Making emotions-based decisions is what separates us from robots, when all other things are equal. But it’s not always the best strategy. Leading with data, especially when it comes to big, monumental decisions, can be the razor-thin difference-maker between just hanging on and actual success. RepricerExpress takes a look at when and why you should be using data, not emotions, to make decisions when selling online.
Researching and Deciding Which Products to List
There are two ways of approaching deciding which products to sell: items you like and would/do buy for yourself, and items with a cushy profit margin. Sometimes the former works out and you can make good money from it, but sometimes you’ll have to go with the latter until you reach a point of stability where the former is possible.
A decent profit margin is about 25%, calculated after how much you’ve spent on the products and their advertising. Using this number, it becomes very easy to see how data can pave the way. Maybe you love silk sweaters, but if they’re only bringing in a 10% profit margin, it’s a better idea to focus on other products.
And when it comes to how to use data to find good products, use the following.
- Social Popularity: This is when a product is talked about, shared, or liked in the tens of thousands. It indicates that people find it simple, interesting, easy to understand in a short period of time, and have a certain cachet that sets them apart.
- Trends: Look at the past and projected future trends to get a good sense of the product’s viability. Check out how the product sold at this time last year to give you an indication for how it’ll sell in the future, but also broaden your scope to see how related similar products might also do.
Key takeaway: Use data to find products that have a strong social presence and selling history.
Early Analysis Stages of Online Ads
What we mean by the early analysis stages is those days between creating an ad and when sales start to come in. It takes a bit of time for ads to work, and trusting in data and in the process is far better than pulling the plug on a campaign because you’re not seeing magical sales right away.
Take Facebook as an example. They typically want to see 25-50 conversions, at a minimum, before deciding that you have enough data present to create stability, which takes about a day or two to garner. If you use emotions to change up the ad, you could be harming your chances at creating an audience you can build, sustain, and scale. Look at these metrics to make data-based decisions.
Click Through Rate: A CTR of more than 2% is really good and you should keep sticking to the plan. If it’s under 1% after you have enough data to go on, then your campaign should probably be shut down.
Cost Per Click: Here, the magic number is $1. Below that, and you’re good to keep going. But if it’s higher, close the ad.
Cost Per Action: Finally, the number you should be focusing on here is 75% — that’s what your ad and what you paid for the product should amount to for the product’s total selling price (keeping your profit margin at 25%).
Accept that Losses Will be Inevitable
The measure of success isn’t how many times you get a winner right out of the gate, but how many times you keep getting back up after you’ve fallen. You’re going to have little failures along the way, and accepting that will make you stronger in the end. But panicking after a setback (and not falling back on data) means that temporary setback will turn into a permanent failure.
As said earlier, your profit margin goal should be around 25%. But scale your expectations down quite a bit and aim to hit that about 1 out of every 10 times. It’ll take time and patience to test products and hit on winners, especially when you’re first starting out and can’t afford to test many products at once.
But if you keep your eye on the long game and keep grinding away, you’ll become better at recognising what works and how to go at the process more efficiently.
Try approaching it like a scientist: instead of trying to prove something, try to disprove everything else so all you’re left with is the logical answer. Look at each product failure like that, like it’s not a failure but just one more thing you’ve eliminated on the path to finding what works.
One of the ways you can achieve that 25% profit margin is to aggressively reprice products until you find that sweet spot. But doing it manually takes way too much work, which is why RepricerExpress is needed. All you have to do is input min and max values and set your rules, and we’ll implement them while you sleep. Sign up today and enjoy the first 15 days absolutely free.