This guest post was written by Victoria Greene, a freelance writer and founder of the blog site VictoriaEcommerce. You can follow her on Twitter @vickyecommerce.
If you’re an entrepreneur looking to make the most of your new online brand, you can spend hours stressing and still see sluggish sales figures. Quite often, even the most well-intentioned ecommerce merchant can make a few mistakes and entirely miss the mark with their marketing strategy.
This is easy to do, as sites like Google and Facebook regularly change their algorithms and more often than not it’s in favor of the user experience – rather than your business. But don’t worry, this post will offer you five tips for boosting online revenue without even breaking a sweat.
Monitor The Online Chatter
Keep ahead of conversations online with social media monitoring tools. As well as setting up Google Alerts for important industry headlines, you should also identify terms to monitor on social media. Doing this will allow you to jump into interesting conversations and offer your help in the comments section.
Social media analysis tools will also tell you the major influencers in your chosen industry, as well as your audience’s preferred internet haunts. Use these insights to your advantage within your content management strategy.
For more on creating amazing content, check out this previous post.
Opt For Opt-Ins On Your Site
Your ecommerce site needs to capture leads, as well as facilitate sales. If you haven’t set up an email newsletter and email opt-in, get one set up on a site like MailChimp. The first couple of thousand subscribers are free; you will need to start paying for the service when your email list grows.
Your newsletter should present a marketing channel for your best customers. Your email subscribers should receive regular discounts and links to informative content. You can also introduce your new products and run competitions. Do all you can to look after your dedicated 1,000 fans with your email marketing.
Remember, the aim is to get more sign-ups, so use these quick tips:
- Install a pop-up to appear when your customer lands on one of your pages. Alternatively, if you want your opt-in button to be more subtle, create an animated sign-up link
- Create a button that includes a small movement or color shift every three-five seconds. This will catch the visitor’s eye without interfering with the primary task of the page
- Your signup should include a small written Call to Action to give people a reason to click. This could be an offer like free shipping over a certain spend limit or special discounts
Get More Reviews
Reviews offer customers social proof before they buy. It is really the case that the more reviews you have, the more trusted your site becomes in the eyes of consumers. The comments you receive will also provide you with vital feedback on your services. You obviously want to do all you can to get your rating up to five stars.
With all ecommerce hosts, reviews should be included as a default option on all pages. However, to fill your sites with comments, you should also set up an auto email upon purchase. This will trigger your customers to leave a response when their product arrives.
- Within the post-purchase email, you should also encourage your customers to share their photos of your products on social media.
- Set up a branded hashtag and make the user-generated content fun to take part in. This will also help you attract views and hopefully reviews you can post elsewhere.
Double Up On Your Facebook Ads
With Facebook advertising, there are many options for brands looking to create a range of sequential advertising campaigns. This is where you ‘pull’ the reader towards your site through a series of ads that pique their interests. For instance, you may start with a video advertisement in your sequence, followed by a free PDF guide ad pushed to those that watched the entire clip.
You can further boost the individual posts by ‘doubling up’ on content. Add a product gallery below the video upload with the click of a button. This will give you the chance to promote specific products on film.
- You should also look to advertising on alternative social media channels like Instagram, Pinterest, LinkedIn, even Snapchat. Instagram and Snapchat also allow you to experiment with video and filters
- You can also set up shoppable pins (Pinterest) and galleries (Instagram) where customers can click and buy directly
Upsell And Cross-Sell
Customer lifetime value is a key sales metric you need to boost. The better a customer’s experience, the more likely they are to come back to you in the future and refer a friend. Return custom proves (to the customer) that they must trust your brand.
We are all used to seeing product recommendation tabs scrolling along the bottom of product pages. Set up automated tools that help you generate personalized recommendations based on your visitor’s past behaviors. You can find many applications to run from your online storefront, regardless of which ecommerce platform you use.
- You can also create upsell and cross-sell opportunities by creating specific product round-up promotions
- Use audience research to identify common demographic interests and products customers would like to see on your site
Boosting your online revenue comes down to three main things: you need to make your product is valuable to your customers, they need to be ready to buy, and they need to trust your brand. By building social proof, presenting tempting offers, and informing your visitors with relevant content, you can increase sales without breaking a sweat.
