Its Bihu time here. Wishing everyone a Happy Harvest season. May the music and food be great wherever you are
Monday, April 14, 2014
Friday, March 21, 2014
Conversion Optimization
I am not an expert and havent done split A/B testing and have had limited success but have tried a few things which seem to work for me :
1) Added a trust mark : This can be something a SSL Seal or a guarantee.
2) Highlighted the call to action button - Orange seems to work well as a color. Also de-highlighted other buttons like Add to Wishlist so that the main call to action stands out.
3) Remove extra information from the Conversion page - Minimize possible actions. Earlier I had Facebook buttons, pinterest, twitter etc - now I have just three - Buy (Main Conversion button), Add to Wishlist (De-highlighted but just in case you want to come back later), Facebook like. The sizes and colors are in that priority
4) Speed - Did some tweaking suggested by Google for making the page faster(lot to do still). The assumption is that faster pages convert better.
5) Conversion steps : Reduced conversion steps from 8 to 5. Made Guest checkout the default option(We are a niche site so dont expect a lot of repeat find something and buy)
Do let me know if you know of some low cost ideas to improve Conversion
1) Added a trust mark : This can be something a SSL Seal or a guarantee.
2) Highlighted the call to action button - Orange seems to work well as a color. Also de-highlighted other buttons like Add to Wishlist so that the main call to action stands out.
3) Remove extra information from the Conversion page - Minimize possible actions. Earlier I had Facebook buttons, pinterest, twitter etc - now I have just three - Buy (Main Conversion button), Add to Wishlist (De-highlighted but just in case you want to come back later), Facebook like. The sizes and colors are in that priority
4) Speed - Did some tweaking suggested by Google for making the page faster(lot to do still). The assumption is that faster pages convert better.
5) Conversion steps : Reduced conversion steps from 8 to 5. Made Guest checkout the default option(We are a niche site so dont expect a lot of repeat find something and buy)
Do let me know if you know of some low cost ideas to improve Conversion
Sunday, February 23, 2014
Online Market Places
We are a small handicrafts manufacturing company and we primarily sell online. A good part of our sales come through our own website - www.kraftinn.com but we soon realised that as a brand, looking at your website alone is sometime not the best strategy. This is basically because of the following :
1) Costs : Setting up an online store is not very difficult nowadays. However getting good traffic is indeed a continuous and difficult task. This is where marketing comes in and whichever channel you choose be it Google ads or Facebook, cost of marketing is significant. Apart from that there are other transaction costs like Payment Gateway costs that are significantly high at small scale.
2) Brand : Each brand is unique and people connect to it in different ways and even though customers may love your brand, many are more accustomed to online purchases through the very large established online players like Amazon - this is due to a lot of different reasons from trust to customer service to purchase guarantees to robust feedback mechanisms.
Because of the above, we made a conscious decision to make our products available in well known marketplaces like Amazon.in and Ebay.in.
Some of the great advantages of the market place model are :
- If you got a great product, you just need to list it. There is no additional expenditure for marketing and commissions are paid only when a product is sold. This frees up marketing expenses that can be put back in the business for expansion.
- Good marketplaces reward you for good performance. This means if you ship on time and customers are happy with the product, you get good reviews, your products get better rank and this converts into better sales.
- Marketplaces have great followup mechanisms and analytics tools that can give you excellent insight into what your customers are looking for.
- The commissions that are charged are usually in line with the industry one operates in.
The only model that works for us in the marketplace model right now are ones that just connect the buyer with us for a reasonable commission - the ones that take care of the logistics or ask us to ship to them or ask for very high commissions don't work because the Indian Ecommerce market is a value market - where the customer has to be happy, the vendors have to be sustainable and inefficiencies have to be minimised. Thats all for today. Thanks for reading.
1) Costs : Setting up an online store is not very difficult nowadays. However getting good traffic is indeed a continuous and difficult task. This is where marketing comes in and whichever channel you choose be it Google ads or Facebook, cost of marketing is significant. Apart from that there are other transaction costs like Payment Gateway costs that are significantly high at small scale.
2) Brand : Each brand is unique and people connect to it in different ways and even though customers may love your brand, many are more accustomed to online purchases through the very large established online players like Amazon - this is due to a lot of different reasons from trust to customer service to purchase guarantees to robust feedback mechanisms.
Because of the above, we made a conscious decision to make our products available in well known marketplaces like Amazon.in and Ebay.in.
Some of the great advantages of the market place model are :
- If you got a great product, you just need to list it. There is no additional expenditure for marketing and commissions are paid only when a product is sold. This frees up marketing expenses that can be put back in the business for expansion.
- Good marketplaces reward you for good performance. This means if you ship on time and customers are happy with the product, you get good reviews, your products get better rank and this converts into better sales.
- Marketplaces have great followup mechanisms and analytics tools that can give you excellent insight into what your customers are looking for.
- The commissions that are charged are usually in line with the industry one operates in.
The only model that works for us in the marketplace model right now are ones that just connect the buyer with us for a reasonable commission - the ones that take care of the logistics or ask us to ship to them or ask for very high commissions don't work because the Indian Ecommerce market is a value market - where the customer has to be happy, the vendors have to be sustainable and inefficiencies have to be minimised. Thats all for today. Thanks for reading.
