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Abandoned Carts on WooCommerce: Rates, Recovery, and Plugins
Profit optimizationAbandoned Carts on WooCommerce: Rates, Recovery, and PluginsWhen a customer leaves an online store without checking out, their items are left in an "abandoned cart". This is usually caused by the customer not having time to complete the purchase, being distracted, or encountering an error on the site. While most abandoned carts are never completed, they can still be a major source of lost revenue for online stores. Unfortunately, like any e-commerce store, WooCommerce is not exempt from experiencing online shopping cart abandonment. For WooCommerce, WordPress estimates that the rate of cart abandonment could be as high as 80%. That’s a ton of potential profit left on the table. So, to maximize your sales and keep your business trending in the right direction, getting on top of cart abandonment is a must. Reasons for Abandoned Carts Unfortunately, abandoned carts are a common occurrence in online stores. Why does this happen? There are several reasons shoppers might abandon their carts, including: A loss of interest in the itemsThe customer found a better deal on a competitor's websiteAdditional or unforeseen costs, like shipping rates, taxes, etc.The customer experienced problems with the checkout processA store’s shipping and handling fees are too highThe customer was not sure if the store was trustworthy How to Recover Abandoned Carts When a customer abandons a cart in your WooCommerce store, it’s not the end of the world. In fact, there are several ways you can go about recovering those carts and getting the sale, such as the following: Using a cart recovery plugin, like AddifyA profit/revenue analysis, like that facilitated by BeProfitAn email marketing platform, like Mailchimp The average cart abandonment rate across all sectors is around 69.99%. However, adding plugins and tools to your store can be a good way to reduce this number. Email marketing campaigns and “retargeting” strategies can bring 3 out of 4 customers back to your site, and boost your chances of a conversion. According to WooCommerce, sending a simple follow-up email can help recover up to 30% of lost sales on their platform.Around 45% of cart abandonment messages get opened and 21% of them receive click-throughs taking them back to the site. 50% of users who click on a cart abandonment advertisement or email make a purchase eventually. At the same time, tools for profit and revenue analysis and cart abandonment trackers can help you to pinpoint your most “at risk” customers, and determine which factors in your store may be increasing cart abandonment. How Do Plugins Help Recovery Rates? Specialized cart abandonment plugins can seriously help an online business’s recovery rates. They do this by leveraging these features: Purchase history Plugins provide the ability to react to cart abandonment by recommending items based on previous purchases.Payment portals The best plugins can even provide dynamic payment options, such as a discount coupon or free delivery.Email marketing If a customer is shopping for a specific product and then leaves the store, these plugins can land automated email-based recommendations for the same or similar products straight to a customer’s inbox.CRO optimization Some plugins will optimize your website for conversions, focusing on conversion rate optimization (CRO) best practices.Profit/revenue analysis The best digital shopping cart abandonment plugins will feature profit/revenue analysis capabilities. This allows online store owners access to valuable shopping cart abandonment statistics that can be used to reduce cart abandonment. Best Abandoned Cart Plugins for Woocommerce If you run a WooCommerce store, there are several abandoned cart plugins that can help you recover lost sales. The best of these include: Abandoned Cart Pro For WooCommerce WooCommerce Abandoned Cart Pro plugin is the ultimate solution to recover abandoned carts and increase your overall sales. It will automatically email your customers and remind them about their abandoned cart, giving you the opportunity to convert a sale that would have otherwise been lost forever and features a fully interactive dashboard and WordPress widget. Plus, it will automatically delete abandoned orders after a specified number of days to prevent your dashboard from becoming cluttered. Abandoned Cart Lite For WooCommerce Abandoned Carts Lite is lightweight, easy to use, and will help you boost your sales and profits. Unlike the Pro version, this plugin is limited to a few features. However, it will still send an email to the admin when an order is recovered and collects basic abandoned and recovered statistics that can be later viewed by the user. Although, the Lite version doesn’t collect customer emails, won’t automatically send recovery emails, nor allow users to access a full WordPress dashboard area. If you can afford the Pro version, opt for it over the Lite one. Use WooCommerce Plugins to Mitigate Cart Abandonments WooCommerce cart abandonment plugins are a behind-the-scenes remedy that will work to improve your online business’ recovery rates. Such plugins can help keep customers onsite and reduce the likelihood of them abandoning their carts - cart abandonment emails being a prime example. The best plugins for WooCommerce will also eliminate the chance of human error, making your online business more resilient to cart abandonment and profit loss than ever before.
