Discover the top ways for your online business to increase profits. From reducing overhead costs to finding your most profitable products and streamlining operations, dive into some effective techniques to boost your bottom line. After all, that’s probably one of the main reasons you got started in the first place.
1. Reduce overhead costs
Overhead costs are expenses such as rent, utilities, transactional fees, maintenance of equipment, domain hosting, and more. That list can go further depending on the sort of business you’re running, how long you’ve been in business, the efficiency of your different operations, and so on.
The bottom line: Increasing business profits depends directly on reducing overhead costs. Eliminate these costs by thinking out of the box – for example, this could be done by making some space for your inventory inside your home or by learning to maintain the equipment you use to create your goods on your own. Plus, it never hurts to try and negotiate with your different suppliers for better rates.
2. Discard processes producing low value
Gather all your store’s operations in a single list and rank them according to the economic value they bring to your store.
For example, allocating some of your overall budget to pay for a warehouse will likely be at the top of your list since it allows handling your inventory more efficiently and processing more orders\sales than if you were to store your products at home.
On the flip side, exaggerating with marketing efforts by hiring professional actors to create video ads is probably not a smart idea as it may create an unnecessary dent in your budget, leading to a negative return on investment\ad spend. This example obviously belongs at the bottom of such a list.
The bottom line: Identifying such processes requires deep and unbiased analysis of your operations which is based on data and data alone.
3. Spot your most (and least) profitable items
It is likely that you offer a range of different items on your online store, but the thing is, probably only a few of them are generating a significant amount of profits. To make sure you fully optimize your bottom line, identify your most profitable items and focus your eCommerce advertising efforts on those.
Determining which of your products is most profitable doesn’t have to be as difficult as it sounds. While using spreadsheets to compare between orders, products and costs could work, it may take a significant chunk of your time.
One effective way to identify such products is by utilizing an app like BeProfit which gives you a breakdown of your most and least profitable items automatically.
The bottom line: remember, it’s not about quantity, but rather all about quality. Focusing on selling products with higher profit margins can make all the difference between loss and profit.
4. Prepare for seasonal trends
Regardless of whether your business sells season-related items or not, chances are you’ve been able to identify upswings or downturns in your sales as the year goes on. Much of the time it’s got to do with weather, other times with holidays. In any case, it’s important to also pinpoint exactly how big those shifts in sales are so that you can prepare your business to handle them.
The bottom line: Measuring and analyzing the history of your business’s profit and profit margins will help you get ready for whatever those changes are – either surges in demand for certain products, or dramatic drops thereof. It won’t suffice to simply know that the change is coming; having exact profit margin data to reference means that you can make data-driven decisions to keep your business running at optimal levels.
5. Optimize your pricing strategy
The way you’re pricing your products should not only take into account expenses of production and other costs associated with other business operations, but rather reflect the actual value they provide your customers as well as the efforts you put in making their shopping experience as good as it gets.
The bottom line: as long as you’re providing your clients with some form of compensation, don’t be alarmed by the thought that higher prices mean less sales, as customers often value the quality of the shopping experience and support you provide to the extent they’d prefer adding a few extra dollars for having a peace of mind.
6. Sync with your team members
Achieving eCommerce success is a lot about maintaining effective communications with your employees, co-workers, and suppliers. Make sure you’re always in sync with your teammates, as miscommunication often causes tasks to slip through the cracks, which in many cases translates into the loss of profits. This could be a hot lead that is overlooked, items which run out of stock, or even worse – existing customers who don’t receive the proper support.
The bottom line: there are plenty of paid and free useful team communications tools, especially for teams working remotely. Invest some time in exploring different options to pick the most suitable one for your business.
7. Cut down on rent costs
If your online business operations are part of a brick-and-mortar store, make your best to cut down on rent. As this expense is probably an integral part of your entire business costs, try to negotiate the price down, or nonetheless, agree with your landlord on a fixed price that doesn’t go higher when re-signing the lease.
The bottom line: there’s nothing to lose when trying to get a better deal, especially when signing a long-term contract.
8. Optimize the payment process
Last but not least, take crucial steps to ease the payment process for your customers. When the checkout process is complicated, customers are basically encouraged to abandon their shopping carts and put their money somewhere else.
The bottom line: make sure your customers aren’t surprised with different rates on checkout, which not only cause drops in conversions but can lead to negative reviews which have negative long-term effects on sales and profits. Provide customers with the option to create an account and save their payment details, and allocate some budget to secure the payment process.
Increasing business profits relies on many different aspects of your online business, from operations to marketing, pricing strategies, business development, and more. Make a habit of exploring new ways to lower costs and increase your profit margins on a regular basis. It starts with constantly being aware of opportunities or processes that may seriously cut down on your bottom line.e-commerce strategyguest blogging