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How do you tell an online store is making money?

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mosaster

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Jul 18, 2017
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Hello fellow entrepreneurs,
I'm evaluating opportunity of a new store. My business will be running both as online store and presented IRL at a shopping mall. I am absolutely confident of my future business selling points, but need to evaluate efficient strategy online.
Now I am proofing online showcase of potential competitors.
There are some good ideas implemented here and there at competitors' online stores, however the idea is generally pretty new for e-commerce.
I was wondering how do I tell whether their web-store is efficient an generating profit?
 

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LightHouse

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You can make general assumptions, but it won't matter much.

Can you sell your product without and online store? If so, at the point you are, starting a shopify store or something similar is going to be far more efficient than the time you are wasting trying to figure out your competitors.

Worry about selling your product, not what everyone else is doing. Your business will have different needs that you will solve as you get down the road.
 

Kybalion

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Look at their traffic through some online traffic checking site. + Try to find out if they are running any ads.

These indicators won't give You concrete evidence of their business success, but they can be used to make general assumptions.
 

ZCP

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Buy one from them and see there process, response, and customer service.
Then crush them in their weaknesses.
 

ZCP

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Back to your question ....... @mosaster

So if they were massively profitable, what would that mean to you?

If they were losing money, what would that mean to you?

If they were breaking even, what would that mean to you?
 
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mosaster

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Jul 18, 2017
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Look at their traffic through some online traffic checking site. + Try to find out if they are running any ads.

These indicators won't give You concrete evidence of their business success, but they can be used to make general assumptions.
Thanks for this advice, looks right what I need. Need a general idea whether they have substantial traffic or hold the store hoping it will generate sales. That's what I'm looking for.
 
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mosaster

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Jul 18, 2017
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Back to your question ....... @mosaster

So if they were massively profitable, what would that mean to you?

If they were losing money, what would that mean to you?

If they were breaking even, what would that mean to you?
Hi,
Knowing that gives me an idea what I make of my own web-site:
1) profitable. . . I make an online store, but better one to make even more money : )
2) losing money, breaking even . . . If I observe errors then I make my own webstore, but, again, a better one : ) then if my fix does not work or they have no traffic with a good site than I might consider other options of driving customers.
No rocket science, just executing :-D
 

MJ DeMarco

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Buy one from them and see there process, response, and customer service.
Yes, and check out your order number!

Some of them also use a sequential order system.

If they've been in business 2 years and your order is #1941, you can assume they had 1941 orders or 941 orders (you can start at 1000).

If it's a higher number, say 101941 and it's not likely they've sold over 100,000 units, you can also assume it's probably 1941.

Of if it is 19-2303, then you can guess it means 2019, order #2303.
 
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mosaster

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Jul 18, 2017
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Yes, and check out your order number!

Some of them also use a sequential order system.

If they've been in business 2 years and your order is #1941, you can assume they had 1941 orders or 941 orders (you can start at 1000).

If it's a higher number, say 101941 and it's not likely they've sold over 100,000 units, you can also assume it's probably 1941.

Of if it is 19-2303, then you can guess it means 2019, order #2303.
Although not accurate, absolutely simple method I haven't thought of! Thank you! Since anyway I was going to check some of their own products, will try it first of all here and with other stores just out of curiousity :-D
I guess my question has been answered :)
 

ZCP

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Hi,
Knowing that gives me an idea what I make of my own web-site:
1) profitable. . . I make an online store, but better one to make even more money : )
2) losing money, breaking even . . . If I observe errors then I make my own webstore, but, again, a better one : ) then if my fix does not work or they have no traffic with a good site than I might consider other options of driving customers.
No rocket science, just executing :-D
as long as you are doing it for information to beat them. it initially sounded like you were doing it for money chasing.

first one, good. second one, revisit your path.
 

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Yes, and check out your order number!

Some of them also use a sequential order system.

If they've been in business 2 years and your order is #1941, you can assume they had 1941 orders or 941 orders (you can start at 1000).

If it's a higher number, say 101941 and it's not likely they've sold over 100,000 units, you can also assume it's probably 1941.

Of if it is 19-2303, then you can guess it means 2019, order #2303.
I was going to say the same thing.

When I was starting my web design business I guessed people would think this way and used it to my advantage...

Website #3 in 2017 would be like invoice number 170034 haha.

It can work sometimes - you can place a small order one month and then one more a month later. See how many units were sold in X amount of time.

But as others have said this won’t help you as much as it seems. Looking at external stats never gives you much of a full picture.
 

Danczyk

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All great answers. I can add another tip here for you.

As someone mentioned here you could go to similarweb website but pay for a month. It's 40 bucks or something. It's harder to get organic traffic to online stores than authority websites so generally ads are the way to go.
On similarweb not only you see the traffic, there is also a section where you can see the ads and for how long they run it. If the same ad is running for a long time it means it's profitable. You can also find their ads on FB only by going to their FB page and looking at the menu and find their ads there. Very easy stuff.

Good luck.
 

biophase

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And you can also buy something today and buy something else in a week and see how much the order number has jumped.
 

Alex19

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If they have atleast a decent amount of visitors, then Similarweb.com - Digital World Market Intelligence Platform might help.
Yes, similarweb is a good starting point. You can check the average conversation rate in your industry. Most online stores have 2-3% conversation rate. It means, that 2-3 people buy from 100 visitors.

If the store has 100.000 visitors per month, then they have 2000-3000 customers per month.

Now, you need to know the average order value. Check the best selling items in the store. Which offer products do they promote most of the time?

Let say, that the most popular product costs 25 USD+ 5USD shipping cost =30 USD shipping so the monthly revenue is around 30 USD * 3000 visitors = 90 000 USD per month.
 

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