Price and special offers management in e-commerce (part 6) – cross-selling: how to increase the amount of goods sold – 6 tips
Cross-selling – is a commercial technique connecting a product or service to the purchase of another product or service. In 2006, Jeff Bezos, revealed that 35% of Amazon sales were a direct result of cross-selling. It’s worth becoming familiar with techniques for utilizing this practice, especially during times when margins on products are often lower than 10%. Cross-selling is a great way to increase return on sales.
The most often used cross-selling strategies:
• Complementary products – they are most often offered as suggested item to make the original purchase even better; for example, laptop + case for it. The margin on a cheaper product is often higher and it considerably improves return on sales.
• Separate sales – this strategy is widely used by Ikea. To have a complete product A, you have to buy product B. So the client is forced to buy two products.
• Complementary service – offering services connected with the item that was sold, for example equipment insurance, furniture assembly.
• Similiar goods – very often used in fashion sales, for example Zalando – offering products similar in colour to the product that was bought.
• Automatic cross-selling – offered with most e-commerce platforms -this informs the buyer that others who bought the item that this client is buying also bought another product that should be considered by this buyer.
1. 25% rule – it’s proved that the most effective cross-selling occurs when offering products, whose value isn’t higher than 25% of basket value.
2. Limit the number of choices so that the client is not overwhelmed. While there is no specific ‘magic’ number for each market, testing various options and tallying results will give a reliable number in your market. –Price and special offers management in e-commerce – the paradox of choice
3. Remember that cross-selling is effective only then when you offer an additional value to the client – it can be a discount, free shipping and so on. Emphasize an additional value through the explicit indication of the benefit that the client will get –Price and special offers management in e-commerce – bundles: 9 practical tips
4. Most clients compare prices on the main product they are buying, so lower that price and build the margin on additional products.
5. If you use e-commerce platforms, for example www.shopify.com or other popular platforms, they likely have built-in functionality for offering bundles; you can also buy plugins that do the same job.
6. You can also use external tools, which automatically offer bundles for a product and it’s easy to integrate them with your e-shop – swogo.com