Website - A drain on profit - to keep or not to keep.

JJWinst

Free Member
Mar 27, 2013
320
16
Wigan
Hi all,

I've invested a lot of money on our website and it has been running for over 24 months without really making much profit. A good quarter is to break even with the current costs of the site;

- Hosting & Support
- Finance of paying for the site
- Sage Pay costs
- google shopping

We have good success on Amazon & eBay and there is definitely a need for our products we just find the 'PPC' marketplace to be so hard to convert on without wasting money.

My question is whether I should keep on with paying to advertise the site or not, the turnover loss wouldn't be harmful to the business because it is currently running at a loss..
 
A

arnydnxluk

24 months isn't crazy, are you on the right path? Are sales growing month on month or has it flat lined?

- Finance of paying for the site

What does this cover?

My question is whether I should keep on with paying to advertise the site or not, the turnover loss wouldn't be harmful to the business because it is currently running at a loss..

Are the ads bringing in more than what you're spending on them? If not, reduce spending and go back to the drawing board with the basics - work on improving your click through rate and conversation rate. Do your customers acquired through advertising convert to repeat customers? If not, why not? Also, where are ads being placed and are you targeting the right audience?

Lots of questions but nobody can advise you without knowing a lot more about the business and its current situation.
 
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JJWinst

Free Member
Mar 27, 2013
320
16
Wigan
That's my biggest concern, over 24 months we started stronger than the last 6.. Our products are seasonal and change very quickly so it's not always comparable. The finance is for the total cost of the site which was over a finance agreement split over 4 years.

At present the revenue brought in is more than what we are spending the margin is squeezed so hard that it's either at close to break even or worse, a loss.

I re-market using mail chimp but find it hard to get repeat business.
 
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PPC and ecommerce done right should be able to win out over amazon and ebay fees, so something seems missing here. You mention sage page, is your volume high enough to justify their fees? Perhaps another payment solution would be more cost effective, also unsure why your site needed finance, is it a complex ecommerce system with epos integration?

Some more details on your current setup might help with us all weighing in on advice :)
 
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A

arnydnxluk

In 'Hosting & Support' - I assume the support is more along the lines of website development/modification, is that right? If not what kind of support are you paying for?

I would make sure all of your costs are tightened down before reducing advertising spend, then look more closely at your advertising and in particular how to turn customers into repeat customers.

Where are you advertising currently?
 
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JJWinst

Free Member
Mar 27, 2013
320
16
Wigan
The website at it's peak ran at about 12% of turnover for cost of sales.. eBay & Amazon are both around 15% so not a huge difference.. The difference is turnover which is a lot less through the website.

Sage Pay is only £30.00 a month and is fully integrated now so would seem pointless to change. The website cost a considerable amount over 2 years ago and around a year ago I updated to a responsive site which added on to our finance.
 
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JJWinst

Free Member
Mar 27, 2013
320
16
Wigan
In 'Hosting & Support' - I assume the support is more along the lines of website development/modification, is that right? If not what kind of support are you paying for?

I would make sure all of your costs are tightened down before reducing advertising spend, then look more closely at your advertising and in particular how to turn customers into repeat customers.

Where are you advertising currently?

By 'Hosting & Support' that is for the hosting of imagery; banners etc, and support is Visualsofts ticketing system for queries etc..
 
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pelparc

Free Member
Apr 10, 2017
264
34
We stopped our PPC adds quite a while ago. It became pointless with the cost of a click almost the margin of the product. We found that people who tended to click on the PPC adds are the type of person that searched the internet for the cheapest price, so if your not the cheapest you do not get the order and if they order they only come back when you are the cheapest which we are normally not.

Personally i would try and reduce your hosting and management costs its sounds like you have a very large capacity with your ticketing system and special image hosting which might not be needed (obviously we have no idea as to how many orders the site processes or what your actual costs are) We managed to save a fortune when reducing costs. Keep your site, are the prices on the site cheaper then eBay and Amazon as i often look to buy direct rather than through eBay, which has saved me a lot of money.

