3 Probable Reasons You’re Not Making Profits in eCommerce

The eCommerce development industry is booming and there are millions of websites battling to grab their customer’s attention. Even though the giants like Amazon, Walmart are leading the game, small businesses also have an immense potential to make significant profits. But how can you beat the competition? Is making an attractive website and put great content enough? Certainly not!

Apart from all the common best practices, and digital marketing, there can be other reasons that your eCommerce is not making a profit. Here are 3 such probable causes that you might be overlooking.

Lack Of Investment

Setting up an online store and start an eCommerce takes as little as $50. However, to make it a success story takes way more investment. Not only for inventory but also for web marketing. While planning your online business, consider all costs involved in launching the store properly and make it up and running. It takes several infusions of digital marketing strategies, capital, and a significant amount of labor to make it a success.

Having owned a brick-and-mortar store won’t give you a competitive edge in eCommerce. Statistically speaking, the traditional retailers are often the worst about adequately investing in an online store, resulting in an insufficient profit. Your new eCommerce needs a similar time investment and at least one-fifth of the money, compared to your traditional store.

Poor Inventory Management and Marketing

Inventory of any store is crucial. While it is safe to assume that the inventory of your eCommerce store is going to be lesser than that of a physical store, it is still one of the most important concerns. Gathering too much inventory will hurt the cash flow and too little will lead to disappointing customers. You need to buy just enough inventory to satisfy the customer’s requirement, and run sales.

Moreover, it takes a different timespan to get repeat orders for different vendors selling the same products. Understand the market requirement of your product and be patient. Moreover, freight expenses to get inventory can also be significant to further selling price, time and reflect in your sales and profits report.

Higher Shipping Costs Harm eCommerce

Nearly everyone who is proficient or has at least attempted to purchase something online can tell you the importance of the shipping cost for the final “click to order”. Your customers are looking for Free Shipping and anything more than $0 may drive them away. Offering free shipping and 2-3days delivery has become a norm among successful online sellers.

Shopify reported, 59% of consumers agree that free delivery improves their online shopping experience. Additionally, 67% of U.S. customers say that it’s “crucial” to their online shopping experience. No wonder, Amazon offers free one-day delivery to Prime members and Walmart provides free one-day shipping without even a membership. However, free shipping raises profitability issues for many vendors. While there’s no universal solution for all eCommerce, businesses must strategically find the right balance of driving more conversions and budget. A few sneaky ways to offer free shipping are,

  • Increase the product price in a way that includes all the charges.
  • Encourage a second or third purchase through subscriptions, and loyalty programs, etc., and increase a customer’s lifetime value.
  • Increase the average order value (AOV), to upsell and help you gulp the expenses to offer free shipping.

Your website needs an expert analytical approach to become a successful eCommerce. One thing out of line and things can go south. In light of recent events, many stores/businesses are forced to close their doors to the public and are losing out on a lot of business. To help out, the eCommerce developer, Digital Sprout, is offering discounted services and waived fees to help bring these stores online so that they can continue to sell to their customers. Contact us now!

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