eCommerce Lifestyle
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How To Adjust Ad Budgets For Seasonal Products

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Can you make money with spring and summer products in the fall and winter?

Anton answers that question in today’s episode of the eCommerce Lifestyle Podcast.

As always, if you have any questions and suggestions, please feel free to leave a comment below. Don’t forget to share this with someone who needs to hear it.

What's Covered in This Episode:

  • Google trends
  • Adjusting ad budgets
  • Geotargeting
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Links From This Episode:

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Transcript

What's up everybody? Anton Kraly here from ecommercelifestyle.com. And welcome back to the podcast. If you're new here, just know this show comes out twice a week. We have brand new episodes every single Monday and Thursday morning that are all designed to help eCommerce store owners to increase their revenue, automate their operations and become the authority in their niche. Podcast is on every podcast player you can think of, just search for eCommerce lifestyle. Look for my face, click subscribe, and you will get notified every time a new episode goes live.

Now the topic for today's podcast is how to adjust ad budgets for seasonal products. And the reason this is on the top of my mind right now, the reason I'm talking about this, is because I just had a question come in, I'll just read it to you before I answer it. And it says, "When experiencing a decrease in demand because of seasonality, do you recommend decreasing ad budgets and keeping the store at least a little alive or what do you think I should do?" Okay. So, basically the way I'm going to reword this question is, can you make money with products that typically sell best in the spring and the summer during fall and winter? And if you can, how can you actually put money behind it?

So, the first thing I'll say is it depends on how seasonal something is, right? If your niche was, if you were selling like Christmas trees, the artificial Christmas trees, then yeah, cut all your ad budgets in the off season, right? You have probably a three-month window with your real window being maybe a month. So for those, no. Now, for something that typically sells best in a season, but just drops off but not to zero in other seasons, then yes, you can totally keep your ads running. And what I'm going to do in this episode is show you how.

So, the first thing I want you to do is to know what seasonality actually looks like within your niche. And the way that you could do that, the way that we do it as well, is use a free tool just trends.google.com. So go to trends.google.com and it's going to ask you to input a search term or topic. So, I'm just going to use a random example, something that's obviously seasonal, and we will use outdoor sectionals, right? Let's say you sell outdoor furniture, specifically outdoor sectionals. So I'm going to search for that on trends.google.com, and what it's going to show me is interest in that topic over time.

Now, by default, it shows you the past 12 months in the country which you're located. I'm going to change it from where it says past 12 months to past five years. So now what I'm looking at is, and I'm actually going to change it. I searched for outdoor sectionals. I'm going to search for sectional because that's the most likely keyword that a buyer would search. And when I do that, what I see is a graph over the past five years, showing trends up and down over the years for that search term in the United States.

Now, if you do this yourself, you'll notice what I'm noticing right now. That is pretty much just like every product type, when COVID started in March, literally like every search term spiked because people were online more, people were spending more money because they were spending less on travel. So, everything pretty much peaked. But if you look at a general trend line over the past five years, you'll notice that in about, let me see, I'm just going to look at my chart right here, in about April of every year, late March to early April, it really like hits its peak of the year.

And then throughout even May into June, July and August, it starts dipping down. And then when we get to September, October, November, December, January, February, the search volume, it's still there, people are still searching for it, but it is way, way, way, way down. So, does that mean if you sold outdoor sectionals that you should just literally not run the business for those, what is it? Five or six months where search volume is probably a 10th of what it is at its peak? Or should you adjust the way you run your store to still make the most amount of money possible?

Now, the first thing I'll say which everybody in Drop Ship Lifestyle knows, I do not recommend selling seasonal products. Especially for your first few stores, build something that has a chart that doesn't look like this. Build something that is relatively consistent year over year, month over month. That way, you don't have to worry about all this, and you don't have to have your income get cut in half or cut into 10th. But with that being said, if you are a podcast listener and you have a seasonal store, maybe you started one before you heard about Drop Ship Lifestyle or eCommerce Lifestyle, and you are like, "Okay, well, what do I do now?" Like the person that asked the question said. What can you do to still make money from it when it's in off season?

So, what I do, and what I recommend you do, is literally pull up that five-year chart in Google trends and try to chart it month by month, you could do this in Google docs in a Google sheet, and put what the peak month is, and then put as a percentage of that how much it dips. So, let's just say, peak month for us here with this niche is late April early May. So, let me see if check like this. So, April really is when it goes up. So, April and May would be the two busiest months. So, what I would do if I was making this, is for April and May, I would put demand is at 100% right? That's like the maximum it's going to get to.

And then I would look month over month. So, what does it look like in July? Well, it drops a little bit. So maybe in July, I'm putting that demand is 80% of what it can be. And then in August it drops again. So maybe there I'm putting demand is 60% of what it could be. And then as we get into September even lower, maybe it's 40% of what it can be. And then through October, November, December, January, February, maybe it's 10% of what it could be. And the reason you're doing this is so you can actually have a representation of how much demand there is for your niche throughout the year. And that way, when you're making your budgets, how much money you want to put into paid ads, you can do it accordingly.

So, let's just say, hypothetically, I'm going to use round numbers that, I have no idea if you would spend this much or less, but just to make math simple, let's say in those busiest months, right? We had April and May when demand is at the 100% level, the highest of the year, you're going to spend, so I'm going to put 100, D for demand. You're willing to spend, let's just say $10,000 a month on ads, right? So you have a 10K ad budget. Now, you know that and that is your ad budget. Now, what does it look like when it drops off in June and it gets to 90% demand?

