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After $15K/month and $30K/month, let’s look at how to double the revenue goal and break through to revenues of $60K/month in your online store.
Breaking through the $30K plateau
In between $15K$ and 30K of turnover per month, the merchant has to structure their offer, their logistics and their team (however small). All this has to be done with a web marketing presence but with minimal risk.
By the time they reach sales volumes of $60K a month, the merchant has passed and validated an important additional step: the favors of suppliers.
With the increased volume of orders, the store has become an attractive sales partner, enjoying extra privileges like professional photo layouts and other goodies direct from the brands. Yet if this e-merchant has slipped through the cracks of the wrong SEO agencies, certain predators’ discount codes and Ad keywords have already sniffed at it. (See Risks discussion, below.)
The $30K/month cap is a plateau that all e-merchants have encountered. The right methods to break through this plateau involve pragmatism and, fortunately, only a small increase in web marketing expenses.
A challenge nearly every e-merchant has had to face
At $30K/month, the merchant is frustrated, because they feel that they’ve reached a plateau, and no longer know what to do to double their sales to $60K/month. A lot of sellers feel the same pain. The $30K/month plateau is the hardest to break through. But it’s something the vast majority of merchants with more than a $Million in annual sales have done, and we’ve watched how many of them were able to nail it.
In the two previous articles (How to make $15K and then $30K per month) we started by describing the best practices of the traders in question, then finished on the risks they faced. This time we’ll reverse it.
What are the typical risks of merchants who make $60K a month in their online store?
First, there are common strategies that will certainly increase the turnover, but that will also stagnate the merchant’s gross margin. If, in addition, they had to recruit to meet the increase in demand, they will end up with a net result lower than what they were doing at $30K/month.
Spending more on Adwords without optimizing first
Sure, increasing your ad spend will get you more exposure – and probably a few more sales. But the benefit can be disproportional if you don’t do it right. As at both the previous levels, the merchant takes the risk of increasing their daily AdWords budget without first optimizing the campaign with the strategic use of keywords. This ensures losses and it’s money down the drain.
Using a shopping comparison channel, without monitoring prices
The same happens if the merchant sells through shopping bots but doesn’t keep up with price comparison. As multiple comparators broadcast their offers against others, a price that isn’t competitive means lost sales. The upwardly bound merchant will always know the other offers out there, and compare frequently.
Even given these risks an Adwords strategy and selling through shopping bots at least have the advantage of increasing sales turnover. Suppliers are will begin to take an interest. While that signal is positive, the accounting firm will highlight a problem: the merchant has invested too much in web marketing! The reality is that they just invested badly and didn’t pay close attention.
Some risks that must be avoided, proactively
There are, however, much worse solutions: those that will increase expenses without increasing turnover.
Beware the discount codes.
In our experience, discount codes do not bring any additional sales! With each discount code Internet users who have already filled their shopping carts will open another page to search for a discount code and finalize the purchase.
Our BuyLine software proves it every day. The biggest BuyLine users even went so far as to remove the “Discount Code” field from their shopping cart, in order not to give their buyers bad ideas. A less radical approach is to name this field “CR”, which makes it possible to leave this field present without inciting the Internet user to go and get a discount code if he does not already have one). All the merchants who have removed their discount codes will tell you: they have lost NO sales. You can do it without risk.
And watch out for the Keyworders.
Basically, these are scammers posing as Adwords “experts” who supposedly “buy Long Tail keywords”, “manage the CPC to the nearest quarter of a cent”, blah, blah, blah…. They sell their services by claiming they’re paid only for performance, saying the risks they take are more than minimal. But I challenge any Adwords Keyworder to prove to me that they are true Adwords experts, or that they know any better how to choose keywords than the seller themselves using their own Adwords dashboard, plus a little research using the free tools provided.
Use of these last two strategies, Discount Codes and Keyworders, will not increase turnover, but will definitely increase a merchant’s expenses while reducing their net income.
What are the best strategies to grow from $30K and reach $60K/month in an online store?
Here is the typical profile of e-merchants who make $60 per /month:
Those who arrive safely at the$60K/month stage are the retailers who have applied the same best practices used to reach $30K/month, but on a wider range of products.
They’re consulting all their suppliers to find new products that are selling well.
They then follow up by doing a good job with those new products and expanding sales every month, or every 2 months.
Another good trick used is to benchmark sales from the previous December.
As buyers are more active everywhere during this period, products with under-exploited potential are often sold at this time. They can represent the potential of year N+1.
Once they’ve done this work of increasing the number of products, highlighting products with untapped potential and “commercial blows” with their preferred suppliers, they’re applying the same techniques as when they set their target of getting to $30K/month, but on an expanded line of new flagship products.
They’re stepping up the web marketing, but doing it right.
Optimize the keyword terms used on AdWords, Google Shopping, NexTag, Bizrate, or other paid comparators. Optimize the latter for top sellers only and don’t send your entire catalog. First, confirm the SEO on these new products via an internal optimization or a small test with Adwords.
They’re working at smarter merchandising.
They know to highlight on the home page and on the “Categories” pages these new products with good potential.
This is what will get you through the plateau, but used alone these strategies still aren’t likely to get you to the $60K mark.
Reaching $60K a month: give turnover a boost by expanding to the marketplaces.
Open an eBay store and then join another marketplace (Walmart, Jet, Amazon or Cdiscount, for example). Shopping Feed’s software enables you to discover competitors’ best sellers on eBay. Use that data to deploy merchandising best practices in all of the bigger marketplaces for your product listings. (See the previous article.)
With the expertise gained through diligence, the store is ready to handle the increased volumes realized through marketplace memberships. Having perfected your product listings, your product feeds can easily meet their more stringent requirements for ASIN matching and other product tags.
Some final words of advice
Getting from $30K/month to $60K/month in an online store is not done by going the most funky way possible. No FaceBook store, Twitter, “all valves open” web marketing budget or crazy design for your storefront will get you as far as the hard donkey work of plugging away at optimizing, every day and in every way.
You will have to stabilize your activity and continue your sourcing and product promotion work, as if you were launching into Ecommerce the day before.
We have seen too many e-commerce retailers thinking that having finally crossed the $30K/month mark, it was time to open the floodgates, to recruit Community Managers, and integrate internally functions that can be subcontracted for less (such as the designer) or, again, to let themselves be seduced into affiliating with Discount Coders or Keyworders.
To go from $30K/month to$60K/month in your online store, there is no point in exploding your web marketing expenses. You just need to find the most reliable sources of profit within your suppliers’ catalog and apply the same methods used to get to $30K/month.
In the next article, we will describe the typical profile of e-commerce merchants who make $100k/month. You will see that once your online store is making $60K/month, $100K/month isn’t that far behind.
My mission at Shoppingfeed is explaining how to leverage e-commerce platforms and SaaS technology to e-merchants who just want to run their business and make more money.
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