Marketplaces Yahoo Stores Tested | Yahoo Stores Tested |
| Saturday, 05 May 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Topic: We Test 6 Yahoo Stores Over 6 Months To Determine The Value Of A Listing In Yahoo Shopping Word Count: 3000+ Focus: 7 Questions
Credits:
We study 600 awards sites to select and test the top performers. Can you attract traffic by winning recognition? What does it take to win? How do you prepare your site? What is the easiest way to submit?
How can you rent a $49 million piece of software for just $3.33 per day, approach nearly 4 million plus shoppers per month, and capture an average yield of $3.74 per visit? While many marketers are savvy to the value of a listing in Yahoo's main directory, few have learned how to win highly targeted traffic from Yahoo's "directory within a directory" - Yahoo Shopping. Could a specialized listing help you sell more product? To Yahoo or not to Yahoo? -- that is the question. Here is the answer, as divined by our noble researchers: TEST SUMMARY We created and studied 6 Yahoo Stores over a period of 6 months. The objective was to determine the value of a listing in Yahoo Shopping. We measured traffic generated from the mall, and we measured the average amount of money generated per visit. TEST PRODUCT We tested the Yahoo Store ecommerce package, with an emphasis on a listing in Yahoo Shopping. You can see the URL for this offering in the resource section at the end of this report. Our stores' product categories included:
TEST COSTS We built six stores. The least expensive was $2000; the most expensive was $10,000. Though our stores were professionally designed, it is important to note that the average Yahoo Store is built without the help of a designer. If you choose this approach, there are no development costs. (*1) TEST METHODOLOGY We used Yahoo's (comprehensive) site statistics to track all incoming traffic and orders. TEST DEFINITIONS Yahoo Main Directory - This is the primary portal at www.yahoo.com Yahoo Shopping - This is an online mall. It allows you to search for products by category or by term. Yahoo Store - This is an authoring tool and a hosting package that allows you to create and maintain your own ecommerce enabled web site. TEST RESULTS We have focused this report on three of our test stores, and because they are still operating (profitably), we must refer to them by their (blind) test IDs: > STORE A achieved $.86 per visit from the Yahoo directory and $.11 per visit from Yahoo Shopping. Here is an overview of their stats:
NOTE: STORE A was not fully operational until month 3. > STORE B achieved $.98 per visit from the Yahoo directory and $.89 per visit from Yahoo Shopping. Here is an overview of their stats:
NOTE: We explain the falling revenue experienced by STORE B later in this report > STORE C achieved $3.73 per visit from the Yahoo directory and $.36 from Yahoo Shopping. Here is an overview of their stats:
No one understands the subtleties of a name like Yahoo! better than Paul Graham. We can only imagine that "Yahoo!!!" was the spontaneous expression that erupted when this graduate student sold his fledgling ecommerce system to the bloated directory turned portal for a healthy $49 million. Though Yahoo has made many blunders, this purchase proved to be a bargain. Today, Yahoo is rumored to have more than 7000 paying merchants, ranging from Macy's to the Banana Republic. But how effective is their system? And even if you build a Yahoo Store, is a listing in Yahoo Shopping worth the additional costs? How can you achieve a high ranking in the Yahoo Shopping search pages? We'll examine these questions momentarily. But first, let's review a brief explanation of the Yahoo Store hosted solution. What is a Yahoo Store and how does it work?To answer that question we must draw on a quote taken directly from the Yahoo! site: __________________QUOTE Yahoo! Store is a combination of an authoring tool and a hosting service: > You build your store on our server, using an easy point and click interface. > There is no software to install: all you need is an ordinary browser. > We host your finished site. You can have your own address like www.yourname.com. Or you can use stores.yahoo.com/yourname > Orders are accepted securely using industry-standard SSL encryption. > You can retrieve orders (securely) from our server over the Web. Orders can also be forwarded to you by fax, processed online, or posted to your secure web-server. > You can log in to change your site or retrieve orders whenever you want, from any browser. You'll be amazed how easy it is to create your own online store. You just enter information like the names, prices, and descriptions of the items you want to sell. It takes less than a minute to add a new item, and you can upload an image for it with a single click. __________________END QUOTE Are these Yahoo claims accurate? Mostly, yes... The software is robust. It can handle up to 5000 orders per hour. And it is (relatively) simple to operate. But it is the combination of this software with Yahoo's mall traffic that makes the package appealing to a merchant looking for a new way to market. When you build and host a store with Yahoo, they offer you the option of listing your store in their mall; it is called Yahoo Shopping. Yahoo promises the following benefits from a presence in their mall: __________________QUOTE > Yahoo! Wallet - allow shoppers to use Express Checkout at your store. > Incentive and Loyalty programs like Yahoo! Points. > Yahoo! Gift Registry. > Yahoo! Shopping TV, print and radio advertisements. > Merchandising, including holiday and seasonal promotions. > Yahoo! Shopping promotional modules on Yahoo!'s front page - directs traffic to your store from one of the busiest, best-known addresses on the Internet. > Tie-ins with other Yahoo! properties. > Special advertising opportunities for your brand. __________________END QUOTE While these benefits may sound attractive, in the final analysis, "it's about the traffic". In a test by Internet World magazine, a site made with Yahoo! Store won more than 14 times as many page views as a site made with the number two online store tool. The focus of our research was to quantify the value of this Yahoo generated traffic. First, we had to determine what it cost to participate in Yahoo Shopping. Here is the bottom line. __________________QUOTE
__________________END QUOTE Is is worth it? Here is what we discovered: How much traffic did Yahoo Shopping send to our new stores?Over a period of 180 days, Yahoo Shopping generated this volume:
Why the disparity between these numbers? Why did store A only receive 795 hits and store B receive more than 30,000? When a potential customer visits the Yahoo Shopping site, they view a category and/or search for a specific product. Those search results are the key to a given store's traffic. There are several factors that determine how well your store is represented in these results. The FIRST is the number of products. Store B has more than 1500 products, while store A has less than 100. The more products you have listed, the more search results you will return.(*2) The SECOND is the popularity of your search term. Here is a listing of the most popular terms on Yahoo Shopping for the last two weeks of April 2001.
The THIRD (key to maximizing Yahoo Shopping) is the ranking you achieve. The Yahoo Shopping ranking system is based on several elements including your customer satisfaction rating. Let's examine the most important question of all... How much money did we make from this traffic?Here is a simple chart that details the total amount of sales our stores made to visitors from Yahoo Shopping.
And while Yahoo Shopping produced revenue for our Yahoo Stores, there are still other ways to benefit from this relationship. Yahoo lists five:
So what else did we learn?
(*1) These were working stores built in collaboration with online merchants. (*2) This does not mean that stores with less items cannot benefit from a listing in Yahoo Shopping. Since the fees are based on a percentage, the results are relative... |
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Yahoo Shopping was measurably productive. What's more, Stores A and C did not have to pay any "revenue sharing percentage" since they were under the $5000 minimum.
