There is a myth that you need to grow your following and do more marketing in order to make more sales. In today’s post, I’m going to show you how to make more money in your handmade business, without doing more marketing!
Hi, my name is Mei Pak and I help makers, artists and designers make a living from selling their handmade products online.
Your profit is all the sales minus the costs of running your business.
I know from my experience working with small business owners and running a few of my own, it's really easy to get fixated on doing more and more marketing.
I just need more customers. I just need a larger following and then I'll make more sales.
But today I'm going to show you that that's not the only way to make more sales. You can actually work with what you already have in place and get a higher amount of profit for it.
I know setting up another social media account or sending more emails, all that stuff can be exhausting. So let’s go through the 8 tips.
1. Increase Your Conversion Rates
The first, biggest thing that you can do to increase your sales and make more money without doing more marketing is to increase your conversion rates.
What are conversion rates? Let's say 100 people come to your website, and one of them makes a purchase, your website has a 1% conversion rate.
You can measure these conversion rates over everything. So you can look at what kind of conversion rate you get from social media or what kind of conversion rate your emails have.
And because of technology, it's getting easier and easier to track these. Back in the day, you had to be a pro at statistics to analyze all of this data.
Now we have Google analytics. We have all of the different Shopify statistics, your email provider gives you your click through rates. It's really just an issue of looking at your numbers to see what percentage are converting and how you can increase this percentage.
Increasing your conversion rates is such a low hanging fruit so it’s really important to work on this sooner rather than later because you could be leaving money on the table right now.
In the website example I gave you, let's say you make some changes and now you have two people make a purchase for every 100 people who visit. Okay, so you have a 2% conversion rate.
That doesn't sound like a lot, 2% still sounds small, but what you've actually done is double your conversion rate. You used to have 1% and now you have 2%. That's huge because you’ve essentially doubled your business.
You'll want to think about how your customer approaches your website or your emails or your social media from a fresh, objective perspective.
You can increase your conversion rates by changing out your product photos with ones that connect with your customer more. Maybe moving things around the website, moving which items are featured, maybe it's highlighting different things in your email newsletter that will improve your conversion rates back to your website, removing barriers in the checkout process.
If customers are having to click through too many things to get to what they want, that can discourage them from completing the purchase.
So going through how people interact with you and your shop with the goal of increasing your conversion rate to customers who are already coming to you is a really great thing to work on because even a small change can turn your business around.
2. Capitalize On What's Already Working Well
Your bestsellers are bestsellers for a reason. There’s something about them that really appeals to your ideal customers. So how can you do a spin-off of your bestsellers?
So let's say you're a candle seller and you have a scent that's just selling really well. Well, maybe you can offer it in a different size? You could do a smaller size for people who just want to sample it and they’re not ready to commit to a larger size yet. Or a bigger size for people who already love that scent and just want more.
You'll need to do a little work to identify what aspects of the best selling thing make it a bestseller, but once you've identified that rolling that out into different offerings can allow you to really capitalize on what's already working.
For me, one of my bestsellers is my waffle necklace that Amy Poehler wore in the TV show Parks and Recreation. This waffle necklace is your standard, circular waffle. And I made a spin-off design where it’s exactly the same, except the shape is a heart shape instead of a circle.
At first I felt like it was a cop-out. Like I was cheating because I wasn’t being very creative. But people love the heart shape variation and it sells well in my shop!
Subscriptions are another great way to take advantage of what's selling well and keep it going on a recurring basis, and I have a video that talks just about subscription products and how to start one.
How can you make the average order amount larger? Your average order amount, or AOV, is how much people buy from you in one order, on average.
For me, people usually buy 2-3 necklaces in one order. Of course, we have some outliers who buy just 1 necklace, and some others who buy 5-7 necklaces. But the average is, 2-3 necklaces, which makes my average order amount to be about $40.
How can you increase that $40?
- Can bundle items together into sets?
- Can you make starter sets?
- Can you offer discounts, like a buy two get one half off?
- If there are multiple items ordered, can you include a gift box?
- Can you include a gift card?
- Can you include personalization, customization, especially after someone has ordered a certain amount. Like, free shipping after $75.
How can you make your average order slightly larger? Because when a customer has already come to you and they're already adding things to their cart, that's a great time because they're primed to buy. They're much more likely to add in more things with the right encouragement.
Thinking about that part of the purchase and coming up with ways to expand on that is another great way to increase the average order amount and make more money in your business without doing more marketing.
4. Product Prices
I’d like to encourage you to think about your product prices and maybe for items that are doing really well, it's time for a price increase.
You deserve to be compensated for the work that you're doing.
First of all, you’ll want to reference my video on product pricing because a lot of handmade business owners aren't charging really what they should be charging to make their business successful.
