At Shoppingfeed, we talk every day with customers about their business. These are e-merchants of all sizes, and we’ve learned a lot from them about the various ways they approach their online store.
Without getting into a long academic discussion, we thought it would be useful to note the actions implemented by those merchants who pass the different levels of monthly revenue turnover.
This is the first in a series of articles that will reflect our experiences with stores that have achieved the different levels of customer acquisition for their online store.
We start with the $15K/month tranche, and by the last article in the series we will take it up to $100K/month.
What is the typical profile of e-merchants who make $15K a month?
These merchants are legion across the web. If $15K/month provides sufficient turnover to pay salaries, with a correct margin, a light structure and controlled marketing and technical expenses, the manager will be able to pay himself his income.
So how do we get to the $15K level?
- This online store generally has less than 1,000 products in their catalog. They have been in business from one to two years.
- Their site has a professional design and a simple, but unique graphic theme.
- They work their banner ads on the home page, even if they realize that sales do not necessarily improve with each new banner.
- If the SEO is correct, they don’t trust Google’s first places either. In general, their site has good Google positions on one or two products or product lines.
- There are one or two brands that sell very well, because of good relations with the supplier–which keeps them up to date on new products and promotions.
- They distribute their products on Google Shopping.
- There is a small Adwords campaign budget ($30/day). This AdWords campaign is not the most optimized, but it focuses on its flagship products or brands, so profitability is there.
- Finally, it takes a little volume for suppliers. These e-merchants manage stock and deliveries themselves, and are therefore often in a just-in-time situation (subject to the suppliers’ availability).
What are some common mistakes made by these $15K/month-level online stores?
Once the model seems viable, most merchants want to go further to scale up their business.
This is where mistakes can often happen because if at the beginning, classical merchant management could be enough, taking ecommerce and ecommerce marketing to the next level is where the traps begin to appear.
Incorrect approaches to SEO
Well aware that SEO on Google is important, the ambitious e-merchant will sign with the first SEO agency they come across. What happens too often is they drop a few thousand dollars for little return.
Too many SEO firms serving every type of business don’t truly understand the market for any type of business. They’re “Jacks of all trades.” And many don’t bother to ask before spending your whole budget on irrelevant strategies.
Increasing ad budget without a new SEM strategy
He will also increase his AdWords expenses (let’s say he will go to $60/day), and take more risk. But just increasing the budget without adjusting the keyword strategy is a mistake. It will sometimes only take one or two highly popular keywords to consume all the extra clicks for the doubled budget. But most of these will never convert. So, at double the expense, sales are exactly the same as with $30/day.
Expecting free shopping networks to deliver peak results
As with all things, you get what you pay for in this world. You can list products on the free side of networks like (in France) Leguide.com, but will ultimately be disappointed by the few sales brought in. This causes many merchants’ motivation to conclude they don’t work. However, sites like Kelkoo and Leguide.com deliver the best results for their paying customers who join at the premium levels. Read the fine print.
Basic merchandising errors
When an e-merchant decides to increase their product offerings, they often lose sight of their bestsellers. They disperse the marketing initiatives to products over which they have less control. After broadcasting their first promotion email, they get discouraged by the lack of response when they might instead have focused on the bestseller, while also suggesting other items from the expanded product line.
In the next article in this series, we will show how a $15K/month merchant can move to $30K/month.
Shoppingfeed is a certified Partner in Google’s Shopping platform, as well as in every major online marketplace worldwide.
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