How to Identify Best-Selling Products That Convert
Chances are, you’ve been getting your best sellers product list totally wrong.
We know that an eCommerce retailer's best sellers collection is one of the most critical online “shelf spaces” in your store. AKA prime online merchandising real estate on homepages and menus.
This is especially true for stores with extensive product inventories.
However, it’s not enough to just sort by units sold.
To optimize for conversions and profit, best sellers should be your best-performing products that account for inventory optimization and retail KPIs.
So, What Is the Right Way to Find These Converting Best-Selling Products?
Many stores identify their best seller products based only on sales quantity. But for long-term growth and profitability, that is simply not enough.
Instead, eCommerce retailers need to analyze their overall store revenue, sales, and inventory performance.
Example: How to Identify Your Real Best Sellers
To show you how retailers should be finding the right best-selling products to promote, let’s look at two product hypotheticals.
Product A: An online retailer pushed product A on marketing channels with a big budget, resulting in a lot of exposure. This resulted in a significant sales boost. It looked a little something like this.
- Marketing budget: $1,000
- Units sold: 100 units
- In-store conversion rate: 0.5%
- Facebook CTR: 1%
Product B: For product B, the retailer opts for a continuous average budget which results in average exposure, while still boosting sales. It looked a little something like this.
- Marketing budget: $500
- Units sold: 90 units
- In-store conversion rate: 2.5%
- Facebook CTR: 3%
Which product would you consider being the better product in terms of performance?
If you were to only consider units sold, a retailer may think product A.
But is that the real best seller?
Of course not; product B is the best seller. But that’s not the full picture.
What about Inventory Metrics and Product Margins?
eCommerce retailers should aim to promote the best-performing products that align with their inventory goals and KPIs.
Additionally, to boost profits along with sales, they need to take product margins into the decision-making process. This will show you which high-performing products to present and push to boost sales and profitability.
The trick to really boosting profits is combining this product-sorting approach with automation, something online jewelry retailer Swarovski (IL) have mastered.
In fact, they were able to increase profits by 8% in just four weeks by using optimized product lists.
In short, they were able to harness the power of a multi-parameter sorting strategy for all of their collections using Kimonix’s advanced product sorting.
This then enabled them to establish the influence of each parameter based on the business goal of each collection, and use advanced AI to continuously optimize their collections based on real-time data.
You can read the full case study here.
Final Thoughts: How to Optimize Best Seller Lists
By identifying your real best sellers, eCommerce retailers are able to increase conversion rates while boosting overall profits.
Before updating your best sellers product sorting strategy, eCommerce brands should take note of the following:
- You will want to identify best sellers according to recent data (e.g., last 30 days) in order to have relevant products that are hot now.
- Don’t put too many products in your best seller collections – this will cause you to lose credibility.
- Best seller lists should be updated often so that retailers are showing the trendiest products at any given time.