What’s in a number? A lot, actually.
That’s why today, we are going to be talking about the top five eCommerce statistics that all dropshippers need to know.
These are things that are going to help you get a better handle of your business. Along with helping you see exactly where you should be.
The online shopping statistics below will provide a baseline for your dropshipping store. The only way I figured out these statistics was by actually putting in the time, building stores, and just going through so many different processes over the 10+ years I’ve been doing this.
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5 eCommerce Statistics for Online Shopping in 2020
Over the years I've kind of established a baseline of metrics. And in this blog I'm gonna give you five of them. That should really help you and let you see where you're at with your business.
I’ll also give you some ideas of quick wins you can implement right away to help to get you better results.
1. On Average, Funnel Conversion Rates Drop 50% at Each Step.
The first of these five eCommerce statistics is about conversion rates in your sales funnels. It’s important to know that on average, the funnel conversion rate for your store will drop 50% at each step.
Note: Keep in mind these numbers will all be averages, because of course, there are exceptions.
Now I'm not talking about ClickFunnels, I'm talking about in Shopify. So, if you're already on Shopify, and running, you will see in your dashboard what your conversion funnel looks like.
The reason I’m sharing this eCommerce stat (and the reason we use it) is to identify problem areas in the sales funnel. Once you could find the problem, then you could start doing things to fix that specific step and get more sales.
This 50% is a good general rule of thumb to start with. You want to be able to dissect possible problems in your business and with your pages on your website.
Let’s do an example and say that on your website, eight out of every 100 people (8%) add a product to their cart. With a 50% drop, you're going to see about four (4%) of them are then reaching the checkout page. Going further, 2% of those 100 visitors are actually placing orders.
Conversion rates do vary of course, based on where your traffic is coming from, and how optimized your site is. So these are just numbers I'm plugging in here for the sake of giving an example. Remember though, as a general rule of thumb, conversion rates will drop about 50% at each step.
Now how do you use this? Look at the data that’s already available in your store and identify the problem areas.
So let's just say for example, your conversion rate right now on your store, is 1%. But 10% of people that visit your site are reaching checkout. And maybe 20% of people that visit your site are adding to cart.
Well, if I was auditing a store and saw this massive drop off from 10% to 1%, I would know there was something wrong with my checkout. Then I would look for problems in that step to fix that drop off and get my conversion rate up to 5%. Remember, 50% each step.
2. With the Drop Ship Lifestyle Model, a Good, Blended Return on Ad Spend is 10x.
This online shopping statistic is specific with the Drop Ship Lifestyle business model that I use and that I teach. With what I call a blended ROAS (return on ad spend) is 10x, okay? Blended, meaning a mix of everything.
This is a question that we get all the time that has to do with how much should I spend on Google Ads? The answer always varies.
Let's say for example you are using Google Ads, which if you're part of Drop Ship Lifestyle, you definitely are, and you spend $100 on advertising. Well, if you spent $100 advertising your paddle board store, that would mean that I would want you to get at least one sale for $1,000.
Why is that? If you spent $100 to get a $1,000 sale, you would get a 10x return on ad spend. That number is a great baseline to aim for.
So, when people ask us how much they should spend on ads. My answer is simple– if you can maintain a 10x return on ad spend, you should spend as much as you can.
Now does that mean to spend it all the first day you're in business? No, absolutely not. But as you scale, get more comfortable with paid traffic and as your return on ad spend stabilizes, then you can keep spending more.
Listen, if I can give you $100 and have you buy something for $1,000 from me, I am going to make probably 20-25% net profit on that. I would do that all day long.
I should also note that this does not include product cost or cost of goods sold. The profit margin does, but not the return on ad spend.
To recap, the second important eCommerce stat to know is that with Drop Ship Lifestyle, a good, blended return on ad spend is 10x
Now if your return on ad spend is lower than that, then my advice is to look at what's causing drop offs in your conversions.
Look at what you're getting traffic for, and do better with it. If your return on ad spend is higher than that, that's amazing! However, that also means to me that you can spend more money, that you can keep working in your sweet spot.
At the end of the day if you spend more, even if your return on ad spend goes down a little bit, you'll be left with more net profit. Which really is the name of the game, right? How much money stays in your bank account every single month and how big that number can get. Additionally, check out our Ultimate Drop Shipping Guide for more tips and tricks of the trade.
3. Targeted Traffic From Your Alpha Campaign Should Convert at 2.5% or Better.
The third eCommerce statistic that you need to know when dropshipping is specifically for the Drop Ship Lifestyle model is that targeted traffic should convert at 2.5%, or better. Now, when I'm talking about targeted traffic I'm talking about the alpha campaign.
Now alpha and beta campaigns are all taught in the Google Ads for eCommerce course that's included with Drop Ship Lifestyle.
Let’s say your alpha campaign sends 100 clicks. Meaning 100 people click on your product ad on Google. That means 2.5 of them should buy. Statistically, you should have 2.5 sales.
If your alpha campaign is giving you anything less then it's time to again work backwards. Start reverse engineering everything and look for possible leaks or weak points in your campaign.
