Prices are rising and consumer sentiment is falling. Smaller eCommerce players are increasingly having their bottom lines eaten into by the behemoths of the industry.
Having said that, global eCommerce sales reached $4.9 trillion in 2021. What’s more, this figure is set to grow by 50% over the next four years. There are reasons for eCommerce entrepreneurs to remain optimistic.
To remain competitive in an increasingly competitive marketplace, it’s more important than ever to maximise eCommerce profit in whatever way you can.
In short, eCommerce is going to remain one of the highest growth sectors in business. It’s important that eCommerce players can both weather the current storm, and capitalise on the opportunities that lie ahead.
So without further ado, here is our list of tips to maximise eCommerce profit in an increasingly competitive market place.
Reach out to Repeat Customers
In order to maximise ecommerce profit, it’s critical that eCommerce players do not neglect their existing customer base. The logic is really quite simple: it costs money to attract new customers. Selling to existing customers will cut back on your marketing costs. After all, the hard work in positioning your brand is already done!
In relation to repeat customers, we should look at the data. RJMetrics looked at the data from hundreds of online retailers, and found that the typical online store generates 43% of its revenue from repeat customers. However, this figure can rise to 75% when these customers are cultivated properly.
In order to maximise eCommerce sales, don’t neglect those customers who have already shown an interest! You should consider loyalty cards, retargeting campaigns, using receipts for further advertising, and always remember to show your top repeat customers some personalised messages.
Focus on your Best Products
Focusing on the products that sell is a no-brainer. Yet we see many eCommerce players try to constantly expand their product ranges. Ultimately, products that don’t sell will use up unnecessary storage costs. If a product isn’t selling, simply move it to cash and refocus your efforts.
Remember, approximately 80% of your products will come from 20% of your best performing products. In order to maximise ecommerce profits, you should therefore focus 80% of your efforts on your top 20% of performing products.
In order to maximise eCommerce profits, consider slimming down your product offerings, instead of scaling it up.
Focus on your Best Products
Ultimately, maximising eCommerce profits isn’t just about making more sales. It is about making sure your operation is as lean, and cheap, as possible. However, there are plenty of ways to do this. You should try to reduce product returns as much as possible. You can do this by ensuring your information is as accurate and informative as possible. You can also try to negotiate better terms with your suppliers. This may require buying in bulk, however if you do this with your highest performing items, then you may find yourself in a win-win situation.
Similarly, doing your research on the cheapest transaction operators, leveraging automation and focusing on quality services are all great ways to lower your costs, and ultimately, maximise eCommerce profits.
Keep your Inventory in Check
Nail your Pricing
Always have confidence in your market fit, the quality of your product and your marketing. As any successful eCommerce entrepreneur knows, it’s far easier to move a price down than it is to increase your price over time. Increasing your prices will only lead to lost customers, and ultimately, lost sales.
Ultimately, having the ability to drop your prices is key for simply keeping your product moving. In the end, this is the only way to maximise eCommerce profits.