8 Practical Ways to Reduce Costs in Your E-Commerce Operations

Worldwide, as e-commerce retail sales increase, so are its attendant costs. This is typically on account of the fact that e-commerce businesses attract a large number of visitors every single day. The increase in costs is attributable in the main to rising operating costs, particularly as related to shipping expenses, transaction fees, supply and logistics costs, and marketing costs. Many e-commerce businesses struggle online because of these costs and stiff competition. So, the only way your e-commerce business can really survive and grow is to explore all ways to implement practical strategies that help to cut down costs.

Following are eight practical ways e-commerce businesses can reduce operating costs and still be able to maintain good customer experience and satisfaction.

1. Optimize Your Supply Chain Operations

When supply chain costs are high, they can directly affect business revenues and profit margins. With less revenue after accounting for expenses, the ability of businesses to invest in growth or other strategic initiatives is severely limited. Rising expenditures usually occasion lower revenues. This can hinder operational efficiency because it holds up capital for unnecessary expenses or inefficient processes. What to do? The best way out is to optimize your supply chain operations and cost control. This is absolutely necessary for businesses to stay agile, grow steadily and be profitable. If you want to optimize your supply chain operations therefore, you may wish to outsource non-core activities to third-party logistics providers, leverage technologies like inventory management software, consolidate shipments to lower the number of deliveries and maximize truck utilization, establish strong partnerships with suppliers, distributors, and logistics providers, all in a bid to cut down effectively on your supply chain costs.

2. Use Dropshipping Options

As a product merchant, you can use a dropshipping model to directly ship your products to customers. That way, you are not required to hold any inventory. All you do is to simply accept customers’ orders then pass them on to the dropshipper for fulfillment. That helps to reduce your operational costs since you don’t hold or buy inventory. Additionally, dropshipping does not require a huge investment and can therefore save your business a lot of costs. Dropshipping allows your business to offer a wide selection of trending products to your customers, the business can be easily scaled, makes it easy for you to operate your business because there are only a few restrictions on your location. A dropshipping business is comparatively easier to start because you don’t have any need to invest in the payment for a warehouse or directly pack and ship orders yourself.

3. Control Your Inventory Management Costs

Controlling your inventory management costs can directly benefit your business. This is because inefficient inventory management can quickly exhaust your valuable resources. For instance, excessive stocks can hold up vital capital, while insufficient stock results in lost sales opportunities. This can directly affect customer satisfaction. Huge storage costs can strain profits. This is more so for businesses that pay high rent or utilize third-party logistics providers. So, if you tightly control your inventory management, your business can reduce storage expenses associated with excess stock. This helps to minimize the impact of expired products. For effective inventory control management, you can consider reducing supplier lead times as it can help you to reduce the size of your warehouse and overall inventory, conduct regular inventory checks to compare your products to the demand, adopt a minimum order quantities framework for wholesalers, eliminate excess inventory to reduce additional storage space, all in a bid to cut costs.

4. Explore Ways to Minimize Products Returns

Online shoppers do return products for various reasons. Excessive products returns can directly affect the fortunes of any e-commerce business. Sometimes, in addition to the costs you’ve already incurred delivering a product, a product return pickup can almost double your expenses. You may even incur more costs if you are required to repair the product if it is damaged. Minimizing product returns therefore is one great way to bring down operational costs. What to do to sort of guarantee this? You must try to encourage product exchanges instead of outright returns, optimize products and visuals with accurate details and high-quality images or videos, try various angles and include detailed sizing guides in your displayed products, display your products with detailed product use and maintenance guides to enable buyers receive the vital and necessary information, encourage product reviews and feedback.

