As January closes, we can finally put the Christmas and New Year sales period behind us. Hopefully, you had an exciting ride over the festive retail peak and the experience didn’t leave you feeling too exhausted to enjoy a little time off during the holidays.
Throughout November, December and most of January, you’ll have been too busy being busy to really take stock of how your retail business performed over its busiest period. It’s probably only now that you are adding up your sales and subtracting all the costs involved with getting so much stock through your warehouse and into people’s homes. And boy, do those costs add up.
First, there’s the actual cost of the stock. Then there’s the cost of marketing, logistics, customer services and returns. But it doesn’t stop there. There are lighting, heating and other everyday office expenses. Even the cost of keeping your office clean and tidy takes a cut out of your profit margin.
It’s only when you truly understand these figures that you’ll know if all that hard work was worth it or not. Sadly, it is at this time of the year that many online retailers realise what it is like to be a busy fool.
Take Control of Your Margins
If Christmas was more of a struggle than a win, now is the time to take stock and learn from your experience. And for those retailers who completely blew Christmas out of the water – well there’s an opportunity to make this year’s festive season even bigger.
The planning starts now and be warned you should expect to analyse everything.
Here are 4 things we suggest you look at first.
- Products vs Marketplaces: eBay and Amazon will, of course, encourage you to list your entire catalogue on their marketplaces but this really isn’t the best option because not all products will do well on all marketplaces. Sometimes acquisition costs will completely destroy any margin you have in a product. Therefore, it is important to know what products sell profitably via which marketplace and list accordingly. If a particular SKU doesn’t perform well on an individual marketplace, get it off there.
- Scale of Opportunity: Did you scale up your operations over the festive period? Perhaps you took on additional warehouse space and staff, added to your customer service team and spent a tonne more money on acquisition marketing. Did this additional investment yield a positive return or just add to the cost of running your business? Remember, you should be looking at profit and not turnover.
- Business Partners: How did business partners (software vendors, couriers, suppliers, etc.) help or hinder your performance last year. Did they deliver on all of their promises or drop the ball when it most mattered. Now is the time to evaluate their performance and put plans in place to ensure maximum efficiency this coming Christmas. This might mean making a few changes with the people you work with. Remember, it’s always best to test new partners and opportunities when you are not running at full pelt and so you should aim to complete this work before the end of the summer months.
- New Sales Channels: You could always reach a larger audience, it’s just a question of which channels provide the biggest bang for your buck. SKU Cloud can help ease the pressure here. A single, free integration with SKU Cloud opens up multiple sales venues for you including our very own Flubit.com marketplace and the retail sites of some of the UK’s largest online publishers and communities. The set-up is free and unlike most other online sales channels, there are no listing or final value fees. This means, unlike with other marketplaces (as suggested in #1) you can list your entire catalogue of products on SKU Cloud with the confidence that sales will deliver a positive return.
For more information about how SKU Cloud can help your business enjoy a more profitable 2017 visit: https://sellers.skucloud.co.uk/