5 Secrets to Success of the Most Profitable Shopify Stores
If you’ve already set up your store on Shopify, you probably already know that online selling can be a real challenge. With thousands of other stores competing for the attention of your potential customers, it takes more than just creativity and hard work on the products you’re offering to become one of the most profitable shopify stores.
In recent years, correct use of data has changed the world of online selling and marketing in particular, as more and more businesses realize the importance of tracking and analyzing their most valuable business metrics. Our data of over 1,800 Shopify businesses tells us that success of the most profitable Shopify stores lies within, you guessed it, data.
What does it mean to be profitable?
First, let’s dive into what it really means to be a profitable online store. Obviously, it’s about having a financial gain where the income outweighs the cost. But, it gets more complicated than that, with more than just one type of profit to take into account.
Major types of profits:
- Gross profit
- Operating profit
- Net Profit
Gross profit is a subtraction of the costs of the products sold from the sales revenue (net income), meaning your sales minus your direct expenses related to specific products, which usually include costs of labor and materials.
Contrary to gross profit, Net profit takes into account the indirect expenses related to your products, such as payment to suppliers, rent, etc. A calculation of your total Net profit is your indirect expenses subtracted from your total Gross profit.
Operating profit is one of the key business metrics, reflecting your business’ core activity. It is the profit calculated before deducting interest and taxes. The Operating profit margin can be calculated based on your Gross profit and Net profit.
What do the most profitable Shopify stores have in common?
The world we live in has gone online, driven by data analytics. In recent years, more and more Shopify stores understand the importance of data to their online business and make sure to incorporate use-of-data into their business strategy to better understand what works for them.With over 29 million online purchases in 2020, jewelry is taking the place of the most profitable online product niche. Click To Tweet
By tracking your website’s traffic, paid advertising or Search Engine Optimization efforts, you can gain extremely valuable insights about your target audience, which should help a great deal in creating or adjusting your potential personas. You might decide to start reaching out to customers in new locations, of different age groups or those of a specific marital status.
But while use-of-data is important in marketing, it’s even more crucial in keeping track with the rest of your business operations metrics, which directly impact your bottom line, from tracking your expenses, profits, shipping and more.
The Shopify profit calculator by BeProfit does just that, with easy tracking of all your core business metrics in one place, including analyzing your advertising efforts to help you make cost cutting decisions, optimize your store and increase your bottom line.
5 secrets of the most profitable Shopify stores
While there are more than just a few steps you can take to increase your online store’s profits, here’s our pick of five things every online business should aim for on their way to become a strong, constantly-growing brand.
- Conduct research. Whether it’s about your target audience, potential service providers or making any kind of adjustments to your products, always do your homework first. Making a decision that is based on assumptions is not likely to result in success.
- Create opportunities. Instead of seeking opportunities, create them. Reach out to social influencers, engage with your customers to better understand their pain points, and always come up with new ideas. It’s about being proactive and taking action.
- Work on your business skills. From accounting to marketing, sales or operations, always strive to learn new skills that will help you gain a higher level of control over your business, even if being out of your comfort zone.
- Create the right network. Finding the time for socializing (even if only online) can be challenging, but connecting with the right people can only do good for your business. Search for relevant forums, blogs or the right conferences and build the foundations for what might be future prosperous relationships.
- Know your numbers. With many factors that can impact your bottom line, always use your data to your favor. Keep track of your business’ profits and expenses, and follow relevant reports on a regular basis, which in turn will help you gain insights and make necessary changes to optimize your store.
Most profitable products to sell online
With the rise of many online-selling platforms like Shopify, Amazon, WooCommerce and more, many entrepreneurs all over the world are building their brand around their passion. With over 29 million online purchases in 2020, jewelry is taking the place of the most profitable online product niche. Intangible products, pet supplies and beauty products also make the list of the most profitable products to sell online, with billions of dollars worth of sales spent in the U.S only in 2019.
Need more inspiration? Check out the full list of 10 best profit margin products to sell in 2021
Looking at a wide range of online stores tells us that the success of your business depends on more than just coming up with a good idea and creating an excellent product with meaningful value. It’s about planning, controlling and executing a bunch of elements that might be out of your comfort zone, like constantly tracking all of your business metrics and using data to better understand how to improve and increase your profits.