The Website Acquisition that Boosted Revenues by 4x with no Additional Traffic
In the Summer of 2015, MonetizeMore purchased a polling site called MisterPoll.com, a website that enables users to create polls, share them and then provide the statistic results. At the time of purchase, MisterPoll.com was only running AdSense directly on-page, which MonetizeMore saw as a huge opportunity to increase MisterPoll.com’s ad revenues without even increasing traffic. MonetizeMore has been in the ad optimization industry since 2010 and has some of the best ad optimization tech and experts in the industry. In this case study, the team at MonetizeMore reveals just how we were able to take a site, and within one month, grow the site’s revenue by 4x.
The MonetizeMore team started by implementing the most widely used ad server in the world called DFP (Google owned). The implementation of the ad server enabled the team to run many revenue sources at once, include direct sales ads and incorporate complex ad optimization techniques. The first technique that was implemented was integrating Google Ad Exchange (AdX). Google Ad Exchange is the best performing demand source in the world. It is even more powerful when integrating in DFP using a technique called dynamic allocation. Since Google owns DFP and Ad Exchange, the two technologies are able to communicate with each other so that DFP always knows what AdX will pay for each impression. As a result, the publisher can be confident that AdX only serves when it is the highest paying demand source. This is a very important part of ad optimization and realizing a publishers’ ad revenue potential.
Once DFP and AdX were implemented, MisterPoll.com saw a revenue increase of about 50%. This was a nice increase but MonetizeMore was not done there. The next step was to implement managed demand ad networks. Managed demand ad networks are traditional ad networks that send ad tags to publishers that have passbacks if the ad network is not able to payout on a minimum RPM for that ad impression. They are implemented in DFP at price priority level and the priority levels are adjusted on a daily basis based on past performance. Six managed demand ad networks were implemented and after a month of optimizing, the ad revenues more than doubled.
The last and most important step to ad optimization was implementing header bidding. Header bidding is a similar process to dynamic allocation for non-Google demand sources. Each header bid network makes a bid via an API, then the highest header bid will compete against Google and the managed demand sources. It is called header bidding because it is enabled via a header container technology which is implemented in the header of the page and the auction happens within the browser before the DFP auction. MonetizeMore has a header container called PubGuru.
Header bidding dramatically increases ad revenues and page RPMs for similar reasons that AdX implemented via dynamic allocation increases page RPM. The technology ensures that the highest bidder wins the ad impression. When you maximize the ad revenue for each ad impression rather than educated guesses via managed demand, you see some incredible increases in ad revenue. This boosted the MisterPoll.com revenues to 4x compared to the monthly revenues before the site was acquired. PubGuru header bidding not only increased the ad revenues but it also:
- Eliminated passback ad impressions which improved site speed
- Decreased blank ad impressions
- Increased the accuracy of DFP reports
- Decreased the daily hours needed for ad optimization
There is no doubt header bidding was the most important implementation on MisterPoll.com that contributed the most to the ad revenue increases and additional benefits. However, the previous 3 steps were integral to the success and also enabled header bidding. If you are considering to purchase a website on Flippa that monetizes via programmatic ads, it is in your best interest to follow the four steps that MonetizeMore followed.
You can complete the four steps on your own or outsource it to a company like MonetizeMore. If you decide to do it on your own, you can use the PubGuru SAAS solution to guide you through each step at your own pace. If you don’t have your own direct account with AdX, you would need to use a company partnered with Google (Like MonetizeMore) to offer AdX demand. If your site gets over 5MM page views per month, you can qualify for a free DFP implementation. If you get more than 20MM page views per month, you can qualify to become a premium publisher and MonetizeMore will handle all ad optimization for you so you can focus on the more important parts of your business.
Whether you decide to outsource your ad optimization or do it in-house, make sure to make a decision and stick to it. The worst thing you can do is ignore this low hanging fruit. Do not settle with just running AdSense. Otherwise, you are leaving a significant portion of revenues on the table, just like MisterPoll.com was.
Investing in websites is appealing for several key reasons. The first is the return on investment. High quality websites sell for three times annual earnings which means they are generating 33% profits each year. That’s pretty good right?
