Business Strategy. More is More
Posted: May 24 2016 / Richard Bairstow / We are Underground
Earlier in this series we talked about the importance of margin and of making sure that you consider all the small hidden costs when setting your pricing. We acknowledged the need to include expenditures of time for picking packing, shipping and also for payment gateway charges. So it’s one thing to add them but how can you reduce them?
Well so much depends on upon the products you are selling as to where savings can be made. For example, it’s worth spending time on the layout of your storeroom or warehouse if you have one - as an efficient picking process will reduce the time it takes to transfer products from there to be packed.
One of the best ways of cutting down the cost of processing per unit is to increase the volume of units being shipped. Obvious you might say and sure - that’s what you spend most of your time doing, trying to sell more right?
But there are other ways of increasing volume than doing more of the same.
Add More Flavours of Stores!
What you may not know is that many organisations sell the same things under different branded eCommerce stores. It’s so easy to spin up a new theme on Shopify that looks completely different and with a different name but sells the same products. You can use most of the same assets to build the store if you wish - like photography, product descriptions, standard terms, and policies.
The casual customer may only see one store anyway because they found what they were looking for in a search or came from a link that only worked with one of your sites.
So if you sell pet jackets, then you could have three different domains with three completely different themes such as petjackets.com (for all pets), poochwear.com (just for dogs) and kittycoats.com (for cats). In that case, you would just sell a subset of products aimed at more specific markets.
So why would you run multiple stores?
Test different pricing strategies – if one site sells the same product at a different price then you can determine how price sensitive the market is without affecting the other sites
Appeal to a different audience. One store may have a different ‘feel’ with a focus on a different age group or geographic territory. Perhaps also you may want to sell a more limited range for a particular audience
Test different marketing and traffic strategies.
Increase the volume of sales – multiple sites may not enhance sales in the same proportion, but they will undoubtedly be larger overall.
How about the downsides?
As with so much of e-commerce operations, it’s about using the time where it’s most effective. So creating multiple stores is probably something to start thinking about after you have the first one up and running. But after that the risks are few:
You need to be careful that you don’t dilute your traffic - so try to keep the audience types separate
While there is nothing wrong with running multiple eCommerce store brands, some stalwart customers may feel cheated if they find out the same product is available from the same seller at different prices. So be ready with an explanation for why that is if you feel the need.
If you are going to run multiple stores, then make sure you can aggregate all your sales through a single payment Gateway such as Stripe. The greater the value of total sales, the less transaction, costs you will pay per unit.
Also, be sure to measure the effect in conversions from every change you make to each store. Things that work on one site can be tested without affecting others initially, but if they work then you can roll them out across your Empire!