Well, that could mean then you drop it $1,000, right? Because there's less people searching. So, maybe you're dropping your ad budget there to 9,000. Now what about the months, again, September, October, November, December, when it's way down and it's at 10% of the total possible peak demand? Then maybe your ad budget for those months is only $1,000, right? So you're not keeping your ads consistent, you're definitely not trying to scale your ads as demand drops, but you're trying to keep your ad budget in line with what demand looks like. And because it's seasonal, there obviously is a lot of fluctuation. So that is a key thing you could take away from this, but there's a few more things that will really help you make the most out of your lessened ad budgets.

So, let's just stick with the outdoor sectional example I gave, and let's say that's what you are selling. Well, it would make sense that in April and May, when most people are getting ready for the spring, it's starting to get warm out, they're thinking I'll buy new outdoor furniture, I'll get a new sectional, right? That makes sense. But what happens as the months go on and the weather changes and people up North don't buy it anymore because it's now cold out and they don't want to put a new sectional in their backyard to sit in the snow and rain for six months before they can use it again? Well, this is where geo-targeting comes into play.

So, what you want to do as your ad budgets gets smaller, is rely heavier and heavier and heavier, I should say, on geo targeting. And what this is, is basically telling Google or whatever platform you're advertising on, what locations you want your ads to show in. So, what I would do, especially in the months where demand was 10% of what it could be, is I would use geo-targeting and on all of my existing ad campaigns when I was selecting where I wanted them to show, instead of doing what we typically do, which is just choose United States, I would choose the states where the weather was still warm, where people could actually still enjoy a brand new outdoor sectional so that my money wasn't getting blown through from locations where people would never buy.

So, important to note with geo-targeting, you're not making all new ad campaigns or anything. You're literally just applying this targeting criteria to your existing campaigns. And then, in this scenario with outdoor sectionals, as the weather improves, then what you're doing is upping your budgets and removing your geo-targeting restrictions. So, as it's warmer, you're spending more and your ads are reaching everybody that would actually want to buy from you.

So, hopefully that makes sense to everybody. It's not that complicated, but I know a lot of people get into Drop Ship Lifestyle, for example, my eCommerce coaching program, and they've already run a seasonal store in the past or that's what they have. And they think like, "Well, Anton says don't sell seasonal products. Let me just shut this thing down and start in something that is evergreen, that sells year round." And if you were starting from nothing, if you didn't have a store yet, that is 100% what I would recommend. But if you already do have a seasonal store that performs well, this is what I recommend doing to really make the most out of the year and to be able to at least be profitable in down months.

Now, with that said, you're not going to match your revenue or profit in the worst months of the year in terms of demand that you will get in the best months of the year, but you can still have sales coming through, it could still be profitable. Yes, it will be less profitable, but there's still money to be made. So, don't set your ad budgets to zero. Don't keep your ad budgets consistent, follow this model to make the most out of it. One more tip I just wanted to share in this podcast because I think it could benefit a lot of people and it's something we do. We'll just keep using one niche because it's easier to demonstrate. But let's say outdoor sectionals was your niche and you're doing the test I just showed you to test. You're checking on Google trends, and you're seeing that in March it starts to tick up. And then in April, it's big. Well, does that mean in February you should only start inching up your ad budgets?

Well, no, that's not what I would do. That's not what I would recommend. What you can do, and what I recommend you do, is in February where demand is still lower but starting to creep up, that's when you can remove your geo-targeting restrictions and you can run specific ads. By the way, do this as ads to your cold audience, meaning people who don't know about you yet, do this as ads to your warm audiences, meaning re-marketing, and do this as email broadcasts to your email lists. But before the main season starts, before all your competitors ramp back up, start promoting last year's models at discount prices. Because if somebody in February, when it's still really cold, it's maybe in their mind like, "Oh, this spring I'm going to replace my outdoor sectional."

If they see an ad a few weeks earlier than everybody else is serving them ads, and you say, "Get last year's model of XYZ sectional, normally 3,500, now it's $1,000 off, whatever it is, 2,500 while supplies last," then a lot of people are going to be willing to buy sooner rather than later. And especially in seasonal niches where pretty much every season new collections come out, there will be inventory left from the year before that you can negotiate with your suppliers to get better deals and be able to promote it at a discount while being profitable before all your competitors jump into the game with next year's collections.

So, that's going to do it for this podcast guys. I hope it wasn't too over the top. I know a lot of people that listen to this are still just early on their journey. So, if that's you, and again, you don't have a store yet, don't worry about this. Don't choose a seasonal niche, follow the Drop Ship Blueprint it shows you exactly how to pick something that's evergreen. But for everybody that does sell something that's seasonal, this is what we do with our seasonal stores. This is what works. This is how you can at least maintain revenue and profitability throughout the year.

So, as always, if you got value from this podcast, I would really appreciate it if you can leave a review over on Apple podcasts. I will link up the direct link to do that in the podcast description. And if you are not subscribed yet, be sure to subscribe on your podcast player of choice. We have brand new episodes every single Monday and Thursday morning, all designed to help eCommerce store owners to increase their revenue, automate their operations, and become the authority in their niche. So, that's it for today, guys. Thank you. Appreciate you. Have a great weekend, and I will talk to you on Monday morning for the next episode of the eCommerce Lifestyle Podcast. See you everybody.

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