You are your own boss when you own a website. That means you have the flexibility to work when you want and as hard or as little as you want.
And finally, there is a pervasive narrative that websites can be passive sources of income. That begs the question:
Can Websites Truly Earn Passive Income?
Cash flow from websites will never be as passive as opening a savings account at a bank and seeing interest from your deposit year after year without lifting a finger. On the other hand, there are many web businesses that run with limited owner involvement because they use tools and methods to reduce or almost eliminate the workload. One of my websites takes no more than three hours per month of effort and consistently earns over $3,000 per month.
In this article I will tell you what to look for if your goal is to buy a passive website. Then we will discuss what you can do if you already have a website which isn’t passive now but could be in the future.
What to Look for in a Passive Website Investment
What Does the Seller Say?
Always look at what the seller has to say about how much work is involved to operate the website, but never believe it.
Is that a bit harsh? Only a bit.
A few sellers may actually remember everything they do and accurately estimate how much time it takes them to do it… but not many of them, I assure you. People are bad at estimating and worse at remembering.
Sellers may have skills and knowledge you don’t have. That means it will take you more time than it takes them, at least at the beginning. On the other hand, I often buy websites where I have skills the seller doesn’t have and end up saving time because of it.
Nevertheless, talking with the seller about what they do, how they do it and how much time it takes is one of the most important things you can do. Not only will you get a much better idea of what the important tasks are, you will also begin to learn what it would take to make the website truly passive.
Hands-Off Transactional Websites
Many web businesses make their money one transaction at a time. When you are evaluating the business model of a website it is important to look at the steps involved in a transaction. Take an eCommerce jewelry site for example.
A customer visits the site, looks around at different products, adds one to their cart, goes to checkout, enters their contact information and payment method, and then waits for the product to show up at their door. All of that is what the customer does.
Whether that transaction is passive or not is dependent on the process and tools the website is employing. Here is a near worst case, least passive example of what could be happening behind the scenes:
The owner of the site hand makes the jewelry himself and keeps inventory in his home or office. If the jewelry is custom made, the scenario gets even worse.
So when the customer places their order, the owner packages the product for shipping, prints out a label with the customer’s address (or writes it, God forbid), applies postage, takes the package to the post office for shipping, comes home and emails the customer with a tracking number, orders more materials, inventory and shipping supplies to replace what was used, follows up with the customer some time later by email and who knows what else.
However another site might handle the same transaction in a completely automated fashion. The customer places their order in exactly the same way but:
The order gets automatically sent by the website to a manufacturer or distributor. The distributor packages and sends the order to the customer and also sends an email with a tracking number for the shipment. A system generated email is sent to the customer asking for a product review a few days after shipment.
Drop-ship isn’t necessarily more profitable than self-ship, but it is certainly more passive.
When you evaluate a website to buy, think through the steps involved to fulfill a transaction. Who performs each step? Are they automated? Can they be? This is a critical component of your due diligence, whether for an eCommerce site or any other site where a product is purchased one transaction at a time.
What About the Techy Stuff?
Look for sites that are running on industry standard platforms like WordPress, Joomla or Drupal. Many sites require very little technical support after they are setup. However, when something does need fixed or improved, it will be much easier and less expensive to find someone to do it if the site is built on industry standard tools. Beware of sites that say they were “custom built” unless you are prepared to pay to have it maintained. I’m not saying custom built sites are bad investments. They may have a unique differentiator that puts them ahead of the competition, but that does not mean that they will be passive plays.
Marketing and Promotion
In some unusual situations, sites have stable or growing traffic without much additional work. I mentioned earlier that I have a site that just seems to keep growing without much help from me. That is rare but I’ll tell you why it doesn’t take much support.
The site was old, almost 15 years old now. It is a content site with long and well written informational articles. The articles are linked extensively one to another. The original owner didn’t do any external link building, so all the authority from the site came naturally. Much of the content is interesting enough to attract comments from the visitors.
The site doesn’t do anything to make Google unhappy like having plagiarized content, paid links from other sites, too many ads, bad formatting for mobile users, old technology or manipulative keyword techniques.
