Are Shopify Stores Profitable?
You may be thinking of starting a Shopify store, but before diving headfirst into this exciting opportunity you’ll want to know if it’s worth your time or not.
Shopify is a great website builder and enables non-technical individuals to create good-looking online stores, without diving into code. Having a profitable store can be based on several components, these are the product, marketing quality, delivery times, testing and the physical appearance of your website.
Each component must be nailed down to a “T”, for you to see profitable results from your Shopify store. In this article, we’ll be discussing why each component is important and what to consider when creating an online shop. If this is your first store, it may seem like a lot of work.
Trust me, once you start to understand the process of creating a profitable Shopify store you can easily rinse and repeat the technique.
When starting a Shopify store you need to identify which product or products you are going to sell. Choosing products that are easily available offline and can be found in high-street shops or supermarkets normally perform worse than items that don’t.
You should also consider the following when choosing a product or product range:
Price – If this is your first Shopify store, you need to make sure your product price is on point. Meaning you don’t want your goods to be too cheap but also not over market value. However, you still want to take into consideration your profit margin and make sure you have enough to cover the costs of fees, shipping, possible returns and of course profit.
Niche – Find a good niche, not something that is overly popular or too small. Before setting up your Shopify store, study the niche you want to get involved in. This knowledge will go along way by understanding what the target audience wants in your chosen niche.
Quality – If you’re handmaking, locally sourcing, or dropshipping products on Shopify make sure they’re good quality. Think to yourself, as a customer would you be happy to receive this item? Word of mouth is important for any successful online business.
Marketing will drive traffic to your store. Without it, your store will simply gather dust and not receive any visitors. If you don’t know too much about marketing, I suggest you pick up some books and get studying. Unless you’re going to pay someone of course.
But if you’re just starting, I assume you haven’t got the budget for that. It may seem daunting at first. However, it’s much easier to understand the marketing concept than you think.
Budget – Opening a Shopify store is like opening a new business. Therefore, a budget is required to get that business running. Understanding your finances and knowing how much you can spend on marketing throughout the year or month is vital.
However, not just for marketing but also for product cost, fees and delivery expenses. The biggest downfall to most small businesses is due to cash flow, to reduce this potential business threatening issue.
Learn how to manage and budget your money within different important aspects of an online business.
Networks – What advertising network is your shop going to benefit from the most?
To do this you need to understand your target audience. For instance, if your products are more geared towards the younger generation.
You may want to advertise it on a social media platforms like TikTok, instead of marketing it on a search engine.
When you’re shopping online, you want your items rapidly. Whether you are fulfilling your shipments by yourself, or with a wholesaler (dropshipping). You need to make sure that your logistics are quick and flawless.
Fulfilling goods (yourself) – Most online retailers that fulfill goods themselves either at a warehouse or their homes, use the following delivery structure. 1-2 days processing time, 2-3 days delivery. If you’re fulfilling your goods yourself, time is really based on the resources you have.
Wholesaler (dropshipping) – Shopify is widely used by dropshippers, therefore it would be rude not to mention them. With dropshipping, a wholesaler will be taking care of all the shipping for you.
If you can, try to narrow down shipping to around 5-7 days and even less if possible.
Shipping times worldwide can awful. if you’re targeting a specific geographical location, I recommend you find a supplier within that area.
Testing may seem like a confusing topic to mention if you are new to eCommerce. Those who are more advanced on the topic will understand the excitement and importance of this.
If you’re seriously thinking about creating a successful Shopify store, you need to test everything.
Products – When you first pick a product or a selection of products, you may have to test the market to see if they’re sellable.
Personally, I think it’s a good idea to have a general store before you move onto a branded one. In your general store, you’ll be able to test multiple different products and niches at the same time.
Here you’ll be able to see which products are worth going to the extent of branding.
Ad creative – Any platform you advertise on, you must test the creative. I’ll use Facebook ads as an example. If you’re advertising a product on Facebook, I’d personally create around 10 different creatives that have 5 separate marketing angles.
Let’s say I’m selling a pen. I’d create five different advertising scenarios, that include 2 creatives each based on the angles.
This is how my planning would look like when testing creatives.
Angle 1 – Woman writing with the pen.
Angle 2 – Man writing with the pen.
Angle 3 – Boy writing with the pen.
Angle 4 – Girl writing with the pen.
Angle 5 – Pen alone.
From each of these marketing angles, I would now create two different videos or images for each. I’d then run the test on Facebook for around three days and see which angle is profitable.
If I find that when a woman is writing with my pen is the most rewarding, I can then split it down further. For instance, I can change the model, the environment, camera angles, to narrow the testing even more.
This takes time to get right and a lot of money in some cases. A massive upside of doing this is that the more you test, the more you’ll start to understand your audience and how they react to certain advertisements.
This makes future ad-copies much easier and more profitable straight of the bat.
Testing website – When I mean you need to test everything, I really mean everything. Once you’ve narrowed down your product, ad copy and target audience. You can now move onto your website.
From personal experiences, I’ve seen an increase in conversions by simply changing the color of my “buy it now” button. Something so simple that was losing me potential customers and I wouldn’t of even notice if I didn’t test.
As you can see, there is a selection of important components to building a successful Shopify store. If you’re wanting to get into eCommerce, there has never been a better opportunity than now.
It may seem like a lot of work to begin with. However, the skills you’ll be learning by setting up your own store can be greatly beneficial.
Are Shopify Stores Profitable in 2021?
Shopify can be a great opportunity to break into e-commerce with a profit! With the variety of options available, you’ll do doubt find a way to make your online business profitable.
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