5. Use Automation to Accelerate Business Processes

Most e-commerce stores usually involve numerous manual tasks in their operations. This is more so for the processing and inventory management. By this arrangement, there is always the risk of human error and inefficiencies. This necessitates constant supervision which can significantly inflate operating expenses. It can even hinder scalability and profitability. You can go around this huge cost inducing practice by deploying marketing automation software. These tools can help you to automate most of your routine business activities. The tools are effective to minimize human error, monotonous manual work, and process completion time while boosting productivity and efficiency. You can in addition depend on these tools to get automated data analysis and valuable insights into customer behavior and e-commerce trends. Now, where exactly can you automate in your business to help cut costs? You can consider automating inventory reordering, returns and refunds processing, answering common customer queries and guiding customers through the shopping process using AI or Whatsapp Chatbots, customer support meetings, personalized product recommendations, fraud detection and prevention and so on.

6. Review and Streamline Your Vendor Contracts

In most e-commerce business arrangements, vendor contracts usually outline in clear terms and conditions what businesses and vendors must adhere to. These contracts ensure clear expectations and reduce the risk of misunderstandings or disputes in the business arrangement. They clearly and adequately define rights, responsibilities and obligations of all parties. These agreements also provide a strong foundation for a mutually beneficial working relationship. If well crafted, these contracts can be very crucial in nurturing trust and collaboration between e-commerce businesses and vendors because they leave no room for poor coordination or even mishaps that can lead to avoidable losses and increased overall costs. It is best therefore to periodically review your vendor contracts to ensure that they clearly:

• Establish ownership and usage rights for intellectual property rights during the business-vendor relationship.
• Detail the process for resolving disputes between the parties and the circumstances in which the contract can be terminated.
• Define pricing and payment terms with transparent agreed-upon prices, payment schedules, and any penalties related to timely payments.
• Outline delivery schedules, performance metrics, and quality stands to ensure compliance and satisfaction from both ends.

7. Use Minimal Product Packaging

If excessive, packing and materials costs can also lead to high operating costs in e-commerce business. In addition, if you use poorly designed or ineffective packing materials, it can cause damage in transit. That is why it is hugely essential to identify ways to optimize packaging without compromising quality and product safety. For effective minimal packaging arrangements, you can cut shipping costs by using smaller boxes to package your products, ensure proper packaging of the products, use different packaging materials for various types of products, buying only a small quantity of packing materials then assess how it holds up in different conditions to ensure minimum loss.
 
8. Reduce Customer Acquisition Cost

Customer acquisition cost is one of the major cost elements in e-commerce marketing. It is simply the approximate total cost required to acquire a new customer for the e-commerce business. This cost encompasses salaries of marketers or salespeople, time spent on marketing campaigns, advertising and other related business costs. So, if you are able to significantly reduce customer acquisition costs, it will help your business retain more profit, increase marketing ROI, and allow scalability. Here is what to focus on if you want to considerably reduce customer acquisition cost.

• You can re-target customers who leave incomplete actions on websites and applications.
• Provide meaningful content, educate customers, and build trust with your e-commerce business.
• Improve customer retention by utilizing strategies like customer feedback loops, customer education programs, and loyalty programs.
• Deliberately tailor your content for appropriate audiences by segmenting them.

Last Line

It is not enough to always try to earn more revenues in your e-commerce business. Cutting costs in addition to earning more revenues is the best way to profitability. These here cost-cutting tips come in very handy to help your e-commerce business earn more revenues and ultimately more profits.

7 Tips to Retain Customers in your E-commerce Business

With more and more people now shopping online, e-commerce business owners really need to explore all ways to retain customers. If as a business you invest a huge amount of money, time and effort in attracting customers, it makes a lot sense to do things that can help you retain these customers in a hugely competitive market space as the internet. You cannot afford to lose customers if you want your e-commerce business to thrive. This is more so when you factor in that today’s time-strapped consumers expect a lot from their buying experience and are easily distracted by offerings from your competition. Doing everything to retain customers is key to success in your e-commerce business. Following are a few steps you can take to help you retain customers in your online business.

