How do you save costs in the eCommerce industry? Many people who get into the world of eCommerce think that it will naturally be a less expensive business to run due to the fact that it is operated online. Of course, it is possible to save on the costs of office and retail space, but you still need to invest in employees, products, warehousing solutions, and the like which means that it can still get pretty expensive if you aren’t careful about watching the cashflow.
That being said, there are lots of things you can do to save money in the eCommerce industry, so let’s take a look at a few of the best ideas below:
1. Build an amazing website
It can be tempting to set up a barebones website when you’re starting gout as an eCommerce business, but this is rarely a good idea because your website needs to be good enough to attract and retain customers and you need that website to stay up and functional at all times if you want to make as many sales as possible.
So, although it may mean spending a bit more upfront, it really is the case that a good eCommerce website will save you more money in the long term because you won’t need to keep calling in IT support or having developers come in and change that niggling bit of code, and you won’t be hemorrhaging unsatisfied customers all the time.
2. Make use of logistic solutions
Often, it is the logistics side of an eCommerce business that can be the most challenging and the most expensive. Something that can help to cut costs in this department is to use third-party logistic solutions instead of trying to handle everything from warehousing and packing to transportation yourself. When you do this, you can take advantage of economies of scale because logistics solutions companies will obviously be working with multiple clients, which means you can lower the cost of everything from warehouse space to order fulfillment while also increasing the efficiency of your company substantially.
3. Make good use of digital marketing strategies
The great thing about running an eCommerce business is that it is based online which means you can really take advantage of digital marketing strategies to save you money while also ensuring that you attract as many customers as possible.
If you really want to save money on marketing, one of the best things you can do is to brush up on SEO best practices and start your own business blog that contains all of the right keywords and optimization. If you know your industry well, this is something you can do yourself for free. If not, finding a good freelancer should not be that hard or expensive – it will certainly be cheaper than TV or radio ads, that’s for sure.
Of course, you should also make good use of free social media platforms where, if you are able to write posts and make videos that are fun, informative, and engaging, you can really sell your stuff without spending much (if any) money.
4. Streamline your stock
For many eCommerce businesses, one of the biggest expenses is their stock. The good thing about this is that it is really easy to cut the cost of your inventory by simply not ordering as much of it when there is no need to do so. It can be tempting to stock up on a high number of every product you sell so that you always have it ready should someone make a purchase, but unless it is a good seller this may be unnecessary, and not only will you tie up your money on buying that stock, but also on the cost of warehousing it too, By using inventory management software, you can streamline your processes, order only the level of stock you need, and immediately cut your costs significantly.
Another strategy would be to really take a close look at which products are very popular and which are not and consider offering fewer products in total overall. That way you can focus all of your energies on selling the stuff you know is actually popular, while not being distracted by items that probably won’t give you a great return, and save a lot of money in the process.
5. Keep your customers loyal
It can cost as much as five times more to attract a new customer than it does to retain an existing one, so if you’re serious about saving costs in the eCommerce industry, one thing that you should very clearly be focusing on is keeping those customers you do have loyal to your brand. There are many ways you can do this, but offering them regular discounts or setting up some kind of loyalty program where they can earn points to redeem against purchases is probably one of the best. Show them that they are valued and chances are they will keep coming back, and you can save a bunch of money by not having to chase quite so many new customers quite so hard.
6. Shop around for delivery companies
If you are using an outside delivery company, you can really save money by looking at all of your options instead of simply going with the most well-known. For example, if you ship heavy items, using a company that charges by weight instead of the number of packages would not be sensible, but a company that charges a flat rate will probably save you quite a bit. Don’t narrow down your options and explore every solution if you want to save – this is something that applies across the board, not just to delivery, too.
Saving money in the eCommerce industry, as you can see, is really very possible if it is something that you are committed to doing. You don’t need to implement all of these ideas right now, but if you choose the one that seems the simplest and then work your way up from there pretty soon you will be operating one lean, mean eCommerce machine with a better bottom line than you might have thought possible.