Online Marketing options for low sales values    If you are selling low value products your potential profit per sale will severely limit the amount you can spend on promotion and still remain profitable.   For example a typical cost breakdown might look like this:   Retail sale £20.00 VAT £2.98 Net value £17.02 Cost of Goods £11.23 Admin cost £2.00 Net profit £3.79      Yet, if you use AdWords to promote the sale, you might find the following result:   Cost per click £0.50 % clicks convering to sales 10% Total cost per sale £5.00     So, on this basis, the more sales you make the more money you lose!   What are the options?   Increase the average sale value Try to package a more valuable product by selling bigger packs, complete sets, higher value products etc   Ensure you have repeat sales Provided you know that your customer will return for a repeat order you can use the ‘lifetime’ value of the customer to measure the profitability  - not just the first sale.  This would be a normal strategy for those selling magazine subscriptions for example.  It does however mean you must plan your cash flow carefully because the faster your initial sales build up, the more cash you will need to fund it.   Don’t spend money on promotion If you can ensure your website appears high in the natural listings for relevant searches, you should achieve reasonable, profitable sales.  However using professional help for Search Engine Optimisation is likely to prove expensive in the short term with no guarantee of success.  If, when you search for your own products, you find all the top positions taken by major companies, I would suggest you do not rely on this strategy.  However you can always improve your visibility yourself by learning how to do your own SEO.   Use your website to improve the profitability of other channels If your new website is acting as a new sales channel for an existing offline business, it may well be cheaper to handle customer traffic via the web than expanding physical resources.  Since you already have contact with your customers you can point them in the direction of the web by using existing advertising and promotional budgets to offer the new option.   Sell via established online web shops Major established sites like Amazon, e-Bay, eDirectory etc offer their standardised service to small retailers at a low cost.  This cost may be lower than the cost of promoting your own site directly provided they are already attracting suitable motivated buyers.             Nowadays you can sell virtually all products and services  on the web.  The difficulty for the small company with limited resources is to find a niche that enables them to build sales profitably and generate positive cash flow quickly.   If you want to be the next Amazon, look at how many millions of dollars they had to invest before achieving break-even.  Don’t assume that you can do as well as established competition without investing at least the same resources as they have.  Use TestYourMarket to check the strategy at low cost.   Home | New Business   New Business Startups  New Business Idea  Low Sales-Value Sites | Market Research | Test Market | Profit Plan | About Us | Contact Us | Start Now! |