Profit Analytics Blog
Read expert articles with insights about e-commerce profitability from analyzing thousands of e-commerce businesses' data.
How to Double CLV: 7 Methods From WooCommerce Sellers
Customer Lifetime Value (CLV) measures how much time customers will spend with you over their lifetime, therefore tying in with customer loyalty—increased loyalty leads to increased CLV which ultimately leads to increased sales. Your e-commerce customer acquisition cost (CAC) is also closely linked to CLV, because you have to incur costs to reach and retain your customers. Together, these two metrics can provide a balanced view of your profitability because they're focused on long-term value and success. Below are seven methods you can implement to increase your CLV from WooCommerce sellers. » What is the ratio between CLV and CAC? Read this guide on calculating customer behavior 1. Create Engaging, Value-Adding Content No one has time to read pages and pages of content anymore. If you want to catch your target market's attention, your content must be engaging and strategically add value. Sift out all the unnecessary information and craft the remaining nuggets into short, sharp copy that tells your customers what they need to know, when they need to know it, without them having to look for it. This is especially important when it comes to your social media posts, newsletters, and emails. Every time you put content together, you need to ask yourself: What is the purpose of the content?Will it stand out from my competitors?Is the message clear? Customers will start to trust your brand, and CLV will increase. 2. Implement Cross-Selling & Upselling Strategies Upselling is selling a superior, more expensive version of a product that your customer already owns or is in the process of buying. Alternatively, cross-selling is selling products that are related to a product your customer already owns or is in the process of buying. These strategies are beneficial because: You're not searching for new customers—you're increasing the sales you receive from your current customersOverall customer satisfaction will improve—customers feel you're taking their needs into consideration by offering a variety of better-quality products The key is to not be too forceful. By offering value for money—a real deal that's hard to resist—you'll build customer loyalty and in turn CLV. » Want to implement an easy upsell strategy? Discover how one-click upselling can boost sales 3. Optimize Your Customer Service There's nothing more frustrating for a customer than inefficient customer service. Let's say you offer an upsell opportunity and it's a great deal. Your customer is caught hook, line, and sinker. They get to the payment page and there's a glitch in the system that stops them from processing their payment. They try to contact you but there's no answer, or the agent doesn't know how to help them. It's one way of putting a customer off for life. Make sure your customer service agents are always contactable, highly knowledgeable, and can offer solutions. It builds trust, shows that you're a professional business, and builds your customer loyalty and CLV. 4. Enable the Provision of Customer Feedback Customer feedback is an essential element in the customer's sales journey. There must be a platform where they can voice opinions and feel that their opinions are taken seriously. Not only that, but customers can give you valuable insights into substandard products or website glitches, which you may not have picked up on. Therefore, you must make sure that: The channel you offer for feedback is professional, user-friendly, and up-to-date.The customer's feedback is acknowledged—there's nothing more unprofessional than getting no response at all.You analyze the feedback regularly and make changes accordingly. Customers who feel important, and not cast aside once the sale has concluded, have a better chance of providing a higher CLV because they become loyal. 5. Develop a Subscription Model A subscription model is a sales strategy that requires regular monthly payments from your customers for specific, pre-defined products and services. It must be a win-win for both you and the customer to be effective. A subscription model is very effective when it comes to increasing your CLV because you know how much you can expect from customers and those customers are locked in for a period of time. It's an opportunity for you to show your customers how professional your brand is because they get what they want, when they want it, with no hiccups along the way—building trust and loyalty to your brand. 6. Reward Customers With Loyalty Programs Everyone loves a freebie or a good discount. If you show your customers that you truly appreciate their recurring business by implementing a solid loyalty program, you will keep them coming back, which will increase your CLV in turn. » Unsure how to start a loyalty program? Explore different apps for easy setup and implementation 7. Offer a Referral Program Similar to loyalty programs, referral programs must offer value to the customer to encourage them to engage. However, referral programs hold an additional benefit in that apart from keeping your current customers, you may gain many more. The details of the referral program can be changed and tested over time until you find what works best for your e-commerce store. Conclusion The bottom line is that if you treat a customer well, they will treat you well in return. Customer loyalty is a long-term investment that will continue to pay off and is worth devoting resources to. These seven methods will help you to reap the rewards of catapulting your CLV and seeing your bottom line soar.
