When it comes to making more sales of your handmade products,
there are really only two things that matter:
getting traffic or views/visitors to your shop and turning those views or
traffic into actual sales. This last one, turning your views into sales,
is something I refer to in a lot of videos as your conversion rate.
It was recently brought to my attention though that many of you are not actually
clear on what a conversion rate really is, why it's important,
what's a good conversion rate or bad or an average one and how do you calculate
it. So that's exactly what we're going to cover today.
Hey, I'm Deb, founder of Tizzit.co,
a membership community for makers and handmade shop owners.
In today's video I want to run you through everything you need to know about
your conversion rate. I also have a free calculator you can download.
I'll put the link just below this video so that you don't have to worry about
the math at all so make sure to download that. Let's get started.
What is a conversion rate? Well,
a conversion rate is the number of people that will turn into customers for
every 100 visitors. In other words,
the percentage of visitors to your shop that actually become customers.
So say that for every 100 visits to your shop,
you're making two sales, then your conversion rate is 2%.
If for every 100 visitors you shop you are making five sales,
then your conversion rate is 5%. Here's how to calculate it:
you want to divide the number of sales that you got over a time period by the
number of visitors that you got to your shop over the same time period and
multiply that by a hundred. For example,
if you had six sales this month and you have 342 people visiting your shop,
then your conversion rate would be 6 divided by 342 times 100.
That would be 1.75% conversion rate.
So why does it even matter? Why do we care about this?
Because it helps you make strategic decisions.
You can bring as much traffic and get as many views to your shop as you want,
but if your conversion rate is really low, you're not going to make sales.
You're better off making improvements to your shop to put that conversion rate a
bit up before putting more efforts into bringing traffic to your shop.
And on the other side of that, if your conversion rate is looking really good,
then you know you can invest more time and even money in paid advertising,
for example,
into getting more traffic to your store because you know that this is going to
generate more sales. So what's a good conversion rate then? Well,
the industry average is between 1 - 3% but beware here that it really depends on
the actual data that you are using because not all platforms count visits,
views and visitors in the same way.
Depending on the data that you use,
you should expect a slightly different number. For example,
if you sell on your own website,
make sure that you're connected to Google analytics and that you look for the
unique visitors to your shop. If you use Etsy,
you want to use your visits number, not your views,
because views are different than visits or unique visitors. In other words,
if you get a thousand views to your shop,
this isn't necessarily a thousand different people - that would be great.
It's more likely that it is somewhere around 500 or 600 people who clicked
around your shop and visited different listings in your shop.
So if you use views to do your calculation,
it's normal that your conversion rate would be around 1% but if you use visitors
or unique visits, then you should be at around 3%.
Anything above that and you're doing great.
Anything below that and you might want to make some improvements. Again,
don't forget to grab the free calculator that I'm putting just below - it'll do
the math for you. Once you're done and you know what your conversion rate is,
let me know in the comment below:
are you happy with that number or do you think you need to make some
improvements? And finally, if you like this video,
make sure to like it and to subscribe to my channel.
I come up with a new video every Tuesday,
always with the goal to help you start and grow a successful handmade business.
Bye guys.