In your opinion, what’s a good conversion rate of visitors into customers in an ecommerce website? I know this also depends on what the site is selling, but let’s assume a website that sells gift items at an average of $15 per sale. How would you define a good conversion rate? When 1% of the visitors make a purchase? 10%? 20%?
It would all depend on the products, how easy the site is to navigate and how comfortable people feel about purchasing from the site.
Right, those would be things that affect the conversion rate. What I’m asking is what is a good target. I know 100% conversion rate would be good 
but in your experience what is a good conversion rate. I.e. how many of amazon’s visitors actually make a purchase? what would your guess be?
In the case of Amazon, people specifically go there to buy a book/dvd/etc. so I would think they have a very good conversion rate, maybe 20% or better. It also helps that they are a trusted, well established site.
For a small ecommerce site, it’s really tough especially where so many people hear horror stories about identity theft and the dangers of purchasing online. I would guess that the conversion rate for a small ecommerce site is less than 1%.
Table with conversion rates by product type:
The lowest is electronics, the highest is for traditional catalog retailers.
Wow, great link Matt. It’s interesting to see a comparison between different markets.
We estimate that our average client’s conversion rate is approximately 2%. I have seen up to 10% on sites that sell very unique items and as low as .02% on highly price competitive items (electronics falls into this category). If you are setting a “goal” for your site, 3% is a good number. I bet i could tell you two or three items that will increase your rate over what it is today. Interested??? 
Steph
Interesting post Mat … but How can these figures be anything but a “semi close … half estimate … close to a wild guess.”
Surely their sample size would be too small to be anything else!
I’ve now read the article a few times … makes some interesting points.
Thanks for the link.
Regards
Micmol
I believe it depends on your method of promotion.
If you were doing targeted PPC advertising for a specific keyword, I would expect atleast a 20% conversion rate.
If you were to do an untargeted promotion campaign (eg newspaper advert or ad in sig. of forums), naturally, you should expect a lower conversion rate.
Thanks for the input everyone! I had a look at that table - very interesting. What does he mean by catalogs though? Don’t all multi-product sites have some sort of a catalog?
Conversion rate can be a misleading index. You could have a low conversion rate because your site has great content that attract lots of peoples, including some that have not the slightest intention to buy something online. I sure spends a lot of time on Amazon reading the reviews and checking stuff without buying anything.
This is not necessarily bad - having lots of visitors, even with a low conversion rate, can be better than having a high conversion rate but few visitors. Attracting lots people to your site with great content will usually lower your conversion rate, however it might increase the overall number of sales - which is really what matters in the end 
A lot of companies started out in catalog sales (a bound paper book that you could order products from). Some companies that have catalogs are Sears, LLBean, Lands End, Barnes & Noble, etc. Companies will mail their catalog to you and you can order from the catalog either online, by telephone or actually going to the store in person.
Companies like Amazon do not have print catalogs, only websites.
I would say that for the site you described in your initial post, anything above 1% can be considered a good conversion rate.
This page lists the exact stores from which the data is obtained, by category:
Everything I’ve ever read says better than 1% is what you shoot for
it completely depends on where your traffic is coming from.
if you happen to rank #1 for “books” on google, your traffic will be amazing. your conversion rate will be horrible.
if you’re paying 20 cents per visitor, you better have a conversion rate high enough to give you a decent ROI.
as long as you’re making enough money after costs, you’re doing decent.
We are selling softwares for webmaster.
Our conversion rate is about 4%. We have been able to increase it with a site redesign.
If we take only the traffic coming from Search Engine, the conversion rate is much higher.
Selling a good product helps as well as word of mouth.
Interesting table Matt, thanks for that link !
The actual rate of conversion doesnt matter much, its how much profit you make after advertising.
Lets say you spend no money at all and rely on word of mouth and your great search engine position for a targeted niche product. You have a 1% conversion rate and earn a PROFIT of $5 off of each product.
You then implement some CPC ads and offline marketing to your target market. It increases your conversion rate to 2%. Great! not really…
You have to take into account the money spent on advertising. If you spend $4 per customer (not per visitor, but the amount of money spent on advertising / paying customers it brought in) then even with doubling your conversion rate you are doing worse.
At beginning, 100 customers would earn you a profit of $500. After marketing, you doubled the amount of customers (200 customers now) but spent $4 per customer ($5-$4 = $1 profit). So now you only get $200 profit for that same amount of visitors.
I did make this very simple and leave out a few things like the advertising bringing in MORE customers rather than making the customers MORE TARGETED, but you get my drift. You can spend all the money in the world changing your conversion rate to 100%, but it doesnt matter if you have a less profit margin than when you had a 1% conversion rate.
This is also NOT saying don’t advertise. Just include the cost of advertising in your calculation of success.
I’ll preface this by saying I don’t believe conversion rates mean very much on the internet, despite all the hype.
This doesn’t really tell me anything new. A catalog-based company’s website has better conversion rates. You know why? Because the customer already saw the product in the paper catalog and they knew what they wanted to purchase when they got to the website. A lot of people would rather place an order online rather than wait on hold over the phone.
Also, this information doesn’t include the average price of the items. You’re going to have a lower conversion rate for high ticket items and a higher conversion rate for low ticket items. Anyone ever buy a new computer online? How many times did you go back and customize the features before you finally bought it? Probably two dozen times. So, you just wrecked that website’s conversion rate. But they still got the sale.
Now, what if you’re searching for a particular CD? If you find the one you want, you may just go buy it that first visit to the site because it’s only a few dollars. So that site has a higher conversion rate but is bringing in much less money than the computer website. Which site is better off?
So conversion rates are helpful but don’t live and die by them.