We Test 6 Yahoo Stores Over 6 Months To Determine The Value Of A Listing In Yahoo Shopping

Word Count: 3000+

Focus: 7 Questions

  1. How much traffic can a retailer expect from a location in the Yahoo Mall (Yahoo Shopping)?
  2. How can you get the highest ranking in Yahoo’s Product Search?
  3. How profitable is the traffic from Yahoo Shopping?
  4. Is Yahoo Shopping a good way to sell digital products i.e. ebooks, ereports, etc?
  5. What are the top 100 product searches in Yahoo Shopping?
  6. Can you link a Yahoo Store to your existing web site and use if for transaction processing?
  7. How much revenue can you expect to generate with a new Yahoo Store?

Credits:

  1. Writer – Flint McGlaughlin
  2. HTML Designer – Cliff Rainer

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:

  • Electronics
  • Videos
  • Clothing
  • Advertising (Packages)
  • Jewelry
  • Books
  • Supplements

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:

Month 1 2 3 4 5
Page Views 85 4,892 6,169 12,552 13,387
Unique Visitors 30 1,389 1,984 3,094 3,102
Orders 0 0 5 32 30
Income $0 $0 $154 $2,020 $1,793
Average Order N/A N/A $30.96 $63.15 $59.79

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:

Month 1 2 3 4 5
Page Views 86,815 64,467 73,520 75,016 56,606
Unique Visitors 17,537 15,568 14,110 16,578 11,818
Orders 274 185 137 133 80
Income $24,414 $21,282 $9,968 $10,677 $6,202
Average Order $89.10 $115.04 $72.76 $80.25 $77.52

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:

Month 1 2 3 4 5
Page Views 973 602 7,272 23,969 22,767
Unique Visitors 393 344 2535 9127 8285
Orders 0 0 7 17 33
Income $0 $0 $1,688 $3,817 $6,576
Average Order N/A N/A $72.76 $80.25 $77.52

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

  1. $49.95 per month hosting fee — for hosting your store on our secure, reliable servers, as well as for the use of our powerful, award-winning, and always-evolving Store software platform.
  2. $0.10 product insertion fee — charged per product per calendar month, based on the daily average number of published products in your store.
  3. 0.5% transaction fee — applied to every Yahoo! Store transaction.
  4. Yahoo! Network 3.5% revenue share — applied to all transactions that originate from the Yahoo! Network including Yahoo! Directory and Yahoo! Network search. If you decide to participate in Yahoo! Shopping, this revenue share will also be applied to all transactions that originate from Yahoo! Shopping.

__________________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:

  • STORE A – 795 Hits
  • STORE B – 30, 559 Hits
  • STORE C – 2,540 Hits

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.

Search Rank Last Week Rank This Week
cars 2 1
dvd 1 2
flowers 7 3
sony 3 4
superstore 4 5
shoes 9 6
wallpaper 6 7
lyrics 12 8
adidas 8 9
playstation 2 5 10
maps 14 11
golf 10 12
sunglasses 16 13
lingerie 11 14
watches 15 15
dkny 13 16
dogs 17 17
bicycles 18 18
greeting cards 26 19
air conditioners 85 20
motorcycles 25 21
nike 19 22
dragonball z 22 23
gucci 23 24
nokia 20 25
wedding 32 26
clip art 40 27
golf clubs 21 28
love poems 39 29
digital camera 24 30
swimsuit 44 31
panasonic 28 32
dresses 35 33
cell phones 41 34
gps 36 35
hair styles 34 36
swimwear 37 37
skateboards 30 38
posters 29 39
engagement rings 43 40
bikes 27 41
rolex 42 42
patio furniture 53 43
tires 50 44
flags 54 45
lamps 56 46
computer desk 31 47
prada 47 48
birthday cards 58 49
penthouse 45 50
dale earnhardt 33 51
mountain bikes 51 52
horoscope 59 53
microsoft 61 54
nascar 60 55
screen savers 56
refrigerator 90 57
harley davidson 65 58
paintball guns 63 59
horses 68 60
guns 49 61
tattoos 69 62
pioneer 55 63
compaq 62 64
screensavers 52 65
e cards 84 66
weddings 71 67
calvin klein 66 68
sandals 79 69
wedding invit. 64 70
jewelry 87 71
wine 75 72
computer 74 73
clipart 98 74
air conditioner 248 75
digimon 46 76
plants 99 77
entert. cent. 76 78
cartoons 91 79
hats 38 80
swimming pools 67 81
baseball 108 82
animals 97 83
simpsons 88 84
toshiba 83 85
mobile phones 190 86
motorola 77 87
rugs 57 88
jvc 70 89
wwf 107 90
soccer 95 91
bose 78 92
lawn mowers 82 93
canon 72 94
cats 135 95
mirrors 104 96
treadmills 89 97
wedding gowns 92 98
graduation gifts 152 99
gift baskets 139 100

