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How to Increase Profits on Shopify
Last modified: December 4, 2023
Profits are an important metric by which the success of your business must be measured. If your business on Shopify is not making a profit, then you’re going to do be earning a living and a cost is just an expensive hobby. While you’re not expected to earn a profit for the first year, you can set in motion some of the key aspects that can help you increase profits on your Shopify store.
Here are some of the key ways that you can increase profits on Shopify. Not all of these options involve your getting more traffic, either (though a couple do). Some of the options are about maximizing the potential of your business through conversion improvement and cost-saving. So what are the best ways to increase profits on Shopify?
1. Build Traffic
The first is the most obvious, but can be one of the hardest to achieve. That is to increase traffic to your website. This can be done in several ways. The most cost-effective option is to improve the SEO of your website. Free, organic search traffic should represent about 70% of your traffic.
Social media is another option. Many influencers find great success in running their brands using Instagram and other highly visual social media platforms. Building traffic is a long term operation. Changes to your SEO, even when using one of the best SEO apps, can take months to yield results.
2. Conversion Optimization
Conversion optimization is one of the top ways to grow sales on a website. There are lots of ways that you can convert more visitors to your website, like changing the add-to-cart button color or text. Or you could improve product descriptions, change product photos, add product videos and more.
While conversion optimization does increase revenue, it doesn’t always increase revenue. If you’re making a loss on every sale, getting more sales is not going to be the solution you’re looking for.
3. Reduce Costs
Reducing costs is one of the top reasons why profits are often limited. You will want to find costs that aren’t necessary for your business and then reduce them. This could be reducing your app subscription, like using one app instead of several (i.e. Vitals), or it could be ordering more products in bulk. You might need to negotiate with landlords or suppliers as well to get better deals for your business.
4. Cross-Selling and Upselling
Another option is to cross-sell and upsell on your product pages. Using impulsive buys can be a great way to add more revenue and profit to an order. For instance, sell a complementary product to the one that is within the basket of your customer.
Upselling can also be a good way to grow the profit of an order.
5. Abandoned Cart
Finally, you can retarget those who’ve already placed something into their cart and then left your store. Up to 80% of carts can be abandoned on any given store, and you can reclaim about 20% of them. While this might not seem a lot, it can result in a 90% increase in revenues in some cases.
Advanced Strategies for Increasing Shopify Profits
Optimizing for Mobile Users
Ensure your Shopify store is fully optimized for mobile users, enhancing the shopping experience and potentially increasing sales. Optimize images, leverage browser caching, and minimize redirects to enhance page load speed on mobile.
Implementing Effective Email Marketing
Segment your email list based on customer behavior, preferences, and purchase history to send more relevant emails. Use automated email campaigns for cart abandonment, welcome emails, and post-purchase follow-ups.
Leveraging Social Proof
Display customer reviews prominently on product pages and throughout your store to provide real-life testimonials of your products. Encourage customers to leave reviews after their purchase through follow-up emails or incentives.
Increasing Profits on Shopify Through Multichannel Selling
Integrating with Multiple Sales Channels
Integrate your Shopify store with marketplaces like Amazon, eBay, and Etsy to reach a wider audience. Utilize social media platforms like Facebook and Instagram for selling your products directly through social commerce features.
Managing Inventory Across Channels
Use tools that help in managing inventory across different channels to avoid stock discrepancies and overselling. Ensure that your brand messaging and customer experience are consistent across all sales channels.
Leveraging Emerging Marketplaces
Beyond the major platforms like Amazon and eBay, consider niche marketplaces that cater to specific interests or industries. These platforms can offer a targeted audience that aligns closely with your product offerings.
Conclusion: How to Increase Profits on Shopify
There are many ways that you can increase profits on Shopify. Some of the top options are listed above and will result in your store earning you a better income for you and your family.
What metrics should I track to monitor the profitability of my Shopify store?
Tracking key performance indicators (KPIs) like customer lifetime value, average order value, and profit margins is crucial for understanding the financial health of your business.
How can I effectively manage inventory to balance profitability and customer satisfaction on Shopify?
Inventory management is a delicate balance. Learn about inventory turnover rates, demand forecasting, and safety stock levels to avoid overstocking or understocking and maximize profits.
What are some customer retention strategies that can contribute to long-term profitability on Shopify?
Customer retention is often more cost-effective than acquiring new customers. Explore strategies such as loyalty programs, personalized recommendations, and excellent customer support.