6 Tricks to Use Google Analytics 4 for Product Analysis
Did you know that product analytics can be used to connect your data to your business goals? You can do this by focusing on user engagement and ensuring you have a comprehensive understanding of the entire user journey. You may be wondering why you should care about your data aligning with business goals. The simple answer is that your data tells an important story that should be used to create your goals in the first place. The customer interactions and journey will tell you where and why your customers leave your site. Below we discuss six Google Analytics 4 (GA4) tools you can use to analyze product metrics, which will enable you to optimize your site and drive conversions. » Dissatisfied with your conversion rate? Follow these tips to increase your marketing efforts 1. Examine Customer Behavior With "Behavior Flow" The behavior flow tool is a feature on Google Analytics that will highlight the journey your customers take while they're on your site, including all their interactions with your pages. It can tell you where they entered your site and where they exited. This information will indicate which sections of your website are performing well content-wise and which sections may be problematic. To find the tool, click on Behavior > Behavior Flow. You can then choose how you want to view your data: site section, automatically grouped pages, events, or pages and events. 2. Identify Popular Features Using "All Pages" The "All Pages" tool measures which pages on your site have been viewed the most, thereby telling you which pages are more popular with your customers. It goes without saying that those are the pages that are working. You can use the information from your popular pages to improve on the pages that are getting less traffic. To find the tool, click on Behavior > Site Content > All Pages. » Need to increase your organic traffic? There are 8 easy strategies you can try 3. Leverage "In-Page Reports" to See What Users Click on This tool tells you what your users are clicking on within each page. It gives you a good idea of how your customers are interacting with each of your pages, including bounce rate, the average time spent on pages, and how well your call-to-actions are working. This function can also help you track and boost sales via Google Analytics. To find the tool, click on Reporting > Behavior > In-Page Analytics. 4. Leverage Google Analytics 4's Data Segmentation Tools A segment is a subset of data, which you can use to analyze your users and gain valuable insights. In GA4, you can create segments through comparisons, explorations, and audiences: Comparisons: This is the simplest form of exploration and is only really used to guide you to deeper insights. It's a quick way to gather ideas and highlight trends.Explorations: Automated anomaly detection picks up unusual behavior. This will help you to get insights into user behavior that's different from normal.Audiences: This is the most useful tool out of the three. Audiences collects rather than calculates data. This means that it will include users from the day your site was officially up and running. To find the tool, click on Explore > Exploration. You'll see that there are already several Explorations. You can use those or build your own new segments. 5. Determine Where Users Leave With "Exit Pages" Exit Pages is a critical tool for your e-commerce store, because it tells you which page your customer was on when they decided to leave your site. This feature can help you detect any patterns in customer behavior, therefore allowing you to implement a strategy to combat exit rate. To find the tool, click on Behavior > Site Content > Exit Pages. 6. Conduct A/B Tests via "Experiments" A/B testing, also known as split testing, is a randomized experimentation process where two or more versions of a web page or page element are shown to different users. These visitors get to view the different versions at the same time so that you can establish which version works the best and has the biggest impact. This includes testing elements like your headline or your call to action. To find the tool, click on Standard Reporting > Content > Experiments. Alternatively, click on Behavior > Experiments. » Need help navigating your sales funnel? Try one of these apps Conclusion Now that you know more about the handy analysis tools and features in GA4, you can leverage these tricks to improve your sales funnel with your GA4 micro and macro goals. You can also enhance your overall customer satisfaction and drive innovation with new product design and development initiatives.
