Today, a lesson from a conversation I had while visiting my client earlier this week.
(But of course, anonymously-presented — to protect the innocent and the guilty!)
It’s mainly focused on physical products. But don’t discount it at face value if you sell services or digital products.
As I continuously harp on — try to figure out in every lesson, “How can I apply this to my business?”
If you do, it could dramatically increase your profits.
So here it is…
Double your profits with this one easy secret!
How a stupid-simple trick could double your profits from selling physical products online, starting in less than 10 minutes, and without any additional costs, or acquiring any additional customers!
(How’s that for a cowabunga promise?!)
First, the setup…
Let’s say you sell a $1,000 product. (I like really easy math.)
And your cost of good sold (COGS) including shipping is $500.
That means to get your product made, out the door, and to the customer costs $500.
That leaves you with a $500 margin to advertise, get the customer, run your business, and make a profit.
Now let’s say you’re spending $400 to get the customer. Every $400 you spend on advertising sells one product at $1,000, with a margin after COGS of $500.
That leaves a $100 profit after advertising expenses (we’ll ignore all the operational costs — for simplicity’s sake — and just call this our profit).
Now let’s look at some ways to double your profits…
First, you could simply spend twice as much on advertising. Assuming the market is there, ramping up your advertising to double — if all other factors remain equal — is a solid way to double profits. However, maybe all other factors are not equal. Or you don’t have the budget to do this. There are many reasons that make this difficult…
Second, you could increase your conversion rate. If you could improve the conversions on your website so that instead of it costing $400 to get a customer, it only cost $300… That doubles your net profit to $200! ($1,000 revenue – $500 COGS – $300 advertising = $200 profit.) NOTE: You don’t have to double your conversion rate in this scenario, you only have to boost it 25% to double profits! Downside? Well, sometimes increasing conversions can be tricky. Although you SHOULD be trying.
Third, you could increase the price of the product. Adding $100 to a $1,000 product may not change sales volume or conversions at all, and would instantly double your profits. It’s also possible it could go the other way. But testing prices is a valid approach.
Now let’s look at a brain-dead simple way to double profits without even getting more customers, without changing the price, and without spending any more on advertising — that can be implemented in as little as 10 minutes…
What if, instead of all of the above, you made sure that people knew they could get not just one, but TWO of your products?
Let’s say everything else remains the same…
$1,000 sale. $500 COGS. $400 advertising costs. $100 profit.
But that’s all just on the FIRST product.
Here’s the numbers for the SECOND product that person buys…
$1,000 sale. $500 COGS. $0 advertising costs. $500 profit.
Notice: ZERO advertising cost on the second product dramatically increases profits.
That means if you can get ONE IN FIVE who are already buying ONE to instead buy TWO…
Just 20% buying another for a friend, a backup, or any other reason…
You just doubled profits!
And we’re assuming here that they only buy two. Given the option, some might buy 3, 4, or more, depending on the product.
Of course, this won’t work for ALL products. If your product is consumable — meaning it gets used up (like food) and they want more, it’s a relatively easy sale. If it’s a product that should last for years, maybe it’s harder.
But with almost any product, don’t underestimate people’s willingness to buy in bulk. Maybe they want one for their home, and another for their office. Or one for home, another for the car. One for a friend. For their RV. The works.
Who knows? All you need to know is: given the option, will they buy multiples?
How can you test this in 10 minutes on YOUR website?
Simple. Many direct marketers use a spartan one-page checkout process.
Someone clicks “buy now” and they’re taken to a page to fill out their billing and shipping addresses, payment info, and to click order.
This is stupid simple…
Just add a “Quantity” option on this page.
Instead of just letting them buy one, give them the option to buy as many as they’d like.
You can also add relevant copy here or in your sales letter that tells how useful it would be to have multiples of whatever it is you’re selling.
Based on what your product is and where and how it’s used, give them “use scenarios” that show them the benefit of having more than one.
If they’re already convinced they want one, getting a second one will be an easy decision for a certain segment of your audience.
And a quick and easy way to double your profits.
Yours for bigger breakthroughs,
Roy Furr
Editor, Breakthrough Marketing Secrets
