“Typical results for us are actually quite consistent across the price range of products, and are typically between 20% to 25% of the product's retail price. So around $75-$100 to sell a $500 model speedboat, but around $6 or $7 to sell a $30 product.”
Introduction
At Stilyoapps, the makers of your favorite Shopify upsell app, we’re focused on helping eCommerce store owners sell higher product volumes.
However, we go beyond the use of technology as a means to help Shopify entrepreneurs. We’re big believers in education, so from time to time we bring in eCommerce experts from around the world to help educate you, our blog readers, about the various ways you can grow your Shopify empire.
Today, Stilyoapps had the opportunity to speak with Sheridan Chaffey, from Batela Giftware, about how he grew his eComm store, which just recently hit its first $10,000 month.
We have an exciting interview planned for you today, so without further ado, let’s jump in!
The Interview
💬 Hello and thank you for taking the time to speak with us today about your experience as a Shopify store owner. Can you kick off the interview by telling us a little bit more about your approach to sourcing products? I see on your website that you work with 250 small, independent retailers across the UK. Why did you take the approach? What are the pros and cons of this decision?
We have two parts to our business:
Supplying stock wholesale to small independent retail stores.
Our consumer website.
In order to sell enough merchandise for the whole business to be commercial, we need the extra trade that independent retailers represent. They do well, and represent more than £0.5m of sales which gives us a little substance. They also give us a lot of feedback on products and what's right or wrong with a product, helping us to refine the range for the future. We avoid the big store chains... because so many of them are in financial trouble, that just one going under is too much risk for us. Likewise, they often expect countless miracles such as endless credit, sale or return terms and unreasonable discounts.
For the sourcing of products, we did one single deal with another European company, so actually our supply chain is very simple.
💬 A lot of people get lured into the world of Shopify stores and high ticket dropshipping because there are many people online who make it look fairly easy. Is it easy? What are some of the most under-discussed challenges that eComm store owners face when launching a new store?
Shopify is unbelievably easy, and I love it! But its real strength is in the apps that are available. No matter what you want to do, there is an app for it. When we began we tried all sorts of dropshipping ideas, and very gradually we have learned that it can easily be a waste of time and effort!
Essentially doing a deal to supply products to a major website, such as Wayfair, can work really well, but working with lots of tiny web sites, and getting an order or two a month is pure time waste.
And I don't recommend that people do Amazon!!! Why not? Well getting an endless stream of emails suggesting that I should lower my prices to get in the buy box is infuriating, and yet who am I competing with? Usually myself! It was madness and I'm delighted that pulling out of Amazon actually made my sales go up, and gave our website better exclusivity.
The real challenge is in getting sales and mastering Google, especially Google Shopping. This is the really important step. Not Facebook or any other social media. We don't sell fashionable stuff, and becoming a 'brand' isn't very likely, so for us, Google it is.
💬 You've managed to scale your store very nicely over time. You have much less volatility in your growth than many other Shopify stores I've seen. Best of all, both your traffic and sales growth are trending up and to the right! Can you tell us a little bit more about your underlying approach to scaling your store?
Our continual focus has been on Google Shopping. The results are not fantastic, but they are our bread and butter. Results from Google Shopping are reliable and predictable, but still require a cost of around 25% of sales, which is high, but just bearable. Making the best of Google Shopping is really tough, and needs lots of concentration, but it is our underlying approach to growth.
💬 So many people focus on Facebook and other social channels. I want to dig deeper into Google shopping with you. Can you expand on your answer above a bit? You said Google takes about 25% of sales, but what does this equal in terms of cost / click. Can you get more specific with costs associated with this channel?
We sell products with a nautical look and feel that range from an expensive display model speedboat at around £500, down to a flower pot for under £10. So looking at cost per click is the wrong way to do it! To sell something at £500, I might be quite happy to pay a few pounds for a click, for something under £10 I might be reluctant to even spend a few pennies. So looking at the results as a percentage of the sale is much easier, and fairer.
💬 Great point, Therefore, can you say what your experience has been on FB as a % of your sales? Can you get more specific here? On average how much over your cost were you going to make a sale?
I don't really recall the actual Facebook cost as a %, but it would be fair to say well over 100% of the retail price of the item. Some people would argue that 'so what', it's part of the cost of building a brand. It might be, but to me, it was just financial madness that made Mark Zuckerberg rich and me poor! 😊
Another way to look at it, is that clicks actually don't matter very much! What really matters is conversions. So looking at the cost per conversion is the logical conclusion for a retail store.
💬 You’re right. It’s more interesting to look at this from a cost / conversion standpoint. Can you give us more details about your campaign specifics?
