Purchasing An Existing Shopify Store: January 2018 Update

In late 2016 I purchased an existing Shopify store. You can read about why I purchased this site, see the exact purchase price, and other details in this post.

As my Amazon sales continue to grow, I want to focus more time in 2018 on expanding sales to other platforms. Currently, my business is selling mainly on Amazon, eBay, Jet, and our own websites through Shopify.  Amazon is by far the biggest component of this, and the goal is to further diversify where the results of the business are coming from. In particular a big goal is to increase the sales of the Shopify site that I purchased at the end of 2016.

2017 Recap 

2017 was a year where this project fell to the wayside. It was a big year for my overall online retail business, and for my consulting.  Those 2 projects took most of my time, and the existing Shopify site was neglected.  

Essentially it’s been on autopilot for much of 2017. I have decided that it’s time to see if this project really has legs, and have decided to invest in human capital to help manage and grow the project. At the end of December 2017 I brought on a full-time team member to help work on this project for about 20 hours per week, and help me with other aspects of the business the other 20 hours per week. If this project really takes off there is the ability to have them focus on this project full time.   

I brainstorm ideas and outline plans with this individual, and then they are responsible for implementing them. This setup makes it so that I am only investing a few hours per week into this project. 

The goal for 2018 is to get this project to making $5,000 in net profit per month by the end of August 2018. If that doesn’t happen, then my plan is to sell this website. Then I would shift the time and resources that were going to this project to other areas of my business. 

First I will share a few pieces of information from 2017 to establish a baseline of where the site is at, and then will share the results specific to January of 2018.  

Here’s a look at the total sales for 2017: 

So you can see that 2017 was a decent year in terms of overall sales, but it’s not much in comparison to the Amazon business. These sales are less than 1% of what my business does on Amazon. Here’s a look at the total traffic from 2017: 

And here’s a look at the conversion rate for 2017:

So this gives you an idea of where we are “starting” from. There was some time and effort put into the site over the past year, but it’s been minimal. Especially of my personal time, very little has gone into this project.

The website sells products that are a lot more in demand during the summer months. This shows in both the sales and traffic charts above. There are products this site sells that are in demand year round, but at the moment it’s somewhat seasonally dependent.

That’s a quick overview of how 2017 went. If you have additional details you would like to know, please let me know in the comments section below.

With that background information, let’s dive into the results from January 2018.

January 2018 Results

Here’s a look at the total sales for the month: 

In the above screenshot, the online store sales are orders that are shipped directly to customers, and the draft orders are wholesale orders from retailers carrying our products. You can also see that this is up 1,782% compared to January of 2017 which is great progress.   

Wholesale orders accounted for over 40% of total sales for the month of January which was great to see. The margins on wholesale aren’t quite as good as on the orders that go direct to consumer, but the order volumes more than make up for it. Our largest wholesale order was $900, and our gross margin on wholesale is about 53%.  

The order volume makes this worthwhile alone. This is without factoring in that these orders have the potential to repeat (if they sell well for the retailer), and it will help get the brand in front of more customers.  

We just started working these wholesale strategies at the beginning of January and they have provided some good results already, so the plan is to continue to strongly focus on finding more wholesale clients leading up to the Spring and Summer months. We have products that are in demand year round, but some of our more popular products sell better between April and September.  

Here’s a look at how much traffic the website is receiving:

We were up 177% in terms of online store visits. We saw 1,585 total online store visits and 1,381 unique visits to our store during January.

And most important, how well did these visitors convert into paying customers:

We were able to increase the conversation rate by 345% compared to January 2017. This report shows how many visitors added products to cart, reached the checkout page, and then actually purchased.

The increase in conversion rate compared to last year is a huge step in the right direction, and we’ll be looking for ways to further increase the overall conversion rate for the store.  

Some of the changes made during the month of January that I believe contributed to a higher conversion rate:

  1. Cleaned up website by updating pages and making sure all photos have a pure white background.
  2. Direct phone and email conversations with potential wholesale partners.  
  3. Responsiveness on social platforms. We’ve been doing a much better job on social media platforms of engaging with customers and responding to any messages / posts in a timely manner. Especially when they are asking questions about products, a quick response has led to sales on several occasions.  
  4. Better performing ads. We are still working on optimizing all of our ads, but they are doing a better job of getting people who click on them to make a purchase.

Next up, I will share the income statement for the month of January for this website:

Outside of cost of goods sold, our biggest expense has been advertising costs. With the advertising we are doing quite a bit of testing, and the ROI on that is not where it needs to be yet. We’re going to be continuing to test, and over time I am confident that we’ll get that dialed in. Once we have a good ROI on ad spend, I plan on increasing the budgets there.