How to Track and Calculate Your Profit on Amazon FBA
Profit calculationHow to Track and Calculate Your Profit on Amazon FBAYou may be wondering what Amazon FBA is, and you are not alone. It stands for Fulfillment By Amazon, a service that helps Amazon sellers outsource their shipping requirements to Amazon. How the Amazon FBA Calculator Works The Amazon FBA calculator is a very handy tool for anyone who is thinking about outsourcing their shipping requirements to Amazon to avoid having to calculate your own shipping costs. It calculates how much money you will make selling your products through Amazon's logistical network. It goes without saying that you need to have a clear understanding of the costs involved in running your e-commerce store, and shipping is an important aspect of those costs. Just make sure you know what mistakes to avoid when calculating profit. Also, take note that each of marketplace has its own revenue calculator, including Australia, Canada, China, USA, UK, and various European and South American countries. Amazon FBA Profit and Loss Spreadsheet Amazon FBA has a few handy tricks up its sleeve—one of them being its profit and loss spreadsheet. Make no mistake, the spreadsheet can be tricky if you don't manage it well; however, it can be managed better if it is all incorporated into an analytical dashboard. How to Use the Amazon FBA Calculator The Amazon FBA calculator is a relatively straightforward tool, designed to show potential sellers how much they can expect to spend on fulfillment, and how much profit they can make. To get started, you’ll need to log into your Amazon account and enter your Seller profile. Click on the Amazon FBA Calculator, or visit this link if you’re having problems. Step 1: Find the Relevant Product Firstly, you must input an “identifier” number to find the product you’re researching. You can use a search term, ISBN, EAN, or ASIN, depending on the information you have, and select a specific location for your search. Step 2: Set the Price Next, you can input values into the fields within the “Amazon Fulfillment” space to figure out a margin for the product. The first value to enter is the price of the item. Research similar products for inspiration and play around with the pricing to see what kind of margin you can achieve when raising or lowering the price. Step 3: Determine Shipping Costs Fill in the “Ship to Amazon” field. If you’re already selling products via Amazon, you should have a good sense of what the average unit price is to ship your items to the Amazon warehouse. This number varies based on the size, weight, and quantity of products being shipped. Again, experiment with a range of costs to see how it impacts the margin. Step 4: Determine Product Cost Complete the “Cost of Product” field. This is where you input the price it costs to purchase your product from a wholesaler or manufacturer. Make sure you use the “all-in” cost, including the price for any overseas shipping, packaging materials, customs, and any extra expenses related to purchasing your items. Step 5: Calculate Your Margins Click the “Calculate” button. From here, the calculator will give you a net profit and net margin for the product as well as your selling on Amazon fees and fulfillment costs. Other Ways to Calculate Profit on Amazon FBA Amazon FBA Profit Margin Calculator This calculator gives a broader view because you can include all your expenses to get to your net profit per unit. To use this calculator, you start by entering some basic information as well as your fixed costs and upfront costs per product. Your job is to replace the red information in the table provided with your own information. You don't need to do anything with the green figures; those are formulas. Just enter "0" if something doesn't apply to your business. The next step is to enter your marketing costs under "advertising" and "promotions and giveaways," but only if you have marketing costs. And finally, enter "calculate," and you'll get your gross margin calculations. Amazon Profit and Loss Dashboard You can also give the BeProfit profit tracker tool a try. BeProfit offers one of the most accurate profit calculators available on the market today. It includes a data analytics dashboard specifically developed for e-commerce businesses. This innovative tool helps you to stay on top of your business finances while optimizing your bottom line. It is easy to navigate and can be a trusted partner that supports you through the highs and lows of your business's journey. FBA is a service offered to businesses that helps them grow by using Amazon's extensive logistics network. It's quite simple in practice—businesses send their products to an Amazon fulfillment center. Once the products are at the center, and a customer buys one, Amazon receives, packs, and ships those orders, while taking care of customer service, returns, and refunds. This isn't the only way to fulfill your e-commerce orders with Amazon—read our Amazon FBA vs FBM post and our dropshipping on Amazon for beginners guide to learn more. Calculate Your Amazon FBA Fees Before you start your business and throughout your product's lifecycle, your very first step is to consider all your costs. There are four main categories of costs that you would need to look into on Amazon: Upfront costs You'll need samples, and you'll need to ship those samples.Variable costs This includes your FBA fees (15% of your product's price plus $3 to handle and ship your product), returns, and storage fees.Marketing costs You'll have to launch your products at some point and then promote them on an ongoing basis.Business costs This includes insurance, taxes, salaries, and wages. These costs largely depend on the product(s) you are selling. All these costs will impact your profits. To offer your customers a product that is value for money, you need to finetune your expenses and sharpen your calculations to find the perfect match between your profit margins and your customer's pocket. Additionally, you'll need an Amazon profit calculator. Struggling to optimize your spending? Read our guide to using Amazon advertising reports to help you do so. Is Amazon FBA Profitable? The short answer to this question is yes. The long answer to this question takes a couple of statistics into account. Firstly, did you know that Amazon’s revenue was $386 billion in 2020? That's quite a leap from $280 billion in 2019. Almost half (54%) of this revenue comes from third-party sellers! But that's not all. A total of 92% of those third-party sellers use Amazon FBA. The bottom line is that the demand for online shopping has increased significantly since the onset of COVID-19. People are feeling more comfortable with online shopping and are, therefore, exploring different online shopping avenues. To drive the point home, 62% of online shoppers start their search for the products they want to buy on Amazon. If that doesn't convince you, nothing will! And once you get started, be sure to take a look at our guide to promoting your Amazon products.
Net, Gross, & Operating Profit Margins: What Is High?