Yes, typical results for us are actually quite consistent across the price range of products, and are typically between 20% and 25% of the product's retail price. So around £75-£100 to sell a £500 model speedboat, but around £6 or £7 to sell a £30 product.
Underneath that, the title of the product is really important. So if a product has a simple, likely to be searched title, then it will definitely perform better, whereas a rubbish title will clearly do worse. Some of our best performing products, such as the Vintage Union Jack Flag for £30, have very clear searchable titles. This is what we strive for on all products... but it is hard to do well. We keep learning and testing.
💬 What have been your top three drivers of organic growth? If you had to double down on just one organic channel, which would it be and why?
This is one of our key problems! We have very little organic traffic to our website, and no matter what we do with Facebook or Instagram it doesn't make much difference to sales. We have tried competitions, and have several thousand followers... but they buy very little. Social media takes a huge amount of time, and produces, for us, very few sales.
So no, we won't double down on any organic channel.
💬 What have been your top three drivers of paid growth? If you had to double down on just one paid channel, which would it be and why?
There are not three channels... I wish there were. The singular answer is Google Shopping, and a little bit of Google Search. Bing is almost invisible, and paying for email lists to use for e-marketing produces very marginal results. So unfortunately, it's the expense of Google Shopping for us.
💬 Interesting. Many Shopify store owners are aggressively using Facebook or Instagram to drive growth. However, this seems like a channel you've been a little less aggressive on. Why?
We have spent a ridiculous amount of time on both Facebook, and on Instagram, with terrible results considering the time and effort. We have had three different agencies try things for us, and had no success at all.
We have concluded that social media is too much 'chit chat' by people with time to waste in life!!! For a business selling home décor products it just isn't cost effective. And I know many many people will say I'm talking rubbish, but my audience is older, and mostly male. I think this is why it doesn't work for us.
💬 You just recently had your first 10K + month. First of all... congrats! What did you do differently that month to help you grow to that level?
Nothing at all, it's just the benefit of a little seasonality, combined with a steady push on Google Shopping.
💬 You have a mailing list of 3500 subscribers. What have been your most successful strategies when it comes to growing that list and how important has this list been as a sales and marketing channel?
We simply do one emailing each month, and do our best to find an appropriate subject for the mailing. I'm sure people worry about the style, the subject and so on. However, it’s much more important for us to do something regularly, but not too often or the customers will unsubscribe! Of course a consistent look and feel is essential to help build the brand.
💬 How big of a role has upselling and cross-selling played in your store's growth?
Very little, unfortunately. It is one of our biggest problems. We keep trying to get customers to make repeated purchases, but the percentage is far too low, and yet we have excellent reviews, and mostly next day delivery. So it's an area where we need to learn and work on the marketing side. We have done reward discounts, promotional emailing and so forth, but the effects are fairly minor.
💬 If you had to go back and start Batela Giftware over again from scratch, what are three things you'd do differently and why?
I would have started with Google Shopping, and left Social Media for a later stage.
I would have paid more attention to the App store, and realized that some form of data extract for third parties, Feed for Google Shopping, and a Purchase Order management system for stock such as Full Shelf were vital.
💬 Can you expand on the last point above a little bit?
Probably the reason why Shopify is so very good is the sheer number of Apps in the App store. I believe it's in excess of 1,500 apps. Finding some of the better ones, and working out how to use them is worth every minute of your spare time. I mentioned three in particular... so for example
Data Extract – is an app that allows you to send an extract of data to a third party automatically. In our case, we have many of our products on Wayfair. To make this work Wayfair wants a file sent several times a day to detail what stock we have. Data Extract does this automatically for me. A third of our sales come via Wayfair!
Purchase Orders – operating a good simple stock purchase order system is vital for money and stock management. In the early days, we used a very complex app that was great, but proved 'too clever'. In the end, we settled for a much simpler app called Full Shelf. It does a very simple job, and costs only a small amount each month.
Feed for Google Shopping – to make Google Shopping work, you need an app to 'feed' Google with information about the products you have and their stock situation. This app is great at doing this, and is much better than the default built into Shopify. The feed puts information about every product into the Google Merchant centre, and in turn into the Google Ads system for Google Shopping.
With product images... it took us far too long before we realized that product images are much much better if they are consistently of the same size, in our case a canvas of 2000 x 2000 pixels, with products very slightly smaller at 1950 x 1950. The real revelation was finding a free Windows app to do this in a batch mode, making things so much more consistent and attractive on the site.
💬 This has been a very insightful interview. Thank you for sharing your insights with Stilyoapp’s blog readers. To our readers, if you’d like to learn more about Batela Giftware you can head over to their website here.