With online sales expected to decline along with the economy, ecommerce stores will be seeking ways to reduce overhead. Here are some strategies I have had advertisers implement to reduce costs and increase profitability when using shopping search engines and comparison sites:
When paying for clicks from shopping sites:
1. If possible, remove from that feed inexpensive products that get tons of clicks when the profit margins do not more than cover the income generated.
2. Slightly increase prices on inexpensive items so your products are NOT being featured in the top positions.
3. Slightly decrease prices on high dollar items when you DO want your products to be featured in the top positions.
Don’t assume that all conversions sent by shopping sites are due to that site. Because Google Analytics and most other common analytics programs attribute conversions to the LAST click that buyer made, if someone finds what they want via ppc ad or on your site and then goes to do a price comparison, the shopping site gets credit for the sale but did not really generate it.
Ecommerce Tips:
Gail Gardner
@Gabriel Great. It is always gratifying to know that the time I spend answering comments is of benefit. Thanks for subscribing to the comments thread.
Thanks, I’ll check it out!
@Gabriel Did you see my latest posts on Web Analytics? I’ve linked one into this comment to make sure you see it. It is the most important but there are many others. Just click the link for Web Analytics in the categories listed in the right sidebar.
InternetStrategist’s last blog post..Don’t Make ANY Changes Based on Web Analytics Until You READ THIS FIRST
I’m trying to learn more about web analytics right now and and how to modify tactics based on results. Thanks for the information.
@Blackberry Storm – I’m sure it will work as I’ve seen it work many times. I blog only about what I’ve actually tested (unless otherwise revealed in a post).
@John I had to rescue your comment from Akismet. The only way to accurately track which advertising is effective is to record every visit – not just the first or last visit.
Anyone buying ppc ads should read these two articles:
http://www.theregister.co.uk/2009/01/21/google_secret
(A comment I submitted regarding that post is on FriendFeed at http://preview.tinyurl.com/ar3s2z.)
http://www.pbs.org/cringely/pulpit/2007/pulpit_20071102_003354.html
Internet Strategist’s last blog post..Finding Interesting FriendFeed Users
@busby The current economic situation is bound to affect some buyers for any business. The largest concerns beyond the obvious (downsizing, unemployment, underemployment) are increasing costs for utilities, food and gasoline.
The intelligent thing to do is be proactive and find ways to generate new business. Many businesses are seeking to reduce overhead which, if done unwisely, would further reduce their sales.
Some of my friends even stopped investing on ads because they are afraid of paying too much with little return. Maybe this bit of advice could make them think again of their ad strategy. Thanks for the tips.
GrowMap,
I currently sell books and other merchandise through several different channels. Ebay, Amazon, ABE, Albris, Google Base, and my website. I am not tracking conversion rates for the traffic that come directly to my website. I’m not using adwords either. Is there a good tutorial about tracking conversions that you can recommend?
@Doug. Great to have an expert on analytics dropping in. Understanding Web analytics well enough to take action is the real trick. Hopefully more businesses with sufficient means will start hiring analysts to assist them.
Applying common sense and logic are a great place to start along with a focus on maintaining profitability in any specific action.
Internet Strategist’s last blog post..Ecommerce Tip: How to Increase Profitability On Shopping Comparison Clicks
@Christine There is a free ten part email tutorial on Google Analytics that you can get by going to Mastering Google Analytics ecourse. When you leave the page a window will open offering you the free course.
That will give you some basic understanding on how to use analytics to track conversions. I’m working on a review of the book from that site and will post what it includes.
The thing about analytics is that they are far more complicated than people using them realize – especially in the case of Google Analytics because it is free. Is some cases the source of a conversion is incorrect 50-75% of the time.
I am working right now trying to determine why the conversions Google Analytics is reporting are so different than those being reported by Share-a-Sale for that store. While analytics are very useful they are also challenging to get configured for accuracy.
If you subscribe you’ll get the review on that book and I’ll share any other good tips on tracking conversions. If you want to visit the best analytics sites go to http://web-analytics.alltop.com. You’ll find many great blogs dedicated to analytics; however, many discuss it at a level that only analytics experts can really understand.
Very good point.
Data is good – but without some thoughtful analysis it’s just data.
@car leasing My advice is always based on results observed while working with small businesses. It will often be opposite of what market research based on only the largest corporations.
Few business owners and many advisers do not have deep expertise in evaluating results using Web analytics. I have seen some recommend actions that greatly increased traffic without considering how much that traffic cost and even when the cost exceeded the profits – sometimes it even exceeded total sales generated!
Really good advice. Thanks for these tips – they are the opposite of what my boss wants to do – so its great to have some additional info to reinforce my own suggestions.