How We Hit Our One Millionth Order On Shopify
Your mission on Shopify will be to test whether you can acquire new customers for equal or less than what they spend on your site. This is your greatest challenge and primary project on Shopify.
We call that challenge your Primary Site Hypothesis (PSH). You are speculating that you can acquire new customers and that they will quickly buy items of equal or greater value than the cost of acquiring them. Do it - and your baby Shopify site will survive and hopefully go on to thrive. Fail - and you will loose money until you shut down your site. In our Ecommerce Mentoring Program, we walk you through how to systematically make that happen.
How We Hit Our 1 Millionth Order On Shopify
You might be wondering about my own experience on Shopify and maybe you’ve already take the time to check-in and see who I am and what I’m actually doing on Shopify with my own website(s). I think our journey can shed a little light on the topic of creating an integrated product suite, so I’ll include it briefly...
We started online in late 2007 by selling custom designed and hand-made doll clothes on eBay. That was our first product type. We did that for two years and made $1,000 a month. So our total revenue at the end of each year was $12,000. My wife was the designer and maker and I was the marketer. You can see those items at www.libertyjaneclothing.com.
We had started the business to try and make extra money because we were in a mortgage mess. I’ll spare you the details, but we had moved to California at the peak of the housing market and used a bad loan product and got caught in a slow and painful disaster. But in the summer of 2009, we lost our house to short-sale and the need for our business went away.
But we had a good brand established, and customers that truly respected our work, so we started considering ways to re-create the business to make it better. After reading Jim Cockrum’s book The Sile Sales Machine, we realized the answer. We started selling my wife’s designs as digitally downloaded PDF files. That was our second product type.
Because my wife is truly a gifted designer, and I was a little better at marketing and promotion than the other people in that niche, we started to gain real traction. It tripled our sales in our third year and tripled them again in our fourth year. We were now a six-figure online seller.
We had begun writing a weekly newsletter and over a period of twelve weeks in 2009 I included a brief description some of Cinnamon’s design principles. Things like proportion, scale, fabric choice, and homage. These were principles that set her work apart and although she was an artist that didn’t create these types of lists, when I observed and then documented what she did, it became our 12-Layers Of Professional Doll Clothes Design. That simple idea expanded into an ebook and digital course. Our third and then fourth product type was born.
Other doll clothes pattern sellers who realized that we were pretty good at our marketing began asking if we would sell their patterns on our website too. We became a publisher of 3rd party patterns. That was our fifth product type. That decision was the genesis of Pixie Faire – our doll clothes pattern marketplace. We launched Pixie Faire in June 2013 with less than twenty designers. Now we have over seventy design partners and a combined catalog of over 1,500 patterns. Together we have had 1.8 million patterns downloaded since we began and average 40,000 to 50,000 downloads a month.
On July 4th, 2014 we launched our cut fabric and notions. These items give our customers everything they need to complete one of the doll outfits. We call them Pixie Packs. So if you buy the Liberty Jane Jeans pattern, then you might also want to buy the Jeans Pixie Pack. Our sixth product type was born.
In the summer of 2016 we decided that maybe since we sold doll clothes patterns, we should also begin selling dolls. So we began working with several manufacturers and began selling their dolls on Pixie Faire. Our seventh product type was a no-brainer.
Today we manage a small but capable team from our main street office in Auburn Washington. We’ve sold several million dollars worth of product online and our sales are steady and growing nicely. We never take large financial risks. We never bet the farm for any specific product idea. We’ve certainly tried things and failed. But overall, we are focused on slowly and steadily adding what our customers want if and when we can do it profitably.
In October 2016 my shipping manager walked into my office and set an order in front of me. He didn’t say anything, which is fairly odd. I said, “what happened, did we mess up their order?” He said, “no, look at the order number.” Glancing at the number in the top left corner, I noticed it said, 1,000,000. Our millionth order had been transacted through Shopify. Wow! We all shook our head in amazement, stood there and smiled for a moment, and then went back to work.
You might consider the doll clothes niche a funny and slightly weird back corner of the Internet, and maybe it is – although we do our best to not make it creepy or weird. We’ve found a way to make it work well as an online business by obsessing over our first product and then adding more products our customers wanted. I truly believe you can do the same in your niche or industry. I hope our story is instructive for you and your pursuits!
The Integrated Product Suite Strategy On Shopify
The best way to make your site profitable is to sell as much as possible to each new customer that visits your site. So the most important question is, what do you sell them besides the primary item they came to buy?
Direct marketers have tested this over and over and the wisest path includes the following options:
- Sell them more of what they wanted. Multi-packs, recurring orders, or some version of larger packaging.
- Sell them information products related to the product, the niche, or the related issues facing the core customer.
- Sell them directly related products.
The idea of selling customers directly related products is referred to by Brendon Burchard as an Integrated Product Suite. It's the idea that if you sell printers, you should try to also sell the ink and paper. If you sell doll clothes patterns, you should also try to sell the dolls and fabric. If you sell coffee, you should also try to sell the coffee cup and coffee maker.
What Makes A Good Secondary Item
Finding a great secondary item can be hard work. You need to answer questions such as:
1. Is the item profitable?
2. Is it easy to include in the package with the first item, or does it add substantial shipping costs?
3. Can I get stable and reliable sourcing?
4. In the case of digital items, is it easy to deliver without customer confusion or frustration?
5. Do I have to buy large quantities and therefore have both upfront expense and storage problems?
6. How hard is it to get rid of if I cannot sell it?
As the chief product planner for your Shopify site, your job is to identify, source, and test these related product concepts. Some will work well, some will work okay, and some will fail your tests and you’ll find they are unsuitable to place on your site, even if the customer wants them.
But each time you can find a way to upsell, cross-sell, or down-sell another item - you increase the average order size per customer. Over time, you’ll be discovering the Long-Term Customer Value (LTCV). That’s the number that you can eventually expect each customer to spend on your products. Knowing your LTCV will also help you decide how much you can spend to acquire the customer.
So while you’re bootstrapping your Shopify site and trying to answer your Primary Site Hypothesis the Short-Term Customer Value number is critical. But over the longer-term, the real question will be what is your Long-Term-Customer-Value.
The higher the average order size per customer, the better your short-term prospects. The higher the Long-Term-Customer-Value, the more valuable your business is as a whole.
So focus on short-term customer value to survive and long-term customer value to thrive. If you don't have a thorough, well researched, and organized plan for secondary products, it’s okay. Get your primary product type up and running on Shopify successfully and then begin doing the research for your second product type.
If you'd like additional training and coaching to achieve your Shopify goals, consider joining our mentoring program today!