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hey guys Sabri sube here and in today's video I'm gonna be talking to you specifically about e-commerce and e-commerce funnels and really specifically this exact now basically you know I get a lot of feedback people saying hey Sabri like you're always talking about like lead generation and service based businesses and generating leads and that's typically because that's what the bulk of our business is kind of made up of however I do want to give some love to you ecommerce folks right now what I see in the e-commerce industry is that it's kind of very black and white like it's with e-commerce it's one of those things where you have nowhere to hide like you spend money in getting people to your store or to your landing page or to your presale pages and you get the feedback from the market very very quickly whether or not people are liking this offer in the form of actually then pulling out their credit card and buying right so it's a very unforgiving space to get into however when you do crack it and you do get it to work you can really scale this thing to the moon because unlike with lead generation say for instance if you're putting an offer on a landing page or a webinar or a video sales letter or whatever it might be you know you're sending traffic to those pages and then you're getting leads but then there's this whole other mechanism which is you getting on the telephone and trying to convert those leads into paying customers and it's a lot harder and the waters get a lot more muddy with being able to specifically find out you know if this is going to be effective or if it is being effective gone are the days in e-commerce where you could just go out there on Google or Facebook and spend money and bring people to a product page and then have them buy that product in a high enough rate to actually make the numbers make sense in terms if you're actually making money on the front end and you're liquidating those traffic costs and then you're paying for your overheads and your e-commerce business and your fulfillment costs and all that kind of stuff and then you've still got enough money / you know to buy candy bars and comic books and coffee and protein shakes and all the you want to do with that money right now basically what it actually requires is is you know a much more advanced strategy in order to really turn that traffic into profit and because you get these people like the Amazons and the a sauces and these big huge companies that are really just gone into all these spaces and I just completely eradicating all of the competition because they don't need to make money on the front em they have a very firm grip of the numbers in their business and the unit economics and they're happy not only breaking money on the front end on actually turning that traffic into customers and into revenue for their business they're actually willing to go in the hole right they've got very bad very kind of huge payback periods in terms of being able to kind of burden the loss on the front end say they're selling like a hundred and a Buehler product or their average cart value is a hundred and eighty dollars and they've got people coming into the business and it's costing them a hundred and eighty dollars to get a customer but that's how much that they make in actual revenue of that customer and that's because they are willing to sustain those losses right and bring those customers in at a loss they understand that either customer comes through and buys a hundred and eighty dollars worth of goods you know on the front end that that person will repeat purchase maybe twice or three times a year and they're making all the money on the back end right but for a small to medium-sized business who's just kind of getting started they're like yeah like let me take my product online or let me go out there and start this ecommerce business you know they typically gets watered because they don't have a firm grip on those numbers and they have no system in place to go out there and turn traffic into profit for their business and you know not only are they in a hard position from the beginning because they might be in one particular vertical or skew right they might be selling t-shirts or shoes or skateboards or bikinis or whatever it might be right and they might have 10 to 20 of those products and let's just say that we're looking at Google Ads right and you you jump onto Google and you type in like men's black t-shirts and then you go on to Google and then there's you and you've got 10 to 20 black t-shirts or t-shirts on your website and then you look at a sauce and they've got 20 thousand right now where do you think that the person is going to have a higher likelihood of finding that product that it is that they're looking for that they want to buy right on the person who has 20 products on their website or the person that has 20,000 right the answer is very very clear and then what that means is that that website that has 20,000 products on it has a much higher conversion rate than the person that has 20 has 20 products on there because naturally the chances of them converting that traffic with such a big depth of SKUs on there is going to be higher and then what that means is that that company can go out there and they're willing to spend more money per click to get that traffic through because the whole exercise is a lot more profitable right and if you look at this say for instance you're selling a hundred dollar product ok typically you should estimate that out of the hundred ala product that you're selling at thirty percent thirty three thirty percent on is going to go to your customer acquisition costs right that's your cat that's how much money that typically