A CEO’s Take on Subscription eCommerce

The CEO of Carthook, a popular Shopify plugin that enables stores to offer upsells at checkout, previously ran an online store business. He famously stated, “If I were starting my online store again, I would insist with my partners that we sell everything as a subscription.”

The Advantages of Subscriptions

Subscriptions provide many advantages: a steady revenue stream, reduced advertising costs, and higher lifetime value (LTV) per customer. They are a retailer’s dream. Although not all products are suitable for subscription, many are. Even seemingly non-obvious products, such as fashion, can sometimes be transitioned into subscription models. For example, some companies send customers curated boxes each month—products they can keep or return—upon paying a fixed monthly fee. Essentials like medications, cleaning supplies, personal hygiene products, coffee, and other consumables that are replenished regularly are also prime candidates for subscriptions.

Subscription Complexity: Simple vs. Advanced

Subscription offerings can range from simple to complex. Some products can be offered as either one-time or subscription purchases, often with a discount. For instance, toothpaste can be a simple subscription: a checkbox plus a dropdown for delivery frequency. Apps like Recharge Payments and Bold, which integrate with Shopify, can set up these simple subscriptions quickly.

More complex subscriptions may involve customization. For example, a Keurig coffee maker allows customers to create personalized boxes with different coffee flavors. Customizing and editing these boxes requires additional development, but many companies find the investment worthwhile, as it significantly increases sales of coffee pods.

Strategies to Increase Subscription Revenue

Unique strategies can further boost subscription revenue. For example, since most subscribers cancel within three months or less, offering prepayment options at a 20% discount for the entire year can encourage longer retention. Another effective tactic is trial-to-subscription conversion: allowing customers to purchase a discounted sample, which, if they don’t cancel, automatically converts to a full-priced recurring subscription.

Why Subscriptions Drive Higher Revenue

In summary, online subscription stores often generate higher revenue due to lower customer acquisition costs, increased LTV, and more predictable cash flow.

For more information or tailored advice for your business, feel free to reach out here.

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My friends starting in eCommerce often wonder whether they should start on a marketplace like Amazon or they should open their own independent store on Shopify or other such platform. This is not an easy question to answer though but I'll try.

Why People Think Amazon Is Easier

Main reason I often hear why Amazon is better than an independent store is that you don't have to worry about your own traffic because millions of buyers are already visiting Amazon website every day. That traffic to anyone's store is guaranteed is not true - buyers on Amazon search for products in very similar way they search for things on Google, which means that if you don't have good Amazon SEO your products will not show to visitors. Amazon SEO is something that every store owner is responsible for themselves. In same way there is an Amazon PPC (Pay-Per-Click), equivalent to Google AdWords, which helps with showing up higher in search results but is not free.

The Downsides of Selling on Amazon

Now for the bad parts of Amazon. Selling fees are high - between 8 and 15% of revenue. Product reviews are hard to get since Amazon is cracking down on any sponsored reviews. They have their own program for professional sellers called Vine but it is not free. Competition is brutal - when your product shows up many other sellers with same or similar products show up as well. You are not the store, Amazon is. You just supply products. Branding is practically impossible. All products pages look more or less the same for everyone. You don't have a blog. You pay for everything and if you don't play by the rules you will be suspended.

Shopify: Built for Brand Builders

On the other hand Shopify is built for branding. Pretty much everything can be changed to your colors and style. Sales fees are low. There is no reviews policy forced on you by Shopify. You are the store and no one even has to know that you are on Shopify. You still has to drive your own traffic but methods are same as on Amazon. You get your blog.

Amazon Has Its Strengths Too

Now lets flip the table and talk about Amazon good parts. It is easy to start on Amazon. Open an account, upload some products and voila you are in business. Amazon has an FBA program that can do all fulfillment of orders for you including storing your inventory, packaging, shipping, and returns. It cost something but if you don't have time to deal with packaging and shipping it is a godsend. Prime program, owned by 100 million Americans, which includes 2-day free shipping for your FBA products is among the benefits of FBA program. If you sell on Amazon, people almost automatically trust your store just because it is on Amazon - until you get some bad reviews, so don't get those.

Shopify Puts You in Control—So It's Smart To Get Help In The Beginning

On Shopify, you have to establish your own trust. Being on Shopify does not help to the same extent regarding trust. Shopify does not have any similar program to FBA so your are responsible for your own fulfillment or find another third party provider. Shipping is also on you. So to start without some help it may be a bit more difficult starting on Shopify because no one tells you all the elements of eCommerce that you need.

