Just to echo what the others have said really you need to work on your conversion rate. Looking at your site, the first thing Id do is have a complete re-design. It wont be cheap but see it as a long term investment. Look at the key players in your industry and pick out what theyre doing right.
Little things really do count. I spent 20 or more seconds looking for youre about us page and when I got there it wasnt formatted very well and put me off your site completely. From looking at Google Analytics a VERY high percentage of visitors look at our about us page. To me this shows people what to know who we are and what we do, so not only must it be easy for them to find, it should also be a good and informative read. Not the normal, we have X number of products, were based here, and so on. Make it personal; tell them who you are (pictures of you and your team are great, too), what experience you have in the fancy dress industry, what makes your products special, the list is endless. You may want to consider hiring a copywriter to do this and your product descriptions, youd probably be looking in the region of £500.
Another point, your categories are very poorly organized. It wasnt until I clicked on them that I saw you had a lot of sub-categories, you should make sure every product category is viewable. If I was looking for Ben 10 fancy dress costumes, would I necessarily click Child Party Supplies? To me that means accessories like paper cups and party poppers, not costumes by any stretch of the imagination. You should organize your categories so that you have no more than 6/7 sub categories, and make them relevant. Look at this shop; see how theyve broken up their categories:
http://www.allfancydress.com that helps believe me!
There are a few other obvious faults with your site; no phone number, you only accept PayPal payments, images are too small, formatting isnt consistent, descriptions are too short, on-page SEO is very poor, the list goes on and on it shouldnt!!
Only once your site is functional and looks good should you think about advertising. Its a waste of time and money otherwise.
What others have said about AdWords I do not believe to be true. If youre targeting keywords like fancy dress, then yes I would agree. However, people searching for fancy dress are window shoppers so even though it has an expensive CPC, youre unlikely to convert many sales from it. Look at getting TARGETED traffic that is vital. By targeted traffic I mean getting visitors that are looking for exactly what you have on offer. Ok, so as an example I looked at the keyword star wars costume which gets approx. 6,600 searches per month! Google suggest you should bid £0.27 for positions 1 3. I often bid half the price Google suggest and get top positions, I do this by making relevant and appealing ads to improve CTR (click through ratio). Just because Google are getting £0.27 from somebody, doesnt mean theyll make the most money if only 1 in 10 people click on it. If 1 in 3 people click on my ad, even though Im bidding less, overall theyre making more money so I rank higher. AdWords is a massive topic and believe me a very powerful means of advertising, I would not over look at as others have suggested.
Social networking is massive and you should certainly look to tap into this. Weve had great success advertising on YouTube (the worlds second biggest search engine if you didnt know already). In our industry people want tutorials, which perhaps isnt relevant for you. However, you could look at just showcasing your costumes. Theres ways you can increase your exposure on there, again plenty of free guides on this. Twitter and Facebook are also very good. As are relevant forums, gain respect there and you can easily build a loyal customer base.
This is a huge topic, youve got to go out and find some information, its easily available. Best of luck with your site!