The Smart Businessman’s Guide to Cutting Down Costs and Increasing Profits
Wendy Dawn David
12/5/20205 min read
Since you are reading this, you are probably trying to figure out how to reduce business expenses and increase profits. Rest assured that you came to the right place.
Thanks to the Internet, life has been easier. Anything can be done online, from downloading information to communicating with other people to making purchases. Yes, shopping for items without leaving your home is perhaps one of the best uses of the Internet.
With this being said, it’s no surprising that e-commerce businesses are highly profitable. Today, there are about two to three million e-commerce websites worldwide. In such a competitive market, how can you make your business stand out?
Here are a dozen ways to help you reduce expenses and still gain more revenue, without sacrificing quality.
1. Reduce operating hours.
Consider cutting your operating hours to reduce operating expenses and payroll. You can close on slow days and use this free time to modify your business plan or come up with better marketing strategies.
2. Offer incentives instead of salary increase.
Rather than give your employees a salary increase, you can offer them something just as valuable like flexible work schedules and opportunities to work from home. They will certainly appreciate these incentives since it will allow them to have more rest and freedom. Plus, telecommuting can reduce overhead expenses.
3. Adopt technological innovations to reduce administrative costs.
You can save money on materials and labor costs if you automate routine tasks and streamline administrative processes. There are software programs you can use to help you back up data. For instance, you can store them in a cloud.
4. Evaluate existing suppliers.
Loyalty is something that everybody appreciates. However, when it comes to business, you may have to replace certain suppliers that you have worked with over the years if it means being able to reduce expenses. Check out other vendors that might give you better deals. Consider warehouse stores and online suppliers.
On the other hand, your loyalty may be rewarded. Existing suppliers might throw some freebies or offer discounts to keep you as their client.
5. Offer live chat.
Statistics have shown that visitors who use live chat are eight times more likely to convert than those who do not use this functionality. You can invest in a software program or simply integrate Facebook Messenger into your system. You can set up a Facebook page and communicate with customers via this social media platform.
6. Lease office space.
If your business takes up an entire floor, you can lease half of it to another business. Surely, you will be able to maximize space by giving your employees cubicles instead of offices. You can also remove any equipment that you do not use. This way, you can efficiently share your work space with others and earn money from it.
7. Offer free shipping.
Everyone likes freebies. So, offering free shipping is guaranteed to turn customers’ heads around and give your website a more thorough look. Most customers are turned off by extra shipping charges. Once they see that they only have to pay for what they put on their shopping carts, they are more likely to checkout and make more purchases in the future.
Then again, won’t free shipping hurt your revenue? Actually, offering free shipping is beneficial to your business. If you are able to get high conversion rates, you can easily and quickly recover these shipping charges. Even better, you will be able to generate more revenue.
8. Use cart abandonment software.
This is such a common scene: a customer browses your website and sees something that she likes. She puts it on her cart and just as she’s about to checkout, she changes her mind and cancels.
This is truly a frustrating sight to behold for business owners. You’re almost at the bottom of the sales funnel. If this keeps happening, your business will suffer.
Fortunately, there are cart abandonment software programs that you can use. These tools can help you reduce rate of abandonment and encourage e-commerce conversion optimization.
Even better, they may persuade customers to go back and complete their purchase. Whenever customers abandon their carts, the software automatically sends them an e-mail, reminding them of the products they wanted. The e-mail may also include additional information, such as discount offers and calls-to-action.
9. Make them “afraid”.
Millennials tend to have a fear of missing out (FOMO), which causes them to do everything they can to keep up with the recent trends. As a business owner, leveraging this fear is good for you.
Instill a sense of urgency in young customers by making your products and/or services seem in demand. For example, you can include a timer on your website with a caption that says “limited offer” or “sale ends in 30 minutes”.
You can also show purchases made by other customers as well as discount codes to further encourage them to complete their transaction.
10. Allow guest purchases.
Put yourself in the shoes of customers. It can really be frustrating to see an item that you like, and then have a registration form pop up in your face once you click on it. This can turn you off and leave the site. Nobody likes complications.
To prevent this from happening to your customers, you should allow them to make purchases as guests. After all, you only need a few details such as their contact information and payment. There’s no need to require them to sign up.
11. Use exit-intent popup boxes.
Yes, popups are annoying… but they can also be endearing, especially when they contain discounts, freebies, and other promotional offers. Make your popup boxes attractive to customers, so they will stay.
For example, you can offer prizes, such as a chance to win a smartphone or a trip to Paris. Your exit-intent popup box can also contain coupons and discount codes. These incentives can surely make customers who are about to leave change their minds.
12. Collaborate with influencers.
Social media influencers are just as popular as celebrities. They have a lot of fans who look up to them and want to be just like them. So, when they recommend a product or service, their fans are surely going to patronize it.
The good thing about working with influencers is that they are not as costly as Hollywood actors, models, and athletes. You can simply give them freebies and gift certificates as payment for their endorsements.
Of course, you need to make sure that you find relevant influencers who are the right fit for your brand. You can use Grin since it has a large database of social media influencers.
Final Words
While there’s no single approach to reducing expenses and generating revenues, the above tips and recommendations can surely push you in the right direction.
Optimize your website to have more conversions. Use tools to attract visitors and encourage them to convert and stick around. Consider using lead magnets, calls-to-action, and lead generation techniques. Check out Oberlo for inspiration.
Furthermore, you should make the entire process quick and simple for customers. They should be able to make a purchase without hassle. Likewise, they should be able to receive their orders in good condition and right on schedule.