When it comes to making a profit, your expenses are just as important as your income. Read this article to learn seven no-nonsense ways to save money with your online store.
Let’s be honest: we’re all in business to make money.
But with rising costs, it’s become more difficult for online business owners to boost profits while keeping prices competitive. In this type of situation, it’s easy to focus on generating more revenue, but that’s only half of the profit equation – reducing costs is the other.
Consider these 7 ideas to help save money on ecommerce operations for your site:
1. Offer the most popular payment optionsPayment processing fees can add up, especially as your order volume begins to grow. While you should offer multiple payment options to your customers, look to see which methods are most popular with your customers.
If you identify a payment method that’s rarely used, such as accepting payments via Discover card or Google Wallet, consider removing that option to save on monthly processing fees. Most online shoppers have more than one credit or debit card, so the customer experience shouldn’t be drastically impacted.
2. Use coupons and discounts wiselyCoupons are a standard expectation for online shoppers. Forrester Research notes that 66% of consumers will use online coupons for at least 25% of their purchases through October 2012. With this type of pressure on you to provide discounts, it’s even more important to leverage coupons strategically.
To get started, define what you want to achieve with your coupon campaign. From there, decide how deep the discount will be and which products it applies to, all while closely monitoring how the discount will affect your profit margins. In other words, don’t arbitrarily create a discount – you can quickly lose more money than anticipated if the coupon becomes popular.
3. Make adequate investments the first timeInvestments in your ecommerce site, whether it’s for web design, marketing or development, can add up. This explains why many business owners look for more affordable alternatives, such as soliciting a web designer via Craigslist or hiring an overseas SEO firm. While these options seem cost-efficient in the short term, you may soon realize that you indeed get what you pay for.
Instead of trying to find the cheap way to improve your business, perform diligent research and look for trusted vendors to make your investments count. Getting things right the first time is much more affordable (and less frustrating) than having to start all over again.
4. Work with a small business shipping specialistShipping charges are typically a big drain on financial resources for online businesses. While paying for shipping is inevitable, many ecommerce merchants are paying more than necessary because they’re afraid to talk to someone.
All major providers provide shipping resources for small businesses, many of which have dedicated specialists to help you gain efficiencies in your shipping costs. Do yourself a favor and utilize these tools to help save money where it counts.
5. Identify and enhance effective marketing channelsIt often takes a lot of money to market your business online. In fact, online ad spending is expected to hit $50B in 2015. Whether you’re using PPC, SEO, email, social media (or all of them) to promote your ecommerce site, one of the best ways to save is using web analytics to identify which marketing channels are the most impactful.
To do so, use your web analytics tool to see where traffic is coming from and what visitors do once they get to your site. For example, if you’re spending a lot on a specific PPC campaign, only to realize that traffic from this campaign never converts, you can use your marketing dollars more efficiently by removing or optimizing this effort. In other words, focus your marketing on what works.
6. Know how to prevent and fight chargebacksWhen a customer disputes a charge to their credit card and wins, you’re forced to pay a chargeback fee, which often costs $25 per instance. While some of these chargebacks may be legitimate, there are several unscrupulous consumers who like to take advantage of the system.
To save on chargebacks, prevent them from happening and know how to fight them when they do. You can prevent chargebacks by setting proper customer expectations by accurately presenting products on your website. To fight chargebacks, document everything. Many consumers dispute charges by saying they never received or ordered a product at all. By keeping confirmation numbers for delivery shipments, order confirmation and returns, you’ll likely win the chargeback dispute and avoid the corresponding fee.
7. Do everything you can to keep current customersAcquiring a customer costs 7 times more than it does to keep one, which means you should focus on customer retention through quality customer service and customer communications.
This includes delivering on your promises and keeping customers interested in your business by sending emails and engaging them through social media. As an added perk, as you build customer loyalty, these fans will begin sharing your business with their networks, which is the most affordable and effective way to drive new business to your store.
Growing your online business takes more than finding new ways to make money – saving wherever you can also makes a huge difference.
-Matt Winn, Volusion