It’s easier than ever for people to start their own online retail business, but a lot of those businesses don’t last more than a few months. This is usually down to poor financial management because people buy into misconceptions about online retail. There is a belief that the startup costs are very low because you don’t need to pay for a big office space or lots of employees.
However, there are other costs that you need to manage and you still need to keep a close eye on spending. If you want your online retail business to be a success, follow these simple tips to help you cut costs.
Find an Affordable Courier
Spending too much on shipping costs is a very common mistake that new online retailers make. It is important that you shop around and find the best deals, and negotiate with couriers to get a reduced price. You can easily get an instant UPS shipping quote online, so you can see what kind of price you are likely to pay. However, you should look at smaller regional couriers as well because they may offer you a better rate. Later on, when your sales increase, you should always renegotiate your contract. If you are sending a lot of products, the courier company won’t want to lose your business and they may be willing to give you a discount to stop you from looking elsewhere.
Reduce Product Returns
Product returns cost online retailers a lot of money because you need to refund the money or replace the product, so you need to reduce returns as much as possible. Often, product returns happen because items are broken when they arrive. To avoid this, you need to upgrade your packaging and make sure that it is offering adequate protection.
Product returns also happen because the product that the customer receives is not what they were expecting and they are not happy with it. This comes down to poor product descriptions on the website, so make sure that your descriptions are accurate and you have plenty of good quality images.
Invest in Online Security
Online retailers are prime targets for cyber-attacks, and the cost of an attack is huge. If you are a small business that is just starting out, it could cripple the business entirely. Even if you do survive it, you will lose the trust of your customers and you will have to start building from scratch again. That’s why it is so important that you take steps to boost security and protect yourself online.
Reduce Credit Card Processing Fees
The processing fees on credit cards can quickly add up, so you should find ways to reduce them if possible. The charges that come from the credit card companies are not usually negotiable, but you may be able to get a reduction from your supplier. You won’t know unless you ask, so get in touch and negotiate new fees with them. The longer you have been working with a supplier, the more likely you are to get lower fees, so loyalty does pay.
If you use these methods to cut costs, your online retail business has a much higher chance of success.