Many large or branded sellers today however have both - the Amazon account and their own store. Why make a decision when both have their pluses and minuses. Shopify store even comes with store management features where you can easily open account, export products, and manage fulfillment on both Shopify and Amazon in the same place.

Final Thoughts: Use the Platform That Fits Your Goals

In summary, I think that Amazon and Shopify are both excellent platforms but they serve slightly different use cases. Shopify, which allows for high level of visual customization is an excellent choice when branding is very important. Amazon, on the other hand, is a self contained environment, and may be in some easier to setup for the new shop owner.

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It is an uneasy feeling when many people come to your online store and then leave w/o buying anything. Some percents are expected but others can be helped with. To better understand what makes too many visitors leave your site w/o buying, I compiled a list of factors that you can check against and see if some factor may be lacking on your store. Every online store owner with a conversion problem should examine it carefully.

Common Reasons Shoppers Don't Convert

1. Product Demand

As much as you think that some product is interesting, there may be insufficient demand from the buyers. There could be too many sellers already selling it, the price could be better on other sites, or the product is complex and new and people still need education. Whatever the reason, you need to understand what is happening before you allocate effort into traffic and conversion improvements that will not help. That is not to say that demand can not be changed but you need to simply know if this is the reason for lower conversion.

2. Product Price

While product's price is intimately connected to demand it deserves its own section. Price can be either too high or too low. If you set it much higher than can be bought elsewhere then buyers will obviously buy it elsewhere. But price can be also too low and will hurt the conversion. For example if you sell an otherwise $3,000 designer item, like a pair of designer shoes, but on your site they cost $300 without explanation, buyers will reasonably assume that there is something wrong with the item. Also, for items that are new and value is not easy determined, you need to provide enough information so buyers will know that the price is a good deal or at least fair. For example, I saw a nice wooden frame watch on some new site yesterday and it cost $49. Problem was that besides a pretty picture I could not tell from product description if the watch was worth $9 or $99. A few words on what mechanism is inside, who makes it, and what is its warranty would have most likely convinced me to buy it instead I decided to pass.

3. Product Description

Product detail page is a place where you actually sell your product. Good and informative description can make or brake customer's decision to place your item in the shopping cart. Description should include images, inform buyers about the use and the benefits, list features specifications and anything that you would want to now if you were the buyer. Not too long and not too short is the perfect length. Make sure images are of high quality and with proper background. good product descriptions is essential for driving traffic to your store through SEO as well.

4. Branding

Branding is a fuzzy topic to talk about but everyone sees it when its presented or when it is lacking. Branding is a visual, mental, and any other presentation of your business that is unique to you. You achieve it with logo, site colors, business cards, email templates, consistent messaging, tag line and anything else you can think of. If brand achieves a good status, the buyers form a relation and trust with the brand. Good examples are Apple, Amazon, BMW where everyone instantly forms an image once the name is presented. To develop a well known brand takes effort and time. As a store owner, who is just starting, you can however still make a consistent appearance and a nice logo. The absence of these is as damaging to conversion as is having a strong brand very useful.

5. Trust

When visitors come to your online store they must trust you if you want them to buy. In online world, trust is even more important than in physical stores. 1. You pay for your order with a credit card while you never saw anyone who works for the store. 2. You don't know if store owner has products that are on pictures. 3. You don't know if they will be shipped. 4. You don't know if the express shipping you paid for will be observed. 5. You don't know how difficult will be to return the products. There can be more but these should get point across why trust in online world is important. These are all obstacles a store must overcome, especially with first time buyers. Some techniques you can use is to make a secure site (SSL certificate or https), list testimonials, get a BBB (Better Business Bureau) certificate and place it on the site, become a Google certified store, get some press coverage, list phone number and address of your store, show picture of the store, offer live chat, and more.

6. Imagery and Visual Appeal

Picture is worth a thousand words. Nowhere is that more true than in online shopping. Beautiful imagery can make or break your site. If you sell apparel or shoes, the image is the main presentation and decision factor in making a sale. Images, site colors and other graphic design features work on conscious as well as subconscious levels. If you are not good at it, hire a graphic designer or at least have one to look at your site and tell you what they think. Looks may or may not break the conversion but if there are other factors present it may just make the difference.

7. Standard Policies

Four standard policies should be displayed on your store: Terms of Use, Privacy, Shipping, and Returns. While Privacy is more or less dictated by laws and some common sense such as not reselling customer emails and sharing their private information the Terms policy has an important Returns policy in it. Both, Privacy and Terms policies are expected on page by the customers even if many don't read them. Shipping and Return policies on the other hand are read by most customers. They should all be easily found in the footer of every page of your store.

