Recession finally bites on my ecommerce store

[Karimbo]

This May has been abysmal.
I've got 2x traffic, 2x+more inventory, much better website compared to May 2022 but may 2023 is only going to match may 2022 sales.

The suceessive bank holidays don't help. Bank Holidays are terrible for my sales.

I sell watch straps and really don't want to do this, but I might have to increase prices to make enough profit from the low sales numbers.

I was doing double what I was doing in previous years and it seems things have finally caught up with me. The successive waves of inflation seem to have hit consumers hard. .5% increase in base rate, another 10% rise in grocery bills. it seems to have squeezed consumers even harder.

 

[lesliedocherty]

Not agreeing here, if there's 2x traffic, then there's demand, your conversion rate has taken a big hit, look into that.

 

[Karimbo]

Not agreeing here, if there's 2x traffic, then there's demand, your conversion rate has taken a big hit, look into that.

Website has expanded it's reach and got more traffic. I've just improved on SEO. Demand is the same as before. I've just taken clicks from other sites.

Are you in ecommerce?
Conversion rates dropping, people search but they're window shopping more, usually day 20 to 25 of the month is really bad until payday. But my website should be doing a lot better than this. After all that work I've put onto the site on photos, traffic etc. should be making more sales.

 

[Ozzy]

Without a doubt the cost of running a business and supply chain has increase, and this will ultimate need you to review your prices anyway.

Although I do agree with @lesliedocherty to look at your website visitor behaviour and conversions, perhaps use tools such as Hotjar or Anayltics funnels to track what website visitors are doing. You mention your SEO is simply taking people from other sites to yours, which is true and instead of purchasing on those other sites they should be purchasing on yours. I do think your website could perform better of you're getting twice the amount of the same quality of visitors but no more orders than you did before. That would be a red flag to me to investigate if it were my site.

The only other explanation would be your SEO is bringing all the wrong, and low intent, visitors.

 

[Shopclicks]

Website has expanded it's reach and got more traffic. I've just improved on SEO. Demand is the same as before. I've just taken clicks from other sites.

Was keyword research involved in your SEO efforts? If so, where did that information come from?

 

[japancool]

I'm not seeing it. I should be up on last year by about x2.5. This month, conversions slightly up, although total sales very slightly down, mostly due to the fact that I haven't had any major restocks (which always gives us a massive 2-3 day boost).

Last couple of days hasn't been fantastic, but that's normal when the weather is good. No one wants to be sat indoors making model kits when the sun is shining.

 

[Karimbo]

Was keyword research involved in your SEO efforts? If so, where did that information come from?

same kws am use for adwords. adwords coversions are 3.75%, seo are 2.5% conversions.

Somethings not right. I need to look at it more. Normally Mondays are so busy packing and posting orders. I'm packing items all of Monday and rushing to RM depot to drop off my packages before last post. This week I'm done already and it's not even 12 yet.

 

[fisicx]

Do you have dedicated AdWords landing pages? Or are you just landing on a standard product page?

 

[Shopclicks]

Somethings not right. I need to look at it more.

Do you sell Apple watch straps? Just looking at keyword volume.

 

[antropy]

This May has been abysmal.

We're slightly less busy in my ecommerce web development business as some of our clients do seem to be seeing a bit of a slowdown.

Our first vape shop is actually doing better than ever though, so I guess it just depends on the sector.

I expect interest rates going up is going to increase monthly mortgage repayments across the board and people are going to have a few hundred quid less disposable income each month.

Paul.

 

[DontAsk]

For me, it's not a recession so much as bumper sales during lockdown were effectively "stolen" or brought forward from future years. Taken as a trend across covid, the market remains stable.

Depends on your market, of course.

 

[thetiger2015]

It's really hard to compare data at the moment. You're comparing against the COVID era, which was a bumpy ride for all businesses and, with all the bank holidays, I find we get almost the same traffic but the conversions drop like a stone because people don't want to order anywhere near a bank holiday. Plus, if you're sending anything via RM, the strikes put some shoppers off for a few weeks earlier in the year.

It's going to be a case of digging in to the data. You're getting that extra traffic but it's not converting. What about customer churn? Not sure about your sector, do you get lots of repeat custom?

Do you have many competitors? Are they doing huge sales at the moment? We've been hit by that a bit recently. Competitors doing 50% off across the Coronation weekend etc. Massively dented our sales.

 

[Karimbo]

Ok. I have looked a little bit more in depth with the data. Conversions have remains stable. But AOV has gone down. I have a permanent 3 for 2 offer on my site (margins are very good and the business can handle it). This offer seems to be taken up more during paydays where people have cash. But for the rest of the month people buy single items. So the AOV is being crushed.

This is why I'm making the same money as I was last year with much more traffic.

