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Category: E-commerce

Not Killing A Dying Product In E-Commerce

When scaling a dropshipping Facebook campaign, you will feel at some point that despite all your optimizations, your cost per purchase is now more than what you can afford to pay to run your ads profitably.

Most people at this point believe that the product has saturated. That the product has already been sold, profitably, to most potential buyers and reaching out more potential buyers will not happen profitably.

I believe that more than product saturation, the cause of higher CPP and decline in sales is ad fatigue. Hence, my first course of action in this situation is to create and try more creatives.

Before the buyer has received the product, the product is only as good as it’s creative. Hence changing creative can reduce some of the ad fatigue and may revive the life of your product. It’s not often product saturation, it’s the creative saturation.

The second course of section, after the first one stops working, is to scale down the campaigns and ad-sets. You might want to see what will happen if you consumed lesser budget, and hence lost more bids. By losing more bids, you can have a winning campaign.

Once the scale down stops working too, and you’re sure it’s time to kill your dying product, you can consider moving to manual bids with accelerated delivery.

You can set the maximum amount you’re willing to pay per purchase. If Facebook is unable to get you a sale under that price, no budget will be spent. By enabling accelerated delivery, you’re asking Facebook to spend your budget ASAP as long as it can do so by maintaining the manual bid. This ensures that as soon as there are cheap bids available in the auction, you want to spend all your budget to get them.

If you’re unable to spend any budget at all on manual bids either, you might consider killing your dying product.

I’m interested to know if there are other, smarter ways to delay the death of a dying product. Please let me know in the comments.

The 1/2 Rule For E-Commerce Metrics

Although there’s no standard for e-commerce metrics, you should still aim to hit certain floors for your metrics in order for you to have a working funnel. I call this a 1/2 rule.

When a user lands on your product page, you need to track the progress between the different steps he needs to go through. A large or unexpected drop at any step should make you want to investigate that particular step of the funnel.

After landing on the product page or landing page, the user may have to add the product to cart. After adding the product to cart, user would land on the cart page. At this point, user would need to initiate check-out to land on the check out page. The user then needs to input his shipping and billing info in order to place the order.

While what percentage of users reach on each of these pages will largely vary depending on the type of products, price of products and the source of traffic, for typical dropshipping stores selling products between $20-$100 I recommend to at least watch out for the 1/2 rule.

The 1/2 rule suggests that if 20 people added the product to cart, at least 1/2 of them should initiate check-out which should lead 10 users to the check out page. And if 10 made it to the check-out page, at least 1/2 of them should purchase giving you 5 purchases in the end.

Landing page optimization is very important and I recommend that you use heatmaps to optimize your funnels. If you get your advertising, creatives and product selection right, but there’s a problem with your landing page, cart page or check out page, you’ll end up wasting all your efforts.

After all a chain is only as strong as it’s weakest link.

The Fast Moving World of Digital Marketing

As I mentioned earlier on this blog, our first e-commerce store was launched in 2016. Our primary customer acquisition strategy since then has been through Facebook ads.

While I had run Facebook ads a long time before, it wasn’t until 2016 that I spent a major budget. Since then, almost everything about the ads has changed. Many new strategies have been introduced and a lot of strategies that I learnt in 2016 are irrelevant.

Case in point, tech moves really really fast. Digital marketing moves even faster. And I’m curious what value could business schools add in your marketing career in this day and age.

It’s likely that my perspective is limited too, since I’ve never been to a business school. But help me understand, do business schools, including international, teach anything about this kind of marketing? If they do, how do the teachings stay relevant since the minimum length of a masters business degree is 1 year. Let’s not even talk about the bachelors degree here. In my opinion 1 year is a long enough time in digital marketing to unlearn everything and learn new things.

In my 15 years of career as digital marketer, I’ve changed my job roles 15 times. If I hadn’t, I would have found myself with no work. My primary source of revenue came from selling ads and our publishing company Socialoholic mastered that area. Only a few years later, we found ourselves buying ads instead. Now all of our revenue comes from buying ads.