How to improve your customer retention strategy with email marketing
You’ve probably heard that acquiring new customers costs more than keeping them. Most studies show acquisition marketing is six to seven times more expensive. Fishing for new blood certainly is part of the ecommerce merchant’s toolbox, but devoting energy to customer retention marketing is much more advantageous. Email marketing is the best vehicle for doing it. We’re looking at why that is, along with five tips to get the most out of it. But first, let’s dive deeper into why ecommerce merchants should invest more in retention marketing. What is retention marketing and why is it so important? The goal of retention marketing is to turn customers into repeat buyers. Such marketing campaigns and initiatives aim to drive higher engagement so that the brand is top of mind. Retention marketing is worthy of your resources for two particular reasons: You’re not wasting money on the hunt. You’ve already got the first-party data of current customers who — we assume — are happy with your brand. Repeat customers are more profitable than first-timers. One study shows merchants reap an average of $39 in profits for every repeat customer purchase. They lose $29 for every new customer, primarily because of the cost of customer acquisition (CAC) and higher product return rates. From a broader perspective, the more customers who repeatedly spend on your brand, the higher the net profit throughout your mutual relationship. This is called customer lifetime value (LTV). And the higher the LTV, the better you can justify the CAC. The optimum is a 3:1 ratio, where your LTV is triple that of the initial CAC. 5 tips for using email marketing to retain customers Full disclosure: we are an email marketing software company with considerable bias. That said, email marketing is the ultimate customer retention strategy besides excellent customer service. Leading retailers agree. They cited email as the top investment (87%) when polled on their 2022 resource allocation plans for retention marketing strategies, beating out loyalty programs and SMS. They’ve got good reason to trust in email marketing. It has an impressive return on investment: for every $1 spent on email marketing, the average return is $42. Of course, keeping customers around requires maintenance. Some of our tips apply to all types of email marketing, no matter the target. Others specifically cater to nurturing customer relationships. Email marketing tip #1: provide variety How often do you receive an email from a brand, and it’s a case of deja vu? Every promotion sounds the same. If you haven’t unsubscribed, then you’ve stopped opening them. Don’t be a brand that emulates this email marketing behavior. Provide a mix of valuable content that engages your customers and makes people excited to open your newsletters. There are times for sales promotions, announcing new releases, and addressing pain points. It’s nice to toss in a slice of your brand’s story every so often, too. And for meatier value, think educational and inspirational. Style guides, for instance, are perfect for apparel-related merchants but also handy in providing advice around arranging/displaying products. The key is curating content so the customer doesn’t have to think. Imagine you’re on the quest to spice up your space with a rug. But online searches make your head spin because interior design is not your strong suit. The example below from The Citizenry could be just the intervention needed. The email highlights pieces from its rug collection by showing how they could work in different rooms. It’s an excellent tactic for leading people toward imagining the possibilities for their own homes, versus a product shot without the surrounding context. It brings things to life. We also appreciate the section that takes viewers to a rug size guide, providing additional information and styling tips. Email marketing tip #2: make a footer that functions You may wonder why the last section of an email is pertinent to retaining customers. Seems like real estate of little significance, right? Wrong. Not everyone will scroll to the bottom. But others will, which makes it ideal for reiterating the vital stuff you want people to affiliate with your brand. A “footer that functions” serves as reinforcement for those who have already invested in you. The more they see the same block of messaging — we’re talking simple icons accompanied by short, descriptive words — the more you build trust and grow brand affinity. (It also can tip the scale for securing a first-time purchase.) Allbirds has a polished retention marketing strategy worth dissecting. All icons link to a landing page with more information. Here’s what we like about the footer: It calls out its “tread lighter” brand value loud and proud; any brand that stands for something — sustainability, a cruelty-free approach — should do the sameIt overrides common friction points of shipping and returns; bonus points for offering a free 30-day trial Infuse your footer with elements that communicate your brand’s value. Alleviate pain points, lean into your audience or niche, and drive home your unique selling proposition. Stick to three or four icons in total, as anything more is overwhelming. Contemplate adjustments for Black Friday and holiday marketing, honing