Profit calculationNet, Gross, & Operating Profit Margins: What Is High?Two popular metrics commonly used to gauge the success of a business are profit margin and net profit. And, while net profit is great at reflecting how much profit is generated from revenue, for some applications, it’s arguable that a business's profit margin is a more valuable metric. This is because profit margin allows you to gauge how efficiently your business is running overall. To help you better understand these metrics and break down everything involving income, revenue, and profit, take a moment to read through this post. Difference Between Net, Gross, & Operating Profit Margins Net profit margin, gross profit margin, and operating profit margin are three metrics commonly used to analyze and measure the income of a business. To help you better understand the differences between them, consider these definitions and demonstrations of how each is calculated: Net Profit Margin Net profit margin is a measure of profitability. It's calculated by determining a business’s net profit as a percentage of revenue. The net profit margin formula looks like this: [(revenue-cost)/revenue] x 100 What’s considered a “good profit margin” will vary depending on industry and business size. A rule of thumb is that a 10% profit margin is average, a 5% profit margin is “low”, and a 20% profit margin is "good" or "high". Anything over 20% is exceptionally good. The average net profit margin can vary drastically by industry. For example: IndustryAverageHighAdvertising3.10%5%+Brokerage and Investment20.34%30%+ Another way to look at net profit margin is by using a net profit margin ratio. The net profit margin ratio is just another way to measure a company's profitability. It's calculated by dividing net income by revenue. This ratio tells you how much profit a company makes on each dollar of sales. Simply put, a high net profit margin ratio means that the company is making a lot of money on its sales. While a low net profit margin ratio means that the company is not making as much money on its sales. Gross Profit Margin The gross profit margin differs from the gross profit and is expressed as a percentage. It's calculated by determining the difference between revenue and the cost of goods sold (COGS), divided by the revenue. The gross profit margin formula looks like this: [(revenue-COGS)/revenue] x 100 Gross profit margin is the percentage of revenue that remains after paying COGS. This calculation is useful because it measures the efficiency of the business's operations and provides a benchmark for measuring other business expenses. For example, if you find your gross profit margin is low, you can look into reducing COGS, including reducing shipping costs or cutting out unnecessary expenses like excess staff or unneeded operation costs. Once again, gross profit margin can vary by industry. The overall average sits at 36.22% for all industries. However, each sector has its own specific numbers: IndustryAverageHighAdvertising23.99%30%+Apparel49.77%55%+Online Retail42.53%50%+Software58.58%65%+Transportation19.91%25%+ » Need help managing your expenses? Keep track of your e-commerce business expenses and calculate COGS for your Shopify store Operating Profit Margin Operating profit margin (or return on sales) is the ratio of operating income to net sales. This is usually expressed as a percentage. The operating profit margin formula looks like this: (operating profit/net sales) x 100 The operating profit margin ratio is used to determine how well a company can cover its operating costs with revenues. In other words, how effective a company is at generating profits from its sales. This is a useful performance indicator when making comparisons to similar companies. Average operating profit margins can also vary according to industry and business size. Apple, one of the world’s biggest software companies, maintained an operating margin of around 24-26% between 2018 to 2021. Other examples include: IndustryAverageHighAdvertising12.2%15%+Online Retail8.67%15%+ Good Profit Margins by Industry Each industry considers different percentages of profit margin to be either good or bad. If you're wanting to know what a good profit margin is for products in e-commerce, retail, and more, here’s an industry-specific look: Retail: 20-45%E-commerce: 15-20%Clothing: 4-13%Wholesale: 15-20%Hospitality: 10-15%Consulting: 80-100%Software: 70-85% Benefits of Knowing Your Profit Margins The ultimate goal for a business is profitability. If your sales are up, but your margins are down, you may need to take a deeper look at how you're running your business. A business with a good profit margin is able to remain afloat during tough times and capitalize on opportunities, such as seasonal strategies for boosting sales. A high profit margin means that the company is making enough money on each sale to cover its costs and generate positive ROI for continued growth. A high profit margin also sends a positive signal to potential investors, lending credibility and stability to the business. Ultimately, a good profit margin is essential for maximizing company growth and achieving long-term success. Limitations of Profit Margin Calculations To calculate a profit margin, business owners need to calculate total revenue and total expenses. This can be complex. R&D costs are expensed in the year in which they occur, while depreciation expenses are spread out over the life of the asset. Profit margins also don’t always consider changes in sales volume. If a company doubles its sales volume but keeps costs constant, the profit margin doesn’t change. If a company reduces its sales but also lowers expenses and increases prices, its profit margin will increase. Calculating profit margins is not an exact science. The outputs, while helpful, should be considered an estimation. » Need help calculating your profit? Make sure to avoid these mistakes and invest in a profit calculator
Ultimate Sales Funnel Metrics Guide for E-Commerce Sellers
Business metricsUltimate Sales Funnel Metrics Guide for E-Commerce SellersWhen it comes to e-commerce and multichannel retail businesses, the importance of analyzing sales funnel metrics can never be understated. It's an incredibly smart way to analyze the interactions your customers have with your site, from their first touchpoint through to conversion. What's more, the calculations aren't complicated, yet they can benefit your business immensely. » Can you use an app to analyze your sales funnel? Compare these top Shopify sales funnel apps Defining the Sales Funnel A "sales funnel" is marketing speak for your customers' journey from landing on your website to finalizing a sale. It's a relationship-focused framework that structures the timing of the build-up to achieving a conversion. The funnel is separated into various stages which usually align with your GA4 micro and macro sales funnel goals. Just remember that the micro and macro steps to achieving a conversion are unique to every business. 