Saturday, January 18, 2014
Pricing Strategies
One of the finer things in our business is to decide on the price of a product. Since we manufacture our own products, there are various costs that one incurs in a product. Following are some of the key ones :
1) Labour Costs : Our products for the most part are handmade and we at KraftInn have artisans as employees who come from remote villages. Apart from monthly salaries, we also provide housing and food to our employees - which helps the artisans to send money home to sustain their families. Bamboo craft is an extremely skill intensive craft and finding the right artisan and retaining is one of our key goals.
2) Logistics Costs : Since we primarily sell online, one important aspect is the logistics costs that we incur - this includes packaging material and payments we make to our Courier partners and India Post.
3) Marketing Costs : Any business that seeks to sell products to its customers incurs marketing costs. In our case, these are related to branding and advertisements that we do to help take our products to customers
4) Operational Costs : These include costs related to production of items, rent, electricity, treatment, machines etc
5) Raw Material Costs : The raw material, which is primarily Bamboo and Water Hyacinth, in our case.
6) Commissions : Third party commissions, payment gateway transaction cost etc.
So the conventional wisdom for deriving the price of a product is to add a weighted average of the above to come with a price that leaves room for a minimum profit. This was our very first strategy when we started out but slowly we realised that it really does not matter if our costs are high or low for particular product but what is more important is if the customer finds value in our product. That is when we thought of what we call a minimum viable price. The idea is the following :
Value : Customers like to pay for the value they get. So, regardless of whether a product is big or small and incurs X cost for labour and Y cost, the customer should feel that there is enough value for what he or she pays. We get extensive feedback through channels like our Ebay page and have derived some insight into what is the right price at which customers see value. After that price is discovered, we slowly tune the cost parameters - example the size of product to make it viable. A good example is our set of laundry baskets - Putting two laundry baskets of slightly different sizes makes it possible for us to package it together in such a way that we save on logistics cost and pass the value to our customer.
Discounts : A friend of ours said in jest that she would buy the same product at Rs 250 with 50 percent discount rather than at Rs 100 because that is how strong the perception of discounts is in India. We however thought it wise to have a minimum viable price rather than pricing it higher and then offering discounts. This also helps us to keep our price uniform across all our channels be it our website or Ebay and KraftInn.
Economy of Scale : As a business grows, it is able to bring in more and more productivity and efficiency and this helps to bring down costs. As a small business, we know that over time, we will be able to optimise better on our costs. But, this does not mean that we need to pass all our costs to our customers. At this moment, we are looking at minimum viable price from a customer stand point and the idea is to focus on growth where over a period of time, the economies of scale will enable us to put the financial model that will help us sustain a large number of artisans while keeping the minimum viable price attractive for our customers.
That's all for today. Thanks for reading.
1) Labour Costs : Our products for the most part are handmade and we at KraftInn have artisans as employees who come from remote villages. Apart from monthly salaries, we also provide housing and food to our employees - which helps the artisans to send money home to sustain their families. Bamboo craft is an extremely skill intensive craft and finding the right artisan and retaining is one of our key goals.
2) Logistics Costs : Since we primarily sell online, one important aspect is the logistics costs that we incur - this includes packaging material and payments we make to our Courier partners and India Post.
3) Marketing Costs : Any business that seeks to sell products to its customers incurs marketing costs. In our case, these are related to branding and advertisements that we do to help take our products to customers
4) Operational Costs : These include costs related to production of items, rent, electricity, treatment, machines etc
5) Raw Material Costs : The raw material, which is primarily Bamboo and Water Hyacinth, in our case.
6) Commissions : Third party commissions, payment gateway transaction cost etc.
So the conventional wisdom for deriving the price of a product is to add a weighted average of the above to come with a price that leaves room for a minimum profit. This was our very first strategy when we started out but slowly we realised that it really does not matter if our costs are high or low for particular product but what is more important is if the customer finds value in our product. That is when we thought of what we call a minimum viable price. The idea is the following :
Value : Customers like to pay for the value they get. So, regardless of whether a product is big or small and incurs X cost for labour and Y cost, the customer should feel that there is enough value for what he or she pays. We get extensive feedback through channels like our Ebay page and have derived some insight into what is the right price at which customers see value. After that price is discovered, we slowly tune the cost parameters - example the size of product to make it viable. A good example is our set of laundry baskets - Putting two laundry baskets of slightly different sizes makes it possible for us to package it together in such a way that we save on logistics cost and pass the value to our customer.
Discounts : A friend of ours said in jest that she would buy the same product at Rs 250 with 50 percent discount rather than at Rs 100 because that is how strong the perception of discounts is in India. We however thought it wise to have a minimum viable price rather than pricing it higher and then offering discounts. This also helps us to keep our price uniform across all our channels be it our website or Ebay and KraftInn.
Economy of Scale : As a business grows, it is able to bring in more and more productivity and efficiency and this helps to bring down costs. As a small business, we know that over time, we will be able to optimise better on our costs. But, this does not mean that we need to pass all our costs to our customers. At this moment, we are looking at minimum viable price from a customer stand point and the idea is to focus on growth where over a period of time, the economies of scale will enable us to put the financial model that will help us sustain a large number of artisans while keeping the minimum viable price attractive for our customers.
That's all for today. Thanks for reading.
Thursday, January 2, 2014
Artisans at Work
KraftInn Artisans at Work
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| We use Bamboo Nails only |
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| The Green India Lamp |
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| Different type of Bamboo is used for different parts of the lamp |
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| Sheets are immaculately glued together |
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| Its a bit cold and the sun sets early |
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