in on common friction points during the Q4 season. For example, we see ecommerce merchants broadcasting a buy now, pay later option. Take the opportunity to feature complementary services such as customization or gift wrapping, or highlight a return policy to help reduce return rates. Email marketing tip #3: implement automation One of the most powerful aspects of email marketing is the ability to nurture subscribers and make them forget about the competition. An easy way to do it is with email automations. An email automation is a message (or series) triggered when a subscriber takes a particular action. Once you activate one, it quietly works in the background. Welcome and abandoned checkout email automations are the most widely known and used, but there’s an entire group of automations specifically targeted at retaining customers. Consider developing any or all of the following: New customer automation. Acknowledge your subscriber’s first purchase. Invite them to join your loyalty program. Provide a customer service point of contact to answer questions. You want to keep the momentum going. Post-purchase automation. We call this a “get ready” email. Unlike a transactional order confirmation message, post-purchase automations build excitement as the customer waits for the order to arrive. It’s ideal for sharing information, such as care tips or installation instructions. Repeat customer automation. It’s always a good idea to show gratitude to customers who buy from you more than once. That spells loyalty, so they deserve recognition. Tell them why their confidence in your brand matters. Lapsed purchaser automation. Connect with customers who haven’t purchased from your shop in a while. It could be 90 days or longer, depending on what you sell. This automation is especially impactful when you offer consumable products — like pet food or cosmetics. Use it as a reminder that it’s time to replenish. A lapsed purchaser email from Grubhub Pick which automations are suitable for your brand. Consider a multi-part series if it makes sense. Sprinkle in small promotions, such as a discount or free shipping, to entice an order. You might even use them to ask for a review. Email marketing tip #4: use segmentation Ecommerce merchants that personalize their marketing have a huge advantage in retaining customers. A survey cites that 71% of consumers expect brands to personalize their marketing. Not only that, but more are frustrated when it doesn’t happen. An even greater percentage will recommend brands that personalize marketing to their family and friends. Email segmentation is a terrific vehicle for sending relevant messages. It’s the practice of tailoring emails for a subset of subscribers. There are many options when creating customer segments, from purchase behavior to demographics. Typical means for grouping include: High-value customers who have passed a certain threshold of spendingCustomers who join your loyalty programWholesale customers Placing customers by residential locationMaking segments per product category purchased The example from Carved is a classic example of how to employ segmentation in your email marketing. The brand grants early access to VIPs for Black Friday sales. A custom code at the bottom reassures the customer that this invite isn’t for everyone. Carved’s email scrapes the surface of segmented email marketing. Consider giving perks to loyalty program members. Reach out to customers when you debut a complementary product or service to one they purchased. You could even identify those who bought during the holiday season and haven’t returned since, and follow up with a message six months later. Email marketing tip #5: survey your customers People like their voices to be heard. They want to know that their opinion matters, especially as a consumer. Surveying them equals empowerment. You could send a survey to your entire list, including subscribers who have never bought a thing. But customers have some skin in the game, as they use your products and have better insight into your brand than onlookers. The email message itself can be short, like Food52 does. Question them about the new products they’d like to see or services that interest them. The goal: understand how you might better meet needs before a competitor swoops in. The results are data points for improving your business. Answers may open your eyes to new solutions worth pursuing or turn your attention to flaws that need fixing. And if you make changes based on their input, let customers know how valuable they are in shaping your business. Use email marketing to show your value Resist viewing customer retention marketing as just another promotional tactic. Seeing it through such a narrow lens won’t reap the desired benefits. Instead, know that good retention marketing strategies give customers value well beyond their purchase. When you’re motivated to strengthen relationships with your customers — versus spew sales pitches — you’re empowering your business to flourish. So, we challenge all ecommerce merchants to examine their email marketing programs. How are you doing with our five tips? How well are you providing variety, harnessing your footer, using email automations, sending segmented emails, and surveying your customers?
Will TikTok Ads Be Worth It for E-Commerce Sellers in 2023?
