Indispensable & sustainable growth framework/lessons is an Amazon guide to growth, that you can apply to your Shopify store as well. We show you how to start ecommerce the right way.
If you’re a Shopify store owner, your #1 goal is probably having a positive ROI (return on investment). Unfortunately, it isn’t an easy task.
Are you spending a big percentage of your budget on PPC ads to get traffic and new customers? Well, I’ve got some bad news. Your PPC investment won’t get you a positive return on the first purchase. And PPC prices are likely to increase in the future.
Read on to learn how you can use this strategy in your own store regardless how many orders you have daily.
Hey, are you thinking “I’ll bookmark this blog post and read it later”? Don’t do it! You will never come back. Take your time now because Amazon, being the multi-billion dollar behemoth that a lot of online retailers look up to, is the perfect company to watch and learn from.
Why growing your Shopify store will be even harder?
The Amazon strategy itself is not complicated, every store can easily pick up on it. But first, you need to understand the problems.
1. A single-deal customer won’t add a lot of value to most ecommerce stores. But it’s hard to retain your customers, even though it costs less than acquiring them.
2. Acquiring new customers with positive ROI is almost impossible. There are multiple reasons behind that. First of all, the effectiveness of free channels has decreased significantly. You can’t build an acquiring strategy without paid advertising. But paid advertising is getting more crowded and it’s really hard to get the attention of your audience while they see so many ads on the market. Not to mention that many people won’t see your ads due to banner blindness.
[bctt tweet=”Acquiring new customers with positive ROI is almost impossible.”]
3. Your competitors became smarter and faster. Removed barriers of entry have made it easier for an entrepreneur to enter the ring. More and more people start an online business today because you can basically build an ecommerce store during a weekend. While advertising is getting more crowded, there’s also increasingly widespread availability and adoption of marketing automation, business intelligence, machine learning and other tools that will close the gap on being data-driven at companies. You have to provide more than “just” a store and some products to stand out from your competitors.
Circumstances in a nutshell: You need a better strategy with a better execution. If you don’t have a huge marketing team specialized in every field, you need to automate and outsource as many tasks as possible. Thus, you can focus on the most important things.
The growth equation of Amazon
First, let’s take a look at the illustrations below. This method is from Andy Johns who’s been a product manager and internet marketer at Facebook, Twitter, and Quora.
Johns’ growth model for Amazon provides an example of how to apply the basic growth equation to a real company. Here’s how John explains it — and this is how one might expect the head of growth to describe it.
1. Vertical Expansion
“When Amazon launched, it sold books. Its growth was limited by books as a vertical. As it moved into more verticals, such as music or jewelry, it unlocked additional, latent growth potential and could expand at a faster clip. Every new vertical brings new growth acceleration. What’s key here is plotting which verticals to move into, in what order and with which plan to automate and scale.”
Rapid solution: Extend your product catalog by your custom designed t-shirts, posters or leggings and let Printful to make the printing, fulfillment and shipping.
Slower solution: Search for new front-end products on Indiegogo, Kickstarter, thieve.co, trendhunter.com and back-end products on Amazon best sellers, Gearbest.com, Thinkgeek.com, Thisiswhyimbroke.com.
2. Product Inventory Per Vertical
“Product inventory within a vertical asks: how can Amazon go from selling 10 books to 10 million books to every book on the planet? Amazon’s growth is proportional to the depth of its product inventory per product vertical.”
Rapid solutions: Add hundreds of U.S & European dropshipping products to your online shop and automate the entire order fulfilment process with Spocket.
3. Traffic Per Product Page
“Product inventory is directly linked to product pages that are capable of yielding additional traffic all over the web. The lever here is converting traffic at a higher rate to buyers.”
Rapid solutions: Attract more customers to your online store for FREE by displaying your product ads in partner stores with SixAds. In turn, partners display their products on your site to access the same benefits.
Slower solutions: Drive organic traffic to your product pages through influencers, SEO or Facebook pages.
4-5. Conversion to Purchase and Average Purchase Value
“These components — the number of purchases and amount of each transaction by a customer — are strongly linked. Amazon optimizes this variable by injecting recommendation engines into the product. The company suggests a related product, which helps it convert another purchase and generate additional revenue.”
You should only increase traffic when your conversion rate is good enough. Would you like to know how to increase your conversion without any costs? 2% increase in your conversion rate can double your business.
Rapid solution: Recover up to 15% of Abandoning Visitors with Onsite Retargeting.
Slower solution: Improve your UI/UX and lead more qualified traffic to your product pages.
(Note: Would you like to learn more about onsite retargeting? Click here to download our free eBook with over 100 pages of tips and best practices for engaging and reengaging your customers with onsite retargeting to boost the revenue on your site.)
6. Repeat Purchase Behavior
“Then eventually the business gets so sophisticated that they can build mechanisms to drive repeat purchase behavior, such as introducing products like Amazon Prime. You just buy and buy.”
Rapid solution: Use Amazon-like intelligent product recommendations which displays the products your shoppers are most likely to buy (next). AutoCommerce make it for you for 100% free.
Slower solutions: Build an own recommendation system in-house or send follow up emails to your customers.
You can see above, the goal of this method is to optimize each areas of your company in order to maximize growth potential. To make it more understandable how it will help you to grow, let’s do the math!
We have 6 areas that we want to improve. If you increase the performance of each areas only by 2%, all in all, you’ll get a 12% growth. Check the illustration below to see how you can achieve a 77% growth.
Now think about: if you increase your performance by 2% in all the areas listed above, what does it mean for you? You have 1 year to increase these 6 areas, which means you’ve got 2 months to boost one area. That’s quite some time to achieve nice results.
How to start implementing it today?
By downloading and using these apps, you’ll be able to boost your performance and lift your sales seemingly.
What’s your strategy to grow your ecommerce store? Let us know in the comments! 🙂