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.

VISITS ORDERS REVENUE
STORE A 795 5 $163
STORE B 30,559 518 $38,540
STORE C 2,540 10 $2422

 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.

And while Yahoo Shopping produced revenue for our Yahoo Stores, there are still other ways to benefit from this relationship. Yahoo lists five:

  1. Yahoo Gift Registry (giftregistry.yahoo.com)
  2. Merchant Advertisement in Yahoo! Shopping
  3. Shopfind (www.shopfind.com)
  4. Merchant Advertisement
  5. Yahoo Store (store.yahoo.com)

So what else did we learn?

  • A Yahoo Store can achieve significant traffic through Yahoo Shopping and other Yahoo based promotional elements, BUT it is dangerous to become too dependant on Yahoo for your growth.

    STORE B did very little outside promotion; it grew dependant on Yahoo Traffic. When it experienced a decline in this traffic (due in part to increased competition), it’s monthly sales plunged by 75% (From $24,414 to $6,202).

    STORE A depended hardly at all on Yahoo Traffic, and in month 5, when traffic from Yahoo to each of our stores decreased, STORE A’s traffic actually increased. This is because store A built two feeder web sites, and promoted them separately.

    STORE D (not profiled in this report) heavily promoted a secondary web site. Here is a summary of their volume:

    Month 1 2 3 4 5
    Page Views 1156 6617 6967 9162 8455
    Unique Visitors 324 1762 2044 2584 2489
    Orders 33 248 332 441 423
    Income $1629 $11,072 $15,615 $20,908 $20,022
    Average Order $49.33 $46.44 $47.03 $47.41 $47.33

     

  • Yahoo may be used with the popular program – Mail Order Manager. Even telephone based “order takers” can log in to Yahoo to record a sale and process the credit card transaction. This allows an entire sales team to work from one system no matter where they are individually located.
  • Yahoo has a feature that will allow you to upload a major database of products and images… but downloading is another matter. It is difficult to obtain more than three fields of information.
  • Yahoo’s telephone support is available seven days a week, but the actual service is outsourced. Their help is limited to common questions.
  • Yahoo’s customer rating system has a significant impact on your search rankings in Yahoo Shopping. The system is one sided — in favor of the shopper. A bad report (whether justified or not) can really damage a merchant.

    Yahoo’s only remedy:

    “If a customer gives you a negative rating, try to resolve the problem directly with the customer. Then, ask the customer to re-rate you using the links on the ‘Order Status’ page. Point the customer to the ‘How do I change a merchant rating?’ page.”

    Good luck…

  • Yahoo Store’s stat reports are the best we have seen in a hosted ecommerce solution: They include page requests, click trails, trend graphs, terms searched, referrers, repeat orders, orders by item, orders by referrer, etc.
  • Yahoo Stores’ product pages are not dynamically generated. This makes it MUCH EASIER to get high rankings with the traditional search engines. And Yahoo Store has a “built-in” search engine submission tool.
  • Yahoo Store can become cumbersome to edit if your product database exceeds 15,000 items (with images).
  • Yahoo Store may be linked to your existing web site. This is often the best way to combine special programming or design features with Yahoo Store’s catalog features.
  • Yahoo Store has a “built-in” affiliate program that reports where a visitor came from and how much you owe the referrer.

(*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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