post by:
Donna Cohen
Managing a business is hard work. There are a lot of variables to consider, so it can be difficult to know how to save money. We’re here to tell you the best ways to cut ecommerce business costs, so you can keep that cashflow flowing.
1. Lower Product Returns
How do you lower product returns? Sell what you promote. No customer wants to be misled. Keep track of what advertising platform has the most returns, too. Is it social media sales? Then reduce your marketing on those platforms. You can also extend the time on your return policy. Customers are more likely to keep the product the longer that they have it, so don’t rush their decision with a limited timeframe.
2. Haggle With Suppliers
Don’t forget to negotiate with your supplier. The more you buy, the better the deal will be. So, if you’ve planned your budget and know exactly what you need for product launches, buy in bulk. You can also get “early bird” discounts if you pay in advance. But don’t forget to consider the cost for storing these goods.
3. Haggle With Your CC Processor
Fees related to the credit cards themselves are not often negotiable, but fees associated with your credit card processor can be. Set-up fees and annual fees are decided by the processor, so if you’re feeling confident when signing up, then try to negotiate better numbers. If you have been with them for a while, they might consider helping you out. It never hurts to ask.
4. Advertise Cleverly
Pay attention to your campaign results. Which ones are doing better than others? Is there a campaign that didn’t do well? Then cut it or try a different approach. Social media, influencers, referral programs, and blogs take your time and money. Eliminating tactics that aren’t working will benefit your budget.
5. Run Promotions and Offer Discounts
If your cashflow has halted and people aren’t visiting your website, then it may be time to give them some encouragement. Send coupons to those on your email list. Run promotions on products that are wasting away in the warehouse. It may seem like you’re losing money when you cut prices, but it’s much better than not making anything at all. Plus, people will come back, knowing that they got a fair deal on your goods.
6. Package Efficiently
Nothing adds up faster than shipping costs. And if you’re a business who offers free shipping, this can eat into your profits. You want to protect the goods being sent, but you can cut costs by choosing a smaller box or a flat-rate option. If it can fit in a padded envelope, then do it! You can also buy shipping materials in bulk, saving you much-needed cashflow dollars.
7. Maximize Labor Time
Do you have employees that like to take lots of breaks? Long lunches? Is that person you? Maximize the amount of work you do during company hours. This adds more worth to salaries paid, and increases productivity. Help yourself and your employees by staying focused. Minimize distractions, and put your foot down about unnecessary breaks. Can you work from home? Your monthly costs will be cut down tremendously if you don’t need to maintain an office.
8. Trust The Robots
Little things that eat up your time can be done automatically. Find the software that assists you with tasks such as adding new customer information to your email list, keeping track of sales, and sending reminders to those who abandoned their carts. Offer an automated customer agent that can answer basic questions like product availability and shipping costs. With these things taken care of, you can concentrate on the big picture.
9. Eliminate Subscriptions
Software programs for bookkeeping, merchandise tracking, or even streaming services for the office can eat into your budget. Little monthly charges go unnoticed but add up quickly. Review your statements and find out exactly how much you’re spending on them and which ones you don’t need anymore. The money from these eliminated subscriptions can be put toward better things, such as your income.
10. Review Your Budget
Review your budget. It’s important to stick to your goals, but things change in the blink of an eye. Maybe you have new employees or you’ve let go of a couple of them. Use their previous incomes and put it toward inventory or advertising instead. It’s good to check your budget monthly, so you can adjust or just remind yourself where you’re at.
Bonus: Find The Right Funding
Extra funding can help you grow your business. If you have a revolving line of credit, you never have to worry about day-to-day costs, such as rent and utilities. It gives you a cushion to soften the blow during the slow months. Nonetheless, it’s important to find funding that fits your unique situation. You need a loan to get ahead, but one that has a fair APR. You don’t want to end up spending more than you have on interest down the road. Consider all your options whether you are starting up, maintaining, or expanding.