1. Robust Social Media Presence: Presently, it appears as if social media is where everyone is at worldwide 24/7. Taking your business on social media is like taking it to where your customers can be found. A robust social media presence for your business helps it to source customers and retain customers. A constructive and engaging social media presence for your business helps to increase online visibility for the business by creating a valuable connection with your audience. Taking your business on social media is taking the business to where potential customers like to spend their time and where you can meet them on their terms. It is one place your marketing messages can be widely shared and interacted with by potential customers as well as customers.

2. Positive User Experience: Online, user experience is made up of different elements. These are elements that attract customers to your website, retain them there for a while and lure them to do business with you. To enhance this, make sure your website design is user-friendly, fast loading, looks professional and is easy to navigate. Be sure it has a clean and intuitive design that works perfectly well on mobile devices. Take quality time to ensure the details of products/services you are marketing are kept engaging with snappy paragraphs and good aesthetics. Deliberately use bullet points and informative visuals to attract and retain buyers’ attention, making sure the site displays clear CTAs to help guide buyers towards a seamless checkout.

3. Personalized Marketing: Selling out of your e-commerce website should be clearly more than just a simple transaction if you want to retain customers. This is why you must carefully tailor your marketing messages to specified audiences. You can do this effectively if you clearly understand your audiences then cater your content to it. You also need to have the behavioral data of your customers. This can be useful in getting a feel of what pages they click on and what content they interact with the most. You can effectively cater better to their needs with these insights. If you engage in personalized marketing, your customers will feel valued and will be encouraged to do more business with you. This is more so in a hugely competitive market space like the internet. You can retain customers better by using effective methods to curt and build their loyalty. Such methods that include offering rewards programs, or regularly sending out personalized emails with product recommendations and discount codes.

4. Simplified Checkout Experience: Available research data indicates that global cart abandonment rate is an astonishing 70%. This directly translates to lost business in e-commerce stores. Taking steps that can help reduce shopping carts abandonment and lost sales can help you retain customers. On this score, you can make your checkout process as simple as possible. Make sure you have multiple payment methods that are safe and easy to use such as PayPal and other reputable e-payment channels.

 
5. Unlimited Shipping Options: Most consumers always expect to receive their online orders within a very short period say from 1-7 days depending on their locations around the world. However, some consumers always have a preference for free delivery, even if they have to wait a bit longer. It helps your customers therefore to offer several options at checkout. This helps to give them choices such as speedy delivery at cost or no delivery charges, making sure to be transparent about costs and delivery times. It is great for customer retention to offer tracking services so buyers can keep their eyes on their orders and know exactly when to expect the products.

6. Selling Globally: In today’s globalized world, geography is no longer a barrier to trade. You can always position your e-commerce store to sell globally because consumers now look beyond geography if they can find any product they want at the right price. You must therefore set up your e-commerce website with features that enables it to trade globally. Doing so will help the site with unlimited growth opportunities and reach. Be sure the site is set up to accept international payment options, that is, popularly acceptable and credible e-channels payment options worldwide. You can also offer international shipping options depending on the country or geographical region. If you’re targeting a specific country, it is a good marketing strategy to make sure your website is accessible in its local language.

7. Robust Security Measures: With hackers and cyber criminals everywhere on the internet, protecting your customer data is of utmost importance as a viable strategy to retaining customers. Your business needs robust security strategy in matters of creating a mutually beneficial relationship with your customers. Because of the nefarious activities of hackers and other cyber criminals, many shoppers are usually apprehensive when shopping online. Your business should always aim to give customers all the assurances they need that they are shopping on a secure website. To enhance security on your website, get your domain address on HTTPS// and a Secure Sockets Layer (SSL) certification for the website. These help a great deal to enhance online security and assure shoppers on your website. 

9 Proven Marketing Strategies to Grow Your E-Commerce Business

Depending on what they’re selling, e-commerce business owners usually adopt a combination of marketing strategies to grow their businesses. They like to combine classic strategies, such as event promotions, paid ads and direct mail with modern approaches, such as content marketing, social media engagement and email outreach to get the results they desire. The rule of thumb however is that what works for you is what you use. If you run an e-commerce business and you want to grow the business, following are nine proven strategies that can be of help to you if you choose to use them.

