Table of Contents
Agency vs Product.
1 comparison, 1000 opinions.
Truth is that after hundreds of hours discussing with friends and colleagues (mainly marketers), everyone prefers a product business instead of an agency.
Today I’m not going to compare an agency to a product business, but how I started a great new idea inside the agency:
Start our own ecommerce store!
Long story short in 90 days we achieved €100Κ+ in revenue.
Why did we get into this? No, it’s not only the money.
I will begin the story with some facts and thoughts before analysing the reason behind it.
When Covid-19 hit, me and my team got a shit ton of calls from business owners that came to the realisation that they finally needed a website. A website that can continue making sales while the physical store was closed due to restrictions.
We created more than 10 websites in 5-6 months and we also ran their ads successfully.
Let’s be realistic though. Not everyone can succeed. To be honest, even though we saw some pretty nice numbers (5-7 ROAS) for some ecommerce stores, there were 2 that did not sell as expected.
And this is something that personally made me feel frustrated, not because “Facebook ads don’t work” but simply because I could not control the product, the offers, the prices, the brand etc.
Something that both marketers and business owners do not understand is that marketing is directly related to the product if you want to see results. Product management teams work very close to Product marketing teams. And in SMBs this often doesn’t happen.
So, I will conclude by saying that the reason I decided to build our own ecommerce store was that I wanted full control over the:
- Ads & Marketing
- Market Positioning
So that I could finally prove to myself and my customers that when everything works clockwise, in favor of Marketing, then you can have:
- Higher Conversion Rate
- More $ales
- Fewer Costs
And so it happened! In less than 90 days of operation we had:
- 107.140€ Revenue
- 4.084 Sales
- 4.58% Conversion Rate
- ~25% Net Profit
At this point I’d like to mention that this is not a dropshipping store.
Let’s see how this worked.
Chapter 1: Products
Product Positioning & Pricing
Having an AOV of around 26-28€ we’re clearly not talking about a high-ticket product.
And that was our goal: affordable products that sell massively.
After conducting a market research, we saw that the Greek market (which we targeted) do not buy an unbranded product for more than 35€. So in order to achieve a large volume of orders we had to target impulse buyers – people that buy immediately.
Personally, I prefer a Branded store and high-quality products but the time needed to establish a brand in the market is usually too much and so is the required capital.
We preferred low-cost products that can sell really well. The products that we chose:
✅ Solved a problem
✅ Had a wow factor and are unique
✅ Have a passionate audience (Product – Market fit)
✅ Were priced at a sweet spot
How and where could we find these products?
I’m analysing the research methods below:
Strategy 1: Search on Facebook
Facebook can show you a lot of winning products if you search it right. Go into the search bar and type keywords like:
Get yours here
Grab Yours Now
Buy it here
Searching posts using the above keywords and key-phrases we discovered a list of infinite posts & videos from other Ecommerce Stores that have gained a lot of engagement (so probably sales too).
Continuing our research we discovered some Facebook pages and we saw what ads they’re running using Facebook Ads Library.
If you see an ad that has been running for quite some time, has a lot of variations and adequate engagement then this is a good sign.
Strategy 2: Marketplaces
There are quite a lot of marketplaces out there with a large product collection. The 2 most well-known are:
Both of them can provide you a best-sellers list from every niche while you can read reviews and compare proies for the products you’re interested in.
Τρόπος 3: Software
Our most preferred way to search for products though is by using online tools.Some of them are:
These tools provide you filters in order to specify exactly what you’re looking for, based on their sales volume. This is a great way to speed up your product research process.
Every product should be sold using a very unique offer. Offers have let us increase our AOV and thus sales.
Some of the offers that we tested and worked really well:
- 15-20% Discount on the first order
- Buy 1 + 1 and get Free Shipping
- Buy 2, get 1 for free
- Upselling & Cross selling with related products
- Free shipping for orders above X€
Chapter 2: Website / Product Page
Don’t build shops, build Product Pages
Let’s get into the juicy stuff.
