As an online retailer, you’ll already know that eCommerce is a pretty cut-throat industry with competition coming at you from all angles.
First off, there are the big retail brands with their deep pockets, huge marketing budgets and immense buying power, often enabling them to sell products cheaper than you can buy them for. Then at the other end of the scale, there are the online newbies who have yet to work out the difference between turnover and profit. These “busy fools” don’t tend to stay in business for too long, but there is always someone ready to take their place when they fail. Then there is the second-hand/re-furbished market, putting additional pressure on your margins by listing their products in direct competition to your brand new stock.
And don’t get us started on the online marketplaces (yes, we’re talking primarily about Amazon) which provide online retailers with customers with one hand and then actively compete against them with the other (with the added benefits of all your sales data to make sound commercial decisions).
In the “good old days” of high street retail – these businesses would trade from very different addresses and so attract very different customer bases. On the Internet they sit cheek to jowl (not very comfortably) often sharing the same product descriptions and images with price being the only differentiator.
With this in mind, it’s easy to see why online retail is often portrayed as a race to the bottom.
But this doesn’t mean that your opportunities as an online retailer are limited. As with all competitive industries, the strongest and smartest will always rise to the top.
Signs of Success
Successful online retailers have three things in common with each other:
- Agile: Meaning they can turn on a tuppence. They are not limited by their suppliers, their routes to market (the marketplaces they sell on) or fashions and trends. They adapt to change quickly and implement new strategies quicker than their competition. This is one area where small retailers really have a significant advantage over their more corporate competition which can take months or even years to change direction.
- Committed: They are committed to providing the best possible service to their customers. They know that customer loyalty online can be, at best, rather fickle. So they pull out all the stops to ensure customers get the service they deserve and return (often). This helps them counter the high cost of acquisition online and create something called Customer Lifetime Value (CLV).
- Focused: They focus on what works now and don’t waste too much time second guessing what the next big thing in online marketing is going to be. Today’s successful retailers are harnessing the power of email, social media and online marketplaces to drive sales. They won’t invest in unproven strategies, but this doesn’t mean they are set in their ways. Because they are agile (see above) they’ll be ready to make the move when new technologies are tried, tested and proven to work.
Above all, successful online retailers understand that while their customers might come to them exclusively from the online environment, it’s the things they do in the offline world that can mean the difference between profit and loss.
Six Offline Optimisation Hacks
With this in mind we’ve compiled a list of six offline optimisation hacks to make your online business a better all-round business.
- Re-Negotiate Everything: Every penny you spend in your business will have an impact on your profits. As your business grows, so will your expenses. It’s all too easy to just look at the direct costs of running your online business but this can be incredibly short-sighted. Expenses like rent, utilities, Internet access, office supplies and cleaning materials along with more obvious packaging, logistics and online marketing costs, are all ripe for a bit of re-negotiation. Remember, a penny saved is as good as a penny earned so don’t be afraid to go back to your suppliers and ask if they can do offer you a better deal. If they refuse, exercise your right to shop around.
- Shop Around: There is absolutely no harm in keeping your suppliers on their toes by letting them know you are open to competitive vendors. If nothing else, it will guarantee they continue to provide the best possible service and carefully consider any price increases. It’s also good practice to spread your risk by constantly testing new product lines and ensuring that a single supplier isn’t your single point of failure. If more than 50% of your business is reliant on a single supplier (or marketplace) this really should be sounding alarm bells.
- Learn to Say “No”: It’s not rude to say “no”. Sometimes, if it saves you and the person you’re talking to time, money and effort, it might be the most productive and polite thing to say. “No” doesn’t always mean “never” and so shouldn’t be seen as the end of a business relationship or a door slamming in the face of opportunity. “No” lets people understand where they stand and unlike the word “maybe” enables people to move on in the right direction. In business there is nothing worse than saying “yes” or “maybe” when you really mean “no”. Stop wasting time and start saying “no”.
- Outsourcing: Adding headcount to your business might be seen as an outward sign of success – but only if that additional headcount is sustainable. Too many businesses scale up for peak sales periods only to let staff go when things slow down. This constant churn is expensive and can damage workplace morale – which will undoubtedly cost you money in productivity. Outsourcing can provide a useful workaround to this problem. Outsourced help can help you test new strategies. For example, outsourced help could help you with video production or ad-hoc design for YouTube or social media marketing. It may also help you cover out-of-hours customer service which will be particularly useful for retailers targeting overseas markets. Outsourcing other aspects of your business, like warehousing or fulfilment, can also help you efficiently scale up and down according to the peaks and troughs of trade.
- Networking: When you work online, it’s all too easy to find yourself becoming isolated from the rest of the world. This isn’t healthy and despite the fact you’re working all the hours under the sun, can be far from productive – especially if you fall into bad habits. Networking with likeminded individuals (fellow online retailers) with whom you can share ideas and problems can be the ideal antidote. It’s also a great way to keep your finger on the pulse of the industry without investing too much time doing all the research by yourself.
- Work/Life Balance: Work/Life balance isn’t some “airy-fairy” concept. Ask yourself why you are in business. I doubt the answer is so that you can spend every waking moment at the office. It’s vitally important that you invest in quality downtime for yourself and your family and stop being busy for the sake of being busy. During work hours, focus on the things that make you more productive and then learn to “turn-off” out-of-hours. Empower your colleagues and employees to get the job done without you micromanaging everything. This may require some upfront training – but the results will pay for themselves in terms of productivity and morale. Remember, there really is no point in spending all your time building a business if you work yourself into the ground and are unable to enjoy the fruits of your labour.
Work Smarter, Not Harder
The team at SKU Cloud fully endorse the “work smarter, not harder” mantra. We know that simple decisions and small actions can create significant opportunities for your online retail business. For example, making the decision to upload your products to the SKU Cloud eCommerce ecosystem can open up multiple new routes to market, including the UK’s largest independent online marketplace Flubit.com and exclusive eCommerce venues from leading online publishers, affiliate networks, discount code, cashback and reward sites.
SKU Cloud doesn’t charge any set-up, listing or final value fees, giving you complete control over your margins, and the fact that products can be added as easily as ticking a check box in your existing multi-channel retail management software means integration doesn’t add to the cost of doing business.
Essentially, SKU Cloud lets you sell more without adding additional time or unwarranted expense to your business. Isn’t it time you spoke with a SKU Cloud advisor about making more smart decisions about your online retail business?
For more information call our London-based team on 020 3745 4483 or send us an email via: https://sellers.skucloud.co.uk/contact