1. Content Marketing

In digital marketing, content is king. Content marketing simply involves the creation of relevant, valuable content to attract, engage and retain a specific audience. You can package this content in form of blogs, videos, images, texts and infographics. The aim is to use them to increase brand awareness, establish expertise in a specific niche, foster strong connections with an audience and drive sales.

2. Email Marketing

Email marketing is a cost-effective marketing strategy that can be effectively used to drive e-commerce sales.  It helps businesses to communicate directly to consumers through their inboxes. Email marketing is not only cost-effective, it can be highly personalized. This is why e-commerce businesses can segment their email lists to specially craft and tailor messages to specific segments of their audience. By way of these targeted emails, e-commerce businesses can promote products, share news and build a community. Email marketing platforms usually allow marketers to track and analyze the success of each email. This is how marketers get to have valuable insights into their audience’s preferences.

3. Podcasting

Even though comparatively a new kid on the block, Podcasting has become quite a valuable marketing tool that lets e-commerce businesses owners talk directly to their target audience. With Podcasting, e-commerce business owners can delve into industry-specific topics to showcase their knowledge and establish their authority. The main advantage of Podcasts is that they can help e-commerce businesses nurture customer relationships by creating a personal connection with listeners. If well packaged and broadcast, Podcasts can help supplement a business’s content strategy by driving increased website visits, lead generation and conversions.

4. Social Media Marketing

This marketing strategy leverages on the huge popularity of social media platforms. Social media marketing thus allows e-commerce businesses to easily showcase their personality, share stories and connect with customers in real time. The vast reach of social media platforms means even the smallest business can amplify its voice, reaching new audiences and building a community around its business when active on social media. Exactly why social media marketing is an ideal cost-effective marketing strategy for e-commerce businesses looking to expand their presence on the internet!

5. Paid Ads

E-commerce businesses that have the resources can use paid ads to cut through the noise and ensure that their messages get in front of the right consumers. These ads can be used across multiple channels, such as search engines, social media and traditional media that offer a straightforward way to connect with a targeted audience. With valuable insights into tangible metrics—impressions, clicks, conversion rates and return on ad spend—marketers can easily monitor campaign performance closely and make adjustments as needed to optimize results.

6. Traditional Marketing

Technically, traditional marketing encompasses a range of tactics including print advertisements, television commercials, radio commercials, direct mail and billboards. Their major setbacks however are the huge costs involved in some of the techniques even though effective marketing strategies in their own rights. Traditional marketing is known for its non-targeted reach. Despite the rise of digital channels, traditional marketing still holds significant value, especially in reaching local audiences.

7. Gamification

Gamification is a marketing strategy that mixes the engagement of gaming elements with traditional marketing campaigns. It is another very effective e-commerce marketing strategy. Gamification involves using contests, challenges and reward systems to spark customer participation. This approach can range from loyalty programs that reward regular interaction with the e-commerce business to educational games that both inform and entertain. The inclusion of gamified elements, such as scavenger hunts or interactive quizzes can enhance user engagement in virtual events, making it a good and effective marketing strategy.

8. Artificial Intelligence (AI) Personalization

In today’s e-commerce business, AI is no longer just a fleeting trend. The way marketers embrace it is increasingly making it look like one advantageous marketing tool for the future. Because of its versatility, AI can be deployed to collect user data on behaviors, preferences and interactions. Marketers then use the data to personalize marketing campaigns. So, e-commerce businesses can thus use AI-driven personalization across email campaigns, social media, website design and more. This is with a view to increasing user engagement, boost conversions and foster customer loyalty.

9. Influencer Partnerships

Marketers have since discovered that influencer partnerships are an effective means to amplify e-commerce business reach and credibility. This is why they try to foster mutually beneficial business partnerships with influencers as much as they can. They easily turn to industry influencers. This is because industry influencers have a built-in audience and established authority that e-commerce business owners can leverage on to open their e-commerce businesses to new audiences. Sponsored posts, collaborative events and social media takeovers are the most popular partnership strategies out there on the internet.

