How to Test Your Ecommerce Idea Before Investing in it?
January 14, 2020
E-Commerce | Paid Media
Do you have dozens of ecommerce ideas, but you’re not sure which one will be profitable?
You have done a lot of research on these ideas, maybe even launched a few stores – all in vain? Well, majority of ecommerce businesses end up like this.
They create a bunch of products, they build massive funnels for it, then they try and figure out a way to sell just to find out that it doesn’t – after they’ve spent a ton of money.
Key to making sales is to give a product that people are willing to buy!
These steps will help you to find out whether there’s an actual demand for your idea before you invest in it. Allowing you to put together a product that people will buy.
Although, you do have to invest a little bit of money and a little bit of time to figure it out, but it’s going to be substantially less than the other route that most people end up in.
So how does this work?
Build a Landing Page and Write Your Sales Copy
Assuming you already have your idea of what you’re going to sell.
The first thing you need to do is to create a landing page. There are couple of options here, Leadpages is my favorite.
Next is to create a basic text-based sales copy for your landing page. If you don’t know how to write one, you will need to hire a copywriter to do it for you – I highly recommend that that you hire one.
The right copywriter will create a sales copy which will help you in increasing your conversions (we will get to the conversion part in a bit.)
And if you end up deciding to go with a different ecommerce idea, the copywriter can help you edit the sales copy, so you don’t have to keep repaying to create a new copy all over again.
Create an Opt-in Form
From the landing page you will have an ‘Add to cart’ button which you can either link to a new page or a pop-up window. A pop-up is what I recommend unless you have a good reason to send them to another page.
Once you have this set up, the opt-in form copy will be something around “Please enter your name and email address.”
After filling out the form, they will be re-directed to a page where it will say “Sorry we’re currently out of stock on this product, we’ll let you know once it becomes available.”
Opt-ins vs Ad Spend
So this way you’re not actually selling anything – you’re driving the traffic from the ads to the landing page and then you’re measuring the opt-ins.
Basically, you’re considering every opt-in registration as sales in this scenario – hence the conversions. Let’s say your product was worth $100 and you spent $500 on your ads to get 20 opt-ins.
We know in a 2-step process not everyone is going to buy. Since there’s no way to figure out how many will drop-off, we need to assume every opt-in is a buyer.
If you did 20 sales for $100 a piece you essentially earned $2000 in sales with $4 return on your $1 ad spend ($2000/$500.)
This means you have a profit potential with your ecommerce idea, which is a strong indicator that it makes sense for you to build or invest in the product.
If you didn’t get enough opt-ins to cover your ad spend then you know there’s not enough profit potential and you will need to test a new idea.
Create an Email List
If you decide that you’re going to build a product, once your e-store is setup properly, send out an email to this list saying, ‘we got the product back in stock, visit the store to order’.
Majority of this list will buy – so you didn’t completely waste the initial ad spend.
If you end up going with a different ecommerce idea, you can promote that new product out to the email list, driving them through the top end of your funnel.
If you did 20 sales for $100 a piece you essentially earned $2000 in sales with $4 return on your $1 ad spend.
Either way, you can leverage the email list that you build.
Majority of your effort is to get the sales copy and landing page built right, and someone to run the ads properly.
Click here to download the funnel model for testing your ecommerce idea.
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