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3 Ways To Reduce E-Commerce Costs

by Tom Fogden
July 23, 2020 - Updated on May 16, 2021
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Reduce E-Commerce Costs
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When you run a business online, you’re already removing a lot of the overheads that most traditional shops encounter. You don’t have to pay rent on a building in a prominent part of the city’s shopping district to attract customers. You don’t even have to spend as much for utilities or staff. This doesn’t mean that an online store isn’t without its high costs. Here are three ways to make sure your e-commerce is as profitable as possible.

Increase delivery efficiency

Whether it’s picking the order, packing it up, or even having to make a regular journey to deliver the parcels to your chosen courier company, it could take hours just to dispatch a few small deliveries every week. Once the website is ready to be rolled out, your next task is to figure out details regarding order processing and shipping. Would you do this in-house, or outsource the same to a third party?

You can also settle on a model where your website can take the orders while a third party handles the shipping and fulfillment services in Toronto. Well, decisions of order processing and shipping should depend on the size and scale of operations you plan to engage with. If the scale is smaller, having an in-house arrangement will do fine but not if you plan to launch e-commerce on a big scale.

One way of reducing the cost of this process is by outsourcing it to an order fulfillment company. Companies like these solely focus on the delivery process, which means that they have ways of reducing shipping costs that just wouldn’t be practical for a small business to implement themselves.

For example, Red Stag Fulfillment has warehouses on both the East and West Coast, which means you never have to face the cost of shipping a product across to the other side of the country. They can also reduce the costs of having to pay for packing materials and your own storeroom, as well as removing the need to contact a courier yourself. All of this not only saves you money, but it also gives you more time to focus on attracting more orders.

Reduce returns

One of the most unnecessary costs any online business can encounter is from having to deal with returned products. If they’ve been returned because they haven’t received the item they ordered, then it can be a very costly error. Whatever method you choose to dispatch your products, it’s essential to use a system that reduces the possibility of human error. For example, the fulfillment company mentioned earlier uses barcode scanners to check they have selected the right product to dispatch.

Check for any damage or defects before you pack up each product. If you are selling fragile products, consider the best packing materials to use to make sure the item arrives in one piece.

Stock what sells

A lot of your money could be tied up in stock. To make a profit, you might decide to bulk purchase or manufacture hundreds or even thousands of a particular item to reduce the production costs. Of course, you’ll make a profit once they sell, but what if nobody wants to buy them? You could be forced the heavily discount them or even dispose of them as a last resort.

Before buying any stock, conduct some product research to check that there is a market for that item. Look at what has sold well before on your website and see whether there are any common trends you can design your next product around.

Tags: Reduce E-Commerce Costs
Tom Fogden

Tom Fogden

Tom Fogden is a writer for Twollow with a range of experience in the world of tech publishing. Tom covers everything from cybersecurity, to social media and website builders when he's not reviewing the latest phones, gadgets, or occasionally even technology books.

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