Love it or hate it, TikTok is taking the world by storm—not only for entertainment but also in terms of marketing. The fact of the matter is that if you own an e-commerce store and you want to keep up with the latest marketing trends, you are going to have to start using TikTok. In this article, not only will you get a good guide to using TikTok ads for your e-commerce store, but we will also be answering important questions you may have when it comes to TikTok as a marketing platform. Average Conversion Rates of TikTok Ads The average conversion rate for TikTok seems to be hovering around 3.4%—pretty good compared to other platforms. Only Facebook has a good lead, but TikTok has grown so fast and is creeping up to Facebook. The reason for this is the short time it takes to absorb TikTok content compared to other social media platforms. It is far easier for them to watch a quick video than read an advert. It's plain and simple: video content such as TikTok is the future, especially when it comes to conversion and click-through rates. Just remember that the conversion rates depend on the type of advert that has been run: Topview ads: as high as 16%Takeover ads: 7% - 10% In-Feed ads: 1.5% - 3% Cost of TikTok Ads TikTok advertising is quite expensive when compared to other social media platforms. TikTok ads start at $10 CPM, with Cost Per Click (CPC) at $1. This means that you will pay $10 for every 1,000 views. In addition, you must spend a minimum of $500 on each campaign. It's important to remember that the cost of TikTok ads also depends on the different types of adverts you decide to run. For example, a branded hashtag challenge could cost you up to $150,000 but will feature your e-commerce store on TikTok’s Discovery banner. Put simply, you probably shouldn't consider TikTok for an informal, small campaign. Average ROI (Return on Investment) on TikTok Ads Did you know that TikTok was featured in the 2020 Singular ROI Index among other top online marketing platforms? This incredible achievement is not something to overlook—especially considering that TikTok hasn't been around for a very long time. The returns that can be expected from TikTok ad investments range from one advert type to the next, and from one company to the next. It's important to remember that the ROI is greatly affected by the platform's ability to provide a global reach. Not only that, but you can also find clever ways to reduce your ad spend by using influencers, user-generated content, and repurposed content from other platforms. » Struggling with maximizing your return on ad spending? Learn what an acceptable ROAS is for e-commerce and read our guide to optimizing ROAS. The Verdict It's a fact: TikTok ads have delivered exceptional results for a variety of advertisers across multiple industries and will continue to do so in 2023. The bottom line is that if you know your target market aligns with TikTok's general audience, you'll be able to use the (relatively) affordable standard ad fees and low minimum spend for new advertisers to effectively build awareness of your brand. It's what you'll get in return that will make it worth your while. However, to make your ad spend count, you should start by experimenting with small ad campaigns. Once you have analyzed your data, statistics, and metrics, you can move on to bigger (more expensive) campaigns that are informed by earlier smaller analyses. TikTok ads are a worthwhile marketing investment, especially in terms of e-commerce. To substantiate that comment, let's look at some pertinent statistics: TikTok fits into a retail social commerce industry that is expected to grow to $80 billion in the US by 2025.TikTok's viral hashtag #TikTokMadeMeBuyIt has generated 11 billion views!In September 2021, TikTok had a billion monthly active users - that's right, one billion!In April 2020, TikTok ranked number one in overall and app store revenue. In Closing... When you look at the phenomenal growth of TikTok over the last few years, you can only imagine how much more the platform is expected to grow over the next few years. It is a bus you don't want to miss if you are serious about keeping up with the latest marketing trends. Pro Tip: It is worth your while taking the time to research and explore the different marketing opportunities offered by TikTok. You can also track your ad performance using BeProfit once you get started, and don't forget to read our ultimate guide to effective e-commerce adverts to help you along the way!
How to Calculate WooCommerce COGS to Analyze Sales, Inventory & Gross Margins
As a WooCommerce store owner, there are a number of metrics you’ll need to track to ensure your business is successful. Learning to calculate Cost of Goods Sold (COGS) means you can understand how much you’re actually spending on doing business. You'll also be able to determine which products in your portfolio are the most or least profitable, so you can take steps to optimize your bottom line. Here’s what you need to know about calculating and using COGS. How to Calculate WooCommerce COGS There are various tools and plugins WooCommerce offers to enhance stores, such as sales report plugins and COGS plugins. Below are steps you can follow to calculate COGS yourself. 1. Identify Direct and Indirect Costs The costs involved in running a business can be both “direct” and “indirect”. Direct costs are those specifically associated with selling the product, such as the materials involved in making an item and the shipping fees. Indirect costs include overheads like sales and marketing strategies designed to bring people to your store. When calculating COGS, most companies will exclude indirect costs, as these are often associated with customer acquisition cost. 2. Determine the Beginning Inventory “Beginning inventory” for the year refers to the inventory left over from the previous period. You’ll need to calculate a total dollar value for all of the items you have in stock during the current accounting period, before adding on additional purchases. 