Also personally i hate popup adverts when i look at a site so the voucher offer actually put me off particularly as i had to give my email address even before i could look at the site, cant you have it as a link in a prominent place instead. Others will also disagree with me (which is normal), but do you need your trust pilot (or whatever it is) i think your site looks real and trustworthy without it. We scrapped our trust badge logos, review indicators etc. and haven't noticed any difference at all.
Would be a shame to scrap the site, which on a quick glance looks good.

Good luck
 
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JJWinst

Free Member
Mar 27, 2013
320
16
Wigan
Thanks for the feedback. I am working on the hosting costs as I don't quite understand why they are so high. The feedback I get from VS is to reduce image size on banners etc but it doesn't seem to make a difference.. I'll take your feedback on the popup.. it doesn't actually collect much information at all so is quite a hindrance.
 
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We stopped our PPC adds quite a while ago. It became pointless with the cost of a click almost the margin of the product. We found that people who tended to click on the PPC adds are the type of person that searched the internet for the cheapest price, so if your not the cheapest you do not get the order and if they order they only come back when you are the cheapest which we are normally not.

How were your PPC ads managed? Did you do them yourself or via an agency?

There should never be a time when PPC has been running for a while and is not making money, if the right customers are not clicking on the ad then its normally more a factor of keywords and ads not the PPC market as a whole.
 
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Others will also disagree with me (which is normal), but do you need your trust pilot (or whatever it is) i think your site looks real and trustworthy without it. We scrapped our trust badge logos, review indicators etc. and haven't noticed any difference at all.

I didn't even notice the Trust Pilot link at the bottom - I've never seen that "Trusted Shops" logo before and it's hidden well out of view.

It looks like the OP is on the free Trust Pilot plan as an ad is being shown on the right hand side of their Trust Pilot page.

OP - why aren't you using the proper Trust Pilot logos in a (slightly) more prominent area (or is this not allowed on their free plan?) Surely those logos are the ones to give visitors more confidence in purchasing.
 
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...we just find the 'PPC' marketplace to be so hard to convert on without wasting money.

My question is whether I should keep on with paying to advertise the site or not, the turnover loss wouldn't be harmful to the business because it is currently running at a loss..

So, this isn't a question about your website; it is a question about PPC.

Is that right?
 
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Yes you could say so.. PPC isn't earning it's way and the site isn't getting anywhere near eBay/Amazon revenue.

OK - put PPC to one side; it isn't working as well as Amazon.

If the question is about the website then it is really about repeat business. Any customer coming to you - whatever the channel - should be a prospect for repeat business. If the value of repeat business isn't outperforming a channel - like Amazon - then you have lots of room for improvement in terms of managing your customer base, which isn't necessarily just about your website. It will have more to do with how you maintain contact with customers.
 
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Chris Ashdown

Free Member
  • Dec 7, 2003
    13,388
    3,006
    Norfolk
    One thing that would put me off the site is that there is no real description on a £230 jacket, I don't know what its made of or even if it's waterproof etc Why its worth the money , how many pockets, I cannot pick it up and look at it or feel it so I need as much information I can get along with more images to see what the back looks like etc.

    Also what size is Large, if I am buying winter clothing can I wear a sweater and base layer under it or is it a fit for someone wearing next to nothing

    Hate the total lack of colour
     
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    Your descriptions are fine, the lack of colour is not an issue, your problem is most likely the VS platform, we are on it, and its really hard to make it work.
    If Vs are runnig your PPC then you are in trouble, they stink at it.

    There are a lot of sites that if people really drill into the numbers, lose money, its an add on to your store, helps clear old stock etc, but to really make it work, takes a more full-on approach.
     
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    Hi @JJWinst

    Let's think positive about this. Your site looks good and it looks like you have good products. I think you probably just need some help on the optimisation and PPC side of things.

    The error that many people make with PPC is that they direct ad traffic to their homepage, category pages or product pages without knowing if those pages even convert well.

