May 6, 2014

3 Reasons My New Online Store Has Been So Profitable

Filed under: Uncategorized — Meredith @ 8:58 am

moolah
Back in March I talked about the fact that I launched a second online store selling apparel that isn’t really my taste. I got a mix of reactions from “you go girl” to “how can you live with yourself.” With my bills paid, that’s how I live with myself, in case you were wondering. To be clear here, I’m selling products featuring designs I find boring, not putting melamine in baby formula. I’m pretty sure this ranks on the crimes against humanity scale pretty far below even littering.

My second online store continues to be very profitable with almost no work on my part. All I’ve done is list a ton of products available for sale and optimized them for keyword searches. I have spent zero time, effort or money on marketing, and my second shop has been consistently selling thousands of dollars worth of product every month. If you’re curious as to WHY this has been the case, let me explain:

1. The Long Tail = Big Sales
When you’re designing for a specific brand aesthetic you are naturally going to have a more narrowly focused catalog. This means your products are only going to appeal to a small subset of potential customers. If you have 20 amazing designs for sale that are all a perfect fit for the vision of your brand, that’s great, but it also means you only have 20 tickets to the lottery that is online sales.

On the other hand, if you aren’t concerned with a specific brand aesthetic and you just want to sell a ton of product you can design products that appeal to everyone. Instead of having 20 cohesive awesome designs that appeal to a narrow subset, you can have have 2,000 designs that are all going to appeal to someone. If you sell 20% of your online catalog in any given month, the catalog with 20 designs is going to get 4 orders per month. The catalog with 2,000 designs is going to get 400 orders per month. Even if the smaller catalog had a much better conversion rate than the larger catalog, that conversion rate would have to be gargantuan compared to the larger catalog’s conversion rate to compete in terms of profitability.

2. Embracing the concept of designing purely for profit opens up a lot of options
With my first online store, I was creating a brand (and this is still the case, my first online store is still around and also still profitable). The difference between the two is that when it comes to my first online store, I was really concerned with the brand aesthetic. I think about what products or designs do and don’t fit with the vision for the brand image and that dictates what I do with that brand.

This limitation means I can’t experiment with any and every trend that comes along without damaging my brand. What’s worse, if the tight cohesive brand I built and felt so proud of isn’t on trend this season, then my wholesale business dries up and I’m stuck relying on our hard core fans for the bulk of our sales. These issues were limiting our income.

With the new online store, I do not care about the brand. I don’t care what the collection looks like, I don’t have one specific target market. All I care about is sales volume. This means I’m free to jump on any trend. I’m free to throw everything at the wall and see what sticks. This all translates to a huge boost in income. My second online store is like a science lab and I can test anything and everything there and see what works.

3. Analytics, analytics, analytics!
When you’re not worried about building a brand that reflects your personal taste, you can really dive into metric data that helps you figure out what to sell. Tools like Adwords and Etsyology.net are great research tools. You can see what’s selling, you can see what keywords people search. You can even go onto the websites of big box retailers and sort their products by best sellers and see what kinds of products are selling for them.

You can compile this kind of information and make a to-do list for yourself. If you notice that unicorns are hot right now, you don’t need to care that you don’t like unicorns. If you’re working strictly from analytic data you can put unicorn designs on your to-do list. If typography isn’t your personal taste but you notice typographic designs are selling well you can start in on that kind of design and make money from it.

I realize a lot of what I’ve said here smacks against what you have probably been told about being a creative professional. We’ve been told for so long that authenticity and putting yourself into your work is paramount to success. That all sounds very romantic, but it’s simply not the only path to profit and sometimes it’s what keeps you from making as much money as possible.

I’m on track to more than double my sales this year and I have no regrets. This approach is certainly embraced by larger companies or you wouldn’t have well-known conservative Rupert Murdoch (head of Fox), at the helm of a business that owns both Fox News and FX Networks and Fox Searchlight. If Murdoch can soak up right wing bucks with Fox News and, let’s face it, plenty of urban dwelling, left leaning, hipster dollars on properties like It’s Always Sunny in Philadelphia and films like 500 Days of Summer, then there’s no reason smaller businesses can’t take this same approach to making money. Like Wu Tang Financial advises, you need to diversify.

If you’re making all the money you could ever want to make on a brand that reflects your personal taste, good for you. If you’re not, don’t be afraid to launch a second brand that captures a customer base you’re currently missing out on.

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