3. Add Up Inventory Purchases The next step is adding up any inventory purchases which you may have made throughout the period of the calculation. For instance, you may have bought additional packaging utensils or more raw materials for high-selling products. Remember to consider the cost of shipping and manufacturing for each product as well. 4. Determine the Ending Inventory “Ending inventory” refers to the remaining sellable inventory at the end of a sales period. For instance, if you started the period with 200 products, and added another 100, then sold 200 of your products, your ending inventory would be 100 products. You would then calculate the dollar value of these products. 5. Plug the Values into the Equation With all of your values in place, you can calculate your WooCommerce COGS. The formula is as follows: COGS = Beginning Inventory + Purchases – Ending Inventory For instance, in a situation where you had a beginning inventory of 200 products equaling a value of $2,000, spent $500 on shipping and manufacturing throughout the period, and were left over with 50 products equaling a value of $1,500, your formula would look like this: ($2,000 + $500) – $1,500 = $1,000 Value of COGS Calculation for Your WooCommerce Store COGS is an important metric on any company’s financial statement, as you’ll subtract it from your revenue to determine your “gross profit”. COGS also helps you to determine whether you’re using your budget effectively. The benefits of COGS calculations for your WooCommerce store include: Indicates Efficiency of Resource Management If you discover your COGS is higher at the end of a period than the amount you spent on labor and supplies, this is a sign you’re not using your existing inventory efficiently. You may find you can cut down on the supplies you use at a later stage to increase your profits. Serves Legislative and Tax Purposes COGS can be included when calculating the taxes for a given period. COGS is a business expense, which means it can be used to offset the amount of revenue you create during the tax season. Knowing how much you spent on goods reduces your tax burden. Supports Product Pricing COGS can help you determine when to make adjustments to your products' selling price. By analyzing your profit margin, you can see whether your COGS and selling price are in relation. For example, if any of your direct costs have increased, making it more expensive to manufacture your products, you can adjust your selling price in accordance with this to ensure you maintain a healthy profit margin. Streamlines Future Planning By analyzing your COGS, you can more easily identify shortcomings in your current strategy and opportunities for increased sales. For example, it can highlight which of your products are the most popular and which aren't performing as well as they should. You can adjust future strategies accordingly to capitalize on popular products and either discontinue unpopular products or utilize one-click upselling methods to boost sales. Conclusion Calculating COGS for Shopify, WooCommerce, or any other store is an important strategy to ensure your business is profitable, because it gives you in-depth insights into your store's sales, inventory, and gross margins. You can use the same strategies mentioned above to calculate and improve COGS for Amazon stores and marketplaces too.
WooCommerce & BeProfit Success Story - 28% Growth in Just 4 Months
Running multiple eCommerce businesses is not an easy gig, especially given the stiff competition in the marketplace. Online sellers must oversee many things, from lead generation to order management to reduce unnecessary costs. Seam Lim -CEO of Lens007 and LensGoGo – could entirely relate to this challenge. But not anymore! Seam Lim has launched 4 successful online stores since 2016, offering glasses, contact lenses, and Japanese goods. This year, Seam Lim partnered with BeProfit to capture all profit opportunities, track all expenses, and grow his business. After joining BeProfit in March, BeProfit established an ongoing relationship with Lim and customized unique features to meet his business needs. The Goal Overall business growth, from the number of orders to profit margins. The Challenge Lim needed a simplified and all-in-one solution to track and manage his profits and expenses. In the ever-evolving eCommerce industry and in his business niches, Lim had to make data-driven decisions to stay competitive and profitable. So, he started looking for tools that could help him achieve better control of key metrics of his business. That's when he stumbled upon the BeProfit profit tracker app. The Solution BeProfit - Profit & Expense Tracking App The Results 21,000 monthly orders $12 Million annual GMV $1.4 Million annual gross profits 28% Growth from April to July Lim’s Favorite BeProfit features: Real-time tracking With this app, Lim can track his business data anywhere, anytime, on any desktop or mobile device. He can even collaborate with his staff in a shared workspace in real time. Perfect Automation No manual work! So, it saves Lim and his team a lot of time. Now, they can set their profit calculation preferences, create custom data reports, and build shipping profits, all in one place. Calculation of all shipping costs As he runs a number of stores, Lim can have his shipping, fees and other expenses pulled automatically from his online platforms. It allows Lim to get detailed, up-to-date reports on all shipping costs. Here’s what Lim has to say about BeProfit: “BeProfit has changed the way I calculate my COGS, shipping, and other expenses as it allows for perfect automation. Not losing money is as important as making money, and thanks to BeProfit, I am now able to track my net profit accurately. Additionally, they’ve been super helpful and customized features to suit my needs.”