 

[Karimbo]

Do you have dedicated AdWords landing pages? Or are you just landing on a standard product page?

it's not really a done thing to do custom landers on ecommerce just for adwords. I do some tailoring for kws but those pages get added to the menu and part of the rest of the site.

E.g. keyword for 20mm watch strap, I create a page featuring all the 20mm watch straps, if there are too many of each strap type. I list 8 best selling from each strap type and create a link where they can see 20mm sizes in all those straps in that range.

For ecommerce you don't want to create hidden funnels because customers may want to see what else you have.

 

[The Byre]

You are selling fewer watch straps because you are selling watch straps! That makes your business a one-trick pony and therefore extremely vulnerable to the slightest change in the market. You are not selling as many watch straps because the budget-price watch market is vanishing.

I have no need for a watch strap - because I stopped wearing watches ages ago. I have all sorts of daft watches - Rolex, Junghans, Omega, in a drawer and I have absolutely no earthly need for a watch because - every telephone tells one the time - there are clocks everywhere, from the three in the kitchen to the multiple clocks in the house, office, studio, car, you name the place and there is a damn clock or some other means of knowing the time attached.

I don't need a watch strap because I don't need a watch! Simples!

The only reason people still wear watches is to show the world how windswept and groovy they are - the old Rolex gets flashed around - these people do not need a replacement strap. In an age when sexy-looking analogue watches sell (FOB from China) in lots of 100 at $10 each, the watch has become either a status symbol with a strap that costs hundreds or even thousands - or a disposable item.

When I was 14, my proudest possession was my diver's watch. But that was nearly 60 years ago! How many 14-year-olds do you see today wearing watches? They all have phones!

My suggestion is to diversify - import sexy watches with your own brand name on them, or just sell something completely different - whatever! But relying on an accessory that is bolted onto a dying product does not sound like much of a business plan!

 

[Karimbo]

You are selling fewer watch straps because you are selling watch straps! That makes your business a one-trick pony and therefore extremely vulnerable to the slightest change in the market. You are not selling as many watch straps because the budget-price watch market is vanishing.

I have no need for a watch strap - because I stopped wearing watches ages ago. I have all sorts of daft watches - Rolex, Junghans, Omega, in a drawer and I have absolutely no earthly need for a watch because - every telephone tells one the time - there are clocks everywhere, from the three in the kitchen to the multiple clocks in the house, office, studio, car, you name the place and there is a damn clock or some other means of knowing the time attached.

I don't need a watch strap because I don't need a watch! Simples!

The only reason people still wear watches is to show the world how windswept and groovy they are - the old Rolex gets flashed around - these people do not need a replacement strap. In an age when sexy-looking analogue watches sell (FOB from China) in lots of 100 at $10 each, the watch has become either a status symbol with a strap that costs hundreds or even thousands - or a disposable item.

When I was 14, my proudest possession was my diver's watch. But that was nearly 60 years ago! How many 14-year-olds do you see today wearing watches? They all have phones!

My suggestion is to diversify - import sexy watches with your own brand name on them, or just sell something completely different - whatever! But relying on an accessory that is bolted onto a dying product does not sound like much of a business plan!

I'm not forcing you to buy a watch strap. Justbecause you got no interest in watch straps doesn't mean someone else doesn't.

I have no knowledge or interest in fishing, I can stand on a pulpit and say fishing is for losers, I don't know anyone whose into fishing. Vegans are taking over so there is no market for fishing gear.

If people are looking for fishing gear on google - then there is a market for it. Just because you personally dont have an interest in it, doesnt mean everyone else in the country has no interest in it either.

 

[The Byre]

You are not addressing the underlying issue - fewer budget watches are being sold and young people are not wearing watches anymore!

 

[Karimbo]

You are not addressing the underlying issue - fewer budget watches are being sold and young people are not wearing watches anymore!

And your solution is to tie up a shitload of capital on make my own watch? LOL

That's you solving the underlying issue? .

Just because I'm having a bad month doesn't mean the market is dead. It was soaring and smashing records in January and March.

Just because someone is having a bad month doesn't mean you go and change your business entirely and move onto something else.

 

[japancool]

You are not addressing the underlying issue - fewer budget watches are being sold and young people are not wearing watches anymore!

They wear Apple watches and Fitbits.

 

[fisicx]

You are not addressing the underlying issue - fewer budget watches are being sold and young people are not wearing watches anymore!

A lot still do. It’s a fashion statement. Some even collect watches.

 

[Shopclicks]

The trend for both 'watch strap' & 'apple watch strap' has pretty much plateaued over the last 12 months, both with a spike at xmas.

Monthly search volumes:

'watch strap' 12,100

'apple watch strap' 90,500

If you're not page one for 'apple watch strap' organic or paid, expect a slowdown.

