dropdown arrow

What are the Benefits of Upselling for E-Commerce Stores? Grow AOV & Profits on Autopilot!

What are the Benefits of Upselling for E-Commerce Stores? Grow AOV & Profits on Autopilot!

Whether you’re the brand owner of an e-commerce storefront or you’re working at a startup and seeking ways to grow your bottom line - you’ve no doubt heard of upselling. 

But what are the benefits of upselling for e-commerce stores? If you’re wondering whether this strategy is worth your time and energy, trust us - it is. And today, we’ll explain exactly why that is. We’re going to cover all the reasons why upselling is important. 

From an increased AOV to higher profits, better customer experience, faster inventory turnover, and a whole lot more - this is not something you should neglect in your storefront. 

After we convince you of the power of upselling for your storefront, we’ll provide you with a few actionable steps to getting started. With the help of AfterSell - the best Shopify upsell app - you can reap all the benefits this selling strategy has to offer with minimal work necessary.  

First, here’s a brief introduction to upselling.

A Brief Introduction to Upselling

To truly understand the benefits we’re going to share with you in just a moment, we want to take a second to explain what exactly upselling is. This is simply a strategy that entails selling more of a product to a customer that is already in the process of buying. This means you earn more on each sale - without having to spend more on marketing. As a result, profits grow.

There are a few ways you can go about upselling, but the two most common are:

  1. Offering additional quantities at a price break (discount bundling)
  2. Offering a higher-end product at a lower price (product upgrades)

Both of these can be effective strategies for your e-commerce storefront. And, you can present upsell offers in a variety of ways, too. Some stores try to upsell directly on the product page - but the best tactics are either Shopify upsell at checkout or on the thank you page (post-purchase).

It’s important to note that upselling and cross-selling are different strategies - although they accomplish similar goals and use similar tactics. Cross-selling is the strategy of selling complimentary products to a customer who is already in the process of purchasing (or has purchased) a different product from your store. We have an article discussing upsell vs cross-sell in great detail if you’d like to learn more. But now, we’re going to address the question you came here with: why is upselling important?

What are the Benefits of Upselling for E-Commerce Stores?

We’ve already touched on a few key benefits of upselling - from increasing your AOV to growing your bottom line. But in this section, we’ll take a deep dive into all the benefits in greater detail - starting with the most obvious: increased sales.

Increased Sales & Profit Margin

A Shopify store that does a million dollars in sales - but spends a million dollars - is essentially worthless. It’s all about profitability, and upselling makes it a lot easier to become profitable and offset marketing costs. Why? Because it earns you additional revenue without additional sales.

Think about it like this - one way to grow your sales is to spend more on marketing, acquiring more customers. But each of those additional customers has a set cost of acquisition. Instead of growing sales by volume, you can grow your sales by dollar amount - which is where upselling comes in.

It costs you the same amount of money whether your customer spends $50 or $100 on your store - but the implications of customers spending more money are valuable for business owners. 

Higher AOV

AOV is a key metric for e-commerce stores, as it represents the average amount of money spent by customers per transaction. Increasing AOV is important for businesses, as it can lead to increased profits and revenue. 

But, the real kicker with AOV is that you are able to generate additional revenue without any additional marketing costs. Acquiring customers is becoming increasingly expensive in a competitive digital marketing space. A store with an AOV of $50 can’t afford to keep up with a brand that has an AOV of $100.

In the event you sell your store one day, AOV is a key metric that will earn you a higher multiple. Customers that are willing to pay more are more valuable. Let’s talk about another obvious benefit of upselling - growing your bottom line.

Better Customer Experience

Smart business owners recognize that providing the best customer experience is paramount to creating a valuable, lasting business. That’s because your CLTV - or customer lifetime value - is influenced by the experience customers have with your brand.

If you can offer more value to your customers and great a better experience through your products or services, they’ll keep coming back for more. You won’t have to spend as much on marketing if your customers are already fans of your business. And that’s where upselling shines. 