I think we should already stop talking about ecommerce stores like we did back in 2017.
A mistake that I see a lot is that people tend to believe that the more products they sell, the better the money.
You do know what the average Conversion Rate is globally. 1-2%… even 3% at the best case.
Well not here.
There were days that we saw 5%, 7% and even 23% (!!!) conversion rate.
What’s the secret here?
How the f*** did we achieve that Conversion rate?
The answer is hidden on the below 4 points:
- Landing Page
We talked about 1 and 2 previously, now let’s discuss about 3 and 4.
Our copies is one of the most important parts of our funnel. The power of copywriting is that it can immediately turn an interested visitor into a buyer in less than 5′.
If you think about it…
✔️ The copy is the one that makes people click on that Facebook ad
✔️ The copy is what convinces people to buy
✔️ The copy is what makes loyal customers to buy again
Being a skilled copywriter can provide you with a lot of benefits across your funnel.
Let me share with you some tips that helped us:
🗣 Write as you speak – try to be friendly and not use complex or “professional” words.
💎 Focus on the results – every consumer would like to know how is your product helping them solve their problem.
👀 Write eye-catching headlines – people tend to ignore large text blocks when reading and focus whatever stands out, and these are headlines. Use headlines to communicate your offers, the solution to the problem and even include social proof.
💬 Use strong and convincing Social Proof / Testimonials – the law of the market says that if someone bought your product then others will follow. Make sure to include real-life testimonials from your customers or even videos.
❤️ Target on emotions – don’t try to sell the product, instead sell the emotion of having this product. Focus on the why.
👨💻 Meet your audience – it’s very important to know who you’re addressing to, which is their problem and how your product can help them solve it.
📸 Insert Photos or Videos – one of the most important parts of your product page are of course the photos, the videos and maybe the GIFs that show the product and most importantly how it works.
✔️ Use Active Voice – Two benefits you get when using active voice instead of passive is that you use fewer words and you “narrate” the story better and faster.
🔥 Show the benefits first and then the features – It’s been proven that saying a small story on how your product solves the problem is much better than mentioning what it includes or how it is constructed.
🎉 Learn your competitors – Make sure that you know your opponents’ weaknesses so that you can fix and improve your product and its USPs.
⚡️ Clear CTA – make the main stand out! That has to be the Add to Cart/Buy Now button. Make sure you use a nice colour to make it stick to your visitors eyes.
％ Above the fold Offer – show clearly your offer (one of the ones mentioned before). It’s important to make the customer feel that he’s getting a good deal.
Forget that old traditional product page that we used to see back in the 00s. Yes the one that only has 3 photos, a title, a price and the “Add to Cart” button. Most of the product pages today look like this:
You have to enrich your Product page and transform it into a fully detailed landing page. For example:
Well, you get the memo!
So, to conclude, the sections that must be included in your product page are:
- Buy box
- How to Photos & Videos
- Social Proof / Testimonials / Reviews
In order to get a higher conversion rate you must watch your:
- Copy & Content
- Your product page
Tip #1: For Shopify users, we can recommend you to use Zipify and GemPage whereas for WooCommerce we recommend. Elementor.
Tip #2: If you still wonder if multi page checkout is worse than one page checkout then stop wondering. They both work. Tested.
Chapter 3: Facebook Ads
The next big chapter is Facebook & Instagram ad.
I’ve talked about our strategy on Facebook on a previous ecommerce case study.
After long hours of creating and testing ads, a rollercoaster of anger and happiness, a couple of disabled ad accounts & business managers, after 90 days we achieved these results:
- Total Spend: 20.768€
- Avg. CPA: 5,7€
- ROAS: 5
General vs Niche
Since our target audience was in Greece, we were favourable in terms of the CPM (2-5€) hence the low CPA.
Despite the fact that a general store doesn’t have a specific audience with the same interests, on the contrary this gives you the flexibility of testing a lot of audiences based on the different niches.
Practically if a product wasn’t selling we would move on to the next by targeting another audience. The ability to have a wide range of products lets you create ads quick ‘n easy.
