5 Practical Ways to Increase E-commerce Profitability
E-commerce businesses continue to be an indispensable part of the retail industry. As more and more people continue to shop online, setting up an e-commerce store is relatively easy, especially when you have platforms like Amazon or Shopify. However, growing your e-commerce business, expanding your operations, and generating more revenue proves to be a challenge in a cutthroat industry.
It becomes harder to foster customer loyalty when there are hundreds of thousands of e-commerce stores, and it doesn’t help that customers are pickier than ever.
According to the US Census Bureau, e-commerce sales will continue to grow in the United States by a whopping 20% between 2018 and 2022 and it’s expected to reach 380 million by 2022. This is exciting news for e-commerce businesses but knowing which e-commerce stores will generate the maximum revenue during this period is unpredictable.
We’ve listed five practical ways to increase e-commerce profitability to increase your chances of generating maximum income and revenue.
1. Design a Great Website
It only takes less than a second for visitors to decide if they want to continue browsing your website or not. So, if your website does not have a clear value proposition that can hold your visitor’s attention longer, your bounce rate will be sky-high.
Effective visual communication is crucial to the performance of your e-commerce store. 80% of your visitors remember what they see on your website, while 10% never forget what they read. Pay attention to how your visitors navigate your website and use this information to improve your site navigation.
Another important factor you want to remember is the presentation of your products and services. You want to present them in a way that catches their attention and piques their interest. This could be in the form of images, videos, and website design.
Your About Us page should also catch your audience’s attention. According to Marketing Sherpa, around 7% of visitors on the Home Page click on the About Us next. And among those who click on the About Us, 33% are more likely to convert into potential customers.
2. Establish Customer Loyalty
Did you know that your existing customers are more receptive to your marketing efforts? Aside from that, they are likely to spend more money, order more frequently, and recommend your store to friends and family.
Customer churn – or losing your old customers to competitors – is a major problem among e-commerce businesses, so it’s crucial to prioritize customer loyalty when creating strategies for your marketing plan.
Focus on keeping your existing customers happy by offering discounts, loyalty cards, provide exceptional customer service, ask for feedback, and strive to continually improve. Before you may significant changes to your e-commerce website, be sure to consider your existing customers first. These strategies can help establish customer loyalty and ultimately improve your bottom line.
3. Consider Offering Subscription Products
The subscription business model has gained a lot of traction over the years. We’ve seen companies like Dollar Shave Club (razors), Blue Apron (meal kits), and Birchbox (beauty) connect with influencers to market their products.
If you’re not familiar with subscription products, here’s how it works: You offer a product or a curated set of products each month and encourage people to subscribe for a fee and receive the items.
Many people love subscription products because they love being surprised by deliveries, curating “random” or “assorted” boxes allows you to offload unsold items in your inventory, and the monthly revenue stream makes it easier for you to improve your e-commerce business.
4. Stay on Top of Your Finances
Regardless of the size of your e-commerce store, it’s important to adopt proper bookkeeping strategies. Keep records of all financial transactions and receipts and keep them organized. You can also use the best debt payoff app and bookkeeping software like QuickBooks to keep your finances in order.
5. Enhance Your Website Security Measures
Keeping your website secure should be one of your priorities. A complicated checkout process can likely expose your customers’ financial information. As a business owner, it’s your responsibility to keep your customers’ information safe. Plus, a security breach scandal is something a small business cannot afford.
Invest in professional security for your website and servers. This might cost you a significant amount upfront, but consider this purchase as a long-term investment that can help you and your customers in the long run.
Professional security services are effective in preventing data losses and hacks. A security company can also help your site in case of a malfunction.
The key to running a profitable e-commerce store is to keep your customers top of mind. Structure your website in a way that’s easy to navigate. If your customers need to click 300 times to purchase something, they will likely shop with your competitor.