An important note is that this doesn’t include wages for the individuals that I have working on this project. The main reason for this is that the team members working on this are helping with other projects as well. In future posts I will consider breaking this out separately to give the full picture. Just know that with that factored in this project is operating at a loss. On the flip side I could have put in all of the time, and then would have made this profit, so it depends a bit on how you look at it.

I also included some traffic stats at the bottom of that screenshot. The conversion rate in particular is moving in the right direction, and here’s a more detailed look at that:

So that’s a look into how this project has been performing for the first month of 2018.  

Overall, I am happy with my total sales for January 2018. I am up over 1,728% compared to January 2017. This is great to see this time of the year since the peak season for this site is still a few months away. We are looking to continue this momentum, and if we keep this pace the numbers should look much different by the time we get to September of this year.

Wholesale orders were a big part of the higher sales, and I plan to continue to focus on this sales channel. 

After reviewing the ad spend, I definitely need to make some adjustments to these. There are some ads producing a solid ROI, while others I am losing money on. I will share more details on how this goes over the next few months. I will likely include more screenshots on how individual ads are performing in these posts going forward as well.  

Overall, the changes that have been made so far in this project have produced some good results.  We are building the foundation that I believe will set this project up for success in the future.

Goals Moving Forward 

Looking ahead to the next couple of months, here are some of the things we’ll be focusing on: 

  1. Launching the products on Amazon.   
  2. Testing out upsells. 
  3. Optimizing the email marketing to make sure that is fully utilized.  
  4. Looking for additional ways to optimize website conversion rate. We’ll be evaluating the design of the site and pages for potential customers and aiming to fix areas where we are losing visitors before they become customers. 
  5. Reaching out to influencers with high engagement that fit with the brand of this site. 
  6. Continuing to expand wholesale outreach.

That’s where we’ll be looking to continue to grow and optimize the website over the next month. The plan is to continue doing these posts on a monthly basis. I will plan on including more details, and answering reader questions about the project that come in during the month. Please let me know in the comments below what questions you have on anything covered in this post, or related to this project. 

Thanks for reading!

11 thoughts on “Purchasing An Existing Shopify Store: January 2018 Update”

  1. I’m a dealer ( we are on line only) and sell a particular type of RC car. We have a Shopify site and .com site we launched but have not gotten anywhere. If we start with Amazon listing our awesome cars , would it be best as an individual or LLC? Can I sell an established brand?

    1. Hi Clarissa,

      On the individual vs an LLC, that is a question that I would recommend asking a local lawyer. For reference on how my business is setup, checkout this post. In regards to selling established brands, yes you can sell those on Amazon.

      Best Regards,
      Ryan

  2. This is great. I’m in a similar boat. Just turned on our Shopify store in January. We’ve got a lot more traffic, but working on getting that conversion rate up as we speak. It’s been fun to see seemingly small changes improve the CR. Holding off on paid advertising as we sort out our conversion rate. What kind of Facebook ads are you running? We’re also dialing in our email marketing…have you considered putting any effort towards FB messenger? We’ve been successful there with high engagement rates. There are some super cool tools out there.

    Looking forward to following.

    1. Great to hear you are testing our Shopify as well. For FB we are mainly running display ads, and right now they are with images. We are in the process of shooting some short video ads that we’ll be getting live within the next few days. I have considered messenger, and I do think it’s something we’ll end up testing out within the next few months.

      Best Regards,
      Ryan

  3. Hi Ryan,
    ‘love your Tuesday emails. We have had a brick & Mortar store for many years. Also have a Shopify Store, Amazon, eBay, launched Walmart Marketplace in late 2017. Walmart’s Marketplace for Buyers needs help! So, I am focusing my energies on the other channels until Walmart gets their bugs ironed out.
    I can’t seem to get Shopify moving. We hired one of their Gurus, who updated and spruced up our site. But, still have not seen many orders. I’d appreciate it if you can offer some suggestions to jump start our Shopify store. If we don’t have to deal with commissions, etc it would generate a better bottom line for us than Ebay & Amazon. Advertising is not my strong area. (have a nursing degree). So, I don’t really know which advertising is worthwhile, social media, etc. Or should I spend more money & hire another Shopify guru. ‘have had the Shopify store roughly 12 months+. I’m frustrated and feel like we are just spinning our wheels.
    Thank you for any assistance you can offer me to get our Shopify store off first base. Judi

    1. Hi Judi,

      Thanks for the comment, and great to hear you like the Tuesday emails! I will plan on doing some more posts about Shopify in the coming months and will cover some of the things that I am doing with my Shopify site.

      Best Regards,
      Ryan

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