Driving More Profit Through E-Commerce

You can read any number of articles that tell you how easy it is to sell online. Set up an e-commerce site, and the sales will just come rolling in.
But there are rather less sources of advice around to tell you how to do it profitably. So here are a few things to consider:-

Stock Availability. Most important of all, whatever it is you are selling, your customer must want it. And when they do, you must have it available. Immediately. The less of your range which is in stock at any one time, the less profitable your online site will be. Not only will you lose sales, you will also lose customer confidence and ultimately add in cost.

Make It Easy. To browse, to choose, to buy. The internet has changed the way customers buy; make sure you know what your best sellers are, make sure you tell your customers what they are as well. Take every opportunity to remove doubt from your customers mind – give them all the information they need to make a purchase. From here on, you should be building confidence – the customer needs to believe that if something does go wrong, you will deal with it.

Customer Charter: Keep Your Customer Informed. When will you deliver? How will you deliver? What if the customer is not at home to receive the delivery? What to do if something goes wrong – if goods don’t fit, or arrive broken? Are you easy to contact?

Terms & Conditions. Who pays for returns? If the vendor’s terms and conditions do not clearly state that the customer is liable for the cost of any returns, then it is the vendor who becomes liable…more cost, less profit!

Returns. Any e-commerce site will generate a level of returns. But the rate of returns will be determined by a whole set of factors – if these are not managed, your costs could escalate out of control. Clothing – does it fit, did the image represent the style and colour correctly. Even if it does fit, customers may order 2 sizes…just to make sure. Fragile goods – is your carrier capable of delivering them without breaking them? Valuable goods – can you deliver them securely? If you get a problem line which does generate a high level of returns – can you handle it; more to the point – can you afford it?

I’ve saved the best until the end. For a good e-commerce site, once sales start to grow the level of sales should grow faster than the fixed costs…potentially making it very, very profitable.


Written by Paul Evanson

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