How to Cut Costs for Ecommerce

01/12/2020 | Share:

Are you looking to increase profits without a significant price hike for your customers? Cutting costs is the way to do it. In this blog post, we’ve got a few tips that will help you reduce costs for your ecommerce business.

Reduce product returns

Firstly, let’s think about reducing product returns. Product returns mean refunding money and paying for shipping twice. So not only do you miss out on a sale, you’re actually out of pocket. You’ve also got the process of putting your product(s) back into stock and repackaging the goods. There’s even a chance it might be returned in an unsellable condition.

It’s all very well to suggest reducing returns but how do you actually do it? With ecommerce, returns are inevitable but putting certain measures in place will help reduce the frequency.

First, make sure the customer knows exactly what they’re getting when they buy with you. Alongside your catchy copy, you need to make sure you provide sufficient photos (or even videos!) to show off your product. Include product specifications that give details on everything a customer would want to know, such as dimensions and weight (as well as size charts for clothing).

Next, pay attention to any specific customers with a high frequency of returns and stop marketing to them. If specific customers are identified, remove them from your email marketing – these customers are likely costing you more than they’re worth. If you find it’s coming from a particular area, for example, Facebook referrals, then slow down on your Facebook marketing until you fix the issue.

Spend your marketing budget more effectively

The next thing you can look at is your marketing budget and invest more effectively. To do this, you’ll need to gather data from all of your marketing channels and work out which channels are producing the highest return on investment. You might find that your Google Ads bring in twice as many conversions than your Facebook Ads. You may also find that your digital ads don’t really convert overnight. Invest more in what is working and reduce spending in areas that aren’t providing much return on your investment.

However, with that said, make sure you give your marketing channels time to perform before cutting the budget. Running an SEO campaign or an advertising campaign for just a week and then vowing never to do so again because of bad results is not a good way to approach things.

Explore cheaper digital marketing strategies

Advertising is an obvious way to promote your ecommerce business, especially to people who may not have heard of you. However, if paid advertising is not your thing, there are other techniques you can use to spread the word about your business and make sales.

Organic social media marketing is a popular choice. A social media account is free to own and you can promote as much as you want on your own profile. With a good strategy in place, you grow your influence for a fraction of the cost.

You could look at running giveaways on your accounts in return for spreading the word of your business. For the cost of a free product, the reach you could achieve with a giveaway might be much cheaper than that same reach through advertising. Think also about teaming up with influencers in your industry who can increase your reach in exchange for a free product.

Aside from social media, you can also look at creating blog posts and other content with the intention of ranking organically within search engines.

Referral programmes are also a great idea that offers incentives to spread the word.

Look at your packaging

Finally, you need to look at your packaging. Are you using excessive packaging that is too big for your product? By making the packaging lighter and smaller, you could reduce shipping costs depending on the arrangements with your courier. Less packaging also means less waste and less fuel needed to transport your products, helping the environment.

Ensure that the packaging you’re using is sturdy enough though to prevent breakages during transit as this could result in unwanted returns, costing you even more money!