4 Stages of the E-Commerce Sales Funnel Even though some e-commerce companies have developed more comprehensive iterations, a typical sales funnel is divided into four stages: Stage 1: Awareness Your first step is to improve the visibility and presence of your brand and start collecting leads. It's an information-sharing stage where you need to use creativity to stand out from your competitors. How does the visitor get to this stage? You catch their attention with sponsored social media posts, guest podcasting, webinars, independent research, SEO—anything that builds awareness without being too pushy. Your visitor is gently nudged to stage 2 if they sign up for a marketing newsletter or watch a webinar. These actions must be defined clearly in your sales funnel. Stage 2: Interest Next, you need to change your visitors' awareness of your products or services into showing an interest in what you have to offer. Visitors get to this stage because they've had an interaction with your brand and now have an understanding of your products or services. To turn their interest into desire, you need to identify and use keywords to drive these visitors to your social media platforms and website. You can also develop blog posts that target these users as well as email campaigns and free trials. Stage 3: Desire The aim of this stage is to build a desire in the visitor to purchase a product or service. You also want to build trust so that the visitor starts to feel comfortable with your brand. Visitors have entered the third stage when they start researching your catalogs and different pricing models. They'll look for social proof by reading product reviews and testimonials. You can boost this by offering the visitor case studies, tutorials, demos, and product comparisons to help them along to the action stage. Stage 4: Action The final stage aims to convince the visitor to take action and finalize a conversion. To get the visitor to this stage you can offer them time-sensitive discounts and special bundle deals. It's critical in this stage to answer any questions the visitor poses quickly and professionally. You can further develop the relationship by sending out consistent email marketing that's hard to ignore. Also consider using retargeting strategies at this point. 9 Essential E-Commerce Sales Funnel Metrics You Should Be Tracking For tracking purposes, stages two and three of the sales funnel are combined to present the metrics according to three phases: the top, middle, and bottom of the funnel. Top of Sales Funnel When your visitors filter into the top of your sales funnel, they're in the process of becoming aware of your brand and discovering your offerings. The metrics that you should be tracking at this point include: 1. Traffic This is the general traffic on your site and on your product or service pages. It will help you understand visitor movement and interactions (why general traffic increases or decreases). If you monitor the dips and increases in traffic flow, you can see which of the changes you implemented on your site are attracting more traffic and which are switching visitors off your site. Use these insights to keep reworking your site until you achieve optimum results. 2. Entry Point This metric will tell you where the visitor entered your website (landing page), and which source led them to your site. This can be a specific social media platform or another website that backlinks to you. If you find that one particular source (or multiple) is bringing your site the most traffic, you can work on targeting that source and pulling in more visitors. 3. Bounce Rate Discover which page the visitor was on when they decided to leave your site. You must find out what caused the visitor to "bounce" before a conversion was finalized and address it. The average bounce rate for an e-commerce website ranges between 20% and 45%. If your bounce rate is lower than the average range, you're doing well. Middle of Sales Funnel This phase analyzes whether your visitors become interested in your products or services. Use the below metrics to calculate how well you're engaging the leads that have come through from the top of the sales funnel. 4. Customer Acquisition Cost (CAC) CAC is the total overall cost to acquire a customer. It includes the cost of producing, storing, and shipping the products your visitors have purchased as well as any marketing costs. Use this formula to track your CAC: CAC = Amount Spent on Marketing / Number of New Customers Each industry has its own average CAC to use as a benchmark. Make sure to look up yours as a simple guide. » Still unclear about CAC? Learn which expenses influence e-commerce CAC 5. Sales Funnel Velocity This sales pipeline metric measures how quickly your visitors move through your sales funnel and therefore how quickly your website is generating new revenue. Use this formula to calculate your sales funnel velocity: Sales Funnel Velocity = (Number of Opportunities) x (Average Deal) x (Conversion Rate) / (Sales Cycle Length) "Number of opportunities" refers to how many leads entered the funnel, while "average deal" is a specific value e.g., your average selling price or customer lifetime value. "Sales cycle length" is your chosen sales period. We discuss "conversion rate" more below. Bottom of Sales Funnel This stage is your ultimate goal—to convert those leads you've generated into sales. The metrics you would use in this phase include: 6. Conversion Rate This metric measures how many of your leads convert into sales. Use the following formula: Sales Conversion Rate = Total Transactions / Total Visits x 100 If your sales conversion rate is between 2% to 3%, then you're hitting the mark. Anything higher than this range means you're doing better than the norm. » Is your conversion rate below average? Discover how to increase your conversion rate 7. Average Order Value (AOV) Use AOV to measure how much—on average—your visitors are spending per order. It will help you decide whether you should spend some time to formulate special deals, packages, and discounts to encourage users to spend more. Use this formula to measure your average order value: AOV = Total Revenue / Total Number of Orders AOV is an important metric because it influences other calculations and the overall health of your business. It can increase your customer lifetime value, decrease your CAC, and increase your overall revenue. 8. Cart Abandonment Rate This metric tells you how many of your leads are abandoning a sale before conversion. Just like your bounce rate, you must find out why visitors are abandoning sales and address it. The formula is as follows: Shopping Cart Abandonment Rate = (Number of Completed Purchases / Number of Shopping Carts Created) x 100 Cart abandonment rate depends on a number of factors like device used, industry, and time of day and year. The average cart abandonment rate can be as high as 70%. » Worried about your cart abandonment rate? Find out how to manage, prevent, and recover abandoned carts 9. Total Sales This is the total revenue of your e-commerce store. It's critical for calculating your profits and losses and gauging the "health" of your business. Use this formula to calculate total sales: Total Sales = Number of Items Sold x Sales Price Use total sales to determine a top and bottom line as well as your breakeven point. It's important to set goals for your business and track whether they are achieved. » How do you calculate profits and losses? Find the essentials of profit and loss statements here 5 Benefits of Sales Funnel Analysis for E-Commerce Significantly Enhances Productivity Your site becomes organic and dynamic, constantly improving because of the data you're analyzing. The result of constant analysis is constant improvement in productivity and therefore a better bottom line! Enables Predictability of Results You take the guessing game out of business because you can monitor and track literally all aspects of your e-commerce store. This makes results more predictable, giving you the opportunity to act proactively instead of reactively. Allows Better Use of Resources & Opportunities When your sales funnel is optimized, you'll be able to use your resources effectively. You'll also be able to make the most of the opportunities you get to take your business to new heights. Enables Management Optimization The more data you have, the more you can read into the finer details of your business. It will give you more control over the different stages of the sales funnel. You'll have your finger on the pulse! Drives Product Development Product development is crucial for innovating and staying ahead of your competitors. The sales funnel can help you with this too because you have a good understanding of what your customers want. Key Takeaway By understanding the journey your visitors take from becoming aware of your brand to becoming paying customers, you can optimize their experience, gain their trust, and turn them into lifelong partners. If you combine this comprehensive guide with the innovative solution offered by BeProfit, you'll learn how to build a successful sales funnel and ultimately improve your sales funnel's performance, while also tracking your data with ease and skill! » Want to connect with BeProfit? Sign up to BeProfit