An Essential Guide to Shopify Sales Reports: Types, KPIs, & Analytics
When you start a Shopify store, it’s important to ensure you have the right strategies in place for analyzing your store’s revenue, growth, and profit potential. Shopify sales reports are one of the many reporting solutions offered by Shopify to give business leaders a behind-the-scenes insight into store performance. This includes information about your customer’s orders, based on criteria like time, product, or channel. Sales reports are available on the Shopify, Advanced Shopify, and Shopify Plus plans for Shopify vendors, so if you have another package, you may need to upgrade. Types of Sales Reports When you log into your Shopify store, you should see all of your analytics and report options on the left-hand menu of your admin user interface. There are reports available for tracking the success of your Shopify loyalty program, understanding POS transactions, and more. You can choose either to use the pre-made sales reports from Shopify to track store success, or you can create a custom report, depending on your Key Performance Indicators (KPIs). The pre-made reports include: Overall Sales Sales over time: All the sales you’ve completed within a specific period. Average order value over time: A record of how the average order value of your store has changed over a specific time period. Product Sales Sales by product: A breakdown of all the sales of a single product (without calculated shipping costs).Sales by product variant SKU: A breakdown of all the sales for a specific variant of a product.Sales by product vendor: All the sales provided by each of your vendors. Specific Criteria Sales Sales by discount: Insights into sales grouped by the name of a specific discount.Sales by traffic referrer: An overview of sales acquired when a visitor comes from a specific location, such as an online ad, google search, or another web page.Sales by billing location: All of your sales grouped by the region or country of the consumer.Sales by checkout currency: A breakdown of all your sales grouped by the currency your customer used on the checkout page. Sales by channel: A list of your sales grouped by channels, such as your online store, point of sale system, or Facebook.Sales by customer name: A rundown of all the sales connected to a specific customer over a set period of time. Essential Sales Report KPIs Diving deeper into your sales reports provides behind-the-scenes insights into your most valuable products, social commerce campaigns, and marketing strategies. You can view KPIs within your Shopify sales reports to gain precise information about business performance and customers, so you can make more strategic decisions on how to grow. Some important KPIs to consider include: Average Order Value (AOV) AOV calculates the average amount of money a customer spends in each transaction. If your AOV is increasing over time, this shows your customers are spending more money with your brand. Gross Sales Your gross sales number is the accumulated amount of all your registered sales within a specific time period. This can be a useful KPI for determining how many sales you’re actually making in a given time, and how much money you could make. Net Sales Your net sales number is the total amount of your registered sales, with any returns or discounts taken off. This will help to highlight how much you’re earning as well as your profit when combined with gross sales. Returning Customer Rate Repeat or returning customer rate shows you how many of your customers are repeat buyers on your store. This provides an excellent insight into whether you’re driving high customer satisfaction levels and loyalty. Customer Lifetime Value The customer lifetime value of your clients is how much they’re likely to spend over the full course of their relationship with your brand. Evaluating this number in relation to different campaigns can help show you which strategies are driving more loyal customers and increasing conversion rates, such as e-commerce influencer marketing. Customer Acquisition Cost (CAC) CAC is the price associated with turning a likely prospect into a loyal client. If your CAC costs are high, you may need to look for new ways to convert customers to keep profits from dropping. How to View and Export Your Sales Reports You can easily find your sales reports within the Analytics section of your Shopify admin dashboard. To find and export your sales reports: Log into your Shopify admin account Click on “Analytics” then “Reports”In the “Sales” section, click “View All”Choose the sales report you want to seeExport the sales report in CSV format Open your report in Excel After you’ve exported your report, you can start looking for useful insights. For instance, you can track your best-selling products by downloading sales reports for each of your top products and analyzing how much customers have spent on these items in a specific time. 3 Actionable Tips for Analyzing Your Sales Reports Reporting and analytics are two very different things, as anyone who has used Shopify sales funnels apps and reporting systems will know. Getting the most out of your reports means having a strategy in place to ensure you’re answering the right questions with your data. Start by: 1. Asking a Question Decide which question you want to answer with your sales report. For instance, if you want to know which of your products have sold the most, you can download your product sales reports for insights into the top-selling items. 2. Choosing a Specific Time Frame Using time frames is a good way to measure the progress of your sales. For instance, you can compare the sales of a product in the third quarter of the year to the second quarter to determine growth. 3. Using Benchmarks If you’re not sure what a good set of results might look like, it’s a good idea to have some benchmarks in place. For instance, if you want to know if you’re generating returns from a marketing campaign, you can compare the results of your new campaign to the results of an existing advertising strategy. Conclusion Making the most of your Shopify store requires you to understand exactly how to analyze and increase the success of your website. Using Shopify apps to generate sales and provide positive customer experiences, and a Shopify profit calculator to understand your earnings can supplement Shopify sales reports to provide you with rich information about your store.