you should be willing to spend in order to acquire customer then from that let's just say that you make thirty to forty percent margin on that actual product that you've got already we're up to that sixty percent right now then you've got another ten percent that you have to kind of you know really allocate for contributing in terms of your overhead then you've basically got at the end of the day anywhere between you know thirty to forty percent margins on what it is that you're selling right so when you look at that that's based on you know $1.00 per click right and you know a lot of times it's a lot more than that so when you do that exercise like if you're selling like a $20 bikini for instance and it you know the cost per click for something like buy bikinis online or bikinis is a dollar a click you know and your website converts at one percent which is typical it may convert a little bit higher it may convert a little bit lower but on average its 1% if you're getting any serious volume of traffic so then you spend a dollar per click you get a hundred people to your website you spent $100 and you get one buyer right and that buyer to you is to $20 for your bikini right so immediately you're just straight up 80 bucks in the hole right and that's not really a scalable model and that's the reason why the traditional way of doing e-commerce is kind of being being made redundant because you're getting so many big global players and Chinese companies at the drop shipping and they've got thousands of SKUs and the a sauces and Amazons all these people are just coming in and just eating everybody's lunch right and then that doesn't leave much room for the small guy to ever get going right now I'm not just highlighting the problem here I'm gonna give you the solution to this thing and this solution is really you know when you look at it is kind of this six step funnel and it's really what you must use if you're doing anything in e-commerce if you ever really want to make money and the thing is that most people aren't ever doing anything like this like the vast majority of people are simply putting their product online and then then just hope it and they're praying that enough people are gonna buy it to make this whole exercise profit right so instead of just having you're getting your gadget or gizmo or your bikini or your pairs of softs or your shoes or the t-shirts that you're selling online this is basically what you want to do you want to have a funnel in place and e-commerce funnel and that's basically you know you're gonna have like a front end which is you selling the initial product and then you're gonna have the back end of the funnel and essentially the back end is everything that you can see on this right so instead of just having the typical product and then you buy it and then they check out and then that's it and that's the end of the relationship it's like when you go to the supermarket and you've got to bought your groceries and then as you line up at the checkout you've got all these different products and magazines and everything on either side that is another opportunity for you to basically upsell that person to make more money off that buyer so let me run you through each step of this right so the first one is quantity breaks so after someone has basically selected the product that they want to buy on your website then I might be vitamins it might be a protein you know protein powder for instance whey protein powder and they put their details in there and they're like yeah I'm gonna buy this then they enter in their credit card details and you've already secured that sale right and then on the next page before that they can fully checkout and they think the sale is over then you say hey like you bought this kilo of protein powder for $30 would you like to buy another three of these kilos and instead of paying $30 it will be just $19 a kilo or 15 dollars a kilo so you're just offering them more of the same thing that they just bought and it's really you know it seems like such a stupid thing when you look at it in theory like hey they just bought this kilo of protein I like why is it they're gonna want more right but you'd be amazed the amount of people that buy these is crazy and the very best first thing that you can offer to some money on the back end of your funnel is more of the thing that they have just bought okay then once that they've put in there then they said no or yes to their quantity break then this is where you want to hit them with an OTA an oto right which is in a one-time offer or an upsell and you can have a series of these upsells and this is where you know they've just bought the protein powder for instance you might be selling them a protein shaker or an e-book or something along those lines we're not really enable because we'll get to that later in the funnel but anything that would be an upsell that would be a complementary to what it is that they're just bought right it might be another four might be a probiotic it might be a multivitamin it could be anything else that you could offer to this person as an upsell and it needs to be a really good offer and I typically recommend at least having two upsells in your e-commerce funnel so you know you're gonna offer them the first one it might be a protein shaker then after that you might be offering a macrobiotic for instance now if they say no to the first one is still gonna offer them the second one if they say yes to the first one you guessed it you're still going to offer them the second one as well right then what you've got here is shipping and fulfillment and a great little upsell and a great little way to make a few extra dollars on each transaction is by offering people an option to have either priority