Calculating Actual Cost in E-Commerce: Definition, Formula & Example
Profit calculationCalculating Actual Cost in E-Commerce: Definition, Formula & ExampleMany e-commerce store owners rely on trend monitoring and estimates to forecast their business costs. The unfortunate reality is that this won't give you a true indication of the actual costs involved when it comes to work that has been performed. Why? Because you need to see the bigger picture so that you don't lose out on important business insights. Actual Cost Your "Actual Cost" is the actual amount of money you spent to purchase an asset or assets. It's made up of the total of the supplier-invoiced expense, plus other direct and indirect costs. In other words, it's the cost of an asset when it's first recorded as a fixed asset on your financial statements. Some examples in the context of an e-commerce store include: The total amount you spent on the delivery.The total amount it cost to set up.The cost of testing the asset. Formula Actual Cost = (Direct Costs + Indirect Costs + Fixed Costs + Variable Costs + Sunk Costs) Components The following is an explanation of each component plus an e-commerce-related example: Direct Costs These are the costs included in directly manufacturing your product or service, or buying a wholesale product for reselling on your e-commerce store. Example: Let's say you resell shoes. The invoice you receive for the shoes you purchase from the wholesale outlet will be your direct costs. Indirect Costs Indirect costs extend beyond the expenses you incur when you "create" a product. In other words, the costs incurred for running and maintaining your e-commerce store. Example: You're still a shoe reseller. Your indirect costs would include computer technology, delivery costs, storage costs, packaging costs, etc. Fixed Costs This includes all your business expenses that don't change based on sales or no sales. They are set expenses that you have committed to. Example: As a shoe reseller, your fixed costs would be rent, Wi-Fi, security, salaries and wages, etc. Variable Costs These costs vary depending on your e-commerce store's income, i.e., the costs increase as you sell more and decrease during quiet times. Example: As a shoe reseller, you would pay more for fuel to deliver packages during high sales times. Sunk Costs These are costs you paid for and there is no potential for recovery. In other words, you've committed resources to these costs. Example: As a shoe reseller, you purchase packaging that gets damaged in transit. Since you've spent the money (or committed to honoring the invoice) and your employees are responsible for the damage, these costs would be sunk costs. Example Let's continue with the shoe reseller example. Actual Cost = Direct Costs: Your shipment of shoes that you received from your wholesaler amounted to $2,000.Indirect Costs: Your computer technology, delivery costs, storage costs, and packaging costs came to a total of $1,000.Fixed Costs: Your rent, Wi-Fi, security, and salaries and wages came to a total of $2,000.Variable Costs: Since you had a very successful Black Friday, selling out on the shoes you had on sale, your variable costs amounted to $1,000.Sunk Costs: In the mayhem of selling out your Black Friday stock, you ended up with sunk costs of $200 for packaging damaged by your employees in an unfortunate accident in your storage facility. The calculation would look as follows: Actual Cost = ($2000 + $1000 + $2000 + $1000 + $200) = $6200 As you can see, the formula is quite easy to use. The challenge lies in listing all your expenses to make sure you have included everything, then categorizing them to make sure each expense fits into the correct category for future use. Conclusion Knowing what your Actual Cost is in e-commerce will provide you with a bigger and more accurate view of your business, allowing you to conduct more in-depth analysis and take appropriate action. If you still feel like this formula and its related costs are too complex to compute, there is light at the end of the tunnel. BeProfit's profit calculator app can make calculating actual costs easy and uncomplicated by letting you customize your dashboard and tracking all the costs associated with actual cost. » Curious about BeProfit's app? Book a demo
How to View WooCommerce Sales Report by Payment Method
Business data analysisHow to View WooCommerce Sales Report by Payment Method Paying attention to your sales reports is essential to managing your WooCommerce store and gaining insights into marketing effectiveness. WooCommerce provides a built-in sales reporting dashboard for free and paid members, allowing you to view reports on orders, customers, stock, and taxes. However, there is no option to view your sales reports via payment method. The ability to view your sales report via payment method will help streamline sales and order reconciliation and give you deeper insight into which payment channels are favored. You can achieve this by adding extensive code or installing a plugin. There are various free and paid plugins that can be installed such as UserInsights and Woocommerce Advanced Reporting and Statistics. » Need more help with sales reports? Discover the best sales report plugins for WooCommerce 1. Download the Plugin Tip: You will first need to purchase the UserInsight plugin from the UserInsight website. Once you've purchased a UserInsight plan, an email will be sent to you with a link allowing you to download the plugin. This email will also include your product license key which will be used for registration later on. 2. Install and Activate the Plugin To install the plugin, navigate to your WordPress Dashboard > Plugins > Add new. From here you can browse for and upload the zip. file that you downloaded from your email. Tip: If the link in your email has expired you can find the folder in the "Account" section of your website. Remember to activate the app once installed. 3. Register With License Key Next, you'll need to register the plugin with the license key provided in the email you received after purchasing the product. Copy the key and paste it into the setting section by navigating to WordPress Dashboard > Users Insights > Settings > Users Insights License > Settings section. 4. Activate Modules and View Reports To view different reports, you will need to activate the modules you require under User Insights> Settings. Once modules have been activated, they can be viewed under the reports section. Reports can also be filtered in the top right-hand corner. Conclusion As different payment gateways have different fees, viewing sales reports via payment method will help you better understand your profit margins and build a successful sales funnel. For an in-depth look into your store's performance such as profit-related calculations and sales gate-way reports, plugins such as BeProfit offer raw data analysis and profit calculation. » Need to brush up on analytics basics? Follow this beginner's guide to WooCommerce analytics
Wix vs. Shopify for Dropshipping: Which Is Better?