Tip: Look for sites that are completely compliant with the rules of the big players they are dependent on. Content sites are dependent on Google. Amazon affiliate sites are dependent on Amazon. Others may require ClickBank, Instagram or ShareASale for their survival. This doesn’t mean they will always stay in good graces with their benefactors because those big companies change their minds several times a year. However, starting on the right foot by following the rules puts the business ahead of the vast majority of its competitors.
Many sites operate on a business model that requires manual work. Product sites may get their traffic from PPC that requires campaign management. Services sites may require someone to answer the phone or chat in a chat box. Content sites may require social media promotion. Sales may be dependent on a steady stream of emails or newsletters. Despite these mandatory activities, a site may still be relatively passive as an investment if the tasks are outsourced to an existing team.
Phone numbers and chat boxes on websites are tell-tale signs that a human is at work. Sites that ask you to fill in a form and request a quote probably have to have a real person responding to that quote request. Be aware of those elements of the business model and ask the seller how those tasks can be outsourced or automated.
Growth or Stability?
Keep in mind that it takes less effort to maintain the performance of a site than it does to grow one. There are very few web businesses that will grow without active effort on your part. The trick is to automate, systemize and delegate as you grow. I’ll talk much more about that later on.
Don’t make the mistake of thinking you can buy and then completely ignore a website. Like any business, if it isn’t growing a little, it will ultimately decline.
Summarizing What to Look For
- Manual tasks are outsourced or delegated and the resources are willing to continue working on the site after you buy it.
- Sellers who understand their business model very well. Smart sellers have usually automated or at least documented the key activities of the business.
- Sites that use industry standard platforms like WordPress or services like Shopify.
- Sites that have integrated their systems with their suppliers, providers and partners.
- Sites that have end-to-end self service processes for their customers.
- Sites that don’t require extensive marketing or promotion to grow. User generated content, intelligent automated referral systems, long standing promotional mechanisms like permanent referral links and cross promotional agreements are examples of methods that reduce the need for manual marketing or promotion activity.
- Simple business models like content websites that earn revenue from Adsense. Note that driving traffic to content sites may be anything but simple.
- Sites that have automated maintenance tasks like new product uploads, comment moderation, credit card expiration notifications, etc., etc.
- Sites that are less depend on customer communication in the pre and post-sale process.
There are many others, but you get the idea.
What if I’ve Already Purchased a Website, and it is NOT Passive Income?
If you are a dismayed owner of a website that requires more effort than you care to exert, you have a few choices.
I bought a site that sold software and, surprise, surprise, the customers expected the software to work, to be supported and to be upgraded from time to time. It was profitable but it got tiring pretty quick. I sold it after a year and a half.
It might be hard to sell to people who have read this article unless they have a particular interest in your niche or business model.
Delegate or Outsource
If your business has enough margin to cover the cost, almost anything can be delegated to an employee, outsourced to a freelancer or contracted out to a service agency. Many tasks may not be as expensive as you think, particularly if you go the freelancer route. Do this with your eyes wide open and choose your resources carefully or you could generate more stress than you avoid.
Change or Tweak the Business Model
Consider changing business models entirely or modifying the model. Consider these ideas:
- Move from a self-ship to drop ship, or send your inventory to Amazon and let them manage fulfillment with their FBA service.
- Instead of selling and servicing your own products, pivot and sell some or all products as an affiliate so they take care of customers for you.
- Replace physical product sales with digital product sales.
- Eliminate services or replace with simpler ones.
There is a plethora of amazing, readily available software that can make your life much easier. Finding, installing and configuring the software may be a chore, but ultimately well worth it. Even these activities can be outsourced if you spend some time looking for the right help.
I can’t begin to list the thousands of painful tasks that can be performed with a little automation and system analysis. Just search for “automate ________” and fill in the blank with your pain point like Facebook Posting, email management, order processing or ad creation and see what Google suggests. Talk to people running similar websites or at least visit their site and become their customer to see how they have automated processes.
Passive income is a Holy Grail that we all seek and are willing to pay a little more for. Tell me your experiences with passive and non-passive website investments in the comments below!
Jeff Hunt wrote The Website Investor: The Guide To Buying Online Website Businesses For Passive Income. In addition to running his own portfolio of websites, Jeff helps entrepreneurs buy and optimize their web businesses. Learn more at www.OwnOptimize.com and www.HeckYeah.org.