 

[Karimbo]

The trend for both 'watch strap' & 'apple watch strap' has pretty much plateaued over the last 12 months, both with a spike at xmas.

Monthly search volumes:

'watch strap' 12,100

'apple watch strap' 90,500

If you're not page one for 'apple watch strap' organic or paid, expect a slowdown.

I actually have top spots on a lower traffic term and make a living from it. more specifically to watch strap and lower traffic. But leather watch strap term would have much better search intent than just watch strap.

Also, you think apple watch strap is low traffic? Getting top results on that keyword is enough to get 6 figure income imho (profit, not revenye). I'm looking at semrush data and apple watch strap gives 22K monthly Uk searches and IMHO that's a good enough volume to build an entire store out of.

 

[The Byre]

And your solution is to tie up a shitload of capital on make my own watch? LOL

A few hundred quid is hardly a shitload of capital! The wholesale price for watches in China is about $10.

Just because someone is having a bad month doesn't mean you go and change your business entirely and move onto something else.

No, but it is a warning that you seem to have a need to diversify.

They wear Apple watches and Fitbits.

And you should see what those things actually cost to make! You can get a single sample smart-watch for $7.50 and 50 for $6 and 1,000 for $5 each (FOB).

It’s a fashion statement.

It's a fashion statement that comes with its own strap.

If you're not page one for 'apple watch strap' organic or paid, expect a slowdown.

This! And prices for budget Apple straps start at around $3. Luxury zinc alloy things are about $20.

 

[Karimbo]

with all due respect. you have no knowledge of this market. Just because you own a couple of watches doesn't mean you know the market.

Some of the things you're saying are actually comedic. I dont want to comment because I dont want to give too much away. But your anecdotes are hilarious.

 

[AlanJ1]

fewer budget watches are being sold and young people are not wearing watches anymore!

Based on what?

The watch market forecast is a worldwide growth of 2.35% in 2023.

Pandemic figures were high for watch sales, but numbers are still higher in 2023 than 2019.

 

[Shopclicks]

Also, you think apple watch strap is low traffic?

I didn't say that.

If you're happy with your long-tails, then fill your boots. It just doesn't seem you are.

 

[The Byre]

The watch market forecast is a worldwide growth of 2.35% in 2023.

I thought it was higher - about 4-5%. Largely disposable and luxury segments. The research company GME puts it at 4.8 - but that is nominal, so about level with dollar inflation.

Of course, @Karimbo can offer funky Apple-compatible fashion straps and some of those can be had bonkers cheap! Under $1.

But my 30 cents worth is still to diversify!

 

[AlanJ1]

I don't disagree on diversify and there's plenty you can sell as well as straps (batteries), watches themselves etc.

But I still don't think the market for straps has really declined, my family is jewellery and in-store it hasn't.

 

[japancool]

Personally, smartwatches seem like a solution looking for a problem.

I still want one though, just don't like the look of the Galaxy watches.

 

[HFE Signs]

Bank holidays are a nightmare for us too, people wind down on the run up and have extra days off too - and to rub salt in they say 'the King has given us an extra day off' - sorry, but I thought is was your employer who pays you to be off work for the day, not the King.

Don't panic, all will be much better in June

 

[Karimbo]

I don't disagree on diversify and there's plenty you can sell as well as straps (batteries), watches themselves etc.

But I still don't think the market for straps has really declined, my family is jewellery and in-store it hasn't.

Margins in straps is phenomenal. Liek $2.80 straps you can sell for £26.

Non perishable, non-seasonable. I thought it was quite resilliant actually. because the sales soar in January (post gifting). I can see AOV go down this month massively. single strap, single strap constantly. It was the norm for me to sell 3 straps in one order..

Was just wondering if anyone else is going through this - that's all. The proof will be payday. Sometimes middle of the month people can hold back on purchases and just let rip on payday. They might bookmark the site and then come back and order loads of stuff.

July energy price caps are being lowered so that will be a bit more disposable income. Hopefully it will bring down cost of refrigeration for supermarkets and bring food prices down too.

 

[Shopclicks]

Was just wondering if anyone else is going through this - that's all.

This infers that everything you're doing is all you can do. If everyone is suffering the same downturn as me, I must be doing it right.

In your position, I'd be a bit more pro-active. Not just crossing fingers.

I thought @The Byre was offering constructive thoughts.

 

[thetiger2015]

But my 30 cents worth is still to diversify!

Doesn't that make the problem worse?

The issue isn't a lack of interest. The watch market is huge, varied, lots of international custom. TikTok has inspired a whole new generation of young watch buyers who are 'trading' watches like Pokémon cards. Same with trainers, kids are buying them for £300 a pop and trading them for £50 or more profit, depending on tags, box condition, genuine marks etc. - I know this is watch straps and not watches but still, there is interest in replacing and repairing quality watches!

