While operating an online business can have its advantages, it also can have several costly drawbacks. Shipping internationally, dealing with international currency exchanges, and more can seriously bring down online sellers’ profits and hinder their success as a company.
However, there are ways for an online seller to save money on traditional costs of doing business globally in an online-only platform. By thinking out of the box and realizing that no savings is too small to make an impact, online sellers can streamline their business model and save money hand over fist in multiple ways. Let’s look at five ways online sellers can reduce costs and thrive in their businesses.
Using Online Money Transfer Companies
Currency exchange can be a huge expenditure for online sellers, and many of them don’t even realize that it’s taking so much away from their business’s bottom line. To keep things simple, many online sellers use default currency exchange programs targeted at online sellers. For example, Amazon’s currency exchange service charges a 4% fee. Although that seems like a small price to pay for currency exchange, the fact is that it adds up. Instead, online sellers should consider using an online money transfer company. Online Amazon Currency exchange alternatives offer currency conversion for sellers with excellent exchange rates, and no or low additional fees.
Consider Coffee Bags (Or Other Alternative Shipping Options)
Shipping globally (or even just locally) can be incredibly expensive. Bulky boxes, padded envelopes, and other traditional methods of shipping can be costly. If the product you’re selling isn’t breakable or sizable, you should consider alternative shipping options. One example is coffee bags. The bags are lightweight, portable, and easily bendable. That makes shipping costs lower and still protects your product during the shipping process.
Alternatively, you can buy packaging in bulk from a number of online retailers. By purchasing in bulk, you’re ensuring that you’ll always be prepared to fill orders, and you’ll be saving money on your overall shipping costs. You can also look to ship in bulk, or see if your suppliers ship directly to your customers.
Streamline Your Software
There will always be newer, more expensive software options available to online sellers. From ecommerce software to accounting programs, there are countless options. To save yourself money, streamline the types of software you use. Rather than always being willing to invest in the latest and greatest technology, take a step back and consider the big picture. If your current software works, you may not need a costly upgrade. Additionally, you’re likely using software you don’t even need. If it isn’t actively adding value to your business, streamlining your selling process, or making you money, you may not need it at all. Save yourself money by being selective and reading through software reviews carefully before committing to a product.
Focus Your Inventory
Are you offering too much as an online seller? Take a hard look at your inventory. In many cases, it’s actually more profitable to narrow the kinds of products you sell online (or flash-sell them). Too many products leaves too many options for customers, and too wide of a customer base, making it harder to market your business. Additionally, when you offer fewer products you can often charge more as your merchandise becomes specialized or marketable to a “niche” audience. Another added benefit: you’ll be saving money on supplies, product, shipping, and packaging materials. All while offering more specialized products to a more profitable customer group who are genuinely interested in exactly what you sell.
Ask for Discounts
When you work with other online sellers to build your inventory, coordinate shipping, exchange currency, and more, you’re in a unique position to negotiate. All of your fellow online sellers are understanding of your position, and they stand to benefit from offering you a small discount in exchange for bulk purchases or your loyalty as a frequent buyer. When you ask for a discount, be upfront about your reasoning, and don’t ask for something that’s completely out of the question. If it’s a discount you wouldn’t be willing to provide, it’s likely not going to happen. But, even if the discount you score doesn’t seem like much, remember that a small discount here and there can go a long way.
These are just some of the few ways online sellers can save money, and they ultimately boil down to the same concept. None of these money saving tips will double your profits, but when you focus on running a lean online selling operation small savings add up. By evaluating all aspects of your business spending, you can minimize expenses to maximize profits.
Source: https://www.theselfemployed.com
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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