24 Strategies To Increase Profits For Your E-Commerce Business
Did you know that, by the end of 2023, eCommerce sales are expected to grow by 10.4% and the global e-commerce market is expected to reach a total of $6.3 trillion? (Forbes, 2023).
As eCommerce sales continue to grow, more and more businesses are entering the market, making it more difficult to stand out. It is no secret that the eCommerce sector is getting more competitive every day. Nevertheless, competition is not the only challenge facing eCommerce stores. Other challenges that threaten to constrain the profits of eCommerce stores include economic stagnation, political conflicts, and environmental issues.
Hence, it is becoming extremely crucial for eCommerce stores to search every day for new ways to increase their profits. However, if you own an eCommerce store or work at one, you do not have to keep searching anymore because you’ve already come to the right place. In this article, we will walk you through some of the best and most effective strategies to increase the profits of your eCommerce store
22 Strategies To Increase Profits For Your E-Commerce Store
As we said, it is time you start asking yourself: “What am I doing to increase the profits of my eCommerce store?” And if you feel like you are not doing enough, the following strategies will help you gain a better perspective on how to start working on increasing your profits.
1- Start By Reviewing Your Target Audience
When trying to increase the profits of your eCommerce store, one of the very first things you should review is your target audience. Targeting the wrong audience is a huge waste of money and can eventually lead to a drop in the revenues of your store. Therefore, do not hesitate to invest in customer segmentation because it will reflect positively on your profits.
Moreover, when we say invest in customer segmentation, we do not just want you to merely divide your customers into segments with common characteristics. We also want you to invest in gathering as much data as you can about them, and dedicate yourself to understanding their interests, preferences, behaviors, and buyer motivations.
Converted.in can help you with that by offering you a great marketing automation tool that will segment your target audience and gather all your data in one place, like a hub, with a 360-degree customer view.
2- Have A Unique Selling Point
As we mentioned at the beginning of this article, competition is rising; therefore, it is essential to differentiate your eCommerce store, to have a competitive advantage, and to find a unique selling point.
Don’t know what your unique selling point is? Follow the “Pareto Principle”.
The “Pareto Principle”, or the 80/20 rule, is a principle that suggests that roughly 80% of effects come from 20% of causes. If we want to explain this within the context of eCommerce, it means that 80% of your sales and profits come from 20% of your products.
Find those products representing the 20%. Those are your unique selling points. Those are the products you should focus on to increase the profits of your eCommerce store.
3- Review Your Pricing Strategy
In today’s fluctuating market, you have to rethink your pricing strategy every once in a while, especially if you suspect that it is negatively affecting the profits of your eCommerce store.
There is an uncommon belief that raising prices will automatically raise sales; and hence profits. Unfortunately, it is not that easy. You have to strike a balance and make sure that you are neither overpricing to the point that you’re pricing yourself out of the market nor underpricing to the point that you can’t cover your costs.
You also have to:
- Carefully observe your competitors and their pricing strategies.
- Adapt your prices to your customers' expectations.
- Be flexible and regularly adapt to market changes.
4- Offer An Omnichannel Experience
Today, customers should not have to make an effort to find you. You should exist wherever they are and offer them the most seamless shopping experience possible. This is known as omnichannel marketing. It means that you have to exist across all available channels, platforms, and devices, and synchronize all of them.
Offering your products and services merely through your eCommerce website might not be enough to increase your sales and profits. Expand your marketing efforts to other channels, such as social media to increase the visibility of your eCommerce store.
5- Optimize Your E-Commerce For Mobile
An important part of creating an omnichannel experience for your customers is to make your online store accessible on mobile devices. Mobile commerce represents 73% of the total eCommerce (Zippia, 2022).
A lot of customers now prefer to shop on their smartphones; therefore, consider launching a mobile application and optimizing your website for mobile devices. This will open new opportunities for growth in sales and profits.
6- Discover Why Your Customers Are Abandoning Their Carts
Cart abandonment is one of the major problems that eCommerce stores complain about. It is a black hole that eats a big chunk of your potential sales and profits. That’s why you should start investigating the reasons your customers are abandoning their carts, and start finding solutions for them.
7- Use Scarcity and Urgency To Get People To Act
Sometimes people need a little push to take an action. It’s human nature. This push in eCommerce marketing can happen by creating a fear of missing out. This is known as FOMO marketing and scarcity marketing.
You have no idea what a sense of urgency mixed with the illusion of scarcity can do. Trust us, it can create wonders, especially when it comes to increasing sales and profits.
8- Invest In Technology And Artificial Intelligence
Well, it’s the year 2023!
To name a few: ChatGPT, Metaverse, Augmented Reality (AR), Virtual Reality (VR)... etc.
We know what you’re thinking. You’re thinking that these technologies do not come for free. Yes, we are aware of that. However, investing in technology is not like investing in stocks, for example. With stocks, you can either win or lose. But, with technology, winning is guaranteed.
So, bless your eCommerce store with technology and wait for your profits to increase.
9- Leverage Product Recommendations
Another way you can increase the profits of your eCommerce store is by using product recommendations. Customers do not always know what they want. They often get overwhelmed by the huge amount of options and may end up leaving your eCommerce store without making a purchase. Hence, lending them a hand by recommending products for them will help you secure more sales.
Check out this article to learn the best product recommendation tactics for eCommerce.
10 - Build Trust With Customer Testimonials
We’ve mentioned a few things about human nature throughout this article. Another thing that you should know is that people can get skeptical very easily. Thus, they always look for reassurance and seek social proof. Customer testimonials offer them the kind of social proof they need.
Imagine how many customers decided not to make a purchase just because they did not trust an eCommerce store enough. Imagine how much sales got lost because of that reason.
