Building a successful webshop, the 4 components

Every online entrepreneur wants to start a successful webshop. But how do you do that? There are actually 4 components that will lift your online business to a success:

  1. visitors
  2. conversion
  3. profit margin
  4. retention

You could put these in a formula: Success = Visitors x Conversion x Profit margin x Retention

Definition of a successful webshop

successful webshop

First of all, success is personal. What is success for you may be failure for another. What is failure for another can be success for you. Someone who is used to running a million a month and then runs 500K is disappointed. Someone who first runs 10K and then 500K has success.

In addition, profit margin plays a role. You can run 500K and have 0 left or 250K and 20K left.

Examples for online success

If you look at the above 4 components for success, you immediately have 4 parts that you can tinker with. The great thing is that an exponential effect takes place when 1 of the 4 improves.

Suppose you have 10000 visitors per year and 300 of them become customers, bring in 100 euros profit per customer and buy 2 times a year. Your winnings are 10000 x 3% x 100 x 2 = € 60,000,-. With 20000 visitors you suddenly have 20000 x 3% x 100 x 2 = € 120,000,-.

Now you are going to optimize the 4 components. The traffic to 30000, the conversion to 4%, the profit margin to 120 and the retention to 3. The effort you have to put into this is negligible compared to the increase in profit that you make. 30000 people come, 1200 of them buy, make a total of 144000 profit and buy 3 times what a total of € 432,000,-.

You suddenly see the profit increase exponentially!

Get more visitors for a successful webshop

The first step is to get more visitors to your webshop platform. You can do this by working on organic or paid marketing via, for example, search engines, Youtube, social media, affiliate marketing, e-mail marketing. It doesn’t really matter how, as long as it’s visitors who fit the persona of your target audience. Here’s what you could do:

  • advertise in Google on certain keywords
  • create videos in Youtube with a link in the description
  • advertising in Facebook for certain interests
  • Making TikTok videos go viral
  • find affiliates who promote your site
  • send emails to your mailing list

The difficulty is to bring consistency and keep believing in yourself. At the beginning, your effort yields little, but as you become more consistent, you will notice that success comes naturally.

Read more about getting visitors to your webshop

Increase conversion for a successful webshop

Webshop creation

The visitors who then come to your website have to convert into customers. If you sell low-ticket products of less than € 50, – you will notice that the conversion is fairly high. If you sell mid-ticket or high-ticket, your webshop must radiate extra confidence and you also need retargeting to stay under the spotlight.

I have written a blog about how you can improve the conversion of your webshop.

Read more about increasing the conversion of your webshop.

Increase profit margin for more webshop success

The third component you can work on is the profit margin. Without a profit, you are a box pusher. You only move purchase to sale without earning. That is not trade. There are plenty of ways to increase the profit of your webshop:

  • buy more, at a lower purchase price
  • higher price ask
  • do not offer free shipping and returns (or partly)
  • automate logistics more
  • save; on materials, employees, rent, mortgage
  • making marketing more effective
  • increase order value with more expensive variations and related products

By increasing the profit margin, you have more room to grow your business. At the moment I am also working on the platform where I sell digital products. This ensures a very low purchase price and a high profit margin.

Read more about increasing the profit margin of your webshop.

Increase retention for more recurring revenue

The fourth and final component for a successful webshop is increasing customer retention. Customer retention is the number of times per year that the customer comes back. If you ensure that a customer buys the same product or something similar not 1 time but 2 times a year, your turnover will double.

A successful webshop is therefore a confluence of 4 parts. The nice thing about it is that you can give all 4 a creative interpretation. As an entrepreneur, you can decide for yourself how you get visitors, give them confidence, let them spend as much as possible and come back more often.

Read more about increasing the retention of your webshop.