If you’re a member, I would definitely encourage you to go into the members area and watch the video we have in Module 7 that shows a live campaign. There you’ll see how to identify different weak spots, and what to do to troubleshoot that.
4. Urgency, Scarcity, & Bonus Offers Should Double Your Conversion Rate.
The fourth online shopping statistic that you need to know is that urgency, scarcity and bonus offers should double literally 2x your conversion rate. This one is probably going to be a little hard for people to track if you're looking to start implementing this.
If you're part of Drop Ship Lifestyle, you're likely already using some of these on your website. If you're not, or if maybe you're not getting the results that you think you should be getting, these are three places where you can easily, easily, easily pick up extra money on your store.
Seriously, if you have a 1.25% conversion rate right now, then if you do this and you do it right, that could easily become 2.5%. Which sounds pretty obvious. But that means a lot more money in your pocket and in your bank account at the end of each month.
First, let’s start with urgency.
One of the things that we recommend doing in dropshipping stores is using an expiring header coupon code bars. Could be something as simple as “Click to Save 10% on All Orders! Expires Tonight at Midnight!”
Having that would be something that adds a sense of urgency. It's giving visitors a discount code for a limited amount of time. Seeing that, they have to make a decision to save money and they have to decide in X amount of time.
Now with scarcity, this you can do when there is a limited amount of items left. You can add to your product page that there is only a few items left in stock. Amazon does it all the time!
By doing this you’ll be creating scarcity with a very powerful persuasion technique.
If quantity really is limited then your visitor will need to make a decision sooner than later if they really want the product.
And when you couple that with the urgency of saving money, then it just compounds. You have a much better change in making a sale by pairing urgency and scarcity.
Finally, let’s talk about bonus offers. What that means is including something with a purchase to help to seal the deal and have visitors choose to buy from you.
If you're selling paddle boards, you can include a free bag, so they can carry it around in their car.
So, you would have a photo of that and you would highlight the free gift along with the actual value. I even go as far as saying, “When you buy from us we're gonna ship it to you at no cost.”
Now if you’re not doing any of the above tactics, you should implement them right away and expect to see a big spike in conversions, at least double! This is some powerful stuff when it comes to converting visitors to buyers.
Now, if you do this and it doesn't at least double, then maybe work on the bonuses you're including. Maybe have a more enticing coupon code in your header bar.
Whatever it is, keep playing around with these things. It will always be an easy way to double your conversion rate and make more money from your business.
5. 66% of Online Shoppers Will Buy From Your Competition if They Offer More Shipping Options.
And the fifth and final online shopping stat dropshippers need to know is that 66% of online shoppers will buy from the competition if they offer more shipping options.
Now what a lot of people do, and I get why, because it's the easiest, is offer one shipping option– either a flat rate or free. Especially if you're using the Drop Ship Lifestyle model and selling high ticket products, we typically just go for free shipping.
What's good about that is obviously all of your competitors are doing it, so you kind of need to as well. But you should not end there.
Different people have different needs.
This is why in the Drop Ship Blueprint I talk about how to do things like including expedited shipping as an up sell. I also talk about white glove delivery on products where it makes sense.
What if you have somebody that's ready to place an order for $4,000 or $5,000, but they really need white glove delivery. They really need somebody to bring it in their house. Well, if you don't offer that, they're just not going to buy from you. If you offered more shipping options, you'd be able to capture that sale.
This doesn't mean you should offer free shipping and have that as your standard. It just means the more options the better. When it comes to just being able to help your customers, imagining multiple scenarios like this should give them the options.
Options When it Comes to How People Can Buy
Another place where options make sense is when it comes to how people can pay.
That's why I recommend you highlight your store accepts Apple and Google Pay. Straight up, if somebody wants to give you money, you should be able to accept it.
Now, let's go through the options. You would have your defaults free shipping, so everybody gets that if they want it. That would add on zero dollars. Then maybe you have the expedited, right.
You could do this as an upsell on the page, you could do it in your cart, you could do it wherever. But let's just say somebody needs the product in four days instead of your normal 10. Then you should have that as an option for them.
Like I mentioned depending on your niche, people might also want white glove. If they want it, then you could have that for whatever the price is.
Just because you’re offering all these different shipping options, doesn’t mean everybody’s going to take it. But visitors are going to be more likely to buy from you if they need it. Just leave it there, have it as an option.
Most people by far will still take free shipping. But those people that want something else, instead of leaving, they'll still be able to buy from you. It will still make your store more money than your competitors that are not giving those shipping options.
Wrapping up Online Shopping Statistics Dropshippers Need to Know in 2020
I hope these five eCommerce statistics about online shopping habits helps to open your eyes to all the ways you can improve and optimize your dropshipping store. To wrap up:
- On Average, Funnel Conversion Rates Drop 50% at Each Step.
- With the Drop Ship Lifestyle Model, a Good, Blended Return on Ad Spend is 10x.
- Targeted Traffic From Your Alpha Campaign Should Convert at 2.5% or Better.
- Urgency, Scarcity, & Bonus Offers Should Double Your Conversion Rate.
- 66% of Online Shoppers Will Buy From Your Competition if They Offer More Shipping Options.