Making More Money
Welcome to the final lesson!
We’ve come quite a long way. You have everything you need to start making money with an online store. Today, I want you to think about how to make more money. In e-commerce, there are three ways to increase revenue, and I want you to at least start thinking about them right now.
Increase Average Order Value
One thing that can help your revenue immediately is to make sure you have upsells and cross-sells set up correctly.
An up-sell is when you convince someone to buy a more expensive version of the same product. An example may be convincing someone to buy the premium version instead of the regular version.
A cross-sell is when you convince someone to buy a related product—for example, to buy a case for their laptop.
Both of these increase your average order rate, so you’re basically getting more out of each purchase. Specifically, instead of making $50 for every 100 customers, you might make $70. That doesn’t sound like much of a difference, but if you can get 1,000 or 10,000 customers, that means much more revenue for you.
I recommend setting up basic up-sells and cross-sells, such as offering the same product with fancy packaging or with accessory pieces, when you launch your store. For example, one of my favorite card games, Hanabi, sells for $10. However, their deluxe version (which replaces the cards with little tiles) is $40. I love that game, so guess which version I bought? They quadrupled their revenue from me because of an upsell. So, you can use the same strategy—if you can create a premium version of your product—go for it.
Increase Conversion Rate
As mentioned in Lesson 8, a typical conversion rate is 1-2%. As a new store, it will probably be closer to 1%. But if you can turn every 100 customers from one order into two orders, you can double your revenue, which is amazing. Still, be prepared that this is really hard to do and could take months of work.
Because conversion rate optimization is all about experimentation and adaptation, you need to have a huge amount of data first. At a minimum, you need to have hundreds of orders each month. After that, you can start testing things, and once you learn something (for example, people love free shipping), then you can make relevant changes across the website.
And for that, you’ll probably need A/B testing tools. They will let you edit your website to test wording changes, CSS changes, showing or hiding certain information, etc. The two most popular are Optimizely and Visual Website Optimizer (VWO).
E-commerce is a big field, and there’s so much to explore, but now you already know enough to start building your own online store. Don’t spend forever reading the parts of e-commerce you can only really learn by doing. Get your feet wet and launch your business.
P.S. I’d love to see your store when it’s launched. Feel free to send me an email at email@example.com.
Join “Lift Off Summit.” It’s a free online summit that shows you how you can start drawing customers to your site. To get a preview of the content, watch a 45-minute interview with Chris Lema (who normally charges $250/hr) about building trust. It will be worth it no matter what stage your online store is at.
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