You’re chasing all the wrong things.
Like wondering what hashtags to use and what color to use on your Add to Cart button. Am I right?
Those things matter (kinda) but they won't do a darn thing to grow your Shopify business if you haven't first laid the right foundation.
The good news is the foundation of a successful e-commerce store needs just four things.
If you already have a store, and you're struggling to make sales, it's very possible you're missing one of these four things.
And if you're just starting out you want to make sure you have these in place before you start investing money (because otherwise you'll end up wasting tons of money).
I'm about to teach you how to build a solid foundation for your business.
This is the Retail 101 class you never took (I promise to make it more fun than the one I took in a huge lecture hall).
I’m talking about the 4 Ps.
The 4 Ps are also known as the marketing mix. They are essentially the four pillars of every retail operation. From small start-up Shopify stores to behemoth retailers like Amazon or Wal-Mart all retailers need to know and understand the four ps.
Each P is like a moving gear, and when they all come together they make your business flow. This, put simply, is the foundation of your business.
If you feel like you’re spinning your wheels, not getting any sales or not getting traffic, you’re probably missing one (or more) of these things.
So what are the 4 Ps?
The 4 Ps are:
Here they are in a nutshell:
Product: what you sell, to who, and why anyone should care.
Price: this is a mix of the actual price and the perceived value. It’s also how you know how much to charge and how much you’ll need to sell to be profitable.
Place: where you’re selling.
Promotion: this is where you get visible. This is all the things you’re doing to get in front the right customers
(Promotion isn’t just buying expensive ads. There are other key ways to get visible even when your advertising budget is miniscule. But I’ll share more about that in a bit).
So you can see why these are the four foundational pieces your business needs.
Because let’s be real, if you’re selling something, but not selling in the right place, you’re not going to get sales. Or if your product sucks, you could be in all the places and still no one’s going to buy.
But if you put in the time to get all 4 Ps in place you’ll be able to run your business confidently.
Because knowing these 4 Ps for your business means you’ll know:
- Exactly who you’re selling to and what problem you’re solving for them
- How to price your products so they’ll sell and with margins that allow for profits and discounting (two things you need in the retail world)
- Where you need to be to make it easy for people to give you money
- How to spend your time and money marketing to people who actually want what you’re selling
Get all 4 P’s right and you’ll be able to build a business that your ideal customers are obsessed with, and brings in consistent sale.
If you get all of this right, your business will work. Got it?
Clearly you need to have a product to sell. That's obvious. But what's not obvious is that you need to have a product that people actually want. That sounds very simple but it's not. And lots of people get this wrong.
Choosing the right product requires product market research.
Picking a product doesn’t start with the product. It starts with:
- Who do you want to serve?
- What problem do they have?
- And how can you solve that problem with a product?
This is not about going on Alibaba finding hot sellers ordering them and peddling them on a shady looking website. This is about finding (or creating) a product that people are actually clamoring for, waiting for.
You want a product that's going to solve a burning problem for them.
I don't mean that you need to invent some wildly new invention. That's fine to do but it's very labor-intensive, time-intensive, and capital-intensive. It is possible to find products to sell, or products to make, that are going to solve a problem for a particular group of people.
For example other people were selling Turkish towels. I did not invent Turkish towels. What I did was take a different approach.
Where other stores were selling tons of options, bright bold colors and funky patterns, I took the minimalist approach. I chose limited styles for a specific purpose. I chose colors that worked in a minimalist home. And I focused on home/bath towels vs beach towels.
This is how I differentiate my product and solved a problem (overwhelm) in an already crowded market.
So again you do not need to invent some wildly new product. But you do need to know who you want to serve, what is their problem, and how can you help. What does your product solve for your target market? You need to know the answer to this question.
And if you haven't yet done market research this is the time to do it.
I’m going to repeat this over and over because it’s that important.
Who do you want to serve and how can you help them? What is a problem that they currently have?
This can be as simple as searching in Facebook groups. What are your target market people talking about? What are they frustrated with?
If you have an idea for a product that you already want to sell you can look at Amazon reviews to see what people liked and didn't like about the products that was available and that they purchased. How can you differentiate to solve the problems of the people who were leaving one star reviews.
If you're looking to add new products to your store this can be done by surveying customers. Ask them what is missing from your store ask them why did they purchase what they purchased in the first place and you can use that information to find new products to serve to them.
In short, to stand out in the market, your product needs to solve a problem for a specific group of people.
So who are your people and what problem are you solving for them? Answer that before doing anything else.
Retail is about buying or making a product, marking up the price, and making a profit. Profit is key. So when pricing products we want to make sure that we are able to make a profit.
When pricing your product you one want to make sure that it is priced high enough where you will make a comfortable profit.
A simple way to do this is to take what it cost to purchase or make the product multiply that by 4 and that's your selling price.
Cost x Markup = Retail Price
Ex. $10.00 (cost) x 4 (markup) = $40.00 (retail price)
Of course there are a multitude of ways to price a product. That is a very simplistic approach. It may not work for you but it's a great starting point.