In digital marketing, if you’re not pivoting every few months or even weeks, you’re being left behind.

So if you’re looking for a marketing school, let me tell you one. It’s where I went to. It’s called YouTube. The course length varies from 4 days to 4 weeks. And after that, you can get shit done.

Mudding of Pixel Data

I saw strange metrics on my Facebook ad account today. The ‘add to carts’ in pixel were twice as much as the ‘add to carts’ tracked by Shopify and Google Analytics.

This had me concerned because I thought something is wrong with my landing page. My first intuition was half of the users are somehow trying to add to cart, the pixel is getting fired, but they are unable to open the cart page in a proper manner.

On further digging in, store, landing page and cart page seemed intact. The problem was that ‘add to cart’ event was getting fired twice; once on the click of a button, and once on the cart page which was being caused by a buggy app.

This was mudding our pixel data as we were reporting twice the amount of add to carts to Facebook than originally initiated.

When you take a long time off from work, it takes bit of silly mistakes like these to get back to work!

Protecting Your Ad Campaigns From Yourself

Lately, I’m writing only about Facebook ads & e-commerce. That’s because since 1st January, we’re busy with the launch of our new store. We took a big part of 2019 off and planned to do some work from 1st January 2020. It has consumed us so far. But today is a good day because today we made it profitable.

In 12 hours, we have done $415 in sales. We’re projecting to close the day at $700.

Our ad spend for today is $154.81 which is about 37% of our gross sales. The net-margins are low right now but since we’re just getting started and the pixel is developing, we’ll see improvements with conversion rates over time. We also haven’t introduced any kind of lookalikes at this point in time.

These aren’t our desired results. We have to make up for the losses incurred with ads in the first 15 days. We need to optimize the ads after removing whatever segments aren’t converting to bring the costs down. We also then need to scale this campaign. If everything goes right, we should be able to do that in the next 7 days.

The reason why I’m not touching the ads right now despite that there’s room for improvement is because campaigns take time to optimize. Many people suggest not to touch your campaigns for 24 hours after you make them. While this could work if your campaign is completely off, I generally suggest 48 hours if there’s some sign of success. And so I’m going to let these go on for at least 48 hours and will not modify them.

After 48 hours, I’ll decide how to modify them by looking at breakdown data.

So if you want your campaigns to work, you need to protect them from yourself. Stay away for 48 hours, be patient. The cash might burn and it is going to hurt you, but the profit lies after that.

What to Realistically Expect From Your Drop Shipping Business

If you’ve read this blog before, you may have read some of the content that I’ve already written on dropshipping thus far. While e-commerce and dropshipping are very profitable in general, they are not as simple as most people market them to be.

I wanted to share my experiences with dropshipping so far to give you a more realistic overview of the journey, instead of the flashy end-result that you often see.

We launched our first store in Sept 2016. Our first sale happened in the first week. But it wasn’t until Feb 2017 that we were profitable. So it took us 5 months, 68 unique products in testing, and $10,000 in ad-spend before we figured out how this was going to work.

We targeted primarily english-native markets hence the competition was higher. It was also our first attempt with sales of any kind so we were inexperienced. But collectively we had over 10+ years of experience of running various internet businesses mostly related to content. So we weren’t completely inexperienced either.

From Feb 2017 till May 2017, we had achieved the flashy status that you often hear about. The margins were 40% initially but after scaling, came down to be about 23%.

Since then we’ve launched many stores targeting many different industries but drop shipping as a whole has gotten way more tougher. This is due to the obvious: more competition, higher ad costs, and lesser margins.

But it’s also because that in addition to ads getting more expensive, Facebook ads machine learning has gotten more advanced too. What it means is many marketers are now able to achieve results with little to no targeting options. Many times strategies have gotten as simple as running a broad ad with no targeting.

Since there’s lesser room available to outperform your competition with ad strategies, the competition now lies in creatives and product hunting. If you’re able to create better video ads than your competition, you stand a much higher chance of winning.

