Regardless of what your business is, you should always be looking to cut costs wherever possible. The less money you spend on overheads, the higher your profits will be, it really is that simple. But a lot of people in the online retail sector can’t seem to grasp this concept.
This might be because people often talk about how cheap it is to run an online store compared to a traditional brick and mortar one, so they’re less inclined to worry about costs. But that’s actually a bit of a misconception. While you don’t have to pay for the same overheads, there are still a lot of costs to bear when you’re running an online retail business. If you can’t find a way to manage those overheads, you’ll struggle to get your business off the ground. The good news is, there are plenty of simple ways to cut costs in an online retail business.
Returns are one of your biggest problems as an online retailer. If a customer returns a product and you have to replace it, you’ve effectively lost money on that sale. If it starts happening a lot, you might as well just be giving your products away for free. There are a few different reasons that it might be happening, and they’re all fairly easy to deal with. Packaging is a big one, if products keep arriving broken, it might just be because they’re not protected properly in transit. It might be worth spending a bit more on some more robust packaging to see if that makes a difference. It might also be that the products aren’t being handled properly by the courier. You should speak to them and ask them to explain why so many products are arriving broken and what they can do about it. You might see an improvement, but if you don’t, it’s probably time to look for a new courier.
Streamline Delivery Routes
If you don’t use a courier and you handle deliveries yourself, it’s important that you iron out any inefficiencies in this area. If your drivers are taking an unnecessarily long route, you’re spending far more than you need to on fuel. But you can use telematics solutions to give you lots of data on your drivers and their routes. This will help you to work out if people are driving in a way that wastes fuel or taking long routes when they don’t need to. By making changes to your delivery routes so they’re as short as possible, you can get products out quicker and save yourself a lot of money in fuel costs.
Use Remote Workers
Office space is one of your biggest overheads so anything you can do to scale back here is a big help. A lot of the staff that you have working for you don’t necessarily need to be in the office at all. For example, if you’ve got people answering live chat or email queries from customers, they could do that from home. If you start using more remote workers, you can create a smaller, more dynamic office space that you can alter to fit your needs. There’s no need to have a space for every single employee if they’re only in the office from time to time, which means you can downsize and save a lot of money.
Online retail businesses are just as expensive to run as traditional retail companies, so make sure that you’re using these simple methods to cut costs and increase profits.