If you’ve been running Tiktok ads and not getting any sales or you aren’t profitable, this can be a very frustrating situation and you may want to know if you should kill that product and test another product or hang on, well, here is how we determine when it’s time to move ahead and test another product;
If you are testing a product and not making any profits, you can either keep runing ads and hoping for better days when the data already shows you that it isn’t working or test another product.
If you invented that product or have a greater stack to loose, for example; if you have already bought hundreds of units of that product and stocked them up in a where house, then it make sense to hang on, to keep testing other variables such as targeting options and creatives for as long as you can and hope it works.
However, if you are dropshipping, instead of spending both time and money hoping a product will be profitable when the data already show you that it’s not, we recommend setting some rules for how long you can test the product before moving ahead to test another product.
This rule can be the maximum amount you can spend on ads to test a product, the maximum number of visitors you can drive to your site without sales before testing another product or the maximum number of days you can spend testing a product.
The following rules have worked for us;
- If an ad has good metrics (i.e CPC of of less than $1, CPM of less than $6 and a CTR of more than 2.5%) and have spent up to $50 ad spend, we kill the product and text another one.
The idea here is despite the ad having good metrics, if we have to spend $50 with no sales. Assuming we keep running the ad and make a sale after spending, let’s say $55 on ads. Adding that cost of Action (CPA) of $55 to the cost of our product. Given our product price and profitable margin are we still profitable?
If our product cost is $50 and we sell at $100 with a profit margins of $50, if we have to spend more than $50 to get one sell is it still worth it?
Of course, we can decide to keep running the ads, creating more awareness for our product and over time your CPA may reduce, for example to $10 and you become profitable with $40.
If we invented the product or have bought hundreds of units of the product and stocked them up in some warehouse then the wait game is necessary.
But if we are Dropshippers with no large investment in the product itself, it’s the wait game worth it? or will it be better to test other products more quickly and find a product with early on profitability?
We believe that when dropshipping, work with data and time. In Dropshipping, we aren’t trying to reinvent the wheel, we are trying to test existing products for their marketability and profitably sell the product.
We kill any product that have spent up to $50 without any sales and test another product.
- If your site is optimized for conversion and you have received more than 5000 real visitors on your website with no sales.
The idea with this second rule is if you have great metrics, let’s assume you have a CPM of less than $6, CPC of less than $1 and CTR of more than 2.5%.
You have received up to 5000 teal visitors on your site, not bot traffic. Your site is optimized for conversion and yet you have no sales. We interpret this to mean that although lots of people are visiting your site, the product is not compelling and so you should test another products.
An exception to this rule is if the product is a luxury brand which the average person will love but not have the financial means to purchase it or lack the trust to purchase it from an e-commerce store that is not popular.
In this case you can create more awareness for your store and try to increase the trust element of your store. For example, having reviews, using influential marketing, having reputable payment options like Paypal etc.
On the other hand if your product is regularly priced mostly around $30- $199, your site is very well optimized for conversion, you have real traffic exceeding 5000 visitors with no sale, then you should test another product.
- If you have tested a product for a determined number of days.
For example if you are looking to test a product as fast as possible. You can say that after testing a product for 2 days with no sale, you test another product.
Rules in this sense vary and there are no definite and general rule. To avoid getting stuck in a loop of constantly testing an unmarketable product, setting rules help you know when to move ahead and test another product.