Upselling and cross-selling when dropshipping are two great sales methods that allow you to increase your revenue and customer retention. They are responsible for introducing new products to existing audiences and giving your customers the best experience possible.
You may be wondering why cross-selling and upselling are important, well, here are the reasons “why”, in-depth explanations, and the best practices you can still for your store.
Let’s dive in.
What Is Upselling?
Upselling is encouraging customers to buy the same product but just with extra features. It is like subscribing to a plan but this time with premium services. An example would be if you are ordering a hamburger and they ask you if you want it small, medium, or large. It is the same product, just comes in a different size.
What Is Cross-Selling?
Cross-selling is a sales tactic used to generate even more sales by offering a related product or another product that goes with the one you buy.
When cross-selling you are operating by this premise: if a customer buys something from you, then, it is easier to promote another product. Cross-selling can’t be used if you try promoting something that doesn’t go with the product you are selling, so avoid this at all costs.
An example of cross-selling would be when you buy on Amazon, it also shows you a list of products that customers also bought.
What Are The Benefits of Upselling and Cross Selling when dropshipping?
Both of these selling techniques are great ways of adding additional value to your customers. Here are the benefits of both cross-selling and up-selling:
Increases Order Size
Because cross-selling and up-selling are all about offering something extra, many customers won’t think twice about buying what you offer. If done right, your order size will increase really easily. It is the same logic when you go to McDonald’s and they ask you “do you want fries with that”? Pretty convincing!
Whether you are up-selling or cross-selling, your product is getting more exposure. Customers will start paying more attention to the product you are selling.
You always want to pay close attention to what the customer’s buying habits are so you can take advantage of cross-selling.
Higher Conversion Rates
Conversion rates count after your customer already bought a product and left a good review about your product. Cross-selling and up-selling help increase the customer buying experience so this also means your conversion rates will go up along with it.
Why Are Upselling and Cross-Selling Important?
Both these amazing sales tactics are a great way of differing from your competitors and increase the shopping experience of your customer.
It also directly impacts your revenue and profit margins generated from your dropshipping store. Here are a few reasons why both upselling and cross-selling are important:
Revenue is highly affected during these sales tactics. It is because your product promotion is at maximum level and gets more revenue than expected.
It doesn’t have to mean you are selling to more customers but selling more value to your loyal customers.
Cross-selling and upselling can also increase customer loyalty because you can offer personalized shopping experiences. Once, you gain customer trust, then revenues go up through cross-selling and upselling.
This is where you distinguish the new and loyal customers. The overall lifetime value of the customer increases.
Every time a customer comes back to buy something, they will know that you will offer them premium services or an extra recommendation while others may not.
When customers feel like they are treated well and have a better shopping experience, then they also become loyal customers.
This is where you differ from the competitors and where you are getting customer retention from long-term customers.
According to a study done by Harvard Business Review, it showed that only a slight increase in customer retention (loyalty) means that revenue can increase from around 20% to almost 100%.
Return on Investment
New customers come and go. You never know if they will always buy more products or never ever come back again. That is why you should focus more on the customers you already have.
That is exactly what upselling and cross-selling do. Long-term customers give a better return on investment in comparison to customers who buy once and never again.
These 2 sales tactics are firmly focused on providing the highest value for long-term customers, exactly what your dropshipping store needs!
What are the Main Strategies for e-commerce stores?
Let’s find out what upselling and cross-selling when dropshipping are best at doing.
Suggesting Premium Products and Services
Upselling is responsible for trying to get you to buy the same product with premium services. Give your customer 3 options and check if they are willing to pay a few hundred more dollars for much better features.
Keep in mind that if those extra features don’t really matter, you won’t be selling.
When trying to upsell them, try highlighting or mentioning the differences between the product. That way, the customer can distinguish what you are trying to upsell. Those who may not be aware of the product they are buying too much, may not even realize a difference.
You buy a PC without a monitor, cross-selling complementary products is suggesting a monitor with the PC too.
Maybe you are buying a phone, and you suggest a phone case with it. That is the power of cross-selling.
Product bundles are selling multiple items in a single purchase. They are made with something to add just like complimentary products. You are buying a video game from a series, and you may see a trilogy offer to buy 3 games in 1. That is cross-selling with bundles.
Showing What Others Have Bought
Frequently used by Amazon. You can try incorporating this strategy in your dropshipping store.
After your customer buys a certain product, they will get shown what other customers buy the most from that specific niche. A great way of cross-selling.
