What to do if the investment is not returned?

Question

Conversion

Good afternoon!
There is an online gift shop. Investments in advertising do not pay off.
Statistics according to Y.Metrika:
Last month store conversion ~0.7%.
Failures 28.5%.
View depth 3.52.
In total, there are about 2 thousand visitors per month (all from advertising).
At the moment, for 100 buyers, it’s not a fact that someone will buy, while with a click price of about 9 rubles and 100 visitors = 900 rubles. For some items, there is an extra charge of about 300 rubles. Advertising does not pay for itself. CTR advertising about 25-30%. Our market prices are below average. This raises the question: does it make sense to set prices below average and attract an insolvent audience (who wants to snatch cheaper)? Or raise the prices of goods and let them sell less, but then at least pay for advertising? I know for myself that when choosing between the same product on several sites, I will take where the price is above average but not the highest.

Answer 1

Yes, it makes sense to raise the price and increase the average bill.
But action itself is not a panacea. Your traffic specialist is inadequate, you need to set up romi (return of marketing investment). It is normal that some of the traffic channels did not turn out to be profitable, in principle there are always two ways. Quick - redirect the budget to other proven channels (if there are none - sadness. Ideally, when starting a store, focus on seo so that in the future, with any mistakes in the advertising strategy, the pants will support organic traffic and there will be room for maneuver, and not dilemma to make decisions.) . The first option is intense and with a roller coaster.
The second option is extensive, with the withdrawal of business to passive income in X years.
The essence of the second option:
Conduct an audit of the Republic of Kazakhstan:
Disable rogues and discounters (all traffic for queries price \ cheap \ discount \ coupon \ how much it costs, etc. i.e. all requests for a discount or price clarification are rogue, send the budget of these requests to those for which there has already been a transaction in purchase)
Think about changing a traffic specialist, calculate dryly according to the formula - specialist fee + bonuses for achieving the goal (example of the goal: romi is 4, which means you get 4 dirty from each ruble invested, also write down the profitability threshold in the goal, if after a month pk is below the threshold, then the salary is not paid, the second warning and entering the market for a new specialist) + advertising budget = Y
Revenues - Y = swarms (return on investment). If you see that a more expensive special gives swarms higher, then it makes sense to pay.
And one more thing, for each traffic channel, keep different specialists, pk on Yandex search, one, second on rsya, third on kms, fourth on dynamic ads, fifth on Google pk search. Social networks also try to split.
It is more difficult to control, but it is easier to repair the breakdown of the mechanism, and the overall quality of the pk will be higher if everything is done by 1-2 specialists.

Answer 2

I know for myself that when choosing between the same product on several sites, I will take where the price is above average but not the highest.

Why is that?
I will take at the lowest price among stores with a good rating and some minimum number of reviews.
I think most people do it the way I do.

Answer 3

So you are selling:
1) Not that. Nobody needs a product. May correlate with point 2
2) Not there. In Russia, the crisis is like that, purchasing power is falling. Even in Moscow
3) Not so. Inappropriate target audience selected. It can correlate with point 2, for example, in countries where purchasing power is higher, more people would buy this product for you, because. they have more money

Answer 4

Investments are by no means investments in advertising =)
And so those who are familiar with the gift shop - hard dumping, they don’t give direct at all - it’s expensive, they do a lot of unique texts, photos, descriptions, open self-delivery - all this made a profit.