fulfillment meaning that you just give them the message like hey we get lots of orders every day if you would like to have your order skip to the front of the queue and have our warehouse process this quicker then you can pay an extra $4 at put you at the top of the loop and you'll get a one day processing for instance right or you can also offer them the shipping right you can say like how you you've ordered regular shipping and you can go Express shipping and you make you know an extra one or two dollars on each of these things and you might be thinking like one or two dollars like this isn't gonna add up but when when you go through this whole process the numbers you're gonna see how they add up and it is substantial and what it's what makes this whole process of being out and go out there and actually buy traffic profitable now the next one is for instance they're bought you know some protein powder and then they're bought a probiotic and a protein shaker for instance then what you want to do is sell them an e-book write something at like a very impulse purchase price so maybe nine ninety five seven ninety five six ninety five you know anything kind of below that ten dollar mark and it's just you know literally there's no cost for you to fulfill that ebook you're not shipping it out it's an electronic download that they'll get and it could be something like you offer them three different earmarks in one might be if we're still talking about the protein for instance it might be like a bulking plan or you could be looking at a shredding plant or whatever it might be or how to get six-pack abs right it's something that they can get that it's like you know a three week plan for them to actually get their results you know that they would possibly be buying this product to get and giving them the step-by-step process of exactly how to do that then what you've got is warranty right depending on what the country is that you operate in typically standard is buy more you have a 12 month warranty in your product that you've got right in that means if your product or service is faulty by any means or anything like that its standard you have to have a 12 month warranty but you know another great way to make some extra money is by offering somebody you know a warranty and it may not make sense for instance for protein but it would definitely make sense if your electronics or get gizmos and gadgets or anything like that or skateboards or whatever it might be when you can actually say like you know would you like to get 18 months or 24 months or 36 month warranty for this small added price and the price can be something not something too onerous but something that we've given that protection right this is another great way like if you're gonna have a very very small recall rate on that warranty and essentially a lot of that money that you're gonna be making is good it's going to be additional free profit then the last one is what we call a free plus shipping offer so what you're going to say to them is like you know thank you for your order you've got all this what we would also like to do is offer you the opportunity to get this free product we're going to cover the show the cover the cost of this product so we're gonna give it to you for free just help us out and pay for the additional shipping that it's gonna cost us in order for us to put this into your order and to get it dispatched and it might be a water bottle it might be a key chain it just needs to be something that has value attached to it but it's also very very cheap for you to to buy or fee to manufacture and what you'll find from this process is that this allows you to basically increase your average cart value and that's really the game when it comes to e-commerce right there's two different kind of your three real big metrics that you want to be looking at in the e-commerce space and the first one that you want to be looking at is what is the AOV what is the average order value right or the average cart value there's two different acronyms you can use whichever one that you want right and that is you know how much is the average cost of the bucket basket of goods that someone you know it kind of totals up to when they come through to my website or to my funnel and buys and really it's the person who has the highest ARV who can really afford to spend the most to acquire a customer and that's really the second metric right he's looking at kind of what is the what does it cost you to acquire a customer right and the third metric is what is the LTV what is the lifetime value of that client so the average cart value might be $100 but then they might come and repurchase from you five times over the course of their lifetime meaning that your ARV is $100 but your LTV is five hundred dollars and whoever really has the highest LTV and aov is the person that can really win that market because they can go out there and they can afford to spend the most amount of money on traffic and hiring agencies and the best photographers to take photos of their product and they can just afford everything to be a lot higher because they make way more money off each client but there's a thing here that most people don't talk about and they don't really look at in much detail most people in the marketing community specifically in the e-commerce space they typically look at the LTV right and they think that basically if you're a o V is lower than your LTV then you can scale your business right which isn't the case because you've got this thing called a payback period right and I call it it's like you think about it it's like a pendulum and you put the money out it swings out in terms of ad spend and then it swings back and it gives you a return on that money now even if you're