I think the issue is more about understanding why that traffic isn't converting and why the AOV has dropped. I would be cautious of adding more 'stuff' to a website. You confuse people. It gets bloated. You're just making more and more problems IMO. Also, yeah, you can buy a watch from China for £5 and have your logo on it, that does not make it a brand. That can make your website look tacky as hell.

I used to work for a company that sold jewellery. Own brand sales made up 30% of their turnover, branded goods 70%. Higher margin on own brand of course but they would have died if they relied on own brand. Customers saw the luxury options in the window and opened the door, they could cross sell own brand to those with shallow pockets but it was the strength of the jewellery brands that drove the traffic.

I don't know this market very well but there's the international market to consider, there's fitting services, theres cross selling things like cleaning kits or batteries etc. You stick those around the checkout 'You may also need these:' don't bother advertising those things, just add them as an option on checkout to boost the AOV.

I don't think anyone should sit on their bum and just wait it out, I think it's important to be pro active here. What are the competitors doing? Are there days in the month where you could maximise sales because the conversion rate is higher than normal?

 

[The Byre]

I don't think anyone should sit on their bum and just wait it out, I think it's important to be pro active here. What are the competitors doing? Are there days in the month where you could maximise sales because the conversion rate is higher than normal?

This!

A business is always dynamic. The word 'Dynamic' means to interact with other forces - in other words, a business is incapable of remaining static. A business either grows or shrinks. A downturn in trade is a red light - something is going wrong and your job as a business owner is to find out what that is!

You can never rely on a business to remain the source of a steady income - that never happens! Sadly, too many business people think that they can build a business and then sit back and lo and behold, they earn a relatively steady profit for the rest of their working lives!

That may be the dream - but like all dreams, you must be asleep to believe it!

(And I am even more guilty than you as I have allowed one business to totally crash and rely on my other interests to subsidise it. The C19 hysteria pole-axed it and it refuses to come back to life! We are now starting to do something about it, but IMO waaay too late! Don't make the same mistake! Please!)

 

[Karimbo]

OK a quick update. Have been quite busy since the original post. The tide changed quite a bit towards the end of the month. Mid May 2023 was probably the worst mid-month slump I've seen in the 2 years of trading. No idea why but it was performing very poorly.

By the vitals are good.

3% conversion rate with the potential to improve more.
There has been a reduction in average basket value by around 10%
The total revenue has been a little less than what I wanted, but profitability is much more because I've got a lot more organic search traffic, that I dont pay for.
Paid traffic took a hammering because of the increase in competition - however I'm not going to increase the cost per click. A lot of competitors are increasing their ads back up. My goal is to rely wholly on organic ads, so I'm not going to turn up the CPC to compete with them.

Watch straps are low cost items and I don't want to increase cpc.

Maybe I'm not being ambitious and greedy enough. The straps costs £2.50 to buy and are sold by many others sellers. on ebay they sell for £8, I sell for £18, a big company in UK sells for £24, a rolex mod shop (who sell modded roes watches) sells them for £75. A swiss watch company sells the strap for £120.

Everyone is buying from the same factory. It's a;ll about positioning, and how you masrket the products. the copy & photos which determines what you can charge. For me buying at £2.50 and selling for £18 is a fair profit and I don't feel comfortable charging £26/£30 or the ridiculously high prices the "luxury" brands are selling for.

My goal is to have magazine quality website, with professional artisitic photos and the best copy and still sell for £18. The price is accessible that it will convert more than the higher prices items and the price is reasonable that people won't feel ripped off after buying.

 

[Socio South West]

@Karimbo I am into e-commerce only in a very limited way, and rarely venture into this forum.

The hard fact is... Yes... there is less disposable income owing to inflation and other factors.... Very few watches (for those that wear them now) come without a strap so unless that strap breaks, disposable income for watch straps is unlikely to be a priority for the vast majority - which to a large degree explains the buying trend you describe.
I can't comment on the trends for design of watch straps or the style of products you offer - but it's something that you may want to review.

@The Byre and others offer you great advice to diversify your product range - they are totally right.... You have built a good volume of traffic to your site which puts you in prime position to capitalise with a diversified product range. I find it sad that you think some of the advice comedic, and would advise you to reconsider.

 

[Shopclicks]

My goal is to rely wholly on organic ads, so I'm not going to turn up the CPC to compete with them.

You're going to need a change of website platform if you want to rely on organic search.

 

[Karimbo]

You're going to need a change of website platform if you want to rely on organic search.

What website platform am I using?

 

[Shopclicks]

What website platform am I using?

Shopify

 

[Karimbo]

Shopify

Lol

This is why I'm having to ignore a lot of replies here, because people are just making presupoositions and giving "advice" based on that.

I'm using woocommerce. Never mentioned shopify once.