BusinessWix vs. Shopify for Dropshipping: Which Is Better?The dropshipping business model is a popular strategy for small businesses. It eliminates the need to care for inventory and completely neutralizes the expenses of a brick-and-mortar store. Maintaining a physical store is expensive and time-consuming. Dropshipping eases these burdens by facilitating a competitive advantage over physical stores, primarily by minimizing upfront and ongoing costs. For instance, a third-party fulfillment company handles the ordering, shipping, and the rest—eliminating inventory and warehousing costs. The question then becomes which website builder offers the best dropshipping features. Both platforms allow e-commerce entrepreneurs to operate their online store, but when it comes to dropshipping, the two have some key differences that you'll want to consider before making your final decision. » Is dropshipping profitable? Discover dropshipping challenges and best practices Pros and Cons of Wix Pros Recently added dropshipping options Wix has recently added a ton of dropshipping functionalities to its platform. Most notably, merchants can now connect their stores to the Modalyst marketplace, where they'll access vetted suppliers and an infinite range of products. 2 business plans with built-in dropshipping Wix now offers 2 business plans that boast dropshipping integrations. Inbuilt SEO Wix's pre-configured search engine optimization capabilities are a significant advantage when it comes to SEO. Easy to use Wix is an easy-to-use platform with intuitive features and a user-friendly interface. Lots of customization Wix's website builder works from a drag-and-drop interface, offering lots of templates, themes, and visual templates to choose from. Cons Expensive to list lots of products Wix's compatible dropshipping plans can get quite expensive for larger lists of products. Modalyst fees Although Modalyst is a great dropshipping marketplace, it charges merchants a 5% transaction fee for each purchase. Pros and Cons of Shopify Pros Extensive range of e-commerce features Shopify offers a variety of features that allow you to upload your products and sell them directly to your customers. Limitless growth, flexibility, and scalability You can easily scale your operation and increase your business by adding more products, growing your customer base, and even hiring Shopify experts to help along the way. Complete control over your inventory There are no restrictions over how many products you can sell using the platform. Social media integrations You can easily reach a large customer base and increase sales by adding your products to social media like Facebook, Twitter, and Instagram. Great shipping options Shopify offers international shipping, allowing you to ship products to your customers in over 190 countries. Cons Ethically questionable Shopify has been criticized for not being as transparent as they should be on their terms and conditions. Less affordable Shopify starts at $29/month; however, the costs rise quickly after that. Limited flexibility Shopify isn't as customizable as other e-commerce CMS platforms with limited themes. » Looking for a Shopify dropshipping app? Compare the best Shopify dropshipping apps Cost of Dropshipping Depending on which dropshipping marketplace merchants connect to their Wix or Shopify store, prices will vary. For instance, Wix and Shopify are both compatible with Modalyst, Spocket, Salehoo, AliExpress, and many more. Both platforms charge additional fees for dropshipping suppliers and targeted ad expenses, which is an average monthly cost of $79. There are 2 main pricing considerations for selling products on Wix: Platform plan: $17-35/monthWebsite domain hosting: $5-20/year Dropshipping with Shopify is the same in this regard: Platform plan: $29-299/monthWebsite domain hosting: starting at $14/year The Final Verdict: Which Platform Should You Use? Dropshipping through Shopify offers merchants more options, but Wix is also a great option to use. With the choice, you should consider how complex your business is and what sort of features you need. Shopify is very flexible when it comes to dropshipping as it has a wide variety of e-commerce dropshipping-based features. While, year after year, Wix's platform is becoming more and more dropshipping friendly, adding functionalities that are sure to benefit most dropshipping entrepreneurs who would like more customization options. » Want to try dropshipping on other platforms? Here's all you need to know about dropshipping on Amazon
Email Marketing Best Practices—How to Improve Your ROI
MarketingEmail Marketing Best Practices—How to Improve Your ROIEmail marketing takes some skill – if you aren’t doing it right, you actually may be doing more harm than good. Of course, it doesn’t take a computer genius to figure out what it takes to be a successful email marketer. What’s the secret to B2C marketing? Join us as we take a deep dive into the world of email marketing best practices, just below. Not sure if your business focus should be B2C or B2B? Read our guide to the four main types of e-commerce business models. Different Types of B2C Email Marketing Campaigns The first step to developing a successful B2C email marketing campaign (EMK for short) is to decide on which type of EMK is best fit for your intended audience and specific goals. Are you looking to resolve online shopping cart abandonment? Trying to up-sell by targeting first-time customers? Are you asking for feedback from your regular customers? Maybe you just want to stay in touch with your customers so they don’t forget about you! Whatever the reason or audience is for your B2C email marketing campaign, there’s a type of EMK that will fit your needs and goals. Here are just a few examples: Newsletter A key characteristic of a successful SEO strategy is to create a blog and publish articles on a consistent basis. While the targeting of keywords will help improve your search engine rankings, that’s not the only way for you to use your unique content. Keep your customers engaged with your website by drawing them in with weekly, bi-weekly, or monthly newsletters that provide a summary of your recent blog articles. There’s really no rule or limit as to the type of newsletters you can potentially send out – find creative ways to give your readers a reason to stay tuned for the next newsletter. Ideally, a continuous interest in what you have to say will eventually turn those readers into repeat customers. Cart Abandonment The issue of online shopping cart abandonment in the e-commerce industry is one that all online sellers should pay serious attention to. Why? Because close to 90% of all online shopping orders worldwide were abandoned in March 2020, which makes it clear how important it is for online businesses to tackle this problem head-on. Cart abandonment emails might seem like a somewhat passive way of reaching out to clients, but they’re actually a remarkably effective way of bringing ‘abandoners’ back to complete their purchases. In fact, more than 40% of cart abandonment emails are opened, and more than 8% of abandoners end up making the buy. Cart abandonment might be unavoidable, but it can be addressed by using B2C email marketing. More than 40% of cart abandonment emails are opened, and more than 8% of abandoners end up making the buy. Cart abandonment might be unavoidable, but it can be addressed by using B2C email marketing. —Click to tweet Loyalty Program If publishing newsletters isn’t the way you want to go, creating a loyalty program can be an alternative way of using business email lists to keep customers coming back to your online store. This email strategy makes use of the classic principle of ‘you scratch my back and I scratch yours’. Try sending email alerts to your current regular customers giving them unique coupon codes (which will also make them feel special!). To encourage your first-time or not-so-regular customers to come back