How to Keep Costs Down With an eCommerce Business

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E-commerce business is a business model with one of the lowest overhead costs around. However, this doesn’t mean that there aren’t ways to reduce this cost even more. After evaluating a few areas of your business, you may find some significant savings that can boost your bottom line.

Save Money With a Different Production Method

You can use a production method that doesn’t have to predict customer demand in order to potentially save costs. There are three different production methods: job, batch, and flow. Economies of scale usually mean that the more product you make on a mass scale, the lower the costs. If you’re making products using a job method (one product at the time), you may want to figure out how to move to a batch method (multiples of one product at the time). Usually, only large corporations use the flow method (mass producing using assembly lines). This will allow you to produce more goods in a shorter amount of time, which lowers labor costs. However, if you find that you have a lot of products just sitting around, it may be more beneficial to use a job flow, which will also lower labor costs.

Negotiate Your Supply Chain

If you don’t make your own products, this means you have a supply chain composed of manufacturers whom you get products from to sell at retail values. If you’re a frequent buyer and you have a good relationship with your suppliers, there is a possibility that you can negotiate what they charge. They’ll likely be willing to work with you because they won’t want to lose a good customer.

Re-Evaluate Your Shipping Supplies/Methods

Shipping costs are a big part of expenses for ecommerce business, especially when 81 percent of consumers prefer to shop with sites that offer free shipping. This means that you can save money by re-evaluating your shipping supplies and costs. Find out if there are cheaper shipping supply companies that are convenient for you. You can also switch to a different shipping carrier to save money on the actual cost of shipping.

If you are an ecommerce business owner, you already know the importance of saving every penny that you can. These savings could be the difference between being in the black or red. The tips above are easy to follow and could really make a positive impact on your profit.

For more tips about evaluating your costs and sales, read on here!

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