There are quite a few sites out there that will teach you how to expand your online store, boost sales, and attract more customers.
But growing profit is a result of not only increasing sales, but also cutting costs.
In fact, you might be surprised how much your bottom line improves by keeping in mind a few simple principles.
Here are a few quick tips to reduce costs while maintaining quality.
Try to use discounts strategically. Discounts are a great way to boost traffic to your site, and work well as attention grabbers. There’s nothing that quite gets a potential customer salivating like an 80% off sale.
Some sales can easily bring in an influx of customers that more than offsets the profit loss per item. The influx of new traffic discounts bring can be so encouraging, that you might even decide to offer a site-wide sale. After all, with that much more traffic, surely your profits will increase, right?
Well, hold on a minute. Before you decide to offer that sale, make sure you’ve taken into account how much you’re planning to make per item, how much new business you think you’ll be getting, and most of all, whether you will be making a profit! It sounds like common sense, but it’s not uncommon that a site-wide sale turns into a disaster.
Also, consider using discounts strategically by considering your profit margin per item. Once you are able to identify your lowest and highest profit products, you will know which to offer huge discounts on, and which to avoid discounting. By offering discounts on popular items that don’t need any additional incentives to buy, you are potentially reducing your profit rather than increasing it.
Another incentive often used to increase traffic is offering free shipping. But free shipping can be a double edged sword, depending on the item. In fact, on some low-cost items, free shipping can actually cost you money every time you sell those items! On the other hand, offering free shipping is a proven way to increase sales and traffic.
Consider finding other ways to cut shipping costs so that you can offer free shipping. Depending on the size of your operation and how many orders you ship per month, one way of cutting your shipping costs is by using an order fulfillment service. Generally, outsourcing your fulfillment is a far cheaper option than hiring a fulfillment team and renting out a warehouse. Top outsourced fulfillment providers enable you to ship from multiple warehouses and have favorable shipping rates with courier companies due to the amount of product they ship daily. Not only can this save you a lot of money on your shipping costs, but it can also make the actual delivery-time far shorter.
You don’t have to do everything yourself. In many cases, it’s not only cheaper to outsource jobs and specific projects, but also results in higher quality work from specialists. This not only applies to fulfillment, but also to graphic design, customer service, web design, SEO, anything you can think of. That doesn’t mean that you should outsource all of these things. It just means you should keep an open mind when considering a problem that you don’t have expert resources on hand to solve. You don’t have to outsource to a foreign country, there are many outstanding specialty firms in the U.S. Explore your options the next time you have situation that needs a specialized solution.
How have you cut costs for your online business in the past?