Showing product reviews can be a great way of increasing trust. This also works for upselling and cross-selling strategies. If a customer buys a product, and they get shown additional features or recommended another product with great reviews, their mind will automatically believe that the product is good.
You can try offering upselling and cross-selling with limited special offers.
It will create an urge to buy and a sense that the customer is saving money in this period of time. You can try mentioning time periods when you offer special offers so you also get a better return rate.
A Few Ways to Boost Your Sales With Upselling and Cross-Selling When Dropshipping
According to Oberlo, you have only 3 chances to upsell or cross-sell your product, and they are:
- Before a purchase
- At checkout
To make sure you get everything right, we came up with a few ways to boost your sales with these 2 selling tactics:
1. Upsell and Cross-Sell Your Product
Dell provides a good example of upselling on their page when you go to purchase a laptop or any other product.
By presenting products similar to this, customers can easily distinguish what differs from the same laptop with different features.
This is a clear upselling strategy by Dell. Upsells are always presented by comparisons, the only thing that differs between them is the features.
Here is another Amazon example of cross-selling. Recommendations are given below that show what is related to the product you are buying.
According to research done by practical e-commerce, it showed that 26% of stores revenue account for product recommendations. That shows the real power of cross-selling.
2. Upselling and Cross-selling During Checkout
Below, you will see another example of the Alienware laptop checkout process by Dell. Where it says “customize” and then “more info”, that is the upselling strategy Dell is doing at the checkout process.
During the checkout process, when you click “add to cart”, Dell will also offer you compatible essentials for your laptop that you may need.
This is cross-selling after you add the product to the cart.
Post-purchase offers usually involve a discount on the next product you buy or a free item that may go along with the product.
Every dropshipping store has a different method of offering it, but sometimes they don’t work from the first purchase. It may happen after you have been a loyal customer, or after you made a few purchases from their site.
Cross-selling and upselling after purchases are made may be one of the best promotions done since customers love discounts and coupons.
On-Site and Off-Site Channels You Can Use for Upselling and Cross-Selling
There are many channels you can use for upselling and cross-selling when dropshipping. The most effective on-site ones are:
A homepage is one of the most important pages for selling. Especially, when a newcomer is visiting your site, that is where they decide if they want to continue shopping or not.
Product recommendations, and upselling are more than welcomed on homepages. They give great first impressions about your site!
Just after a visit to your homepage, customers will check out your Shopify landing page. This is where you can use the sales tactic to increase revenues to the highest point possible.
The customer buying journey ends at the shopping cart so also make sure you are paying close attention to how you upsell and cross-sell at the shopping cart. It is one of the 3 major forms of converting on a website.
According to a study done by Insider, 97 out of 100 people from first-time visitors will leave your website without buying anything. That is why when this happens, we pay attention to off-site channels. Here are a few off-site channels you can use to promote your upselling and cross-selling strategies:
Facebook is a great dropshipping social media platform. You can always use the Facebook ad library to promote upselling and cross-selling.
Facebook ads allow you to show several photos in 1 ad. This is very useful when it comes to cross-selling. Display many ads in 1 and become a cross-selling expert of Facebook.
Facebook and Instagram both work together in business. Without creating a business page on Facebook, you can’t function on Instagram.
Instagram has over 1 billion users along with Facebook. Only these 2 platforms together are operating with 1/5 of the world population.
The cross-selling option on Instagram is by using product tags. You can link one product to another and inform your audience about it. There are many buyers on Instagram, so Instagram could also be one of your main channels of driving buyers to your site also.
By using Instagram ads, you can sponsor your products on stories and on the Instagram search page. Over 500 million people use Instagram stories daily with more than half of those people saying that they became more interested in a product after viewing it on stories or on the search page.
TikTok is a newer comer compared to Instagram and Facebook. The platform only allows video promotions so this can also be a good way of cross-selling and upselling. The best thing you can do is to do a video commercial about your product, recommending the product with additional features or other products.
TikTok can be used as another alternative to Instagram and Facebook. It all depends on what product you are selling and your advertising strategy.
Here we cover the best Marketing practices for dropshipping stores.
Start Upselling and Cross-selling when dropshipping
Cross-selling and upselling when dropshipping are definitely very underestimated sales tactics many drop shippers fail to use. Before you read this blog, you maybe didn’t even know what they were until now. That is okay because we are here to give you the best marketing practices.
These 2 sales tactics both have to do with the customer journey map on learning the buying behaviors of customers. We wrote an entire article about this, check it out here.
Happy up-selling and cross-selling.