Over all, in the next few years, it’s going to be best product/creative takes all kind of game. Facebook ads are going to dumb down to just budgets and optimization goals.

What I’ve written above is related to my e-commerce experience in international and primarily english-speaking markets. Others may have had better or worse performances. In addition, e-commerce in developing and under-developed countries including Pakistan, has much lower competition and related ad-costs.

In summary, Pakistan is a much more potent market for early-stage entrepreneurs for e-commerce. We choose to work in global markets for a bigger scale although it comes with much larger set of challenges.

Chinese Are Eating The World

Everyone knows it. You may have already read other variants of this article. A different angle through a different lens. May be in terms of One Belt One Road initiative. But I’m only interested in how they are doing that in tech, and most specifically in the e-commerce industry.

When we first got into dropshipping, there were nearly no Chinese in the industry. They were mostly just suppliers of the goods. Dropshipping in essence began with AliExpress. Chinese would just host products there and fulfil on behalf of other dropshippers.

In the following year, Chinese learnt that they are being duped. For every $5 they get in gross sales, the dropshipper gets $20 in gross sales. The first change we saw happen was the prices went up at least 100% on AliExpress. They needed an equal share in the dropshipping business.

By following year, many new dropshipping stores popped up that have now become some of the largest in the world. Chinese didn’t just want to fulfil orders, they mastered the business end to end. From advertising and sales to fulfilment. They replaced most dropshippers.

A similar trend can be seen on Amazon FBA as well where most new and top sellers are based out of China.

Two Months Streak – Gamification of Your Business & Life

Today, I’ve completed 2 months of writing this blog at least once everyday. A few days ago, I spoke to my friend in a vlog about game mechanics. We spoke of one of the game mechanics that I introduced in my life called streaks. Today, I wanted to talk a lot more about game mechanics.

Games Are Awesome

Games are very very interesting in psychological terms. They are interesting because they don’t (directly) solve any problems like email or Uber does. Despite not solving any problems, game developers retain the users. And they can only do that because they hack human psychology. Because games work in this particular manner, it means game developers must have learnt a great deal from psychology and sociology research.

I Never Played Games

I haven’t really played a lot of games. Then how did I end up studying games? I did that because I read on “gamification” which is the science of taking game mechanics from the games and implementing them in your websites, apps, businesses and even your life. And so instead of reading psychology, I simply studied games as I found it to be an easier hands-on case-study of implementing human psychology for user retention and other reasons.

Why Game Mechanics

As already spoken in a post I made earlier, user retention is often much cheaper than user acquisition. So the startups are always trying to learn new ways to retain existing customers. And there’s no better way to do it than gamification of your startup.

What Can You Do With Game Mechanics

There are many many types of game mechanics. We’ve already spoken of streaks and I’ve first hand seen benefit of implementing it in my life, time and again.

Other types of game mechanics could be points, achievements/badges, leaderboard, etc. Have you noticed Careem gives you both points and a gold status badge, if you use it repeatedly. It’s done to retain you as a user.

Another type of game mechanics is to make user feel like he’s the chosen one. The chosen one feels he was born to carry out the task given to him by the business or the app. When you receive marketing material stating that you’re chosen for something, they are basically just trying to hack your brain.

Users are also driven by sense of accomplishment and progress. A lot of apps try to integrate progress into the app usage to make users feel like they are in process of solving great challenges. This makes users feel accomplished.

Another kind of gamification is creating impatience. It sounds insane when I think about it, but revoking access to a certain feature for certain amount of time and only enabling it after a certain time has passed has a positive affect on user retention. The user craves the feature despite not even wanting it otherwise. This is creating unessential impatience.

And my favorite, scarcity. Almost everyone in e-commerce uses this. Because the stock is obviously always running out and there are only 4 pieces left that would probably go away in 8 minutes and 7 seconds. The fear of missing out is triggered and you make an impulse buy.

