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What am I doing wrong?
I sell a fashion item on my website for $20 with free shipping.
I have about 20 variations of the item.
I have local stock and I make it clear on my site where the stocks ships from and how many days shipping takes etc.
I made my website in Shopify using a nice paid theme.
I connected my site to Google Merchant Center and have a good shipping policy, return policy, and contact details etc. I’m confident my site can’t be much improved.
My website is as polished as it’s gonna get. For each item I have: a professional model shot with the item, a photo of the item on a white background, and a photo of the item in its packaging. I also have a detailed but polished description for each item.
I ran some campaigns through Google Ads (display and text) experimenting with different keywords.
The pay per click rate is about $1-$1.50.
My item sells for $20 including shipping, and it costs me about $5 to ship an item to a customer.
So if 10 people click and only 1 of them buy 1 item, I break even (more or less).
I’ve had days where I’ve sold 10 items to 3 customers with 15 clicks, but I’ve had days where I’ve had 100’s of clicks and only 5 sales.
After a few weeks of experimenting, most days are in the negative, and it doesn’t seem to be getting any better.
I’ve now spent $1000 on various Google Ad campaigns and made $250 profit on sales, for a net loss of $750.
I’ve been tweaking the keywords & locations and haven’t found an edge.
I feel like the $/click is too high, and I feel it would only be profitable to use ppc either: for subscription services where the customer pays a recurring payment, or for a lower $/click (maybe $0.10/click), or on higher-profit items ($90 profit per item sold).
$1.50/click for an item with a $15 profit margin means 1 in 10 clicks need to convert just to break even, and that doesn’t seem feasible.
I spoke to a friend who used AdWords for her previous subscription-based business that she used to run, and she told me I need to “raise my $/click rate” so that my ad will show first before other ads. This doesn’t sense to me because if I doubled it for example, it means I would have to convert 1 in 5 clicks just to break even, so I feel I would lose even more money.
I’ve also tried snapchat ads for around $1/click and I got some sales, but again it wasn’t profitable overall, so I stopped my campaigns after spending $100 on ads.
I assume facebook/instagram ads would be the same (although I understand there’s a difference in demographics).
What am I doing wrong?
Can PPC ever be profitable for my business model?
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6 Replies
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Facebook will probably work way better than google because of shares. The average person has 300 friends on Facebook so each time you get a share that’s 300 more eyes on your product. Get 1000 shares and that’s 300,000 free eyeballs
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It is what it is. Try Display and lower your bids. If it’s not working you can’t force it to work. Advetise your other products with a high margin, or increase theargin on this one. PPC doesn’t necessarily work for everything.
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There are a variety of different ways that we can optimise google shopping campaigns that maybe you haven’t considered. For a fashion item, gshopping can prove to be very effective.
I agree with the other comment that you can find success in this with Facebook & insta as it’s more visual focused.
You can PM me to chat more about the google ads side of things. I’d be happy to help a little -
No, it is not going to be profitable, no matter what you do on adwords with your 20usd price.
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There are several things you can/should do to improve your situation. You have conversions and sales, so that’s good – you know there’s a market for your products. My biggest question would be… What’s your value proposition? Why should a customer purchase from you instead of your competitors?
I feel like 99% of businesses and at-home online retailers never think of this. You can’t simply build a polished/clean website, pay for some clicks, and hope to radically make profits (not critiquing you here, just this mindset). You need to be better, faster, or cheaper than your competitors. Cheaper isn’t really going to get you anywhere here because you are already in the red. And you can’t be faster because you have the stock yourself and are shipping yourself.
So you need to figure out how to be better than your competitors. Again, what’s your value proposition?
Aside from this, you really only have 2 options. Increase sales/revenue, or decrease your ad costs. Here are some suggestions for those…
1. Improve your average customer value or your cart value. Discover, test, experiment ways to find additional products that your purchasers would also be interested in. Do you have any upsells directly after the initial purchase? If not, that’s an immediate fix you need to do ASAP. Are you collecting emails and marketing complimentary products to your purchasers via email? If not, again, that’s an immediate fix that will increase your customer value.
2. Improve your CTR on your ads. CTR is directly proportional to your CPC and cost per conversion. Get cheaper clicks and your customers won’t cost you as much. And I agree with what you said in your post, DO NOT increase CPC at the advise of your friend because this will only make the problem much worse.Last suggestion… Is there any actual sales copy on your landing page? I’m sorry for being direct, but you simply cannot build a profitable and **sustainable** business with a generic (even paid) shopify store page. I know businesses and advertisers spending over $1 million per month on ads (or more) and absolutely none of them send people to a store page when they click an ad. You need a landing page that *sells* your product. Google “advertorial” or “video landing page” if you need more direction.
Good luck. This isn’t easy, but when it works it’s beautiful.
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Obviously something here has to change, although it’s hard to know what without more details.
On the ads front, you may want to try going after more niche keywords with less competition to see if you can hit a lower average cost per click and/or a more informed audience. You should also make sure your ad copy does a really good job setting the customers up for what they’ll see when they hit your landing page. Some people just don’t read, but you’ll save money if people who don’t want your product can figure that out before clicking.
I have a hard time believing that there is literally nothing that you could do to improve your website. Do you have reviews from happy customers? Do you clearly explain the benefits and features of the product? Do you have an amazing return policy/customer service/whatever that sets you apart from your competitors? How is the checkout process? What about on mobile? Do you do any up- or cross-selling?
On the customer side, what is the lifetime value of a customer? Spending $25 now on a customer who will spend $80 over the next year is almost definitely worth it. You may also want to consider increasing your prices slightly, or only offering free shipping on a minimum order size. These things may lower your conversion rate (or maybe not!), but it might be a worthwhile trade.
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