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Commonly the price received for a product is broken downinto parts. And selling
price less overhead and costs is netprofit. No matter how you choose to do the
math, the profit oneach sale made early in the month can be considered as a
steptoward covering costs for the whole of it.
Sales made once all costs have been covered, are clearly thesales you want.
For the profit per sale can now be considerednet. And excepting taxes, these
are bucks you can tuck intoyour pocket come the end of the month.
Where The Real Bucks Are Made
Sales totals, net, and so forth, are a continuum in thereal world. That is,
as volume rises over a given interval,net increases. And conversely.
But to make a point, assume you are selling wigits in anoffline shop at $100
that cost you $50. Also assume youroverhead is $47 per wigit, provided you sell
100 each day.Your net is $3. per wigit.
On a day you sell 110 wigits while holding expensesconstant, the extra ten
sold cost you only $50 each, yourwholesale cost. And your net is now $50 instead
of $3.These additional ten sales put an extra $500 into your pocket.
Again, this example in unrealistic, for there are no suchclearly defined points.
But hopefully it is clear that withfixed costs, there is a point above which
sales cost you onlythat of the inventory itself. And it is these sales thatgenerate
the most significant profits.
Volume Also Dictates Profits Online
The same holds online. You have fixed costs such ashosting. Phone costs vary
month to month, but tend to hoverwithin a range. If you are buying products,
you have inventorycosts. As in the example above, the more targeted traffic
youcan draw over a month, the better your chance of coveringoverhead and reaching
the high profit zone where only thecost of inventory needs to be covered.
Targeted Traffic Is Precious
A CR (Conversion Ratio) of 2% is considered good by many.That is, if 1 in 50
visitors buy, you're doing fine. However,such models must be used only as guidelines.
A gross check onhow you are doing month to month.
Such thinking can be misleading. For one, such numbers cannot tell you anything
about the potential value of a particularvisitor. Even if another 50 hits brings
an additional sale,there is no way to determine whether it will come from the
firstof these visitors, from one in the middle, or from the last one.
Further any set of 50 may produce 10 sales, while the next950 produce none.
The CR remains 2%. There is absolutely noway to determine which visitor will
be a buyer. The bestapproach is to place a high value on each and every visitor.And
assume each and every one will buy.
Closing Doors In The Face Of Your Visitors
Suppose that in the hypothetical offline shop describedabove, the doors had
been closed an hour early and the extra tensales were lost as a consequence.
It would mean in that examplean opportunity was missed to pocket an extra $500.
Splash screens are closed doors to many. They often drivecustomers away in
droves. (A home page generally crowded withslow loading graphics with an Enter
link buried somewhere withinit.) Since this is so easy to measure, it puzzles
me that somany such pages remain in use. Simply count the hits on thehome page
and compare them to those on the page it links to.You'll see you are slamming
the door in the faces of manyvisitors, often as many as 50% of them.
Consider again the example above. Consider the $500 lostin closing early. Can
you really afford to do this? And evenif you can, why would you?
Follow The Rules
Most webmasters do try to get things right. They want tomaximize sales, first
to cover costs, then to grab real profits.They know better than to offend potential
customers. And theyknow that in tossing aside even a single visitor, they may
havetossed a sale.
Targeted traffic is tough to generate. Many hours anddollars disappear in this
task. It only makes sense to treatevery visitor you can draw as a valued and
honored guest.
Here They Are
Here are the "rules," or better, "practices," your visitorexpects
to find in place. If you have erred in any of thefollowing, fixes are needed
immediately. Nothing I know of isquite as effective in evicting visitors quickly
as a splashpage. But some of the following can toss 10% in an awful hurry.And
in doing so, you are quite likely tossing those who mighthave shoved you into
the high profit zone.
Set table width at 600 pixels to prevent horizontal scroll. Limit line lengths
to 65 characters for good readability. Use Arial or Verdana; never New Times
Roman. Stick to black text on a white background. Use an intuitive navigation
system; simple and straightforward. Minimize the use of graphics for fast loading
pages. Hold to complimentary colors with minimal shades of each. Be friendly
to Netscape users; some now ignore them. Forget Flash or sound. Maximize the
impact of the first screen on each page. Begin each page with a powerful emotion-grabbing
headline. Provide strong sales presentations. Include pages of great content
valuable to your visitors.
Go For The Big Bucks
The objective of your site is to maximize profits whichdraws the focus to sales
beyond those that cover costs. Itmakes sense to seek to meet the needs and preferences
of eachand every visitor to your site. Why turn away even one withsome dumb
bust in site design or performance?
You can't please everybody. But the more you please, themore sales you'll make.
And it's in those last sales made eachmonth, that the potential for significant
profits lie. Be sureyou have done all possible with your site to assure you
makethose profitable sales.
About the Author:
Bob McElwain, author of "Your Path To Success."
How to build ANY business you want, just theway you want it, with only pocket
money.
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