I recently I had someone ask “why do I seem to get more sales during in-home parties versus online?”
I instantly flashed back to high school, when I first started trying my hand at this whole “online marketing” phenomenon.
Having a father that owned his own wholesaling business, I grew up believing that I could start a business and maybe work for myself someday. I always thought there was something special about his attitude of independence and work ethic.
I heard stories and watched YouTube videos of entrepreneurs who made gobs of money from their college dorm rooms by “dropshipping” clothes, jewelry, watches, you name it - anything that could be shipped overseas was being sold on Amazon, Ebay, and Shopify stores by these guys.
The process sounded so simple to me. “Just list a bunch of stuff on Ebay and it will sell, right?” I thought to myself, thinking I’d be sipping pina coladas at the beach by the time I was college-age.
In addition, I was always looking toward the future and knew I wanted to own an online business someday down the road. It sounded so much more exciting than working a measly 40 hour work week, away from my kids, making someone else’s dreams become reality. Having an online business would help me provide a stable income for my family, allow my wife to be “stay-at-home,” and I would never have to dread Mondays.
I got my start by listing knock-off women’s handbags on Ebay - not the flashiest product, but I was able to make a deal with someone I knew who carried them. I honestly thought that this could potentially turn into a nice side business.
Long story short, it was a complete failure. I probably listed 100’s of items on Ebay and sold a couple of them. It wasn’t enough to cover the Ebay fees, let alone the time spent taking 7-10 pictures per item listing. On top of that, I had invested money into a nice lighting booth to ensure the highest photo quality.
Point of Failure
Have you ever felt like lying to people to prevent them from knowing that you failed at something?
Yeah - my family and close friends were aware that I was trying to start an “online business” and would continually ask me how that was going… Well, “it wasn’t” going anymore. I really “hit the wall” at that moment. I’ve never been “ok” with letting other people down, and to be completely honest - that experience probably instilled a fear of failure that I’ve been battling ever since.
With my “tail between my legs,” I basically gave up on my dream of being a knock-off handbag salesman (lol - that wasn’t actually my dream).
What I didn’t realize was that, when I was selling on Ebay, I was actually getting a standard “conversion rate” for type of product I was selling and the platform I was using (Ebay).
Conversion Rate definition:
“The percentage of visitors who take a desired action.”
The “desired action” in this case was for Ebay visitors to search a keyword relating to the product I was selling (a handbag), click on my item, and make a purchase. The conversion was only achieved if the customer purchased my item.
Here’s an example of how Ebay calculates their conversion rates:
“Therefore, if your Ebay listing has been viewed by 100 visitors and you have made 5 sales, your conversion rate is 5%. The average conversion rate is around 2-3% and varies depending on the device.”
I was probably in that 2-3% conversion rate range.
… And I quit, even though I was actually batting at or above average. Maybe if I committed to it even when times were tough, I would have enjoyed a nice part-time side-gig and learned some stuff.
Anyways - back to Ebay. In the example above, we said that 100 people viewed an Ebay listing and only 5 people purchased.
Can you imagine if you had 100 people show up to your next in-home party? Do you think you’d get at least 2-3 sales out of it?
I’d be willing to bet that you would. In fact, you’d probably get a lot more than 2 or 3 sales (unless there’s a full moon that night).
That example tells me that the average seller will need a lot more people viewing their online sale versus their in-home party to get the same number of sales.
One of the tips we learned for running successful in-home parties was to NEVER place a mirror in the dressing room. Always have the customer try the clothes on, walk out of the dressing room, and receive feedback from others in the room.
It really got me thinking…
The reason for this is that she probably had a negative experience at some point in her life that formed an external belief as well as an internal belief that became the “whisper in her ear” telling her that she looked “ugly” no matter what she tried on.
This would ultimately prevent her from purchasing something that made her feel empowered and beautiful.
We all have these internal and external belief patterns that need broken.
Remember the experience I had where I had to admit to others that I had failed, and inevitably formed a belief that selling things online must be witchcraft and voodoo due to my own failure?
Our negative experiences in life cause us to form internal and external belief patterns (objections). These beliefs aren’t always true.
When our customers shop with us in person, they collect our positive feedback which sometimes can overcome their own negative thought patterns and objections since we provide an alternate perspective.
When they go to shop with us online, they don’t have that opportunity to collect feedback from us, so they cling to their own thought patterns and objections.
I believe this is truly why we sometimes see lower sales from our online activities with customers. When we send them a link to shop with us, we don’t have a chance to overcome their fears and objections. In essence, a lot of our sales come from shoppers who know we have something they already want.
Can you see why the “conversion rate” would be lower if we send 100 people to an online website versus an in-home popup with us now?
And I’m not hating on Shoppe or Facebook sales. In fact, just the opposite. I shared that story with you to highlight the problem, but there’s also a solution.
… And the solution to selling more online is traffic.
If I have 10 people show up to my in-home party and 3 of them purchase, that’s a 30% conversion rate. If I had that same conversion rate for my Shoppe boutiques (I wish) then I would make 30 sales for every 100 views of our popups.
But the average conversion rate for a platform like Shoppe is more like less than 5% (just like Amazon, Ebay, and Etsy - they are all this low, on average). Keep in mind that these are just industry standard figures - your conversion rate might be higher or lower.
So, in the example above, for us to match the 30% conversion rate that the in-home party produced and get 30 sales, we would technically need more like 600 views in each popup. That’s a lot more traffic, right? There’d be a line down the street and around the block if 600 people showed up to your in-home popup!
I actually just highlighted a good reason to focus on building an online business - local businesses can’t scale as much or as fast and online growth is more easily manageable. We can discuss this some other time!
This is why I had given up selling on eBay in the past, and a big reason why we get frustrated with online sales. It isn’t anything we’ve done… It’s just a whole different ball game.
To continue this upward growth online, we need to focus on getting roughly 6 times the traffic to our popups to match the success of our other activities. It’s not impossible if we are willing to shed our negative thought patterns towards online marketing. I look forward to highlighting more about my journey into the world of online marketing and will discuss ways that we have been able to successfully attract more traffic to our Shoppe popups.
Do you think my theory could be correct or way off base? Let me know in the comments!
Thanks for reading!
Want the ability to set up your online boutiques in 15 minutes without having to schedule posts? We're currently offering a 14-day free trial to Shoppe! You can check it out for yourself and take advantage of this special offer by going to http://shoppesupport.me/free-trial
See you on the inside!
Here's episode 1 of "Marketing Around the Block" where I discuss this same concept of getting more traffic to your online boutiques and why it should be a priority!
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