In business, you live or die by your profit margins. If you spend too much and bring in too little in sales, then you will have a big problem before too long.
In the eCommerce world, profit margins are often pretty low, but there are lots of things you can do to boost them and, in doing so, boost your bottom line too, including the following:
Find a new supplier
One of the best ways for many eCommerce companies to boost their profit margins is to reduce the unit cost of their products and one of the best ways to do this is to find a cheaper wholesale supplier.
Whether you’re looking for wholesale jeans manufacturers, cheaper electrical components or cut-price fabrics, you can usually get a better deal by searching the web and collecting as many estimates as possible. If your company is a reliable payer, you may even be able to negotiate a cheaper deal with your existing suppliers too as they hate to lose good clients.
Stop selling so many options
Depending on the form your eCommerce business takes, you may also be able to save money by reducing the number of options you have for sale. If you focus on selling fewer core products, then you will not have to spend so much money on stock and logistics, and you can focus your effort on marketing the best products you sell more effectively to hopefully boost sales too.
The more stick you sell, the more space you need to have, the more money you need to pay for stock and transport and updating your website, and the less sense it makes financially. So, do the math and see if you would be better off with a smaller selection of goods for sale.
Work one less day
This will not be possible for every eCommerce company, but if you can shut down operations in your warehouse at least one day a week, then you will save a lot of money in terms of utility bills and wages and this will mean that you have a much higher profit margin at the end of the year.
Your website will still be ticking along picking up orders, so you will not lose out on business, but you will need to ensure that your delivery times reflect your new operating hours so you do not end up disappointing customers.
Embrace digital transformation
These days, there are so many apps, artificial intelligence products and so on, that you can use to make your company much more efficient than it is now, and the more efficient your company is, the less money you will need to spend on staff, working hours and wastage, and the more money you will be able to make, which means much healthier margins.
Boosting your profit margins in the eCommerce world is not always easy, but it is possible, and the above ideas will help you to do so more effectively in 2023 and beyond.