There are many many more types of game mechanics and I’d actually like to learn some more from you in the comments below.

Facebook’s Super Lookalike Audiences Using Top Percentile

Super lookalikes isn’t officially a type of audience by Facebook. It’s just a term used by performance marketers to describe lookalikes made using top percentiles of the audience.

This kind of custom and lookalike audience is generally not publicly made available by Facebook but it’s kind of a hidden gem. If you don’t know about lookalike audiences, please check this out. And if you do, read ahead.

This is where you generally create or find your custom and lookalike audiences

But super lookalike audiences are created here.

Using the percentile option under activity in analytics section

You can create a filter to reflect the top percentile of your readers or buyers and save as custom audience

You can then use this custom audience to create lookalikes using the standard way. I call these super lookalikes.

Because results for super lookalikes speak for themselves.

The Secret E-Commerce ‘Hot Sauce’ That No One Talks About

When I started blogging and later ventured into internet marketing, things were a lot different than they are today. During 2009 and 2010, 93% of my traffic came from Windows and Mac. Only 1% traffic came from iOS and Android. This meant, I largely ignored how mobile users viewed my sites and only focused on desktop.

Mobile Evolution

Over the past 10 years, I’ve seen mobile traffic go from under 10% to over 90%, and that brought quite a lot of challenges for me. While mobile has certainly increased the potential audience by manyfold, the responsibility now lies on the website founders to serve content in a way that works perfectly across the large variety of screen sizes, OS, browsers etc.

For content websites, the estate for ads just squeezed into nothing. We couldn’t serve the same quantity of ads anymore. But I’m not gonna talk more about that right now.

For e-commerce which we only ventured into in 2016, mobile had already taken over by the time we started it, bringing its challenges with it.

E-Commerce Struggle

Early in our cycle, we identified what we believed was a winning product and we created a large set of ad sets which we also believed would give us a winning campaign. Despite that, we had a low conversion rate and while we made sales, we struggled to make a profit.

We were sure the product would work, we had data to believe in it. We saw others grilling and scaling it. As for ad campaigns, we had spent enough on Facebook before (outside of e-commerce) to be sure that what we were doing with ads was also not a problem. Which brought us to our final conclusion, that it was the landing page that was the problem.

Often I see, people working really hard but focusing on the wrong things or fixing what isn’t broken. I bring this up, because a lot of people just change their products or ad strategies without thinking about other possibilities.

Landing Page Struggles & Heatmaps

Back to our problem; we couldn’t think that our landing page could be problematic because our store was powered by Shopify. We expected the store and theme to be optimized to work in a perfect manner. But mobile can be tricky and so we introduced heat-maps and video recordings to see exactly how users interacted with our landing pages.

We used a tool named Hotjar, but you could use anyone you like.

I’m not going to go into details of the wide range of things you can do with heatmaps, but personally I focused on scroll heatmaps the most. While it’s a natural behavior for the loss of audience from top to bottom, if the colors change abruptly or sharply, it means a significant number of users left the page there. This can mean, among other things, that user is either not interested in content below that point, or is unaware that the page has more content to offer.

This can be solved by either removing an element at the point of abrupt exit, or introducing new elements that convey to the user that there’s more content available below. After making certain changes, I saw the conversion go up, but not enough to be excited about it.

Video Recordings

The next logical step for me was to watch thousands of video recordings of users interacting with our store. And so I did that.

The reason why I started this blog post with emphasis on mobile was because after watching hundreds of videos, I saw how different the user interaction was for different devices having different screen res, OS, browsers, in-app browsers (such as site loading inside Facebook) and how many changes were needed for everything to be in harmony across the board.

Conclusion & Further Reading

After making those changes to the theme and landing page, we were able to bump our conversion by 120% and so the secret ‘hot sauce’ of e-com, at least for me, is the heatmap and landing page optimization.

I’ve previously written three posts about our dropshipping experience explaining what dropshipping is, how we scaled it, and how we grew it by 837%.