E-Commerce and Conversion Rate
So as we touched on in our last post, all things that relate to monetization in the online business world start with Traffic. It is the river flowing towards your online business. Feel free to let me know if I am getting too metaphysical sounding.
Anywho, once we have this traffic flowing towards us, it is our job to funnel it through some sort of conversion piece. The purpose of this conversion piece is to catch a certain percentage of the traffic flowing towards us and to convert them into some actionable event, such as a sale.
If you are sending traffic from an email list to a specific landing page on one of your e-commerce sites that sells a single product, or a single product with multiple variations, then in theory your conversion rate could get as high as 5%
In practice your conversion rate will depend on how hard of a sell you do, and how many times you bombard your list with sales letters for the same offering. In practice, with lots of split testing and copy writing help, in between 2-4% is not uncommon for an important offering that warrants such an effort.
People who run blogs, and engage in affiliate marketing might write a couple of blog posts and a couple of email broadcasts in order to promote an affiliate product and expect something near a .5% conversion rate. Assuming that they promote fairly often and have multiple streams of income this model can work well.
If you are run an e-commerce site with multiple products where the primary source of traffic is from search engines, then you should expect your site’s average conversion rate to be significantly lower then by the email list method. The Invesp Blog has some conversion rate tables for e-commerce sites listed by industry.
Keep in mind that if you have 100 products listed for sale on an e-commerce site, then each and every one is likely to have a different conversion rate. For such sites, it makes sense to track the individual conversion rate for each product, as well as site’s overall, average conversion rate.
Tracking individual conversion rates will give you an idea of which products are selling well. You can use this data for all sorts of purposes, such as inventory, deciding which products to add or drop, as well as spotting seasonal trends.
Tracking the average conversion rate for your entire site will help you do quick gross conversion rates to get a snapshot of the health of your business.
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