a o V is lower than what your LTV is you know how long can you really afford that you might it might take you three months or six months to earn that money back and that payback period meaning that you're gonna have to go in the hole and burden those losses on your credit card for three to six months so you can't really scale that ecommerce business to the moon because you're going to need to have a line of credit to be able to help you in that payback period and it can get pretty vicious you're not gonna know and get that feedback for three to six months whether or not this cohort you've brought in he's actually gonna repeat purchase and that's really why you want to look at this funnel and you want to in engineer a situation where you're making as much money on the front end as possible so you can fund the growth of your e-commerce business because you might be looking at a typical environment where you're making $30 of somebody who orders protein off you but then they're gonna be repurchasing that every two months and they're gonna be have a very high LTV and that's great right that's obviously the reason that's going to allow your business to be profitable long term but I'm talking about the short term so by going through this exercise you know what you'll find is that all take your your normal conventional aov of being $30 for say a kilo of protein and push it up to maybe 65 or 70 dollars meaning that you liquidate the traffic costs or you liquidate them much much quicker and your payback period might be 30 days and you only have to pay your credit card every 30 days it's meaning that you're buying customers and then you're liquidating that cost of buying those customers in a 30 day period right and you might be thinking yeah but I'm not making any money summary like I've spent this money I've got this customers in I'm not making any money off it that's a good situation right if you can bring customers into your business for free and then everything that you make on the back end in all those repeat purchases is going to be pure profit right and this is the kind of mindset that you need to have if you're going to survive in today's day and age where the cost of traffic just keeps going up and up and up and up right so if you're not implementing a system like this then you will be eaten alive and there is absolutely no way that you're ever going to be able to come with these huge online retailers who go out there and they raise five million ten million twenty thirty fifty a hundred million dollars in venture capital and the only thing that those mentor capitalists really care about is seeing that top-line revenue grow so that company is going out there they're out muscling all the little guys and they're willing to spend way more money to a quiet that customer not worried about profit because they know that they'll make that at six months or nine months and the way that they look at it is like they're going into a market with oxygen tanks on their back okay and they're basically then going underwater and they're taking everyone underwater with them and then these smaller guys who don't have huge budgets their oxygen runs out and they die right and then because they just can't sustain those losses for as long as somebody who's got out there and has got venture capital in their business and then when they they go under the hole for six months nine nine months for those earn back periods and then they come up and there's no one else standing except for the big boys that have enough money to fund those losses and a lot of these big boys they're not doing this kind of you know advanced funnels and trying to really increase the AOV on the front end and have all these different upsells in a booked because they've just got so many products and services that would be difficult to roll out so this is a way for you to find a in their armor and then just go in there and really utilize this where you can start to compete and then you can start to scale so that's the very first part right now the second part let's to say that you've got this all set up and you know you've got your head screwed on right and you've got this system that goes out there and is able to squeeze as much juice from the orange of traffic and make profit as possible right now what are some other ways that you can increase and just crush it as an ecommerce store well a really good way is but if you look at most ecommerce sites like they have very weak copy and they're like this is the product it's like a hundred and fifty word product description and then there's just a Buy button right so the very first thing that you want to is having a story attached to the product that you're selling right you know it's been proven that products that have a story behind them sell infinitely more than ones that don't you know if you can tell a story about how you manufacture the good or why is it you're selling this and the problem that you experienced in your own life the that caused you to go out there and really craft a product that addresses that specific problem and you know you know you really want to tell a story about it talk about the ingredients talk about where it's come from talk about the recipe whatever it is that you can add a little bit more context to is really going to help you now the second thing that you want to really look at is also attaching a cause to what it is that you're saying you've seen a lot of companies have started to kind of attach a cause where it's you know helping restore people's eyesight or you know adopting certain animals or whatever it might be or giving back to less fortunate people this not only allows you to do good in the world and give back to less fortunate people but it also allows you to basically create