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Financial Tips for E-Commerce Sellers

For the past few weeks, I have been doing a Financial Tip series. This week, we will be focusing on Financial Tips for E-Commerce Sellers. In this blog, we will tackle 4 topics that would allow E-Commerce sellers to take their businesses to the next level. 

 

 

 

FINANCIAL TIPS FOR E-COMMERCE SELLERS

 

 

Know what you are REALLY being charged to use the platform

 

If you are using a shopping platform such as Etsy, Poshmark, Shopify, or E-Bay, know that there are considerable fees that can be a part of each transaction. If there is an embedded payment service, there are transaction and interchange fees for taking payment. Then there are fees for listings, advertising, and renewing items on the platforms. These are common, and the cost of doing business with these services. Just know what they are. I had a client one time on Etsy who ended up paying almost 40% of an item with advertising (someone bought through the Etsy ad link), listing, shipping, and payment. When we looked at the numbers she didn’t realize it was so high.

 

 

 

Get your shipping down with pre-paid services

 

I got this tip from a friend of mine who mails out about 100 packages a week! There are places to buy pre-paid labels for the postal service here in the US to get shipping costs down. My husband has used Pirateship (Free USPS shipping software | Pirate Ship) to ship some packages from his coffee business, and it saved his customers anywhere from $1.50-$4.00 per package. That’s significant!

 

A few others to check out are:

 

If you are reading me in the US, another thing to do is to contact your local business development specialist at the United States Postal Service. They can give you referral codes for vendor partners to create your shipping labels at no cost! My husband had a short conversation with our local post office and had promo codes for five vendors the same day!

 

 

Maximize profits with good pricing and good transaction records

 

I frequently see pricing mistakes in this industry, and often it is because entrepreneurs just double or triple their wholesale costs. It would be better, and more accurate to do a breakdown of operating costs and labor that should be included above the wholesale price of an item. Finally, I like to see an added profit margin.  If you need a good pricing formula for any product or service grab my free resource.

 

Often times I see labor as a sticking point in pricing goods.  If you are a reseller, don’t forget to include the time it takes you to shop, take photos, upload and list items, and pack them, when you calculate pricing.  If you are selling items that you make, know how long it takes you to create the item you sell, and make sure that is considered above your operating costs and the actual wholesale cost to make, photo, list, advertise, and sell the item.

 

Once you figure out your operating costs, please include the costs of using the platform that we talked about above, consider adding a flat labor cost to every item, and then a flat profit amount. For example, you can add $10.00 to an item to cover labor and profit above what you need to recover to make the sale. If that isn’t enough, you can go up, if it’s too much, you can go down.

 

 

Another key to ensuring you are maximizing profit is to keep meticulous transaction records. If you need to pay to relist the item, that additional fee is coming out of your profit margin. Know exactly what to pay for everything you make and everything you sell. If you paid $23.00 for a designer item to resell on Poshmark, you need to record that amount.

 

Estimating what you paid or what it costs to make something is an easy way to lose money in your business. What you paid is the starting place of your pricing structure to make money in this business. You can use a spreadsheet, just a notebook, or some software, whatever feels good for you, but don’t skip this step.

 

 

Check your expenses and margins quarterly

 

A lot of things can change in 90 days in ecommerce. Set aside time to review the expenses in your business. Look at the time you are taking to create and list your items. See if your shipping rates are still working. Look at your platform expenses and make sure that you adjust prices as necessary to cover any new increases.

 

Take the time to check your profit margins as well. Is one platform outperforming another in sales? Are your margins staying relatively consistent or are you going wildly up and down on certain items? You can take an average sale at your average price in a few categories and look for trends. If you typically sell items at $35.00, $60.00, and $85.00, look at a few sales in each of those price ranges. That’ll keep you from feeling overwhelmed at the idea of reviewing 1200 transactions! Make sure everything you sell makes a profit. Likewise, limit your losses. Because I know that sometimes lose a little bit to move something stored in inventory for a while.  

 

There are million-dollar eCommerce businesses built every year around the world. People love point-and-click convenience. The ability to get items that aren’t readily available where they live and unique online finds.

 

Make More Sales

It is so much easier to make more sales and sell products and services to an existing customer than it is to try and find a new customer. In fact, there’s something called the “80/20 rule” that states 80% of your sales will come from 20% of your audience Once your customers and fans are in your world, they are more eager to buy your offerings than a cold or even lukewarm lead.

 

Make More Sales

 

So, how do we make sure we are serving and selling this 20%? By making sure all of your offers will be a good fit for your audience, give them multiple ways to buy from you, and giving exceptional service that will win you loyal fans.

 

 

 

 

Making sure your offers are a good fit

 

Nobody wants to be in the awkward position of offering something that no one wants to buy.  It’s important to talk to your customers, get feedback on your products and services. Don’t be afraid to run a beta test or provide samples of your new thing to your audience. I don’t suggest you give things away to just anyone. Have a way to qualify your customers, and when you find them, get their input on what you offer.