How to Optimize ROAS & Lower Break-Even Point: 7 Techniques for Dropshippers
Learning how to optimize Return on Ad Spend (ROAS) is crucial for any business owner. Understanding this metric allows e-commerce site owners and dropshippers to lower their break-even points, thereby generating higher profits from every marketing campaign. This is crucial at a time when digital ad spend is set to reach around $735 billion worldwide by 2026. Achieving a good e-commerce ROAS means knowing how to measure the effectiveness of each ad campaign and using what you learn in future strategies. The more you optimize ROAS, the less you’ll pay to acquire new customers as a store owner or dropshipper. So, how do you get the best returns from your ads? 1. Increase CTR on Your Landing Pages Getting someone to click on your ads is just the first step for any dropshipper. You also need to ensure your customers will engage with your content, and act when they reach your landing pages. Optimizing your landing pages can boost your chances of conversions and enhance the sales funnel. To increase click-through rate (CTR) on a landing page, dropshippers should: Focus on benefits: Highlight the benefits available to your customers as soon as they arrive on your landing page, reflecting the offers you included in your ad. Streamline the landing page: Remove any content that isn’t necessary and focus on guiding customers through the page with a combination of video, text, and imagery. Leverage social proof: Give customers evidence they should interact with your brand in the form of positive testimonials and reviews. 2. Compare Performance Across Channels Many dropshippers use a variety of different channels to attract and connect with clients, including email marketing, various social media platforms, and online content. However, not all of the channels you use will generate results. Comparing your ad performance across different channels and determining which strategies lead to the most conversions or acquisitions will ensure you’re using your budget as effectively as possible. Use analytical tools like Google Ads and social media insights to track where the majority of your customers are coming from. 3. Improve Your Targeting Customers want ads specifically tailored to their needs and expectations. If your targeting strategy isn’t effective, you’re wasting your ads on people who aren’t likely to convert. Getting to know your target audience better and adjusting your marketing campaigns to use the right language, images, and strategies will boost your ROAS and reduce your ad spend. Consider exploring the difference between remarketing vs retargeting to attract previous visitors to your website, so they have a second chance to purchase. 4. Maintain Consistent Messaging One of the most important things customers look for when deciding which dropshipping companies to buy from is credibility. Your audience wants to be able to trust your brand to deliver a consistent, meaningful experience. Ensuring consistent messaging across all channels can help to develop a greater level of trust and increase conversion rates. It also helps to reduce bounce rate from your landing pages. The points you make on any ads you produce should relate directly to the topics on your landing page, showing customers they’re in the right place. 5. Perform Keyword Audits Keywords are among the most valuable tools dropshipping and marketing companies use to connect with audiences. Keywords can be used across social media, search engines, and even guest posting campaigns. The keywords you choose can also have an impact on your ROAS. Bidding for certain keywords and terms across multiple channels can be costly. Knowing which terms actually connect with your target audience and which don’t deliver the right results means you can organize your budget accordingly. 6. Improve Your Ad Copy Ad copy is one of the most important factors that determine whether your customers will actually click on your ads and engage with your business. The right message needs to showcase your personality, highlight the benefits of your offer, and still adhere to search engine and Facebook advertising best practices. There are a number of ways to improve your ad copy, such as using AI in advertising to detect the common words and phrases your customers are most engaged by. It’s also worth A/B testing different messages to measure their emotional impact on your audience. 7. Capture Leads Wherever Possible Finally, there are a number of ways you can capture leads and engagement. If you’re only advertising on Facebook right now, you could be missing out on opportunities available from search engine marketing and email campaigns. Consider spreading your ad spend across multiple different channels and environments to see whether there are any new places where you might be able to capture new leads. Conclusion Producing effective e-commerce ads can take significant time and focus. However, measuring your ROAS break-even point can be a good way to determine whether you’re investing in the right strategies for your business. The more you optimize, the better your return on investment will be.