8. Shipping Options and Costs

Different customers have different expectations and needs about shipping. Some care about cost, some about speed, and some like a particular balance between cost and speed. Inadequate shipping options can be a deal breaker. Nowadays stores try to display shipping costs as soon as possible in the checkout, offering free shipping for certain orders, and a variety of delivery options. Th important thing to note is, that not all customers have same expectations or needs.

9. Returns, Exchanges, and Refunds

There is no doubt that customers want to be able to return things they buy in case they don't like or if something is wrong with the products they have received. Returns is a rather complex legal, operational, and selling topic. some items like downloaded software or food and other perishables cannot be returned or it makes no sense to return them. you should think about returns before you start selling. some sellers charge restocking fee or they don't pay for shipping when item is returned even if it is for good reason. Everything has consequences. Situation you need to think of and which require different actions are: returns because you shipped the wrong product, buyer claims that product description on your store was not what was delivered, product was defective, product was damaged in transport, item doesn't fit - frequent with shoes and apparel, or the buyer simply changed her mind and wants to return the product. In some cases product can be exchanged in other the only solution is to refund the money. Complete returns program is beyond the scope of this post but I plan on writing another post that will cover this interesting topic in more detail.

10. Payment Options

Payment options on store are similar to shipping options thought they address different needs. Some customers care very much about the security and prefer to pay with a PayPal. Dependent on the type of products you sell, other options may be appropriate as well such as electronic checks or even cash on delivery or COD, which is a very popular option in Europe.

11. Usability

Usability is part of the user experience. While an easy and intuitive web store is almost expected, it is easy to make it more complicated than it needs to be. A long history of issues and improvements associated with checkout pages is proof that there is always an easier way to do something. Not understanding what is the next step or how to perform it will frustrate the user who then decides to leave your store. Or a user may simply have a hard time navigating around and finding things. Steve Krug, an authority in the field of usability testing famously said: Don't make me think!. That is why usability is a very important factor on your store that can all by itself bring your conversions to halt. Usability can sometimes be hard to pin down since it is as much science as is an art. Many users need to be observed and provide their feedback to see what are most pressing problems to fix. Without proper testing it is easy to fix one thing and create another problem at the same time. Tools such as A/B testing, where 2 versions of feature are presented to 2 different groups of users and observing which one works better are commonly used in fixing and testing usability problems. Analytics tools such as Google Analytics are also used to pinpoint problems on your store in cases when observing users in the controlled test environment is not an option or simply as a complementary method. In this blog post on usability we examine this factor in more detail.

12. Mobile Experience

Over 60% of online shopping is now done on mobile devices. Factors that affect conversion are the same as on desktop with an additional constraint that it is more difficult to type and fill out any forms than it is on desktop. Stores need to be designed in a way to look good on mobile and that usually means different than on the larger monitor. Thing to remember here is that more people visit your store from the phone than on any other device.

13. Abandoned Carts

Abandoned carts management is an attempt to bring back people, who already left your store, to complete their purchase. Emailing cart content and re-marketing -showing again cart content or other looked at products on other web sites as ads, are two standard approaches to improve the conversion.

14. Fulfillment

From customer's standpoint it is a post purchase experience and it comes down to whether the order arrived, undamaged, and in time that was promised. Needless to say, if this part isn't right, the customer is unlikely to come back to your store.

15. Mismatched Expectations

Last but not least are mismatched expectations. They can happen when you do a good job advertising your store but the store then does not match buyers' expectations. This can happen unintentionally when you don't understand well some of your buyers or when buyer for some reason did not understand properly the advertising message. Since this is not a store problem it is rarely mentioned but it is very real. Anyone who has done AdWords campaigns knows how much guessing goes into ads in hope that landing page will be exactly what visitor wants and expects. Mismatched expectation is characterized by a high bounce rate - that is visitors leave the site very quickly as they discover that it is not what they expected. You can prevent this by showing your ads to some of your friends and/or customers beforehand and see what they think. Just being aware of it is also often enough.

That's it. If you keep all of these 15 factors in check you will be in a better shape than if you don't.

The post 15 Steps to Better Conversion first appeared on SELLTEK.

Mobile presence is a must because close to 60% of all people use their mobile devices to shop.

Start With a Responsive Mobile Website

If you are in the process of making a new store you can use a responsive template that will automatically give your store the right look and feel on all types of devices.

Mobile website should be always the first step because it is easier to do and it has the widest reach. Do it once and all browsers will display it.

