Funnel Fumble

Not only Covid makes it possible: E-commerce is booming. Thanks to online shopping, we were also able to defy the crisis and have our products brought to your doorstep, even when  shops were closed. The developments of the last year where the start to many new start-ups, ideas and processes that also challenge experienced e-commerce retailers. 

In this article I will try to shed some light on this somewhat unclear world – using the purchase chain of a Manitober piece in order to be able to make the relevance and (also sustainable) necessity of it a bit more transparent. Let's start with you, the customer.

It's not unlikely that you found us by clicking on an ad. Facebook (with Instagram) and Google rule the market, other providers are far behind. Ads come in all sorts of shapes and colors, sometimes static, but always pretty on point. This is made possible by information about you and other users, who use clever algorithms to analyze similar behaviors and interests and display ads to the most suitable users. If the algorithm was correct, you will land on our website, where the shopping experience should be made as pleasant as possible. This is done through clear product pages, tons of information about the product and of course through us. The so-called 'user experience' can be measured, optimized and even recorded. You can see, for example, who clicks on what, where, when, how long someone scrolls and when this person leaves again. There are thousands of tricks to keep visitors engaged and to extend their time, because this increases the likelihood of a purchase, a so-called conversion.

The performance of a shop is determined by the conversion rate. It indicates how many sales were made per 100 visitors, 2-5% is good, depending on the industry.

So you've found something, put it in your shopping cart and generated tons of data in the process? Thank you, then please proceed to the checkout. In contrast to the website, there is an almost clinical minimalistic atmosphere happening. Nothing should distract potential buyers from entering their address and payment details in order to get to their checkout quickly.

So far, we haven't looked at the costs at all: Ads obviously cost money. A click can cost 50 cents, not that little when you consider that you need at least 50 clicks for a purchase ... I don't want to go into detail about the costs of the online shop for now. Not that we want to keep this a secret, but it fluctuates enormously and is therefore hardly representative.

One thing is certain: it is not free.

Back to the checkout. Please choose a payment method now. The most popular with us are, as is the average in Germany: Paypal, credit card, prepayment and instant transfer. New at our shop: Sezzle.

The American start-up has an eye on the German market and offers payment by installments for items: one installment when you buy, 3 more after 30 days at no extra cost. So if you are planning a larger purchase or are currently not liquid, you can easily finance your Manitober  pieces, a check is only carried out on the basis of your name and email address. In addition to the bank transfer, we as a seller naturally incur costs that are between 2 and 4% of the purchase price. In return, the money paid ends up in our accounts more or less quickly and is available relatively promptly.

In the meantime, we have already reached a very large amount per purchase, from which of course taxes still have to be paid. In order to get your order to you, however, the 'offline' process starts now: Your order will be transmitted to our warehouse, where it will be picked, packed and sent. However, the shipping costs that you pay us up to an order value of 70 € do not cover the actual costs, which we charge 9 €.

It gets expensive if products are not liked and are sent back. Then both logistics and payment have to be processed back. Fees are only partially reimbursed and there is no need to mention the work in the warehouse and in our office. With our current return rate of almost 20%, this means that almost every 5th order comes back. So these costs add up to the four orders you kept.

The reduction of our returns is therefore a major concern on our part: We not only want to make our products so good that you definitely want to keep them, but also give you as much assistance as necessary with the selection. In addition to all the costs, what is sent back and forth is of course an unnecessary burden on the environment, which is why we are always dependent on your help.

So if you want to support us or other small businesses, give others the opportunity to know more about your experience – either through a review, by taking part in our survey or simply by sending a message via the website, service or social media. The so-called 'Customer Journey', i.e. the journey of a person shopping, does not end with the receipt of the order or the evaluation of the product. We assume that if you liked our article, you would definitely buy other parts from us. So from now on you will receive advertisements from time to time, a newsletter sent or a follow-up email to remind you to submit the reviews or to send your used parts back. 'Customer Lifetime Value' denotes another term that e-commerce enthusiasts like to use. It describes the value that customers have for a shop or brand over a period of time. The more you recall yourself and build a bond, the lower the costs, because an expensive first acquisition is of course not necessary.

Why am I telling you all this? Because we see you as responsible and consciously buying people and not as a collection of data and values. And since we use tools  at almost every point in the interaction process that do not always correspond to our values, we should at least present this transparently. If you have any further questions or if you did not understand certain points, do not hesitate to contact us!