For example, if a customer is buying a new TV, offering an extended warranty or installation service as an upsell can provide them with additional peace of mind and convenience. Or, if a customer is considering a basic version of your product, you can offer them a better experience by upselling them to a higher-end model with more bells and whistles. 

Similarly, offering your customer a great deal at checkout our post-purchase plays on their emotions through exclusivity. They are being offered higher-end or more expensive products or services. This can make customers feel special and valued, improving their overall experience.

Faster Inventory Turnover

Many brands are familiar with the problem of products that sit on the shelves and take up inventory space. This is especially important for products that have a shelf-life or expiration date. 

How do you get these products to move? Sure, you can throw them on sale and hope customers find them in your store. Or, you can take a more active approach to move old inventory through upselling.

If you have a high quantity of products you need to move, you can discount them in a bundled upsell offer. A customer is already interested in buying one of these products at full price - imagine their excitement to discover they can get a second one at 10% off, or a pack of 5 for 30% off! 

The specific margins are up to you - but the end goal is the same. You earn more per transaction, your customer stocks up on your products and becomes a fan for life, and you get dated inventory out of the way. Everyone wins!

Similarly, if you tried rolling out a higher-end product but everyone ends up choosing the basic model - you can try and move some of these more expensive products through upselling. 

The Best Part? All of This Can Be Automated With AfterSell!

These are all the reasons why upselling is important. But we want to talk about one final benefit of upselling, specifically as it pertains to AfterSell. You don’t have to lift a finger to attain all these benefits after the initial setup!  You’ll grow revenue & profits, increase AOV, create a better customer experience, and move more inventory on autopilot with our post-purchase upsell app for Shopify.

Our app makes it easy to get started upselling and will display offers with precise targeting to the right customers, at the right time. And with funnel insights, you’re given personalized recommendations to make the entire process quicker and easier. 

Your funnels just get better with time, too. Our software offers AI recommendations based on the detailed analytics we collect for your funnel’s performance. If you’re ready to get started, keep reading…

Ready to Experience These Upselling Benefits Firsthand? Here’s How to Get Started…

First, download AfterSell from the app store. Or, you can schedule a demo with our team and we’ll walk you through installation ourselves - while showing you key features to help you get the most out of what our software has to offer.

Once your store is integrated with AfterSell, we encourage you to read our article on how to upsell on Shopify. It will teach you the ins and outs of Aftersell itself while providing key information on how to create offers that convert.

But really, through our intuitive drag-and-drop editor, building your first funnel is as simple and straightforward as it gets. Just determine whether you want to show offers at checkout or post-purchase. Then, determine what your offer will be - are you going to bundle additional products for your customers or offer a higher-end model at a lower price than it’s typically available at? This is something you can rely on best practices for, but ultimately it’s brand specific.

Make your offer on-brand and congruent with your store, and then test it out to see how it looks in action. Once you send it live, the hard work is done. It’s all smooth sailing from there as AfterSell will automatically trigger offers based on the criteria you’ve provided us. 

All that’s left to do at this point is split-test different funnels over time, which is something we can help you with as well. As you publish each iteration, the idea is that performance will increase - getting you closer and closer to a perfectly optimized funnel that prints cash for your storefront!

If you want to learn more about this process, read our articles on how to customize checkout on Shopify and how to edit thank you page for Shopify stores.

Final Thoughts on the Benefits of Upselling for E-Commerce Brands

There you have it, all the benefits of upselling for e-commerce brands. We hope this answered the question of - why is upselling important. 

As you can see, this technique can help your brand grow its bottom line and provide a better experience for customers along the way. It also helps you be more competitive in your marketing efforts as you can spend more to acquire customers knowing they’ll spend more on your storefront. And, it can help you move dated inventory all at the same time. 

So, what are you waiting for? Get started building your first upsell funnel today with the help of AfterSell - and experience these benefits firsthand.

Join 5000+ brands already on AfterSell

The world’s greatest brands use AfterSell. Join us today!