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How I turned an online shop into a passive business

by Guest on June 8, 2017
Business

My name is Melissa Stevens, I’m an entrepreneur and this is the story of how I bought a dropshipping e-commerce site and doubled its monthly sales to $10,000 in just one month.

Lightingshoes.net is the site. It sells light-up shoes to consumers of all ages and walks of life. For toddlers, kids and adults too, we offer sneakers, low tops and high tops in various designs and colors.

Last month we attracted 11,000 visitors to the site, and earned $10,000 in sales. This month we’re on target for $15,000, and I’m confident we can continue to increase sales as the business and our marketing develop.

How I Came To Own lightingshoes.net

I’m a software developer and I was exploring the idea of a SAAS product to sell to users on a recurring monthly plan to bring in some passive income. A friend recommended I check out Shopify. He believed there were great opportunities to create plugins for the Shopify market. I really liked Shopify, but it wasn’t clear to me what Shopify users wanted or needed from a new plugin.

I decided the best option was to become a Shopify site owner myself, and I searched for a Shopify business for sale that was already established and getting orders. The next day, I was the proud owner of lightingshoes.net.

Solving Problems

I jumped on the site quickly because I felt it was such as good deal. I’m sure you want to know why. The owner was asking only $8,000 for it, and average monthly sales over its 6 month lifespan were $5,000, with a profit margin around 20%.

The reason the price was so low was the amount of work needed to make the site a proper business, and the issues that had to be fixed after I bought the site.

1. Unreliable suppliers

Dropshipping from our supplier in China was by far the biggest issue. It was taking over 2 weeks for the shoes to arrive, and customers weren’t happy. I found a supplier with a warehouse in the US that would ship shoes directly to our customers in 3-5 days. It was no easy feat, and took well over a week to research suppliers and eliminate bad or expensive ones.

2. New merchant account needed

There were too many chargebacks due to the issues with the previous supplier. So I needed to get a new merchant processor set up when I bought the site.

3. Poor site design

It’s the details that really make a site, and lightingshoes.net was missing all the refinements needed. The site loaded extremely slowly, there were spelling errors in the logo, the footer was inaccurate, and many other problems needed fixing. I did a good amount of redesign to make it look like a real business and a site that people would trust.

How I Doubled The Conversion Rate And Sales

Now, the juicy part. The site was converting at 1.10% when I bought it, and within one month I’d increased conversion to 2.07%. This doubled the number of sales and the value of the asset. Here’s how I did it.

Before:

After: 

1. Added Discount Pop-Ups

When a visitor first arrives on the site, I added a pop-up 10% discount if they share or like us on social media. I also added an exit popup, advertising $10 off if they stay on and shop with us. In the month of March, 14 people used the intro popup coupon, and 23 used the exit offer. That’s more than worthwhile, assuming just 50% of them are customers we wouldn’t otherwise have sold to.

Shopify Plugin used: Better Coupon Box.

Intro Pop:

Exit Pop:

2. Added Sales Pop

I added a little pop at the bottom of the user’s screen showing them “Person so-and-so from such-city just bought these…” I don’t have the numbers, but this helps build trust with customers who can see others are buying from us.

Plugin used: Sales Pop.

3. Improved Product Images

With Adwords, anything that differentiates you from your competitors is a good thing. An image of your product on a white background converts best. That’s common knowledge with Adwords, and what I and every other LED shoe site was using. So I hired a Photoshop expert to change the images and make them stand out.

Before:

After:

4. Added an Abandoned Cart email series

I added marketing directed at visitors who had come to the site, started the checkout and abandoned before completing it. The previous owner missed the opportunity to follow up on these visitors, despite having their emails! We got 12 sales in the month of March from this.

The Fruits Of My Labor

The result of my work was doubled revenue to $10,000 per month, and a profit margin around 25%. The business is essentially hands off for me – about 2 hours per week – since I hired a VA to handle customer support and work with the vendor. All in all, a nice asset for generating passive income.

Moving Forward

My immediate plans are to increase the site’s SEO and social media reach. I want to establish it in the top rankings for all searches related to its keyword.

I’ve already been approached by some potential buyers. When the time is right I will turn the asset over to the right buyer. I’d expect a possible 7x return on my investment.

My Top Advice For Passive Income Seekers

Do your due diligence. Really investigate every little detail, do your research thoroughly and use expert help. In all the excitement and optimism for making money and that the project is going to be easy, be sure to think through how much hard work it’s going to take before launching into your business.

Reinvest the income from your site back into the business. For the future return I’m expecting, I’ve been pouring a significant amount back into SEO.

 

Melissa Stevens is an entrepreneur in pursuit of a passive-income lifestyle. She is part-owner of lightingshoes.net, a dropshipping Shopify store selling light-up footwear for everyone, specializing in light-up yeezy inspired shoes. You can see an example of their adult shoes here.

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