again and become regular shoppers, you can send emails informing them of your store’s loyalty program. Or, you can give them a ‘sample’ discount and tell them the discount is higher for return customers. Again, creativity is a powerful tool when it comes to B2C email marketing! Announcements Introducing a new product to your store? Bringing back a classic item that everyone loved? Launching a brand new feature to make the user experience more exciting? Whatever the announcement is, it’s almost always a good excuse to reach out to your customers and keep them in the loop. Granted, you don’t want to make a mountain out of every mole hill your business comes across – be somewhat selective. Ultimately, the goal of announcement emails is to share some energy with your customers and draw them in to take part in this “new and exciting” event taking place on your website. Your business email lists can be split up so that you can test different sorts of announcements to see which get the best engagement. Sales Make the customers on your business email lists eager for your next email by making special sales part of what they can expect to get from your online store. You can launch season-ending sales campaigns that will help you empty your inventory of items that won’t be in demand the next season. Make the most of holidays. And, of course, be prepared for Black Friday! Another way that using sales can be incorporated into your email marketing best practices is to raise your prices a bit and then offer an exclusive sale for a limited time to encourage your customers to purchase some of your more profitable items. This isn’t to ‘trick’ the customer – the products should be priced fairly so as not to be taking advantage of anybody. But there are ways to weave sales into your business’s broader emailing marketing and pricing strategies. Personalized emails Who doesn’t enjoy feeling like a VIP? Thanks to the power of technology, you can make your customers feel special with very little effort. There are plenty of apps and plugins you can add to your online store and use to pull customer data such as names, birthdates, locations, device use, and much more. With that data, you can create B2C email campaigns that have a personal touch to them. Address customers by their first name to sound more friendly. Automatically send out happy birthday promotions to put a smile on your customers’ faces. Target certain products for customers in specific geographic locations to increase sales (e.g. swimsuits for customers in Florida, winter gear for customers in the Mid-West, etc.). As with the other email marketing best practices, personalized emails depend on a fair bit of creativity to really pack a punch. Don’t be afraid to try something new. Prioritize Email Marketing for Better ROI Business email lists and B2C email campaigns aren’t the only ways to market your e-commerce business (far from it!). Other e-commerce advertising strategies include: Pay per click (PPC)Affiliate marketingSocial media marketingContent marketingEtc. So why all the fuss about email marketing? It turns out that email marketing has continued to rank as the most cost-effective form of digital marketing for quite some time, with a median ROI of roughly 122%. That’s an impressive figure, particularly when you consider the fact that no other form of digital marketing has such a high return on investment. These stats serve as a pretty clear reason for you to prioritize email marketing! Yes, a diversified marketing strategy will work best – but just make sure that you don’t underestimate the importance of keeping emails as a key component. Note: If your email marketing strategy is working well, but you need some extra cash to get started with a new e-commerce marketing strategy, consider using an e-commerce business loan to bridge the financial gap. E-commerce businesses have had a notoriously difficult time finding funding in the past, but BeProfit's online lending marketplace is changing that. Analyze Data of Email Marketing Campaigns Having tons of data about your customers and the performance of your B2C email campaigns doesn’t serve much of a purpose unless you learn how to analyze that data to come up with useful insights. What are ‘useful insights’? Any patterns that you find in the way that your customers engage with your email campaigns that can ultimately be used to improve that engagement. Okay, that’s a little vague – let’s use an example to make this point more concrete. Let’s say you’ve sent out a number of emails to your customers over the past few weeks, and you notice that the highest open rates for all emails were among customers between the ages of 25 and 35 years. You can use that insight in several ways – for one, you can create different email templates to draw more engagement from customers in older age groups in order to increase their open rates. On the other hand, you could seek out ways to further capitalize on the high email open rates you already have – perhaps by adding special offers for products more targeted at younger customers. The bottom line: If your goal is to create the best email marketing campaigns you possibly can, then analyzing data from your EMKs is an absolutely essential part of the process! Klaviyo is a great example of an Email Marketing platform that takes analytics seriously. Its proprietary data analytics software makes use of machine learning to provide statistics with accurate predictive insights; metrics include predicted date of next purchase, number of upcoming purchases, CLV calculations, average time between orders, probability of churn, and more. Responsive Email Marketing Responsive email marketing is a simple idea – your emails should include a special form of coding that will allow it to display properly across all sorts of devices. After all, nobody likes to open an email and have to play around with the zooming, or read paragraphs that are broken up into weird pieces, and so on. The visual attractiveness of an email (or lack thereof) may sound like a petty way to make a decision to give business to a company, but more than 1-in-5 people say their biggest turnoff with mobile email is when emails are poorly formatted. Combine that with the fact that more than half (60%) of all email opens are made on a mobile device or tablet, and it becomes very clear why responsive email marketing is crucial. Customer-Centric Email Marketing A customer-centric approach to email marketing is one that is characterized by a focus on the defining traits of the customer(s) and what makes them unique. From that humanistic perspective, marketing teams then try to find the best ways to engage with customers through emails based on those defining traits. For example, emails make be different for iPhone users as opposed to predominantly desktop-using customers. Or the tone or CTA in the email may differ depending on the customer’s age group. Other parts of the customer-centric approach to email marketing include: Giving customers the ability to customize the types of emails they will receiveAllowing customers to choose the frequency at which they receive emails from youProviding customers with the ability to respond to your emails with questions or commentsAnd so on The customer-centric approach is contrasted with the content-centric approach to email marketing which emphasizes a focus on the emails themselves as well as metrics such as the number of email recipients, open rates, click rates and so on. Both types of email marketing campaigns are useful in their own right, so it’s best to think critically about how each strategy matches with your audience, your business type, and your broader business goals. Email Marketing Tips In case you missed any details above, we wrap things up for you nicely with this short-and-sweet list of email marketing best practices. Scroll down and have a look! 1. Emphasize a Sense of Urgency It’s always good to keep your customers feeling that the clock is ticking and time is running short. Try encouraging them to purchase when you have limited stock, or have the sale last only for a given period of time, or even make a one-time offer such as a discount on any item in your store for example. The important thing is that your customers understand that your great deals will only be available to them for a set amount of time – and that time is running lower by the minute! 