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The quickest way to boost DTC sales and profit margins

One of the biggest problems I see is e-commerce and DTC marketers struggling to get profitable sales.

 

So here's a quick change you can make to boost those profit margins without having to spend thousands of dollars on ad campaigns and sales promotions.

 

Cross-sell and upsell before checkout


Most online customers shop and buy from a single category, and don’t explore other areas of your website.


Use limited-time checkout offers to introduce other areas of a store to a customer buying from one area of the store.


Combined with higher free shipping thresholds, this increases your average order value and retention by turning a single-order buyer into a 2x or 3x one.

 

Here's how this works...



1. Raise the free shipping threshold

80% of this store's products are more than $100, which means they're losing margin on the majority of sales. Instead, set your threshold to equal 60-85% of your average order value to encourage larger orders


2. Make savings clear

Reinforce how much people are saving and how much more they need to spend to get free shipping


3. Incentivize the shop

Everyone loves a deal, so use limited-time pre-checkout offers to make someone thinking twice about just purchasing one item


4. Push people to new categories

Link the best-selling items from different categories to get shoppers' attention and drive them deeper into your site



Cross-selling works especially well with smaller items like accessories or gifts. The goal is to make most orders ~$25-50 away from free shipping and make adding a second item feel like a deal.


Here's another example encouraging women to shop for their kids as well as themselves...



Better customers, better profit margins


This becomes a virtuous cycle. Higher average order values (AOV) lets you raise your advertising cost-per-acquisition (CAC) and acquire better customers, who will place larger orders more frequently, which lets you raise CAC... and so on.


These changes can often be made for a few thousand dollars on most Shopify sites, and should take a seasoned developer around 1 week to implement.

 

You might lose some bargain hunters in the short-term, but usually overall sales revenue should increase and you can look like a hero when reporting better profit margins to the CFO!

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