If you want to take your handmade business to the next level and make a full time income in 2020, then keep reading this post because I'm going to share with you 5 different ways, with a lot of examples for how to double or triple your income from selling your products online.
Hey, my name is Mei and I help makers, artists and designers make a consistent income from selling their handmade products online.
1. Diversify Your Income
When you're first starting out, most likely you have one source of income for your business.
As the years pass and you start to grow your business, you should introduce different streams of income.
Being in business for yourself is like a roller coaster. There are ups and downs, busy seasons and slow seasons.
For most of us, our slow seasons are in the summertime and sales pick up and start to get really busy over the fourth quarter.
For some of us, we can even make as many sales from just the fourth quarter as you would make from the entire first 3 quarters of the year.
It's really unstable and inconsistent.
I know one of the biggest concerns, fears, and frustration is not knowing when your next sale is going to come in.
To help with all of that, you need to diversify.
If you're making sales from live events such as craft shows, farmers markets, or pop up events, that's one source of income.
Then there's online sales that you make selling your products through your website. I usually call those online retail sales because you're selling directly to your customer.
Then if you're not doing this yet, you should definitely start venturing into selling your products wholesale to brick and mortar stores. Brick and mortar stores sometimes have a different busy shopping cycle than we do.
I've found over the summer, online sales for me start to slow down because people are on summer break and vacation, which means they're more likely going into town and doing their shopping at brick-and-mortar stores.
I usually see a spike in wholesale sales around the summer to compensate for this change in behavior.
Online sales are slow in the summer, but wholesale starts to pick up.
That's how you build consistency for yourself. Don't put all your eggs in one basket.
Start establishing income streams elsewhere.
Using Online Marketplaces
I also recommend for you to start setting up your shops and products on online marketplace sites like Etsy and Amazon.
Now, if you've watched my videos, you know my stand on marketplace sites. I don't believe they should ever be your main focus, but when you set them up correctly and you optimize your product listings with good keywords, they can do a really good job at bringing you some passive income sales.
A lot of that is because these marketplace sites already have built-in audiences of potential customers who are looking for very specific products.
Keep in mind that the people shopping on Amazon, Etsy, your website, at wholesale stores, at craft shows, these are all, 95%, going to be different customers.
I strongly believe in the philosophy of being in as many places as you can.
2. Paid Advertising
I do also believe that you should start getting your feet wet with doing paid advertising.
Most shop owners will benefit a lot with Facebook ads, but if you sell a product that is highly searched in the Google search engine, then you might also want to start investing in Google Adwords.
The reason I'm talking about paid ads is because when you become more established, you have consistent income coming into your business.
It's smart to use that money to make money for you.
It's just like investing in real estate or in stocks. You now have a resource other than time or energy to help you get your products and shop seen by more potential buyers.
Paid Ads are Easy to Scale
You can start small, but you can also quickly go up from there.
It's easy to control because it's based on how much you decide you want to spend on ads on a daily basis.
The more you spend (if you get your ads right) the more money you make.
It's as simple as that.
I definitely recommend that you really take the time to learn how to do it well because it's easy to do it wrong and then waste all your money.
I don't necessarily think that you should hire someone to do it for you either. Learn it for yourself first, then hire later.
What's really cool with paid ads is you can create what's called lookalike audiences.
If you've already got a customer base, you can take those people's email addresses, upload to the paid ads platform of your choice, and have that ads platform (whether it's Facebook or Google) build out a new audience of over a million people for you.
What's really cool is those people are very similar in demographics as your current customer base.
I know it's always a constant struggle to find where your customers are and get your products seen by them. This is an amazing shortcut that becomes available to you once you've already done some of that initial hard work of getting those first few hundreds of customers yourself.
It's basically taking what you've got and then amplifying it to a really large scale.
Remember, that doesn't mean you're immediately going to get seen by a million people. You control it based on how much money you spend on ads on a daily basis.
I still have a few other suggestions for you. These other tips are going to be mostly focused on your online website. We've talked a little bit about selling wholesale, Amazon, and Etsy, but these next few tips are going to be specifically about your own platform.
3. Increasing Your Average Order Value (AOV)
Every shop has an AOV.
For example, at my jewelry shop, Tiny Hands, I sell $23-$28 necklaces. The minimum purchase is people buying just 1 necklace, but there's also a lot of people who buy 2 or 3 necklaces.
Then there is an even smaller percentage of people who buy 4 to 6 necklaces. Or they're buying fewer products, but it's products that are more expensive like my charm bracelets or earrings, which are around $50 to over $100+.
So even though my necklaces are around the $20 price range, my AOV is around $50.