more goodwill with your audience which is going to allow you to make more sales long-term right and so if you don't operate in an area you don't already have a cause this is something you definitely want to look at implementing for your ecommerce store because there's a lot of studies out there that show that by having a cause attached to your product can increase your sales by you know anywhere between fifteen to fifty percent right and that's something where it allows you to help somebody but also allows you to make more money on the front end as well so they're just a couple of the hacks that I'm specifically know that we have tried and tested for our clients in our own agency that really allows you to go out there and just completely beat the pants off anybody that you're competing with and really allows you to take your ecommerce store in a challenging market against people that have got way more money and a you know gone out and raised venture capital and got business loans and done all this stuff and allows you to not only start competing but also to get into going like what's going on how can this small person can with me and how they're able to go out there and outmuscle me of certain traffic sources and bring more people in and the very last point that I would make is that you know if you look at like what is the best kind of channel right now to scale an e-commerce business you know it really is Facebook and Instagram ads and that's because you know on Google Ads you're limited by how many people are searching for your product and servers and not only are you limited by how many people are searching for it you're also basically entering directly into a price war because you've got Google shopping right now which has all the prices and it's typically the person with the lowest price who's the person that's going to get the most sales right so it puts you in an environment where yes these people are in hunt mode specifically looking for the product that you sell but you're also competing with every other person on there that's running Google Shopping and who's got an e-commerce site and all the prices are transparent and they can see everything and you know if you don't have like story copy and a cause and a funnel and all these other things then why would that person pick you over the other person and the reason would be solely based on price right we're with Facebook Ads you're you're not really entering into that where that person is gonna be seeing all these other products on Facebook that are directly exactly what it is that you've got at the same price point right so it allows you to also charge higher prices but the biggest benefit really for Facebook ads on an e-commerce store is it allows you to scale you're not limited by how many people are searching for what it is that you've got and you can really just Ratchet it up and you can keep scaling and scaling and scaling and reaching out to audiences that are gonna work well and that are going to convert convert for your business because you know it's all well and trued like basically serving ads to a hundred people or a thousand people that are looking for that but that's not really gonna get you to really the high scale levels that you're probably going for you need to start thinking about well what is it that makes you know an e-commerce product be really successful in Facebook Ads as opposed to the ones that flop and what we've seen is it's the prod that have something that is demonstrable right there you can basically show you can show some jumping on a bed or you can so someone like wiping up a big mess or likes you know wringing out a cloth or you can show you know what a teeth whitening product looks like or contact lenses or whatever it is that it happens that you're selling there needs to be something that you can demonstrate on it that really has that kind of wow factor that people can clearly see in a short kind of 30-second video the benefits are visually shown as a demonstration of what they're gonna get or what makes the product that you're selling unique right so they're kind of my steps in terms of what I look at in terms of helping an e-commerce business go into their market and completely crush it the very first thing is making sure that this funnel is in place in their business and they have all this back-end and all these upsells and these ways to squeeze as much money and ROI out of that ad spend as possible then it's looking at story based copy and really helping them in terms of tell the story around the product and it doesn't just become a commodity where they're looking for the lowest price then attaching the cause to that and really kind of creating more goodwill and higher conversion rates across the board and then making sure that that product has demonstrable value that you can demonstrate it show its unique features or show it actually working and how it works and then you can make sure that your e-commerce but I've ticks all those boxes has that funnel set out then you will go out there and you'll crush it I've included a PDF link to this funnel that you can download and you can reference it anywhere that you want down in the description box below to make sure that you go ahead and do that I hope you got a ton of value out of this video I really enjoyed making it for you and we'll see you in the next one hey guys if you enjoyed this video make sure that you click the like button and subscribe we're dropping a video on YouTube every other day and if you've got any questions about any of the content that I covered in this video just basically leave a comment with hashtag hey Sudbury in the comment section and every week we're also trying to go through 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