VALIGARA's ROI
or How Do I Make Money with Valigara?
What is Return on Investment (ROI) in a jewelry software?
“Is Valigara good for my business?” ,”Isn’t it too expensive for me today?” ,”How do I return the money I put in Valigara subscription?”
When allocating a budget for business software, you’re investing, and you have to know it will be profitable. Return On Investment (ROI) is a performance measure used to evaluate the efficiency or profit of an investment. We wrote down the common cases after seeing hundreds of different jewelry businesses using Valigara.
ROI = Net Profit / Cost of Investment
Retailer, no online presence
Approach:
- Convert an existing sales team member to eCommerce.
- Utilize the waiting time of in-store salespeople
- Current B&M store turnover, monthly: $100K
- eCommerce sales share, after 1 year: 20%
- Standard revenue rate: 30%
- Initial social advertising budget/month: $1000
- Valigara monthly cost: $800
ROI calculation
- Monthly Net Online Sales Revenue:
$100K*20%*30%-$1K =$5,000 - ROI= 5,000/800 = 625%
Single eCommerce channel
Approach:
- Grow eCommerce revenue
- Reduce costs of eCommerce operation
Operational impact:
- Valigara saves 80% of the cost of eCommerce operation
- eCommerce operator monthly salary: $4000
- Valigara monthly cost: $800
- Operational ROI = (4000*80%) / 800 = 400%
eCommerce growth:
- Current eCommerce volume, monthly: $50K
- eCommerce growth rate, after 1 year: 20%
- Standard revenue rate: 25%
- Sales ROI = ($50K*20%*25%) / $800 = 312%
eCommerce: Inventory utilization
Issue solved:
- Large part of the inventory is not available online, causing sales loss.
Approach:
- Upload the inventory online to generate sales.
- Current monthly sales: $50K
- Standard revenue rate: 25%
- Average Valigara package (for eCommerce sellers) $630
- 50% – 80% items are not online
- Sales growth: 100% – 400%
- Opportunity loss:
- low: $50K*100% = $50K
- high: $50K*400% = $200K
ROI calculation
-
- low: $50K * 25% / 630 = 1980%
- high: $200K * 25% / 630 = 7900%
eCommerce: Team at full capacity
Issue solved:
- Growth limit due to eCommerce team’s full capacity, causing sales loss.
Approach:
- Expand to additional sales channels, while using the same team
- Automation increases the team’s capacity by 2 channels
- Each channel sales addition, after 1 year of operation: 20% – 100%
- Valigara cost (3 channels): $900
- Standard revenue rate: 25%
- Current monthly sales: $50K
ROI calculation:
-
- low: $50K * (20%+20%) * 25%/ 900 = 555%
- high: $50K * (100%+100%) * 25% /900 = 2777%
eCommerce: Amazon seller
Issues solved:
- improve Attributes -> mappings -> 30-200% visibility, 25% CRO
- improve descriptions / EBC / A+ content -> CRO increase: 10% for fashion, 20% for fine and loose
- seasoned titles & faster update rate -> increase up to 25% in sales
- optimize titles -> visibility: up to 50%
- add/optimize bullets -> CRO: up to 30%
- add promotional images -> 10% CRO increase
- fix formats/variations -> 30-100% CRO increase
ROI calculation:
- Sales growth, brutto
- low: 0.3+0.25+0.1+0.25 +0.5 +0.3 +0.1 +0.3 = 210%
- high: 2+0.25+0.2+0.25 +0.5 +0.3 +0.1 +1 = 460%
- Current Monthly sales: $50K
- Revenue rate: 20%
- Valigara monthly cost: $800
- ROI
- low: ($50K*210%*20%)/800 = 2625%
- high: ($50K*460%*20%)/800 = 5750%
eCommerce: eBay seller
issues solved:
- fully used Item Specifics (recommended, custom) -> mappings -> 30-200% visibility, 25% CRO
- designed descriptions -> increase CRO (conversion), 10% for fashion, 20% for fine and loose
- seasoned titles & faster update rate -> increase up to 25% sales rate
- optimize titles , below 73 chars -> visibility : up to 50%
- add promotional images -> 10% CRO increase
- fix listing formats -> 30-100% CRO increase
ROI calculation:
- Sales growth, brutto
- Low: 0.3+0.25+0.1+0.25 +0.5 +0.1 +0.3 = 180%
- High: 2+0.25+0.2+0.25 +0.5 +0.1 +1 = 430%
- Current Monthly sales: $50K
- Standard revenue rate: 25%
- Valigara monthly cost: $800
- ROI
- low: ($50K*180%*25%)/800 = 2812%
- high: ($50K*430%*25%)/800 = 6719%
