How Do Small Retailers Really Make Money On Instagram?

When I started researching this article I had one question.

Is Instagram worth it for small businesses?

There are many ways of marketing out there, but as you well know, not all of them are worth a small business owner’s time.

Here’s what I found.

Instagram recently reached 1 billion users worldwide that are active every month. Over 500 million users are active EVERY DAY.

This means it is very, very likely that your target audience is using Instagram. Especially if your customers include those who are closer to the beginning of their path in life. This is a good sign.



Next question.

Do Instagram users care about businesses and brands on Instagram or are they there solely to see photos of friends?

It turns out they love their friends and businesses.

In fact, Instagram reports that 80% of users follow a business.

Now, what about engagement?

Does Instagram act as a place where small businesses can create a community?

Do users engage with posts that promote products?

Do customers create their own content with products they buy or experiences they pay for?

Thankfully, the answer is YES.

Sprout Social reports that of social networks, Instagram actually has the highest interaction rate.

“According to a 2016 Forrester report, Instagram has a 2.2 percent per-follower interaction rate. That dwarfs the other networks, including Facebook with its 0.22 percent rate.”

 Small Biz Trends says, 

“If you’re looking for optimum engagement with customers, you’ll be interested to know that Instagram has 58 times more engagement per follower than Facebook.

My next question was in regards to being local. Does Instagram give you an advantage when it comes to drumming up business locally?

I learned something pretty cool – posts with a location get 79% more engagement!

This is awesome news for local businesses. You can advertise to the globe and your local area at the same time!

With all of this great news. I thought. Ok. So Instagram is worth a retailer’s time.


What specifically connects Instagram to more sales?

Why are small business owners making money on Instagram?


Hootsuite suggests that small businesses are making money on Instagram because of 3 things.

1. Increased Product Discovery

Instagram is a great place to help the world see what you have to offer. “Instagram found that 60 % of people said they discover new products through the network.”

2. Increased Action After Visiting a Post

“75% of Instagram users take action, such as visiting a website, after looking at a brand’s post.” 

3. Increased Mobile Purchases

Instagram users are 70% more likely to make mobile purchases.


How are small business owners making money on Instagram?


1. They get familiar with Instagram and use a business profile.

Small Biz Trends offers a great tip that I think is sometimes overlooked. As a part of your Instagram strategy for your business, spend time there as a user. This applies to all social networks. Then it will be easier to develop a community around your brand and business because you are already a part of the community.

It will also make it much easier for you to learn what works and what doesn’t. 

As you set your business up on Instagram, be sure to do so using a business profile as opposed to a personal profile. 

As Sprout Social says,

“ have access to both in-depth analytics and additional contact and location information for people to get in touch with you.”


2. They use great calls to action.

Here’s a tip from Entreprenuer,

“Including a great call to action (CTA) in every post is a great way to turn those customers from browsers into buyers.


Your CTA doesn’t have to be complex. Try something as simple as “Love it? Click the link in our bio to get your own.”


Just make sure to update the URL in your bio to lead to the right product page; then watch the sales roll in.”

You aren’t allowed to put links in the text of your posts, but you can have one in your profile.

3. They post regularly at the right times.

As is the case with all social media, it can be hard to know when the best time to post on Instagram is. You don’t want your post to get lost amid all the others.

Sprout Social gives these recommendations:

The best times to post on Instagram for consumer goods is Saturday at 11 a.m. and 1 p.m.

  • Wednesday tends to see the most consistent engagement throughout the week.
  • The safest times to post are every day from 10 a.m. to 3 p.m.

Monday is the least engaged day for consumer goods on Instagram (likely catching up on work and spending less time shopping online).


4. They post things that their customers are interested in.

Instagram is neat because it allows you to create a story using photos. It gives you an opportunity to not only show off your cool products, but to show the world what those products can do for them.

You can post photos of those products being used anywhere and everywhere.

You can post photos that show off the culture and atmosphere of your store.

You can post things that show your followers what kind of experience they can have if they use your products.

Small business Pura Vida uses their Instagram to show their products being used in a variety of places, while creating a theme of fun, peace, and adventure.



5. They use relevant hashtags.

Business News Daily gives some great insight into the benefits of using the right hashtags.

“Because users can both search for hashtags and click on hashtags they see in posts in the app, relevant hashtags can be a highly effective tool for getting noticed. However, make sure you’re using the right hashtags for your brand and don’t go overboard.



“It’s also smart to create a custom hashtag for your business or even an event you’re hosting. This way customers can follow along with an event, even if they aren’t there in person.”


In the end…

Finally, don’t get sucked into believing the success of your business can be measured by your Instagram likes. Unfortunately, obsession with social media is a big problem in today’s society. While Instagram can be entertaining and can be a great promotional tool for your shop, it isn’t everything.

And the real finally –

Don’t put all of your eggs into one basket. Yes, Instagram can be a great tool for you and I do think you should use it. 


If you do gain a great following on Instagram, you need to find a way to convert that following to a list of email subscribers. If Instagram goes away tomorrow, and you have no other way to contact your followers, you are outta luck.

You don’t control the Instagram rules or feed. What you can control are the emails you send out to your subscribers.

After all is said and done, email marketing still gives you the best return on your investment. So make a plan to use Instagram to grow your email marketing list and your sales. For example, use Instagram to drive users to your website where you offer them a coupon in exchange for their email address.


Also published on Medium.

Holly Wade is a lover of words and marketing. She can’t read great writing without smiling, and she can’t watch a commercial without analyzing its success as marketing content. She gets a little carried away every time she goes to the library, and she always sides with using the Oxford comma. She loves writing articles that help small retail businesses find success.