In 2015, 61% of shoppers chose to shop at smaller businesses because they offered unique products they couldn’t find elsewhere (Source: ComScore). As customers have become accustomed to the plethora of online product options, they expect smaller online retailers to respond and present them with a vast array of specialized and more personal products.
It’s challenging for smaller retailers, however, to carry a large assortment of inventory due to exorbitant shelf costs. Dropshipping eases this burden. It gives businesses the ability to quickly order inventory directly from their suppliers when customer demand for a certain product spikes, avoiding high shelf space costs.
Starting a successful drop shipping site requires finding the right provider. Based on working with hundreds of successful eCommerce businesses at Volusion, I’ve identified the following top five most important factors to consider when choosing a drop shipping provider for your online business.
1. Relevant Product Options
It’s important to choose a drop shipper supplier that will provide you with a variety of items that are unique and catered to your business. In many instances, smaller online retailers will purchase “hot-selling” items from suppliers; however, these items are most likely available at big-box retailers for a cheaper price. To avoid this, it’s crucial to choose a supplier that offers a variety of diverse products that fall into a category you’re familiar with. When you’re knowledgeable and well-versed about the products you’re selling, your business offers a significant customer service advantage and can charge a higher price for products than a larger retailer that doesn’t know the product as well.
2. Strong Customer Support
Whether you own a large eCommerce website or are just starting your own online store, having a strong customer support team to answer drop shipping questions or help solve pop-up problems is a must. There are several drop shipping companies that provide a robust inventory, but when it comes to customer service, they may be lacking. Be picky about the qualities and extra features your drop shipper offers—this will go a long way in saving you time and ultimately supporting your business’ needs. For example, drop shipping company Doba alerts customers of special supplier deals and when suppliers’ inventory is running low on select goods, making it easy for business owners to update their products in a timely manner.
3. Easy Integrations for Your Online Store
When set up correctly, drop shipping can save you hours of time. Instead of spending time filling tedious backlogs, managing outdated inventory and ordering products for your website, drop shipping allows you to get that time back and focus on making more strategic business decisions. The best way to take advantage of this is by selecting a drop shipping company that has a seamless integration with your eCommerce software. Integrations such as these will automatically manage your orders and customer purchases through one easy-to-use platform.
4. Ability to Sell Your Products Through Different Channels
Creating a well-branded eCommerce store is a key step to growing and developing a successful online business. Creating your own branded eCommerce channel is vital to growing and developing your online business. Despite this, some products sell better on larger retail websites such as eBay, Amazon or even social networks such as Facebook. Additionally, selling on Amazing or eBay can be a good way for first-time or even established business owners to raise brand awareness and generate new customers. Some drop shipping providers give business owners the ability to sell products on Amazon and eBay while providing similar features and the same level of support as if they were selling on their own website. When choosing a drop shipping supplier, be sure to review their multi-platform features.
5. Shipping Prices & Options
“A study conducted by Amazon found that 46% of customers will abandon their shopping carts if free shipping isn’t offered” (Source: Volusion Drop Shipping Guide). That’s almost half of all online shoppers! Shipping cost strategy is an important element to consider when selecting a drop shipping supplier. Drop shippers typically have a shipping fee, so it’s important to choose a provider that won’t heavily raise your product prices or impact your number of customer purchases. Although you may not always be able to offer free shipping, particularly on products with a lower profit margin, try lowering the shipping rates on your more popular products.
Do you have any tips for choosing a drop shipping provider? Share your thoughts in the comments below.
The rise in popularity of the subscription monetization model means that parties to a website sale are increasingly confronted with the challenge of transferring existing paid subscribers from seller to buyer.
Are PayPal subscriptions transferable?
Transferring Paypal subscriptions from one account to another is not possible. However, transferring a PayPal account from one party to another is sometimes possible, which in effect, also sometimes makes transferring an underlying subscriber base possible.
Which PayPal accounts are transferable?
Instead of asking “are PayPal subscriptions transferable?”, we need to know “What type of PayPal accounts are transferable?”