I've met lots of business owners who forget to include the time that goes into making a product, or they don’t mark up their products with enough profit margin.
Maybe you introduce a product two years ago and your materials costs have gone up since then, but you haven't increased the price of the product.
I think a lot of us feel timid about increasing our prices. We think we're going to lose customers, but there's a lot of research that points to that people regard higher prices as being an indicator of higher quality and they’re more likely to buy and appreciate the product more at a higher price.
It isn't necessarily that increasing your prices is going to result in you making less money overall.
Not only is it important to keep analyzing your prices, but also to make sure that you were charging the right prices to begin with.
Increasing your prices, even by a modest amount, let's say you even just want to increase your prices so that they all end in dollar amount, because that makes the prices look a little nicer on your website. That could just be a quarter or 50 cents per item. But if you tally that up over the number of sales that you're making, that can be a significant addition to your income.
I also encourage you while you're thinking about this, to think about your shipping prices, because again, with shipping prices, it's really easy to forget to be charging for the box or forget to be charging for the amount of time you spend packing. Your shipping costs should be paid for by the customer.
5. Lower Your Costs
People often forget about costs. Like I said before, profit is sales minus costs. If you can reduce the costs, then that means more profit for you. You’re making more money.
So a lot of getting your supply costs lowered can be managed by streamlining your systems and thinking about how you can increase efficiency or purchase more materials in bulk to reduce the per item cost.
For example, let's go back to talking about bestsellers. Let's say you offered 20 different kinds of candles in all these different sizes. You have all these different kinds of jars and you're buying all these different scents. If you look at your numbers and see that really two sizes are doing really well and 5 scents are doing really well, can you double down on that and just sell the bestsellers?
Now that you're only buying two sizes of jars, can you buy your jars a hundred at a time, a thousand at a time, which would then allow you a significant reduction in the price per jar cost? Buying in bulk is a way of lowering your costs.
I also mentioned systems. So let's say you’re pouring these candles, and you're doing 50 at a time in big batches instead of doing it just one by one.
Working in larger batches significantly decreases the time you spend per item, which then decreases your costs as well.
Think about ways to reduce your costs. It doesn't even have to be jars, it can be things like the stickers you order for labeling the packaging. Can you order more? These are really great ways to reduce the amount of money you're spending, which turns into increased profits.
6. Abandon Cart Emails
This is only gonna take like 15 minutes of your time. That's not a lot, and it delivers huge results. Once you set it up you can forget about it.
An abandoned cart email is when someone comes to your website, they add something to the cart and then they leave without completing their purchase. These emails will get sent to that person who almost became your customer, and it says something like, “Hey, you left this in your cart, come back and buy it”.
You don't have to feel grubby about sending these emails out.
Sometimes people just start ordering and then the dog starts barking and they leave and they just forget. You're not being intrusive.
People really just need reminding and they’re often quite grateful for it.
Abandoned cart emails really help to increase the number of sales. I mean, it's in the double digits of percentages, so it is really worth your time to go ahead and set these up and you can modify the text in any way so that it really connects with your customer and it feels good to you as well.
7. Add an Incentive to Your Email Sign Up
This takes almost no effort at all, and that is to add an incentive to your email sign up. Sign up for my email newsletter, get 10% off, get this free download, free shipping, whatever offer would resonate with your customers.
These incentives really help increase the rate in which you’re turning visitors into email subscribers. This takes so little effort. It's just putting a little extra sentence on your website or on your social media call to action.
Once you get those email subscribers, you can email them for a long time and they are going to be the ones who want to know about the latest sale you're having or the new item you're having.
They’re a very qualified type of buyer, meaning, they’re very ready and primed to buy compared to other channels of marketing. The more people that are signing up to your email list, the more fans of your work you can email whenever you feel like it, if you need a boost in sales.
Email marketing is like turning on a faucet and money flows out. So start doing this now so you don’t miss out on growing your email list at a faster rate.
8. Segment Your Email List
Segment your email list and extend some special offers to repeat customers.
Depending on the website and email provider that you're using, you can segment your email list to have subscribers who have made a purchase from you and who haven't made a purchase from you.
The people who have already made a purchase from you are your hottest customers. They already like your stuff, they're already interested.
They're the people who are most likely to make another purchase from you.
If you can send them a special offer, that's only for people who've purchased from you before, you're likely to get much higher conversion rates leading to much higher sales. This is really powerful, and it can be simple and automated as well.
These changes that I've suggested are things that have an impact over time.
If you reduce your costs or you put up abandoned cart emails or increase your conversion rates, not only will that make a difference this month, but month over month. These changes will keep making a difference and keep increasing the amount of money that you're making in your business with no additional time spent by you.