Why SMS is a Dependable Marketing Channel for E-Commerce Brands

Many e-commerce business owners usually prefer cross-channel marketing because it enables them to blend different communication channels to reach their customers and to create cohesive shopping experiences. Overall, and because of the overwhelming prevalence of smart devices particularly among young people, the use of SMS mobile messaging in cross-channel marketing has become hugely important in a holistic e-commerce strategy. If used correctly, SMS can be very effective to connect brands with consumers, nurture leads and get conversions. Following are compelling reasons why SMS mobile messaging is now a reliable and effective marketing channel for many e-commerce businesses.

SMS Helps to Strengthen Relationships

SMS just like email is easy to send and guaranteed to arrive destination hence it is extremely useful for e-commerce business owners to build and strengthen relationships with their customers. For most customers who already have a relationship with a brand, receiving text messages is something they’re open to. It is for this reason many brands can effortlessly use SMS to boost customer loyalty and retention. This they do by routinely using text messages to keep their customers constantly in the know of trends, latest updates, price changes, new products and even on-going promos. For exclusivity and better effectiveness, mobile messaging can be transformed into an exclusive channel with offers that are only available to customers enrolled in the SMS program. With its characteristic two-way conversational application, SMS can help brands to deepen relationships with customers through short surveys and collecting product feedback and customer reviews, very useful data for effective marketing purposes.

SMS Helps to Reduce Shopping Cart Abandonment

SMS has the advantage of instant messaging. So, it can be a great tool for providing instant messaging to shoppers and thus helping to keep them in the customer journey. SMS is very good at this because when sending follow-ups, SMS open and response rates are way higher and thus perform better than emails. Many brands do take advantage of this by sending cart abandonment SMS reminders to their subscribed customers. SMS text alerts can help shoppers to pick up their carts and continue their shopping experience at any time and in any channel they presently are. All these greatly help to reduce shopping cart abandonment to the barest minimum.

SMS Helps to Deliver Personalized Customer Journeys

These days, consumers on the average check their mobile smart devices much more than any other gadget. That is why mobile messaging can be effective by being more personal, immediate and direct. Exactly why, brands can effectively use SMS to personalize customer journeys. Brands that are unable to or neglect to do so risk losing many customers as a result. Brands that really want to encourage and nudge their shoppers along the customer journey must be able to use SMS to give personalized info to the shoppers according to their individual preferences.
 
SMS Helps to Convert Shoppers On-the-Go

For marketing purposes, SMS has impressive click-through rates and conversion rates as high as 70% and 20% respectively. Because SMS is direct, straightforward and can be delivered to shoppers on the go, it helps to increase the chances of a shopper making a purchase. Brands can better convert shoppers on the go by increasing their text messages’ relevance with intent-based data that understands shoppers’ real-time intent.

SMS Helps to Easily Reach Younger Consumers

Google reports indicate that up to 60% online data is now attributable to mobile devices and a very large percentage of young people use these devices. Over 70% of these young people, 34 years and below prefer engaging brands in two-way communication and SMS is their favorite. To this huge demographic, SMS increases easy exclusivity and accessibility for them. For marketers who use SMS, it is quite easy and approachable to interact with this demographic. They are therefore more prone to open and read mobile messages which help to encourage their engagement levels as shoppers.

Last Line

Without a doubt, SMS has become one of the fastest-growing tools that e-commerce brands can use to boost customer interactions, loyalty and retention. SMS is not only personalized, accessible and engaging, but has also proven to be effective in increasing conversions. Because of SMS, business conversations are no longer limited to emails and social media platforms, even though they are still hugely popular among marketers. As a highly effective communication channel, SMS completes a comprehensive and result-oriented cross-channel marketing strategy. The reason it is now increasing in popularity among e-commerce business owners.