Shopify Articles

First off, this is really hard for businesses across the board to figure out. It’s part art and part science. I’ve seen several companies go bankrupt because they ordered too much based on the current demand, then the current demand dried up. I’ve seen businesses flooded with demand and rush order a lot of units at a much higher cost. To try to avoid some of these extreme scenarios, take a look at sales data over the last few months to predict how much you’ll need for the next few months ahead. Take into account all events, promotions, holidays and stops in production.

When you have new products though, you really don’t have any data yet. In this scenario it’s good to keep it small, unless you’re really really confident. Buying inventory is investing in your business and like all investments, there’s some risk there.

As a business owner there are so many things that become your job. My general rule of thumb for outsourcing in general is - delegate the parts of the business you hate doing, when the business has the means and extra revenue to do so. So when is it time to outsource marketing? When the business has spare revenue to pay for it and you don’t enjoy doing it.

I really recommend doing a DIY marketing strategy at first if you have the time, energy and inclination; then outsource it. The advantage to learning to do it yourself is that you’ll be able to talk the talk and have a better understanding of how it works. That way when you hire someone to take over, you can communicate and manage them better. Who knows, maybe you get lucky, you love it and are good at it.

Heatmapping is a way to analyze your website’s traffic. It will show you the differences between how you think people should use the website vs. how they actually use it. I like using Hotjar but a lot of people use Lucky Orange too.

Ask yourself these four questions and follow ups to optimize your website’s user experience and create more conversions.

1. Are people clicking on things that do nothing?
   
   Follow up: If so, can you make it clickable in a way that makes sense? Or can you eliminate it to reduce confusion?
   
   For example: You might have product photos in a hero section, but clicking does nothing. In that case link out those products.
2. What elements of the website are being ignored?
   
   Follow up: Are these areas just taking up space and increasing load time? Can you remove those areas to streamline the page?
3. What are the priority areas that 80% of people are going to?
   
   Follow up: How can you make those high traffic areas easier for the majority of people?
4. Did people scroll all the way to the bottom of your page without taking action?
   
   Follow up: What did they click on in the footer? Is that something you can make more obvious at the top of the page?

Why did I agonize over purchasing a Chateau Picard hoodie from the official CBS merch store?

Strap in 'cause we're going to space in this entirely unsolicited screencast of a 38-year-old man buying some Trekkie gear.

$0 - $100K

Nail the cornerstone of your messaging and positioning. Who’s buying this? Why are they buying it? What pain am I solving? When you understand and can communicate that, then you can target your customer. Life gets a lot easier. Plaster this cornerstone messaging everywhere so it’s clear to you, the customer and everybody else. All of this assumes you’re offering something that people want. Until you put your product out there and ask people to buy, you’re not gonna know if they want it or not.

$100K - $1MM

This stage is really about finding a traffic source that scales and works for you. Let’s say hypothetically the right channel is Facebook ads. You can outsource the content and figure out what works and then bring it in house. After that, you can make and churn out content nonstop. Double down on the right channel, get really good at it and just scale, scale, scale with laser focus.

Pro tip: Get your email right at this stage too. It’s an owned channel and the engine of your business machine. You might be able to get to one million without email, but you won't be able to get to five million without it.

$1MM - $5MM

You broke one million and you are ready to keep your business growing. Make sure you pause to celebrate and acknowledge all the small wins along the way. To keep things flowing at this stage you will want to build solid systems, processes and teams.

For the readers: I recommend these books, in this order, to help you through each stage of your business.

1. E-Myth
2. Ask
3. Product Launch Formula
4. Traction

Who

In house or outsource? You could do both! The most successful ad accounts we’ve worked on did the creative in house, but that just isn’t realistic for everybody. Maybe you start by outsourcing to test, experiment and see what works. Once you have that strategy down, bring it in house.

What

Ad content can be photos or videos that resonate and engage with your target audience.

When

Monthly fresh content usually does the trick. It could be a new photo, 10 second video, 10 minute video, whatever it is, keep it on theme and fresh.

Where

There’s no way you can nail every social media or advertising channel. Experiment and find the channel that works for you and your audience. Once you invest in fresh creative content, you can cut it down and repurpose it for various outlets.

Why

The human brain craves novelty, so seeing the same ad over and over will make you remember it, but it won’t make you interested in it. Whereas seeing different content on the same theme, for the same product will make you interested and remember. You’re getting both of those touch points, gaining trust and getting people engaged with your content.

Do

• Only spend money you are prepared to lose. Maybe it works, maybe it doesn’t.
• Find someone who can be an authority figure or content marketing partner to build a relationship with.
• Do your due diligence.

Don’t

• Pay someone x amount of dollars in exchange for photos with your product. It’s their job to sell sponsored content. There was a gold rush on this type of marketing, but there is no way to track it. A lot of people are faking it too, so it’s hard to tell who’s real and who isn’t.

This will vary from one entrepreneur to another depending on what excites you the most about your business. Outsource whatever you don’t want to do or aren’t good at. Nine times out of ten, you will never regret buying back your time and that’s what outsourcing lets you do.

Find the overlap between tasks you don’t want to do and valuable business functions. An example a member of our Facebook community gave is outsourcing the first contact for B2B wholesale. You don’t have to be doing that. It’s time consuming, but it’s also potentially hugely valuable if you get a few good accounts out of it.

Pro tip: If you are looking to outsource bookkeeping, I use Bench.co. I need someone to keep my books, but no way do I want to do that. So paying to have this done and getting a nice easy packet of tax prep documents is worth it for me!

There are a lot of variables to consider that make it difficult to come up with hard and fast numbers. In my client experience, these are some light guidelines based on the type of e-commerce store you are running.

Drop Shipping Stores

This is a tough business as far as gross margin goes. You’re essentially working on commission, so you’ve got a really tiny profit margin. I think my largest client in this category takes home around 8%. A great way to boost sales and margins here are upsell opportunities.

Private Label

Private label is when someone else manufactures the product, but it is under your brand name. These do a lot better than drop shipping. If a store is set up really well, about 50% is what they’re gonna take home. This won’t include advertising or the costs to acquire traffic. That’s always the wildcard.

Your Own Goods

This one is the real magic out of the three. You make and design your own goods and have them manufactured for you, or you manufacture it yourself and sell it. If it’s a luxury good, that could sell at 10x the cost of goods sold. Since, these goods could be 5x to 10 COGS, there is a way bigger profit margin. Although in this circumstance there could also be higher spend on materials.

Yes, instilling scarcity and urgency with your customers 100% works, but you need to be authentic and do it right. There are plenty of scam apps or widgets out there that fake scarcity, lie and just aren’t believable. Beware of those, because they actually violate Shopify’s terms of service in the app store.

As humans we are attracted to urgency, scarcity and social proof. The combination of those three things just makes you want to buy stuff, but it is not okay to lie to people to achieve that end. So, how do you achieve this authentically? Train your customers. Let them know your stuff sells out fast and there is a short purchase window.

We created two apps that can help with this legitimately.

Ship Timer: Ship Timer shows your customer a countdown to a shipping cut off. For example, if you order in the next three hours, you’ll receive it by Tuesday. Well, if you don’t order it, you gotta wait all the way till Wednesday? Come on! Just do it now.

While Supplies Last: While Supplies Last makes your products more attractive by showing your customers when their availability is limited. Whenever your product's inventory drops below a threshold you specify, it automatically adds a note to the product's page stating the remaining inventory, like this: "Only 19 left in stock - order soon. (10 are in shopping carts)"