Mobile Apps: Pros and Cons

Apps can be more sophisticated and use additional technologies available on the device such as GPS and access to contacts but they are more difficult to make

Apps in general require more work and they need to be approved (iPhone) and deployed to the app store.

Apps have a place on your phone as opposed to a browser link, which on mobile, is sometimes difficult to find.

Apps don’t have browser issues and in general they provide better performance.

If you are not a well-known store, users will not look for your app but they may still find your mobile website using a browser search engine.

Mobile apps don’t work with pay per click advertising but they can use display ads.

I hope this is enough of the differences between apps and websites to make your decision a bit more easy. Budget, time to deploy, your name recognition, and desired store features all need to be considered in order to answer my question in title.

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Whatever you do, don’t make it more complicated for buyers than it needs to be to return products they bought.

First, decide whether returns are an option at all. A lower price on products and a strong guarantee that products will arrive as described are required if you don’t allow any returns, or the return option applies to only when products are not as they were advertised. A no return policy is not an advantage unless you have good reasons for it other than costs. Delivering perishable items, such as flowers or food may be such good reason as they may be worthless by the time they are returned.

Generous Return Policies Can Pay Off

On the other hand, Zappos was famous for selling shoes with an unlimited free return and reordering policy. Barrier to buy due to lack of ability to try the shoe when buying it online was compensated for by this policy to a great cost to Zappos. Nevertheless, they made it work and Zappos became one of the largest sellers of shoes online.

Key Guidelines for Handling Returns

In all cases:

• Be quick to return customer’s money if that’s what they asked for.
• Ask for reasons for their return and offer some gift if it was your fault.
• See returns as an opportunity to learn about your customers and what corrections you need to make either in policies, procedures, store product descriptions or other.

Keep buyers always feeling in control by providing them with appropriate guarantees of which knowing they can either return the product at least in cases when items are not as they were advertised is the one that is essential. Learn more with our eCommerce Blog.

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Shipping of customers’ orders that contain physical items is one area of eCommerce that we don’t know yet how to do it online. So, a retailer needs to decide what other shipping options to offer to buyers. As with most things the answer is “it depends”. Basic fact is that shipping of physical products costs money but it depends on buyer’s situation and the nature of products just how sensitive are buyers to charges and lack of options for shipping.

Example 1:

If you are selling office supplies you can assume that a large portion of buyers buy new supplies when they run out of them and not a moment before. In that case having a same day or next day delivery option is very desirable. You can decide to keep low shipping charge for even same day delivery to be your competitive advantage if everyone else is charging a premium. Some larger business customers however may be more proactive in their buying patterns and they also care a great deal about the overall charges. For them a longer delivery is acceptable if they see that it will save them some money. A free shipping option on orders larger than a certain amount would be appropriate here for example. Knowing your customers’ needs, expectations, desires and what they can get elsewhere is key to making a good decision.

Example 2:

You are selling furniture, which often incurs high shipping charges. You can offer reasonable shipping charges to not turn off your customers if you can incorporate the difference into price of the product. Some retailers on the other hand prefer to keep the product price low and then make the shipping charge large but often this tactic is the reason for buyers to abandon the shopping cart once they find out about these additional charges.

Example 3:

You are selling gifts. While a next or same day delivery option may be desired by some customers it is most likely not of a sensitive nature for most and customers won’t mind paying a premium when they need it. A reasonable 2-5-day delivery options may work for most buyers. Also, when you give shipping options, tell buyers the expected date of delivery. For example, if you are a seller who offers only a same day high premium charge delivery option but another is a reasonably priced 5-day delivery option where what is meant is 5 business day delivery option, which in most cases adds 2 extra days to delivery. Such shipping options may not work for most of your buyers in addition that they mostly never know when their items are going to arrive.

Design Shipping Around Buyers’ Needs

Shipping options and charges can be a great service to buyers if they are designed around their needs, expectations and desires and they can also be a reason to go and buy elsewhere if they are not offered or if the charges are perceived as too high.

Learn From Competitors and Leaders

Finally, look at 3-5 of your closest competitors or online stores that sell same products as you and draw some inspiration. Then also look at the Amazon as they mostly have some of the best policies and practices out there that buyers like and expect.

You may after reading this post know little more about what exact options to offer to your buyers but hopefully you are leaving aware of the “one size does not fit all” nature of the shipping alternatives that you need to be offering. Take some time and consider this subject specifically for the nature of your products and their buyers and provide options that provide good service to various buyers and at a sensible price. Visit us at selltekpros.com/ws for more ecommerce tips.

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