3 Strategies To Increase Profits For Your Drop Shipping Business

Here’s the truth…
…You cannot increase profits directly, only indirectly.
In other words—
You cannot just say that you are going to increase profits in your business without some specific strategy.
Here’s the simple secret to increase your profits.
And it’s important so let it sink in…

The only thing that you can do to increase profits is to improve the variables that ultimately determine your level of profitability.

When you improve these 3 variables outlined below you will increase profits and affect your bottom line.

1. Number of Transactions
2. Size of Transactions
3. Conversion Rate

Customer Acquisition Cost: The amount of money it takes for you to acquire one customer on average.

Your Profit Variables: The only way to increase profits is to increase revenue and/or decrease costs.

Your Revenue: The payment received from the customer’s order.

Your Costs: The amount spent for product ads, ordered items and it’s shipment.

Your Profit: The amount gained after total costs are deducted from total revenue.

3 BIG IDEAS TO INCREASE REVENUE IN YOUR DROP SHIPPING BUSINESS

Increase # of Transactions

The number of individual sales that you make to each customer that you acquire.

By increasing the frequency of purchase by ten percent, you increase your sales and increase profits by the same percentage.

ACTION: What are some things that you could do to get your customers to buy more from you and to buy more frequently?

 

Identify your existing natural customer contact points.

What can you do to entice the customer to make repeat purchases?

• Offer Coupons
• Free + Shipping Offer
• Loyalty Program
• Reward Program (You’re so close to your first customer bonus. One more purchase should put you over the top. Here’s a coupon to help you out.)
• Limited Time Discounts
• Offer Bundles
• Offer Subscription Of That Or Similar Products (if applicable)
• See if you can think of some other ideas

Create new contact points and opportunities.

1. Email your customer list.
   • Make sure you segment your list, especially if you have a General Store.
   • Email coupons, new products, similar products, seasonal/holiday specials, customer satisfaction follow-ups, surveys
2. Retarget Your Current Customers
   • Don’t just use retargeting for abandoned cart. Use retargeting ads to create another contact point.
   • Most ad platforms will now let you upload a customer list of emails or you can use your conversion list to create a custom audience.
3. What other contact points can you create?
   • Blog Subscribers, Social Media Updates, Facebook Messenger

Increase Size of Transactions

The size of the sale and the profit that you earn from each.

You should be continually looking for ways to up-sell each customer so that he or she buys more each time.

ACTION: What are some things that you could do to get your customers to buy more from you and to buy more frequently?

Identify your existing natural customer contact points.

What can you do to entice the customer to make repeat purchases?

1. Product Page
   • Bundle products
   • Discounts for adding more than one order
   • Offer many different variations
   • Offer related items
   • Offer discounts for reaching certain order amount
   • Bump Offers
2. Add To Cart
   • Same as above
3. Check Out Page
   • Same as above
4. Thank You Page
   • Offer time sensitive coupon (Falls under number of Transactions)
   • 1-Click Upsells

Improve Conversion Rate

The process by which you convert leads into paying customers.

This is the measure of the effectiveness of your sales efforts.

If you can increase your conversion rate from one out of ten to two out of ten, you can double your sales and increase profits.

Improving your ability to sell and convert interested prospects into paying customers is one of the most important things you can do.

Look at every key result area in your sales process and seek ways to improve a little bit in each area.

A small improvement in each key area can lead to an enormous improvement in overall sales results.

ACTION: Do you have reports in place to measure and track the effectiveness of each step in your sales process?

SHOPIFY APPS THAT HELP

Note: The links below may promote products where we may receive a commission for referrals.

Upsell Apps (increase size of transactions)

• Smar7 Apps - https://smar7apps.com/

Post Purchase Apps (increase number of transactions)

• Profit Pal - Adrian Morrison
• One Click Upsell - Ezra Firestone

Other Apps and Tricks

• Trust - Secure, money back guarantee
• Integrate homepage with Instagram - Shopify Developer
• Cart Abandonment - Klayvio (Finish purchase, 1 day later - 15% off, 2 days later - 20% off)
• Notify App - shows recent sales to customers