Levelling Up From SMB to Midmarket Ecommerce

Navigating the transition from SMB to midmarket is not as straightforward as simply collecting more orders and shipping more boxes. Systems that may have been adequate at the small business level might be not be able to handle increased volume. As the scale of operations expands, there must be a total strategic shift to accommodate growth of the buying audience, workforce, order volume, and revenue. In this blog, we’ll look at the different goals and challenges that go along with selling to the profitable middle third of all private sector receipts.  

Signs That a Business is Outgrowing SMB Practices 

As an SMB, you might gradually come to find that your current systems and practices are no longer sufficient to meet the demands of a growing customer base. Signs of this include frequent stockouts, an overwhelmed customer service team, or an ecommerce platform that starts loading pages more slowly with increased traffic. Perhaps you have expanded from regional to national business, and now require more elaborate local warehousing, which in turn requires far greater ecommerce integration. Or maybe a business wishes to expand operations in order to take advantage of the discounted resource pricing which comes with greater scale. Recognizing these “growing pains” early can be the key to successfully transitioning from SMB to midmarket. 

Characteristics and Challenges of Midmarket Selling 

Midmarket selling operates in a unique space, bridging the gap between small businesses and large enterprises. In general, the midmarket is thought to comprise a third of the U.S. economy, and is characterized by business which earn between 10 million and 1 billion dollars in annual revenue. This position brings its own set of challenges: 

• Complexity: As businesses grow, so do their operations. This can lead to increased complexity in areas like supply chain management and customer relationship management.
• Increased Competition: Midmarket businesses often face stiffer competition, as they're now competing with both larger enterprises and agile SMBs at the same time.
• Higher Customer Expectations: With growth comes increased customer expectations regarding products, customer service, and delivery times.
  

Scaling up from SMB to Midmarket—Goals 

Processing more orders, increasing sales, or expanding product lines are all great reasons to embrace larger scale.  Businesses evolving from SMB to midmarket in fact have many ways to increase reach and profits over time, such as: 

• Entering new markets and channels
• Diversifying product offerings and adding SKU count
• Increasing customer base
• Developing more specialized sub-divisions
• Empowering sales and marketing teams with greater resources
•  Building a more recognizable brand
• Filling gaps left by larger-scale competitors

While some of these goals may be aspirational or longer term, the bottom line is that increased scale can enable business to serve their customers more effectively and more profitably. The flipside of added complexity is increased specialization—the ability to hone offerings to meet unique audiences as they arise. 

How Do You Know When It’s Time to Replatform? 

Deciding whether or not to switch to a new ecommerce platform is a significant decision for any ecommerce business taking the leap from SMB to midmarket scale. We produced a thorough guide to replatforming here. Ecommerce platforms which are oriented to smaller businesses and teams generally do not have the customizable functionality required to support robust processes and growing audiences. These platforms tend to be “one size fits all” by design, as they are intended to serve a broad range of businesses which typically don’t have complex ecommerce needs. Signs that it might be time to switch ecommerce platforms include:

•  Frequent website crashes
•  Difficulty integrating new tools or systems
• Platform capabilities do not support growing number of complex SKUs
•  A user experience that's falling behind competitors
• New sales channels create logistical management crises for store admins

While replatforming can require an investment in time and resources, the payoff in terms of scalability and improved customer experience are well worth it. 

Greater complexity leads to increased sales opportunities—if you’re prepared. 

Transitioning from SMB to midmarket requires re-orienting processes, software, and sales strategy to the complex needs of bigger audiences and sales volume. By recognizing the signs of growth early, taking an honest look at ecommerce platform capabilities, and selecting partners who are skilled at serving the needs of larger businesses and audiences, brands can start to enjoy the higher traffic, revenue, and rewards of scaling up.