The problem with agencies

Launching an ecommerce business can feel like trying to stitch together a parachute as you are hurtling to the ground:

Founders need to maintain a clear strategy even as they are handling all of their startup’s operations – all the while wondering if they’ll be able to find their footing before their cash runs out.

It’s not surprising that many startups turn to growth agencies for help, which is why there are now over 6,000 agencies operating in the US alone. Founders get to lean on the expertise of proven marketing experts who surely know best how to optimise go-to-market.

The problem is that it’s easy to lean a little bit too hard. Agencies are great at solving point-problems but the best web design and ad copy in the world can only do so much if you are selling a subpar product and lack a compelling story.

This was confirmed by a recent survey from eCommerceFuel – they found that what sets the fastest growing brands apart is not better marketing (their ROAS is average) but rather:

• Differentiated products - top brands are 77% more likely to manufacture their products, instead of reselling

• Focus on branding - top brands are 6x more likely to cite branding as a core competitive advantage

The bottom line is that founders should not go to agencies too early on. You know your product and your vision better than anyone else – make sure you’ve engaged with the market and have started finding traction in the form of organic sales. Agencies can build on organic growth but their work is no substitute for it.

Unfortunately few growth agencies will explain all of this to you. In a crowded market any agency that tells prospective clients to go back to the drawing board before engaging them will likely lose a lot of business to their less scrupulous peers.

So be careful. Do your own homework. And try to have some fun with it, as a founder you are in for a heck of a ride.