    Just think, why would you keep trying to fill a bucket if there's a big hole in the bottom?

    Most PPC agencies also totally ignore this fact because they don't want to get their hands dirty once the account is set up. They just want to spend an hour a month tweaking and then take the cash for it.

    Google Ads are super-expensive so it's no longer good enough just to set some ads live and hope for the best. You actually need to put in the work to develop landing pages (either with developers or landing page software) to help you capture the sale. It's work in progress.

    By looking into your analytics you will be able to tell where your weaknesses are in terms of people dropping off your site (i.e what pages they exit). If you have lots of visitors to a product but no sales then you have some work to do on the optimisation side if things.

    If they are dropping off before that then you need to work on the navigation and user journey side of things.

    People don't just buy stuff because you have a nice site. They also don't buy stuff because you have a competitive price. There are a ton of reasons why people buy or don't buy and it's up to you to test and tweak your site to continually improve.

    You also need to bare in mind a few other things:

    1. Sometimes products just don't convert for PPC. - The cost per acquisition is too high and it just doesn't work.

    2. You need to collect email addresses at every opportunity. - Most ecommerce conversion rates are about 5%. That means 95% of people leave the site without buying anything. You need to try to capture an email address from that 95%.

    It looks like you're relying on the email sign-up box at the bottom of the page. Get OptinMonster on the site and watch your sign-ups go through the roof. More email addresses means more eventual sales. Your PPC will start to get cheaper the more you collect.

    3. You need a Marketing Funnel - Consumers generally need to learn to trust a company, especially if they are new. Your marketing funnel is a series of automated emails you can send to introduce, educate and add value to them. At the end, you can also get them to buy from you. It's 'sales on autopilot'.

    4. The first sale is not the end of the job - You may make a loss on the initial acquisition of a customer but they could turn out to be worth hundreds of pounds over the next year. You need to work hard to get your customers to spend more with you. If you do this correctly then your PPC could look quite cheap. It's time to play the long game!

    Some other tips that I have used in the past on PPC are:

    - Always test your ad copy and language. You can always improve.

    - Numbers work well to get the message across. Prices in ads can prevent needless click or encourage qualified ones.

    - Use specific ad copy and landing pages for your slowest days of the week (i.e offer more of an incentive). Sometimes your Saturday ads will need a kick-start. You can either put them on hold or use a deeper promo code.

    - Target by device if you know desktop converts best. If mobile doesn't convert, then you have work to do.

    - Countdown timers work well on landing pages. Scarcity of product or discount works well.

    - Set up Google Customer Match Adwords Retargeting by uploading your email list to your Adwords account. This means you can reach people already on your email list to get them back to your site.

    I hope that helps.

    Best regards

    Matt
     
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    pelparc

    Free Member
    Apr 10, 2017
    264
    34
    How were your PPC ads managed? Did you do them yourself or via an agency?
    There should never be a time when PPC has been running for a while and is not making money, if the right customers are not clicking on the ad then its normally more a factor of keywords and ads not the PPC market as a whole.
    Do not want to detract from OP but to answer you question.
    Quite a few years ago we started using PPC and it was quite easy and each click was just a few pence quite often 1-2p this was great although conversion rate wasn't fantastic but OK. Looking into which products actually converted against the products that didn't when clicked on you could quite clearly see the converted products were the cheapest on the internet (or as good as) again to start with this was still OK, however about 7 years ago we had a influx of people selling part time from home thinking that it would be easy money, which after a few months they found that it wasn't and then they simply reduced the sell price, quite often below cost meaning that we no longer sold the cheap items. As soon as one part time seller disappeared anther would start. A little bit later large companies like John Lewis and Boots started to sell the same or similar items and they also started to use PPC which dramatically raised the PPC price making it completely nonviable to carry on. The items that we still appeared for drew so little traffic and we come up in position 1 or 2 for a organic search there was no point in continuing. People are selling £1.99 items with free postage (to fat to be a large letter) and running a PPC campaign on it. Sometimes you have to know when to stop chucking money away. As Matt above says "1. Sometimes products just don't convert for PPC."
     
