When you run a business online, you should always look for ways to cut costs. If you’re able to increase your revenue, you can maximize your earning potential and use the extra money to take your business even further. Imagine having the ability to multiply your income because you took the time to strategize where you could cut corners and see a major difference in the outcome.
How you manage costs is the answer to whether or not you’ll increase your profit margins. If you’re lazy about where and how you can save money, you won’t reap the full potential benefits of your business. Statista reports that, in 2019, retail e-commerce sales worldwide will amount to nearly 3.5 billion U.S. dollars. There’s a lot of competition to create the best products and operate as the best business, but there’s also room for success.
Here are a few ways you can cut costs for your online business.
Create a realistic budget
It’s important, especially when starting out, to remain realistic about the cost of owning an online business and everything it entails. You need to take into account everything you’ll need to spend if you want a chance at making a decent profit.
As a planner, I like to see how things will go before any action is taken, so the chances of operations running smoothly are much higher. Before diving into a new business venture, I always lay out the expenses and the approximated costs, which I intentionally overestimate on just in case we end up going over.
For most online businesses, you need to put money toward:
• Supplying materials
• Running your website
• Designing your website
• Hiring freelancers, contractors, employees, etc.
• Customer service
• Shipping rates
• Email marketing
As mentioned, it’s better to overestimate the cost of your online business than to underestimate it and be left with debt, so plan wisely.
Do you spend a large amount of your time during the day doing menial, repetitive tasks? The time you spend doing that could be time spent more wisely doing things that can actually elevate your business. It seems like a no-brainer to take those tasks you spend so much time on and automate them instead.
Marketing automation, for instance, is when you pre-schedule tasks to perform without you so they still get completed on time and produce the same results. This can include sending out emails, keeping track of inventory, customer service, posting content to social media and more. Meanwhile, you get to place your energy and focus on more lucrative things that can increase your sales and boost your marketing efforts.
Similarly, I also believe in outsourcing, so that I have more time to do things that will push the business forward. One of the ways I do this is by hiring an administrative assistant to schedule appointments and conferences, answer emails and employee questions, plan the yearly company retreat and much more. Without the extra help, it would be near impossible to cater to other parts of my business that need my full attention.
Cut advertising costs
Back in the day, you’d have to pay a ton in advertising if you wanted to get your brand name out there, market your products, gain interest and make sales. Today, however, the world of advertising is a lot different. With social media and a website, you have the ability to market to anyone -- and to do so for free. There are already 2.7 billion social media users around the world, so finding your target market is relatively easy.
The first step is to create an optimized website that shows who you are as a brand and accurately illustrates your products and services. Use social channels such as Twitter, Facebook and Instagram to get your business off the ground and promote your content to your target audience. It's also important to invest in email marketing that creates campaigns designed to target specific customers and send them content you know they’ll enjoy.
The materials you use to package your products when you send them to customers greatly impacts the overall cost of getting it on their doorstep. Very rarely will you have products where it’s one-size-fits-all, so it’s essential to invest in the right size and type of packaging for all of your inventory.
Buy your product packaging in bulk so you save on the cost rather than buying smaller or individual pieces of packaging. There’s no need to package smaller items in a bigger box. You can also use less protective cushioning for items you know don’t need them and that aren’t as fragile. This will help you use fewer materials and save on the cost of packaging so you can put that money elsewhere.
Whether it’s a few pennies or thousands of dollars worth, even the slightest change in your expenses can determine the profitability of your business. It’s obvious that, as a business owner, you want to maximize your revenue and make the most of what you have. With these tips, you should be able to cut back on costs and see a rise in your return on investment.[from http://bit.ly/2VwvxLm]