When it comes to running an ecommerce business, your expenses matter just as much as your income.
Globally, we’re experiencing a steady rise in costs, making it more difficult for online business owners to maximize profits while selling products at a competitive price. In these situations, it’s easy to think that the solution lies in generating more revenue.
But that’s just half the story.
Knowing how and where to cut back on costs of running an e-commerce store can do wonders to keep your profit margins in tip-top shape. And contrary to popular opinion, it doesn’t have to be a painful adjustment.
In this post, we’re sharing with you five easy, cost-cutting ideas for e-commerce marketers that can help you beat that cash flow crunch and save money running your business.
1. Don’t be afraid to negotiate for lower prices.
Haggling is the fine art of consistently bargaining to get something at the lowest possible cost.
And while the term itself isn’t exactly positive in nature, there’s no denying that haggling can often help retailers and dropshipping business owners save a lot of money.
We aren’t saying you should start annoying your suppliers with daily emails asking them to reduce their prices. But we do recommend that you should at least try to negotiate.
You’d be surprised at how flexible most suppliers can be when it comes to lowering prices. The truth is that they’d rather do so than lose the business of a regular customer.
2. Consider automating vs. outsourcing.
If you’re already doing one or both, then you may need to do a reevaluation of the results you’re getting in relation to what you’re paying for the service.
There are definite pros and cons to automating and outsourcing.
For example, you may have your own dropshipping business but just don’t have the time to manage your inventory or track the movement of products.
You can either use an inventory management software or you could hire someone from Freelancer.com to manage your product inventory for you.
If you think you can get a freelancer or contractor to do the same amount of work or more while paying less than what you do from automating, maybe it’s time to switch lanes.
On the other hand, if you believe you can spend less on automating than outsourcing for the same quality and quantity of work (or better), then focus more on automation.
Remember, if your goal is to cut costs, then it may be necessary to trade off a few features or not have all of the responsibilities covered. Especially if you’re running your online store on a tight budget.
3. Opt for small business logistic companies.
Shipping charges can really drain your financial resources. But if you’re managing a drop shipping business, you’ll need to find the most cost-efficient way to get products from your suppliers to buyers.
Fortunately, there is a way to save on shipping costs.
You can choose to have smaller shipping companies, who usually offer reduced prices, to cover your logistic needs. This is a great cost-cutting option, especially if you’re dealing with high volumes of orders from your online store.
Moreover, you may even be able to strike a deal with these companies to give you better shipping rates transferring products from drop shipping suppliers to your buyers. It’s a win-win scenario that they’re likely to jump at, too!
4. Optimize your online store’s website.
Having money to splurge on a fantastic e-commerce website may seem nice, but in retrospect, it can lead to a lot of unnecessary monthly charges.
For example, you may be paying a web developer and designer to make your e-commerce site as flashy as possible. But that’s not good website design practice at all.
Online consumers today value speed, simplicity, and a smoother online experience. and this is one of ‘corePHP’ strong points on how to optimize a site for speed.
Improve Site Loading By Getting Rid of Fluff
Remember that 79% of customers aren’t likely to come back to your site if they’re dissatisfied with their experience.
So, to know if people are having a pleasant experience on your site, use tools like GTmetrix to check if your pages are loading fast enough. If it isn’t, you’re likely losing a lot of sales without you even knowing.
Not impressed with your website’s performance from the speed test? Good.
This gives you the opportunity to get rid of third-party apps you may be paying for that are just making your site slow. Fix those pesky 404 errors, cut out all the rubbish from your online store, and focus on the bare essentials.
5. Ditch the channels that just aren’t working for your brand.
It takes a lot of dough to market a business online. Whether you’re using social media, paid advertising, email, or search engine optimization (SEO), one of the best ways to save on resources is to find out which marketing channels are working for you, and which aren’t.
And for this, you’ll want to use web analytics.
Google Analytics is arguably the best tool for marketers who want to shape a successful marketing strategy. You’ll know which platforms to pay attention to, which ones need improvement, and which to drop.
With everything Google Analytics is capable of doing, you can drastically change your marketing mix to produce better and bigger data-driven results.
For example, the different types of traffic Google Analytics can track allows for a more targeted research on where your best traffic sources are on social media. You have the option of investing more resources into marketing through these channels.
Similarly, the traffic data can tell you which channels are just wasting your time and money.
You may be doing something wrong with your marketing, but it’s also possible your brand just won’t thrive there no matter what you do, so best to cut your losses sooner rather than later.
With a little experience and creativity, you can find even more ways to cut costs and save money from running an e-commerce website. And remember, saving more also means you’re raking in more profit.
You can even use the extra profit, re-invest it into your business, and find out how you can better serve your customers or give them a one-of-a-kind experience shopping from you.