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    antropy

    Business Member
  • Business Listing
    Aug 2, 2010
    5,322
    1,104
    West Sussex, UK
    www.antropy.co.uk
    Thanks for the feedback. I am working on the hosting costs as I don't quite understand why they are so high. The feedback I get from VS is to reduce image size on banners etc but it doesn't seem to make a difference.. I'll take your feedback on the popup.. it doesn't actually collect much information at all so is quite a hindrance.
    So what are your average monthly costs for the website and I'll give you an honest opinion on if they're too high or reasonable?
     
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    Lots of interesting chat on this thread.

    (I also work on a VS site so interesting to see other people's opinions on it)

    A couple of things to note:
    • If you're using shopping ads - the feed is absolutely crucial (even more so in Fashion I believe) - so have a really deep dig into that and work out what products don't have that much information in.
    • As far as VS and Site Speed goes - make sure you're resizing and compressing images before you upload them. It's time consuming, but definitely helps.
    • Surprising that you're doing better with Amazon - normally their fees are restrictive to margins. What's selling well on Amazon? Maybe run some test PPC campaigns with small budgets at really targeted key phrases to see if you can get it to a profitable place?
    Sounds like there might be a few things at play though ... Best of luck!
     
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    We stopped our PPC adds quite a while ago. It became pointless with the cost of a click almost the margin of the product. We found that people who tended to click on the PPC adds are the type of person that searched the internet for the cheapest price, so if your not the cheapest you do not get the order and if they order they only come back when you are the cheapest which we are normally not.
    This! (The rest of his advice is also very good!)

    PPC is a waste of time and money - only Google ever earns any money from PPC.

    But what you are missing is what is known in Germany as 'Trick 17' and is also known in France as 'System D' (and before you ask, nobody knows where those expressions come from, though I keep hearing some pretty far-fetched theories!) It means to use a simple trick, so as to get the best of both worlds.

    Ebay and Amazon cost money with every sale - so you want to sell from your own website of course. Well, guess what! Yes, many of your customers would prefer to buy from you directly and avoid eBay and Amazon costs as well!

    The only problem is, eBay and Amazon is where people look.

    I bought the wood stove in our kitchen for £100 less, by buying direct, but I found the vendor on Amazon. I bought the roofing material for a building for £1,000 less, but I found the vendor on eBay. I bought the wife's car directly from a dealer for £400 less, but I found the vendor on eBay.

    Just make sure that people who find you on Amazon and eBay, will be able to find your website, thanks to that listing. Just make sure that your eBay and Amazon shops feature your name and that name can be found on Google, etc.
     
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    PPC is a waste of time and money - only Google ever earns any money from PPC.

    We'll definitely have to agree to disagree on this point.

    I'm a huge fan of PPC and have seen it work in lots of circumstances across lots of industries.

    I think the real reason it fails for a lot of people is that quite often it's not configured correctly and there isn't enough attention paid to monitoring and improving campaigns.

    I'm not saying that it'll always work for everyone - but honestly, for most people it will work 90% of the time with the right setup.

    I appreciate the rest of your post for sure - good advice.

    But PPC is extremely powerful and can be incredibly profitable in the right hands.
     
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    I would say do not dump what you have but put it onto tick over

    Get your hosting and other tick over costs down

    And leave it sat there

    Then at any time in the future you can pick it up again

    Things change - your knowledge changes - others drop out etc

    If you dump it - then starting up again is massive - if you leaving it there then you have options

    You should not IMHO be putting effort into it - you have done that already - get the money where it is in the now but do not shut down future options if they can be kept alive for not much dollar

    In the long run the market finds its own level - so if you cannot make PPC pay then others probably cannot and they will vanish or the price will come down etc

    And maybe they have a cheaper source of supply or running costs etc but if not eventually your chance will come around again
     
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