 

For example, I have a signature 6-week group program to help entrepreneurs grow their revenues and profits by focusing on one plan for a short time.  This particular approach didn’t work for one of my clients, who felt that the every-week meeting was too quick to allow her to implement the next step in her plan.  She wanted two weeks between meetings to give her more time to work on her plan. 

 

This request created a 12-week program and is a great fit for certain businesses who need to focus on growth over a quarter. By taking the time to listen and adjust my offers, she works with me over and over when she needs support with her business growth.

 

 

 

 

Multiple ways to buy from you

 

If you offer handmade organic body lotions and scrubs can your customers order in both full and gift sizes? Will they fall in love with your product? Are there gift options that would allow them to ship it to a friend? This is one example of how you can create multiple reasons your customers should buy from you.

 

In the service sector, do you have an “offer ladder” with related and logical offers for your customer to take advantage of? How about a mix, like a course and a live program? Take a minute and think about the logical ways people would benefit from working with you through multiple sales.

 

 

 

 

Giving exceptional service with every sale

 

If you want to keep the fans coming back, you have to give the most amazing service. Ensuring so, they feel well taken care of. 

 

Drop the extra note, send the Voxer, follow up on their delivery.

 

Put a card in your package.  Send a gift. Answer the email. Jump on a call.

 

There are a million ways to let your customers know that they are important to you.  If they feel good, they will continue to buy from you. 

 

Define

 Defining Offers Your Audience Will Crave

One of the services people seek from me is defining offers that are strategic and are profitable.  My first step is to learn all I can about my client’s business and how they currently serve their clients. We then discuss how they are feeling about their business.

 

I’ve had clients come to me ready to pivot, ready to stop doing what they have been doing up to that point.  Truly loving what you do is critical to long-term success in business.

 

Shocked Client

 

 

STEPS IN DEFINING OFFERS

There are many approaches to defining offers that clients are excited to buy.  One is to first define your “Ideal Client Avatar” or ICA.

 

My approach is a little different. I first want to know why people would come to YOU for what you do.

 

What is your unique perspective, method, approach? If someone is shopping for what it is you do and sell, and all other things being equal, what do you think the deciding factor would be for the client to choose you? Have you ever answered that question before? 

 

Secondly, the next step is to ask where the client is in their journey with your current offers.

 

Do they need to really know you to work with you or can they align quickly with your results? One way to explain this is, do they need to commit 3-6 months to work with you, or can they get you for an hour or two? Or do you have an “entry-level” thing to sell? or are you currently only a long-term commitment? 

 

Guess what, all approaches are fine. You just need to recognize where the client has to be to take advantage of your offer.

 

Thirdly,  ask what levels of results do you want to offer? I want my clients to go from A-B, C-D, and E-H. Maybe you just have one result. But know what it is.

 

Lastly, define where you want to serve new clients in your world. For some people, they want to serve on a recurring basis, like in a membership or subscription.

 

 

 

TAKEAWAY:

 

However, some have more of a stair-step approach. Some serve new people with free masterclasses for several days before making any paid offer. Again, it is about your results and how you get them.

 

 

A NOTE FROM THE AUTHOR

There is no one right way to create and sell your offers, and I don’t believe that everyone should have a certain number of offers available. I have paid courses, workshops, group and 1:1 programs, and a book, and then free resources, masterclasses, and a podcast. Plus, this blog. But this isn’t the right mix for everyone and every business. These offers are what work for my clients along a spectrum of needs and desired results and feels really good for me to offer and serve. 

 

I recommend that you approach your current offers through this process and evaluate what you can offer to fill any service and results gaps in your current programs. One other thing to do is to ask people if there is anything you should be offering differently. That question actually created a 12-week program because the 6-week profit accelerator felt too rushed for one of my clients. Don’t be afraid to ask your audience how you can serve!

 

When we get into the “groove” in business, it’s easy to just let things roll. There are areas of business we are good at, that are in our zone of genius, and areas that aren’t. Even after you contract out or hire others to handle the “not so much fun” stuff, you should do an overarching wellness check across five key areas of business at least a few times a year. Take a few moments this week to consider any place that needs your attention. It’s a great time to tackle any changes in these areas before we head into 4th Quarter in October.

 

  1. Marketing.

 

Always keep what is working, but marketing, particularly digital marketing, changes constantly. Algorithms are always changing. When is the last time you looked at your marketing strategy?

 

  1. Sales and Business Development.

 

When is the last time you looked at your sales strategy? Do you have anything new coming out the rest of the year? How is your networking?

 

  1. Branding and PR.

 

Do you need a refresh, or just to ensure that your offers are consistent with branding? How about your PR? How are you staying visible in your business?

 

  1. Finance.

 

Is it time to revisit your breakthrough number? Do you have an income plan for the rest of the year? What do you want to make month over month, and how are you going to reach that goal?

 

  1. Systems and Productivity.

 

Do you have systems and support in place to help you manage your workload and stay productive? Do you need time management strategies?

 

This list has a lot in it, right? My last consideration for you is what can you delegate from this list?  Get expert support for your marketing, branding, finance, systems, and sales if these are not your zone of genius. Invest in a consultant, a contractor, finally decide to get after growing that team. Each of these areas is key to the health of your business.