The month of May is in the books, and that means it’s time to share the results of my Shopify store experiment for last month.
If this is your first time reading one of the posts about this experiment, you can catch up on the past ones HERE. On a monthly basis, I share exactly how this website is performing. Throughout the process I will include things that are working, things that aren’t, and share my progress with you.
Total Sales for May 2018 vs May 2017:
Year over year the sales were up over 1,700%! Sales increased from $1,459.59 in May of 2017 to approximately $26,000 in May of 2018. It’s great to see this growth. Throughout this post and others I will discuss how my team and I achieved this growth.
In May of 2017, we weren’t putting a lot of time or attention into this site. So this comparison is showing May 2018, where there’s a full-time team member working on this project, compared to May of 2017 when it wasn’t the primary focus for anyone on my team.
Once I sat down and put a real plan in place, and then hired someone to help execute that plan, I started to see some real results.
Comparing year over year is a great way to zoom out and see the progress too. When I look at project performance on a daily basis, I don’t see the progress that is being made; however, when I zoom out and compare to the previous year, I can see how far things have come.
May 2018 vs April 2018 Sales:
The above screenshot shows sales from May compared to April of 2018. In comparison, sales were up 61% overall.
Draft orders are “wholesale orders” where we are selling to other retailers carrying our products. Zipify One ClickUpsell and Online Store orders were purchases made by customers on the website.
We have been seeing some great results with the wholesale side of this project where we are selling items directly to other retailers. The sales for this portion of the business more than doubled compared to the prior month. We have been seeing a good percentage of the retailers we work with order from us multiple times, so I’m excited to see if this trend continues.
When it comes to orders placed in our online store, this actually dropped by $919.54 compared to April. This was due to focusing more on wholesale, no major promotions during the month, and a few of our most popular products being sold out.
Overall, I am very happy with the growth of our sales over the past few months. We’ll be working to continue to increase the level of sales for both over the coming months.
Next up, we’ll look at some of the traffic stats for the site.
Total online store visits compared to last month:
We dropped by 0.2% in relation to total online store sessions (visits) for the month. I’m not too concerned about this as we seem to be staying fairing consist in terms over month-to-month sessions.
Since January 2018, here is what we are seeing in regards to online session:
We stayed pretty consistent and have been increasing since January 2018. I only expect this to increase as we have historically seen more traffic to our store during the summer months.
Online store conversion rate:
During May 2018 we saw a conversion rate of 4% on our online store, which is an increase of 0.56% compared to April’s conversion rate. It was great to see this improvement. In the middle of the month, we redesigned the website to improve the overall appearance, improve customer’s ability to navigate the site, among other changes. I believe this was a huge improvement compared to our prior version of the website. In total, the redesign took a good portion of a week for the full-time team member working on this project. In the coming months, we’ll find out how much this update will impact the conversion rate going forward.
During the month of May we spent a total of $1,364.20 on Facebook ads. We were testing out a few new ad strategies and were continuing to run some ads that were delivering a solid ROI. Overall, our average cost per conversion was $27.28 for every sale that we generated. This was about break even. Within this ad spend are some ads that are performing well, and others that aren’t. We’ll be continuing to work to optimize this going forward. The one ad type that has been consistently performing the best is retargeting ads. If you plan to run an online store, or already do, I highly recommend running retargeting ads.
During the month of May we began to see a pretty solid cost per conversion on several of the campaigns we are running. On the 3 shown in the screenshot we seeing cost per conversions lower than $16. Since we have started using an upsell tool, our average margin per order has increased by about $3.50. This means that are break even cost per conversion is now about $27, so these ads are generating a very solid ROI.
Income Statement for May 2018:
Overall the net profit for this project increased by almost 63% from the prior month to over $8,300. This has been a great trend, and we’ll be working to make it continue.
An important note is that this income statement is presented as if the site is being run by an owner operator. It doesn’t include the wages for the main individual that is working on this project. The main reason for this is that this team member is working on some other projects in the business too. So, with their wages factored in, this would add to the expenses shown above. On the flip side, I could have put in all of the time myself for this project, so it depends a bit on how you look at it. The way the numbers are presented are as if the owner of the site is doing most of the work.
You might notice the additional line item in this chart for “Revenue – Off Website.” This is from a retail store that we are working with who sells our products on consignment. They take a fee for selling the product and send us our portion via check. This wasn’t a huge amount this month, but I do think it has the potential to grow in the coming months.
During the month of May we added nine more wholesale partners, and two of them have multiple stores. We also had a total of eight reorders from existing wholesale partners last month! As of today, we are in more than 30 stores since starting outreach in late January 2018. As it sits today, we have seen reorders from about 20% of our wholesale partners, and we’ve only been working with each of them for 1 to 4 months each.
Due to these results, we’ll be continuing to work to find more retailers who are interested in purchasing products from us at wholesale prices. The higher order value, and the prospect of future purchases, makes this a very lucrative relationship. If you have your own branded products, I highly recommend partnering with retailers to sell your products.
On each order and reorder from our wholesale partners we make money, and more importantly it helps get our brand name in front of more customers. In some cases, customers have mentioned that they saw our products at a retail partner store, but ended up making a purchase on our website for an item that wasn’t available in the retail store. This is a nice added value.
If selling products wholesale to existing retailers continues to go well, I plan on doing a blog post to go more in depth on the strategies we are using to find wholesale partners.
On the expense side of things, the main services that are being used that make up the expenses shown are: Shopify for running the site, Zipify OneClick Upsell for upsells, Woodpecker for sending emails to wholesale prospects, Onlinejobs.ph for hiring virtual assistants, and Freeeup for wages for a designer for a few miscellaneous tasks.
The most exciting part about this growth of this project is how much the website could be sold for if we maintain this level of profits. Typically eCommerce sites will sell for 24-36X their last 6-12 month average profit. If we are able to maintain the level of profits we are seeing in May, the site would likely sell for between $200,000 and $300,000.
The goal is to continue growing the site and see what the potential is before making the decision on whether to sell or keep the site.
Overall, May was a great month for this project. We achieved many of the goals we set, and I believe we’ve set ourselves up for continued growth. The website redesign was a big time investment, but it’s already starting to pay dividends.
I will wrap up this post with a few goals for next month:
- Get first sale on eBay
- Get approval from Amazon for another seller account for this project
- Have 10+ existing retailers place their first order with us
- Add at least 2 virtual assistants to help with the research to find more wholesale partners
- Over $30,000 in sales and $10,000 in profit
- Redesign our product packaging
That’s it for the goals this month. The main focus will be continuing to grow the wholesale side of the business.
If you have any questions or want additional information included for next month’s post, leave a comment below – and please share this using the social links on the left side of the page if you know someone else who would appreciate it!