It's the average order amount taken across all your previous orders.
One way to double or triple your sales is to increase that amount.
You don't have to make a huge increase or improvement in what you're already doing. Even just a small increase in your AOV is going to help you increase your entire annual income by a lot.
To give you an example: say my AOV is $50 and I make 200 orders every month. That's a total monthly sales of $10,000.
If I can increase my AOV by just $10 from $50 to $60, you take $60 x 200 sales. My number of sales didn't change, so I'm not doing anything differently in terms of the marketing I'm doing to attract more customers, that stays the same. That $10 increase in my AOV makes me $12,000 from $10,000.
I'm making an additional $2,000 a month, or $24,000 a year just from that $10 increase.
Creating a Complementary Product Line
So a few ways that you can do this is by creating new complementary product lines that make sense to go with your main collection.
Let's say you sell paper planners for around $40 each. You could start selling accessories for those planners, like stickers, different planner pages, other stationery like pens, poster, or desk accessories.
There's a lot of ways you can branch out your product line.
Now, that's not to say that you should just start selling everything, but it has to make sense for your shop and it has to complement what people are already buying.
Deals & Sales
Or, instead of introducing new products, let's say you sell tea. You could have a deal where if a customer buys two packs of tea, they get the third one for half off.
Even little things like that can help encourage people to spend a little bit more.
Every effort counts, because remember, a little bit of an increase adds a lot to your bottom line.
Another easy way to increase your AOV is to offer free shipping at a certain order amount.
Because you're on your own platform and not on Etsy, you can set that order amount to be anything.
A good amount to set is about 15% to 20% more than your current AOV.
If people are regularly buying $50 worth of products in your shop, then your order amount to qualify for free shipping should be 15% to 20% more than $50, which is about $60.
4. Increase Your Customer Lifetime Value (CLV)
When someone buys from you for the first time, if you make a good product and give good service, it's very likely that person will come back to shop in the future.
It could be 1 month later, 6 months later, maybe a whole year later.
The CLV is an order amount that someone has spent with you over their lifetime of being your customer.
There comes a time when they naturally move on and away from your business.
I've had some customers who've stayed with me for three years, while some just buy once and that's it.
How Do You Increase Your Customer Lifetime Value?
In other words, how do you get people to come back and buy from you again?
You want them to become repeat customers.
The two best ways to do this is with email autoresponders and paid retargeting ads.
With email autoresponders, you can set it up so that after someone becomes a first time customer, if they haven't bought anything in the next 60 days, it triggers an automated series of emails to send to them with the purpose to get them to buy again.
Your emails could talk about:
- New Products
- Highlights of Bestselling Products
- Time Sensitive Coupon Codes
With paid ads, you can take that same concept I just talked about, but instead of doing it over email, you can put that into a Facebook ad.
Those ads would show to people who've purchased from you in the last 60 days. You'll show them a sequence of ads that encourage them to buy again.
5. Increase Your Conversion Rate
Like AOV and CLV, every shop has different conversion rates.
What this is, is the percent of how many people who visit your shop, turn into actual buyers.
If you have 100 people coming to your shop one day, and 1 person buys, you have a 1% conversion rate. If 2 people buy, then you have a 2% conversion rate.
For this, just like Average Order Value (AOV), you only need to shoot for improving your conversion rate by a little bit, and it'll make a huge impact on your sales.
When it comes to conversion rate, it's all about the shopping experience that your visitors have on your site.
Ask your friends to go through using your website and watch how they interact with it.
Is something confusing for them?
Is something distracting?
Your site design plays a huge part in that user experience.
The good news is you can control a lot of that by:
- changing the colors of certain elements on your website
- making your add to cart button a very different color from the rest of your site
- changing the position of certain elements
- making sure that important stuff is always above the fold
Above the fold means you don't have to scroll to see that information. If you hide important information below the fold (meaning people have to scroll to find that info) a large percentage of people won't scroll and so they won't see that stuff.
That's why I always say to put your add to cart button as high up as possible on the page. This could mean making your logo at the top of your website smaller and removing any unnecessary white space.
Clean things up, make things look neat and organized, easy on the eyes, and with the right design, you can actually control and guide the experience you want your customers to have when they're on your website.
Your site speed also plays a big role in your conversion rate.
These days people have the attention span of goldfish. They get distracted really easily.
If they have to wait for even a half-second longer than they need to, there's a chance they'll bounce and leave your site.
I know I've given you a lot to think about!
I think it's totally possible to take your business full time in 2020. You just need to know how and you're already taking that first step of reading this post and learning how.