Financial Forecasting for apparel e-commerce

[olimellin]

Hi all

Firstly thanks for having me as this is my first post, so pelase forgive me if this is posted in the wrong forum. I'm currently in the process of setting up an online fashion magazine that will essentially use affiliate agreements with our clients and lokoing for some direction from some of the more knowledgeable and experienced members of the forum.

This is my first online business that I have set up, and my problem is knowing how to forecast traffic and what can be expected as conversion rates.

I am confident enough in the business model away from the traffic estimates, but obviously without this there cannot be a real financial projection for its success.

Can anyone help me with what conversion rates I should be working with, i.e. from hit to sale. For this purpose I am happy for anyone who can help to work on the assumptions that it will operate as a standard affiliate website, although we are working on having our own e-commerce built so purchases can be made without leaving our own website.

The estimated figures will be being used to pitch to investors in the following weeks, and will feature in the business plan going forward.

Many thanks for any help in advance.

 

[oldeagleeye]

First of all OP I can't see you getting investors for an affiliate site becasue there are1,000 and you would have no USPs.

2) It is impossible to forecast traffic without knowing what you marketing budget for SEO is but as far as conversion rates go i get the impression gained from a good many posts on that subject that about 2% although tiny is regarded as pretty good.

3)Personally I would advise you to rethink your who business askingyourself what is an affiliate site ???.

Most are independent on-line shops lets say like a travel agents that already gets 1,000s of hits a day and may earn a few quid extra by displaying a banner add to say car-hire. Fine. Its a possible add on to the holiday.

When it comes to a standalone affiliate site however you will have to pay to generate that traffic in the first place and for what. All youy web site will be is a barrier to the on-line retailers own web site.

Now as is becoming the norm most internet users are getting fed up to the eye teeth with directory and affiliate sites because they are pretty savvy when it comes to keywords so if they want to buy a 'fur trappers hat' that is what they will look for. A company selling them. They certainly don't want to go around the houses by clicking on affiliates sites.

Something that you really ought to take on board.

Hope the info helps

Rob

 

[olimellin]

Hi Rob

Thanks for your reply.
Maybe I was unclear with my first message, but it is distinctly NOT an affiliate site as I quite agree, they are ten to a penny and very difficult to get any substantial point of difference in that market without investing heavily in marketing.

The purpose of the post was to get an idea of what those affiliate sites use as their model for financial forecasting, as we may use it as a comparison to our model - we will be dealnig with brands that currently do not have an online presence, so a traditional affiliate link would be impossible. So the 2% mark was the sort of figure I was looking for.

I am also aware of the need to forecast around the SEO budget, but am lucky enough to have someone do that free of charge for the time being. We are not concerned about lack of traffic, just how to forecast its conversions.

Thanks for your help anyway, and apologies for being vague but I'm not comfortable in disclosing anything further about the business model on the public forum. Perhaps we'll meet again.

All the best