Let’s talk about online merchandising a little bit. In my mind merchandising is an art of selling. Every activity related to promoting and selling your products once a prospect is in the store is a part of merchandising. There are several disciplines in this subject like discounting, product display, promotions, packaging, pricing, etc. In this post, I want to focus on one specific area, which is managing your bestselling products in a given category.
So why bestsellers are bestsellers? (No, I will not use ‘best-sellers’ and ‘best sellers’ in this article)
Some products are real ‘hits’. People love them, buy them, recommend them, buy them again. The bestselling nature of this product is defined by the product features. Some products represent a segment of so-called “biased” bestsellers. The problem with ‘biased’ bestsellers is that the more we push particular products to the top of the category or improve their presentation or perception – the more sales they generate. The bestselling nature of these products is defined by the way they are sold, not necessarily by product’s features. That’s where ‘biased’ part comes from. Some products are simply fake bestsellers, meaning the bestselling list has been compiled by some editor, manager, friend’s mother and so on.
Knowing different types of bestsellers and where they come from helps us to come up with ‘bestsellers’ strategy.
Every e-commerce store should have one and enforce the implementation of it where possible. The main reason is that bestsellers represent the base of your revenue. They require minimal effort in selling, promotion, managing while generating a steady stream of income at the same time. To put it simply – they sell themselves.
Bestsellers Tip #1
Know your bestsellers. Simple as that, this is often overlooked and no tools are used to analyze and manage top products. Many e-commerce platforms have simple sorting options to move bestselling products to the top. Use these tools to find the best performing products for each category, use sales reports or any analytics tool available.
Bestsellers Tip #2
Perform a cohort analysis of your sales. That means you need to break sales in timeframes: monthly, quarterly, yearly, weekly. You can even go hourly if that can be applied to the nature of your business. That will help you to understand customers’ behavior, seasonal dependencies and how new products affect sales. Cohort analysis will also help to uncover top products that might not be considered bestsellers initially.
Bestsellers Tip #3
Come up with a ‘bestseller’ definition specifically for your niche, product type, pricing type, etc. A simple number of sales, which is usually the main measure for finding top products, may not be enough. Imagine you have two products, that were sold 100 times each. The profit margin on the first product is 30%. The margin on the second one is 3%. Which one is more important for your business?
In every article, I ask the same question: Why is this important?
Properly managing bestsellers is important, because, as mentioned earlier, it is the base of your revenue. You want this base to stay solid. Do not forget about customers as well. People find comfort in buying bestsellers because there is social proof attached to them: “If many people buy this product, that means it is good”. Buying right bestsellers customers are contributing to your revenue base.
There is a word Shopify in the title, so I have to write something about managing bestsellers in Shopify. Well, we all know that Shopify has a sorting option “By best selling” for collections. It is great in itself. What about store specifics? What about profit margins, cohort analysis and all other things that make your business unique? Here at EGNITION, we came up with a great app for Shopify – reSort. reSort helps you to manage bestsellers in a very flexible way. reSort can look at your revenue as well per product as well as the number of sales. reSort can analyze sales for a particular period of time. It also has little sweet features like pushing down ‘out-of-stock’ products and pushing new products higher in the category. But the best thing about reSort is that it is available right now and can be installed at your Shopify store. Get reSort here.
The word “bestsellers” has been used only 19 times in this post.
Let your customers have a great shopping day!