There are two primary types of PayPal accounts:
|PayPal for Individuals
||For individuals who buy and sell online on their own behalf.
|PayPal for Businesses
||For merchants who buy and sell online using a company name.
PayPal For Individuals: Subscriptions cannot be transferred
Unfortunately, if you are processing subscription payments with a PayPal for individuals account (or Personal PayPal account), the subscriptions are non-transferable, no matter the circumstances. The reason being that with PayPal for Individuals, each account is tied to an individual. Thus, when a subscriber enters into a recurring agreement to pay a PayPal for Individuals account, they are agreeing to pay that individual. PayPal cannot legally allow that individual to then sell/transfer those agreements to another individual or entity.
If you find yourself in a situation where you want to sell a website, but the subscriptions are held in a personal PayPal account, the business may be valued lower than expected by potential buyers. The reason for this is that in order for a business buyer to take control of the subscriber base, all subscribers would need to resubscribe to make recurring payments to an alternative PayPal account controlled by the business buyer. Because this will lead to user churn, the buyer will value the business less than they otherwise would have if all subscribers could have been transferred without churn.
Clearly, churn can greatly influence the value of your website. For example, if you decide to sell your website which is monetized exclusively by 100 subscribers, but it is expected that user churn upon re-subscribe will lead to a 50% loss in subscribers, the business would effectively lose 50% of its value. This might not seem like much, but imagine a business worth $100,000 that is now worth just $50,000 – all because the owner decided to charge subscription payments on a PayPal for Individuals account.
Can I transfer PayPal subscriptions with a Business Account?
Consider Jeff. Jeff owns a dating site with 100 recurring subscribers. Jeff sells his website to Tom on Flippa. As Jeff begins transferring the assets to Tom they’re faced with the challenge of transferring the recurring subscription payments. We already know that if Jeff processes the existing subscription payments with a PayPal for Individuals account he won’t be able to transfer this account (or the underlying subscriptions) and Tom will have no choice but to ask all subscribers to re-subscribe under another account he controls. However, if Jeff has a PayPal Business Account it’s possible he could transfer this account and the underlying subscriber base to Tom, assuming certain criteria are met.
How to transfer a PayPal Business Account?
In order to transfer a PayPal Business Account, you need to change the contact name on the account. This contact name is not the name of the business, but rather, the name of the business operator. Taking the above example, the parties would need to submit a name change request, asking that the business operator name be changed from Jeff to Tom. The one major requirement is that both parties must be located in the same country, otherwise PayPal will not honor the request.
If both parties are located in the same country the following steps can be taken to request a name change:
- Write a formal letter requesting the contact name change for your business account.
- Identify the previous name on the account, and the name that you want added.
- Provide a copy of a valid photo ID for the new contact person.
- Acceptable forms of ID include a driver’s license, passport, or any other form of government-issued photo ID that contains the individual’s date of birth (DOB.)
- Provide proof of Social Security Number for the new contact person.
- Acceptable forms of proof include a copy of a social security card, recent pay stubs, w-2, or official tax statements that show the individual’s complete social security number.
- Provide proof of business formation including the business name & new contact name:
- Acceptable forms of proof include Articles of Incorporation, an active business license, or any official business documents filed in the business’s home state.
- Provide a bank statement for the bank account tied to the PayPal account.
- If the bank statement does not display the name of business and the new contact person, a Name Change Authorization Letter is also required.
- The Name Change Authorization Letter needs to contain a letterhead, company logo, and signature of an officially designated company representative.
Once you have the information above and are ready to request the name change, take the following steps:
- Log into your PayPal Business Account
- Navigate to the Business Profile Icon and select Profile and Settings
- Select My Business Info
- Select Update Business Information
- Change the Business Name
For security purposes PayPal won’t allow you to submit the supporting documents by email, so you can either submit them by uploading them or faxing them. If you prefer fax, you can fax the supporting documents to 402-537-5731, just be sure to include a cover page with your name, and a description of the request.
At the end of the day, the decision to process subscriptions via PayPal can have dire consequences when it comes time to sell your website and transfer these subscriptions to a new owner. Though I’ve done my best to outline the general considerations of this process above, I would always recommend reaching out and contacting PayPal directly to get the most up-to-date information about transferring PayPal subscriptions and accounts.