inventory and Shipping

“We work with about 60 different suppliers currently. We stock some inventory as well as work with vendors that drop ship.”

“To manage the entire inventory for so many different stores, we have a nice piece of software that allows the vendors to manage inventory themselves. It is a third party extension specifically developed for Magento. For those vendors who choose not to do that, they email us when items are out of stock and our inventory manager is responsible for updating it.

“We have an RSS feed that tells us when we are running low on stock. We only stock the minimum for products that sell through slowly. It’s a very difficult thing to balance, especially during the holidays.

“Our average [shipping] cost-per-parcel is about $9. Drop ship vendors receive email notifications that also include a packing slip and a shipping label. The software does have the ability to be automated, but we manually review each order ourselves before sending them to the vendors for the sake of accuracy and so we can stay on top of our orders and customer’s needs.”

Caring Customer Service

“On the customer service end of things, we have a fantastic lady, DeAnna Roberts, who takes phone calls and replies to emails. I manage live chat myself and I really enjoy it. I’m proud to say that we do not have very many instances where customers are unhappy. In those times when we have messed up royally, we tell the customer we will do whatever it takes to make them happy — then, we do it.

“I’ve gone so far as to send flowers to a customer who we forgot to refund for about 6 months. We also send $5 Starbucks cards and personal notes to customers when we are at fault.”

PPC Marketing Experiment

“Our marketing strategy varies. We lost a lot of money last year trying pay-per-click (PPC) advertising. We never arrived at a profitable result. We lost about $50,000 in just three months. I would not advise anyone to attempt PPC unless they have about $100,000 to spend ‘testing’ it.”

Aqua Vita PPC Note: Testing is key. When you are starting out, don’t bid for the number one spot. Watch your keyword bids and total expenditures like a hawk.

Cull keywords that do not result in conversions or email sign-ups. If a keyword group gets too competitive and expensive for you to make a profit,  drop your bid prices so you aren’t competing with the big fish in that pond.

Think maximum ROI for each click you pay for.  Make sure you push email sign-ups to get PPC visitors into your marketing list. That way you get more than one opportunity to market to these expensive visitors.

Facebook and Twitter for Ecommerce

“As far as Facebook and Twitter go, we post our email campaigns, special offers and have contests. We also have the ability for customers to share on every product page.

“But to be honest I still haven’t figured out yet how to leverage Facebook and Twitter to increase sales. We are considering an extension that allows us to sell on Facebook directly called ‘Facebook Shopializable.’ And I’m very keen on having an ‘incentive to Like’ functionality.

“I think the genius of social media is if a business comes up with something revolutionary, like Groupon did. That’s something people really want to talk about and it spreads like wildfire. Otherwise, you are a nameless face in a sea of millions on Facebook”

“The reason I think it’s important, however, is for rankings. It’s no secret that Google has incorporated the Facebook ‘Likes’ into its algorithm, which makes a lot of sense. Word on the street is that ‘Likes’ will eventually replace ‘links.’”

Get the full story and more ecommerce tips at Practical ecommerce.