2. Try Not to Use ‘No-Reply’ in Your Business’s Outbound Email Address Don’t get confused, you can still ask your customers not to reply to those emails. The point here is that when customers see an email in their inbox, they’ll see your company name or even a representative’s name. When customers see ‘no-reply’, it can create a sense of distance and coldness as if they’re not important enough for you to hear their reply. Avoid this bad practice. 3. Keep the Typeface in Your Emails Consistent Part of establishing a brand is consistency. Sometimes, a company’s font can become so iconic that the script can say something different but the shape of the letters will still remind customers of the company. Think about companies like Disney, Netflix, Adidas, Facebook, and so on. The same concept can and should be applied to your B2C email campaigns – choose a font that fits your liking and stick to it. Try not to stray too far from the base font by messing around with italics, boldness, or size too much. 4. Finish Your Emails With a Signature Even for the most popular, big-name, recognizable companies, signing an email is a standard procedure. It could be signed by a representative’s name or even just your company name and the word ‘team’ (for example here we sign some of our emails as ‘Team BeProfit’). Including some sort of signature is better than nothing at all – receiving an email from an unspecified person or group may raise some suspicions for online shoppers and cause them to avoid doing business with your online store. 5. Run a Quick Test Before Sending Emails Out Don’t get caught in a sticky situation as a result of laziness. It takes a simple matter of minutes to forward a copy of your proposed email marketing campaign to a friend or business associate for review prior to distributing to real customers. Check that your friend or coworker can quickly identify the call to action in the email. If they can, then you’re in good shape. If not, keep making adjustments until you get where you need to be. You’ve Got Mail Or at least your customers do! Email may be one of the oldest forms of online communication, but that hasn’t made it any less effective as a form of marketing. It’s never too late – get started with email marketing best practices today and use the information above to keep your B2C email campaigns on the right track. Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.
How to Calculate Revenue in Excel (Simple Formulas + Templates)
Profit calculationHow to Calculate Revenue in Excel (Simple Formulas + Templates)Every seasoned business owner knows the value of calculating revenue. They understand that it helps you calculate your profit, perform financial analysis, and do forecasting. This article aims to equip you with easy-to-follow formulas and templates that you can use to calculate your revenue if your business is showing solid growth. » Want to know how profitable your store is? Learn how to perform an e-commerce profitability analysis Incremental Revenue Incremental revenue is the profit a business receives from a certain increase in sales. This can refer to the additional revenue received from releasing a new product or service, or trying new marketing strategies. Therefore, the original revenue that would have been generated before the additional product or service was introduced in that time period must be subtracted from the adjusted revenue that includes the new product or service. Formula A formula can therefore be constructed as follows: Adjusted revenue (number of units sold x selling price) - Original revenue (number of units sold x selling price) In Excel, the calculation can be set up as follows: Original Revenue and Adjusted Revenue are listed separately.Incremental Revenue is calculated by subtracting the totals (=D3-D2). Average Revenue Average revenue is the revenue earned for each unit, product, or service that you're selling. People also refer to it as Average Revenue Per Unit or Per User (ARPU). Formula Average revenue is calculated by dividing the total revenue by the quantity sold: AR=TR / Q Average Revenue = Total Revenue / Quantity So, if the total revenue of a company is $5 000 and the quantity sold is 1 000, then the average revenue per unit is $5 000 ÷ 1 000 = $5. In Excel, the calculation can be set up as follows: Gross Revenue Your gross revenue is the total amount of money made by your company before expenses are deducted. This includes the sale of shares, property, and equipment as well as interest and exchange rates. Knowing your gross revenue will help you analyze your financial statements, track your sales volumes, and identify high-impact revenue channels, all to understand how well your business is doing. Formula You can calculate your gross revenue in two ways: Product revenue = the number of units sold x average priceService revenue = the number of customers x average price of service In Excel, the calculation can be set up as follows: Products and services are listed separately.Quantities sold, prices, and any discounts provided are used to calculate the final total selling price of each product and service.Total Revenue is calculated by adding the final totals of products and services (E6 + E10) Quarterly Revenue Quarterly revenue measures the increase in your sales from one quarter to the next. You would use it to review the sales of successive quarterly periods or compare the sales of the same quarter in different years. It's important to note that quarterly revenue can be influenced by seasonal sales. For example, if the Olympics is hosted in a certain country, it may skew quarterly results and give you an inaccurate view of your company's quarterly revenue. Formula You can calculate quarterly revenue growth as follows: Q2 - Q1 / Q1 x 100 In Excel, the calculation can be set up as follows: Q1 and Q2 sales are listed separately.The formula is applied at the bottom before it's converted to a percentage. Marginal Revenue Marginal revenue is the increase in revenue that you get from the sale of each extra unit of output. While marginal revenue can stay constant over a certain level of output, it follows the law of diminishing returns and will eventually slow down as your output level increases. As a business owner, you can use historical marginal revenue data to analyze your customer demand for your products as well as determine your most efficient and effective prices. Finally, this calculation helps you to understand your forecasts because it determines future production planning and schedules. Formula This is the formula you can use to calculate your marginal revenue: Change in Revenue / Change in Quantity (Total Revenue - Old Revenue) / (Total Quantity - Old Quantity) ​ Let's look at a quick example: Your company sells its first 100 products for $1 000. You sell the next products for $8. This means that your marginal revenue for product number 101 is $8. It's important to note that marginal revenue disregards the previous average price of $10. This is because it only analyzes incremental change. If you sell 115 units for $1 100, your marginal revenue for products 101 through to 115 is $100, or $6.67 per unit. In Excel, the calculation can be set up as follows: Conclusion There are profit calculation mistakes to avoid if you're going to use the formulas and spreadsheets provided in this article. If you're not confident to do these calculations by yourself, BeProfit offers an accurate and easy-to-use tool that will remove all the stress and strain from trying to do it yourself. Why not give it a try?