New eCommerce sellers often get married to a particular product, and don’t want to hear about selling anything else. And while there’s nothing wrong with offering one or two items when you get started online, the next step to grow is to broaden your selection.
Go Beyond What’s Expected
Your target customers are usually interested in other, related goods, in the same vein as your primary product. So to reach your full sales potential, you need to source a complete range of products within your niche. That means offering some unique items, some standard items, some low-cost, some high-cost, some accessories – all within a narrow niche. According to renowned Internet marketer Dr. Ralph Wilson, of WilsonWeb.com, there are several backend selling options that you can implement to boost your eBiz profits:
• Cross-selling is carrying products or accessories that relate to your buyer’s primary product of interest. Explains Dr. Wilson, “Your customer comes looking for one item but leaves with two or three. Sometimes, the cross sale profits can exceed even those of the main product.”
• Up-selling means offering more expensive, higher-end versions of a product. Typically, up-sellers are displayed next to the regular product version, to entice buyers to upgrade. The idea is that your buyer comes looking for good, but leaves with better or best.
• Using loss leaders refers to offering a product at a zero margin, or even a loss, to draw or “lead” traffic into your store. Cross-sellers and up-sellers are placed around the loss leader, in hopes that customers will either upgrade to a higher-margin version, or buy other items in addition to the loss leader.
• Bundling is a form of up-selling in which you package related products and offer them at a discount from the price of the individual items. Your site might, for example, offer a $40-hair dryer, as well as an $80-ceramic flat iron. But you might also bundle them as a package deal for $110. Your margin may drop a bit, but your total profit goes up, because now your buyers are purchasing more than they had originally planned.
• Offering quantity breaks is an extension of bundling, in which you lower the per-item cost as your customers increase their order volumes. For instance, you may sell folding chairs for $50 each, but only charge $40 each on orders of 4 or more, and $35 each on orders of 8 or more. If your buyers feel they’ll save money by purchasing in bulk, they may be willing to spend more now, to save in the long run.
Location, Location, Location
There are three recommended locations for placing these backend products. The first is your homepage – this is where you want to display and rotate new and high-markup products. You can attract additional sales by positioning these products for maximum exposure. The second place is relevant product pages: when your buyer looks at one product, you show them accessories, or other, similar options. The third location takes its cue from the brick-and-mortar retail world. Like placing popular goods next to a physical checkout lane, placing complementary products on your checkout page can result in impulse buys.
Most paid shopping cart solutions offer some degree of cross- and up-selling capabilities, although they vary in the flexibility and automation they give you to customize your backend selling process. Some web-hosting services also provide limited backend functions. The great thing about having a backend selling process is that you increase your sales without increasing your marketing expenses. States Dr. Wilson, “As you develop a full product line, you’re going to find that you’re greatly improving your customer sales and satisfaction.”