So, whatever was working we would scale it and what didn’t bring sales we stopped the ads.
For each product the setup was:
Campaign: Purchase Conversion with 3-4 adsets
Adsets: including 1-2 interests each
Ads: 1 – 2 creatives for A/B testing
What we’re looking for apart from the interests that make sense (e.g. you sell a car accessory and target “car” interests) we always wanted to think outside the box, and so for a beauty device we would target women who like clubbing.
Engagement Tip: Don’t forget to create ads using the Post id when creating multiple adsets with the same ads. This will let you gather engagement under 1 post.
Let’s take a deep look on the creatives which plays a major role since it is this part of the ad that will catch the visitors attention and bring him into the product page. Keep in mind that a metric that we should watch out for is the CTR (Click through rate).
The ad consists of 2 elements:
- The video or image
- The copy
What we want is for people to see how does the product work and how does it solve their problem from the first second!
The copy has 1 goal and that’s not to sell. The goal of your copy is to make people click on the ad so they can land on your website.
Attention: Do not try to sell from the ad. The selling process takes place inside your website.
Instead, in your copy try to add a brief description, the benefits and the CTA.
The ads’ lifespan is usually short (5-10 days), which means that they should be renewed often.
Apart from this the optimization process that we follow on each level is:
Campaign: The only thing that we can do on a campaign level is to create a CBO (Campaign Budget Optimization) so that we can let Facebook optimize based on the best-performing adset. Our CBO usually includes:
- adsets for each lookalike (1%, 2% κοκ)
- adsets for each winning interest
Adset: What we do here is a breakdown so we can find the specific ages, genders and placements that performed better and had a lower CPA. Using these we create new adsets.
Ads: On the ad level what we do is to A/B test different creatives so we know which copy, which video angle or hook works best.
Let’s see some real life scenarios:
- If the campaign has a steady performance and all of the adsets are profitable we wait till the ROAS shows signs of either increase or decrease.
- If the ROAS is good, then we increase the budget 20% every 3-4 days.
- If it continues to work good, then we create another campaign with Lookalike audiences using the same ads.
- Then we create a CBO campaign.
- We target more interests.
- If the campaign is mediocre but shows positive signs:
- We research more interests
- We change the ad copy
- We change the ad creative
- If the campaign does not bring results then we close it.
Reporting & Profits Calculation
There are a ton of metrics in your Facebook Ads Manager that may confuse you. Don’t be deceived into thinking that your ads will ever hit their maximum best. Your work as a marketer is to try and improve some of them.
The main metric that we’re interested is the CPA (Cost per Acquisition) and of course the Revenue.
If your CPA doesn’t look good and you’re not profitable* from each sale, then it doesn’t make sense to continue advertising.
*How do we calculate the profit?
The formula we use to see if we’re profitable is the following:
(1) Net Profit = Selling Price – Ad Spend – Shipping Cost – COGS
If the net profit is 0 then this means we are at a Break Even point. There’s no chance we continue running ads if we’re not profitable for more than 2 days. So in order to continue we have to know the minimum ROAS to see if we’re profitable or no.
To calculate the minimum ROAS we have to calculate the BEP (Break Even Point) first. The BEP is a number that shows me if I’m over my break even.
(2) BEP = Selling Price – COGS – Shipping Cost
For example: if the selling price is 30€, the COGS are 5€ and theshipping costs 5€ then BEP = 20€. From then on if the avg. CPA = 5€ then the Net Profit (1) = 15€.
The Minimum ROAS then is calculated:
(3) Minimum ROAS = Selling Price / BEP
For example: if the selling price is 30€ and BEP = 20€ then the minimum ROAS is 1,5.
Now what this means is for the campaign or adset to be profitable then the ROAS must be at least 1,5.
- If ROAS > 1,5 then we’re profitable
- If ROAS < 1,5 then “Huston we got a problem”
That’s all folks.
We tried to explain everything as detailed as possible but if any question occurs then feel free to comment below.
Till next time