And once you know your price you can figure out how much you need to sell each month to cover your expenses (and make a profit).
(fixed expenses would be anything that stays the same no matter how much you sell each month. Like Shopify subscription, apps, accountant fees, storage unit rent…)
If your fixed expenses are $1500 a month then you need to sell 38 items just to cover your expenses.
38 x $40 = $1520
Now you have a baseline for how many products you need to sell each month. And you can decide if this is feasible or not. If you don’t think you can sell at the very least 38 items a month, it’s time to pivot or add assortment.
Pricing is not just about pricing your product but it's also creating value. And offering a variety of prices, and an assortment of products that meet your customer’s needs.
Offering multiple products (assortment) at differing price points helps you attract a variety of customers (and allows you to increase your average order value). An average order value is important to increase.
You want to get people spending as much as possible on your site. So offering an assortment of products at a variety of different prices you're going to allow customers to purchase more from you and also get more value out of what they're purchasing.
Say you sell custom gift boxes. You could also sell an upgraded handwritten note card. The card is an extra $4 and you'll write a handwritten note on this beautiful note card.
Your gift boxes may come with just a basic note card, but now you're offering an upgraded option and it gets them spending an extra $4 per order.
It also increases the customer experience. If they're looking to send a beautiful gift to someone they may feel that your store is a better option. Because now they're able to add a handwritten card, where another store may not offer this option.
For my Turkish towel company I added hand towels. By adding hand towels I can now convert more first time buyers who aren’t ready to buy a $40 bath towel from me. They can try a $14 hand towel with less feeling of risk. And if they do like it they will come back to purchase the $40 bath towel.
This also allowed me to sell towel sets, which increases the customer experience. So many people want a full solution to their problem. If someone needs a new set of towels it's much easier for them to order a matching set than it is for them to put together a set on their own.
It's about making it as easy as possible for people to buy and to buy more from you.
1. Price your products with healthy margins.
2. Know how many items you need to sell each month to cover your expenses.
3. Add an assortment of products to satisfy customer needs and increase your average order value.
This is how you make your product accessible so people can give you money.
Where are you selling your products?
Most likely, if you’re reading this, your main selling platform is your Shopify store. But you may also be selling in different places. Selling on multiple platforms is called omni-channel. It's a very popular and effective way to get more consistent sales, bring in more customers, and overall just make more money in your business.
Omni-channel could mean you sell on your Shopify store and:
- Have a brick-and-mortar store
- Sell in on-line marketplaces, like Etsy or Amazon
- Sell in person at markets
- Sell both retail and wholesale
These are all omni-channel approaches to selling your product.
For the place to be effective it needs to be easy for people to purchase.
It's about optimizing how your Shopify store is set up to welcome in your customer share the value of your product get them to the product get them to add it to cart and checkout.
I cover setting up your Shopify store or conversions and profit in my Shopify Simplified training. Sometimes it's available as a live course sometimes it's available as a self study. But if you are committed to making your Shopify store easier and better for your customers I encourage you to take a look at that training.
This is where you get visible.
So once everything else is in place, meaning:
- You have your product
- You have your pricing
- And you have a place to sell
Now it's time to bring in the customers (without customers you have no business).
So, how are you going to promote your business? How are people going to know you exist?
Before you begin marketing you want to make sure you're speaking to them where they're at.
So, where are your customers?
What magazines are they reading?
What podcasts are they listening to?
What Facebook groups are they in?
What forums are they connecting in?
Know this and you’ll know how to get in front of them (and best spend your advertising budget).
Promotion is also about creating content that is going to attract the right customer. It's about creating content that educates them on your product. It also entertains them and gives them information about things they're interested in.
So content is about education and about connection.
So how much promotion do you need to do? If you're looking for hard numbers, a good place to start is spending about 6% of your monthly sales.
So if you would like to sell $5,000 a month, expect to spend $300 on advertising.
That $300 ad budget could be spent on:
- Facebook ads
- Google ads
- Paying influencers (money or product)
- Sponsoring a podcast
- Magazine placements
- Paying a blogger to write an article about your products
There are lots of ways to spend advertising money. And you want to find the avenue that works best for you and gives you the most leverage.
And, like I said in the beginning of this post, promotion isn’t just about paid advertising. Which is a good thing. Because when you’re starting out your advertising budget is miniscule.
In my first year of business I focused on getting my business visible through multiple channels.
And it worked.
When I first launched my Shopify store The Bali Market, I knew I couldn't just sit around a wait for people to find me.
Because sales were non-existent. Nobody knew I existed. And I knew I had to change that.
I got in front of the right customers and Shopify let me know it was working. I went from invisible to being in the top 5% of stores to now being in the top 2% for traffic. And my sales grew month after month.
And one of my favorite things is teaching you where you should be showing up to get your store visible and bringing in consistent sales.
Are you ready to get your store visible?>>> Click here to learn more.