You don’t want to fall for that trap. So, make sure you include different types of customer testimonials across all your channels.
11- Sell More With The Help Of Influencers
Another way of providing your customers with social proof is through influencer marketing. It is also one of the most appealing and trending marketing strategies these days.
Influencers can have a lot of power over the purchasing decisions of people. They can influence your customers and your prospects and persuade them to buy certain products or subscribe to certain services. This will directly reflect on your sales and profits.
Read this article to discover the top 10 influencer marketing strategies for eCommerce. Also, check this complete guide on how to use eCommerce influencer marketing to boost sales.
12- Focus On Optimizing Your Email Marketing Campaigns
Reports show that, in 2022, the number of email users has reached around 4.3 billion users and that it is expected to increase to 4.5 billion by 2025 (Statista, 2022).
Now, do you really wanna miss out on all the potential sales that you can get from email marketing campaigns?
There are more than ten types of emails that you can leverage in increasing the profits of your eCommerce store. One of these types is “Cart Abandonment Emails”, which can help you solve the critical problem of cart abandonment that we discussed in a previous point.
The automation tool offered by Converted.in can also help you with this. It can create, customize, and automate all of your email marketing campaigns. This indeed will help increase your profits.
13- Optimize Your Website And Facilitate Your Checkout Process
The flow of navigation through your eCommerce website and the checkout process are pivotal parts of the shopping experience of your customers.
You have to ensure that the user can navigate easily throughout your website without interruptions or friction in the path.
Research shows that optimizing your checkout process can boost your conversion rates by 35.26%. So, you also have to make the checkout process simple, straightforward, and limited to 2-4 steps.
14- Use Retargeting And Remarketing
Studies show that the costs of acquiring a new customer for eCommerce businesses have increased by 222% since 2013. So, if you wish to increase your profits, you should work on decreasing your customer acquisition costs.
One of the ways you can do that is through retargeting and remarketing. These are marketing strategies that aim at bringing customers back into the sales process or buying journey. It is a highly effective strategy that can lead to increased sales and profits.
15- Work On Customer Retention
Of course, we cannot talk about decreasing the money spent on acquiring new customers without discussing customer retention.
The retargeting and remarketing strategies that we discussed in the previous points are not the only ways you can retain your customers. Other highly effective tactics include loyalty programs and great customer service.
Utilizing loyalty programs is a useful approach to keep your current customers engaged and committed to your eCommerce business by providing them with rewards for their loyalty. As for customer service, it enhances your customers’ trust in your eCommerce store, which keeps them coming back for more purchases.
And as we said, more purchases mean more sales and more profits.
16- Prioritize Security And Make Sure Your Customers Know That
Speaking of customers’ trust in your eCommerce store, you should prioritize security at all costs. If you think that cutting the security budget is a good way to reduce costs and increase profits, you are wrong.
Your profits will never increase if your customers are not feeling safe sharing their data with you. Therefore, invest in a strong security system and make sure your website is SSL secured. Also, use security badges like McAfee, Comodo, VeriSign, Trustwave, etc. on important pages of your website to let your customers know that you value their security.
17- Leverage Content Marketing And Have A Strong SEO Strategy
Pursuing content marketing and having a strong SEO strategy is a great way to market your eCommerce store without incurring lots of costs. All you need is a good team of content writers and an effective tool to help you manage your SEO strategy. The cost of this will be nothing compared to the profits you’ll gain if your strategies here succeed.
18- Optimize Your Paid Ads
If you are paying to launch paid ads campaigns, then at least make sure you are getting the most out of it. The best way to optimize your paid ads is through personalization.
Personalized paid ads allow for highly targeted advertising to customers and prospects based on their interests, behaviors, and demographics. By using data and analytics to create personalized ads, your eCommerce store can improve its conversion rates, increase customer engagement, and ultimately boost sales and increase profits.
Don’t Worry! Converted.in got your back in that too. Its automation tool will create and personalize all your paid ads for you.
19- Offer Different Types Of Discounts and Promotions.
No, discounts will not decrease your profits. On the contrary, they will attract more customers, and tempt them to purchase more products, which will increase the Average Order Value (AOV); and eventually, increase profits.
Try to offer discounts through coupons and promo codes. These tactics are very appealing to customers. Research shows that emails with coupons contribute a 48% boost in revenue per email compared to other promotional emails.
You can also use discounts on special occasions, referral discounts, discount bundles, and checkout incentives.
20- Properly Manage Your Inventory
You have to always keep your inventory in check because poor inventory management usually leads to a loss of profits.
Our advice for you is to ensure that your store has adequate inventory to satisfy customer demands but avoid stocking up excessively to the point where it depletes your financial resources. Strive to strike a balance between the two.
21- Partner With A Retailer Within The B2B2C Sector
Adopting a B2B2C model in eCommerce can help increase profits because it gives you the chance to work with retailers. These retailers offer your products on their online marketplace, which gives your eCommerce brand more visibility, expands your audience base, and allows your products or services to get exposed to more customers. More customers mean more sales and more sales mean more profits.
22- Do Not Stop Using A/B Testing
A/B testing is your road to success. To figure out which of the previously discussed strategies work for your eCommerce store and which don’t, you have to regularly conduct A/B testing.
You can only evaluate the success or failure of a strategy by subjecting it to testing and measuring its performance against certain standards. Only through this process can you determine whether the strategy is effective or not.
23- Supply Chain Optimization (SCO)
SCO involves applying cutting-edge technologies and methods to reduce inefficiency and improve performance and delivery in a supply chain ecosystem.
Technologies used include; blockchain, artificial intelligence, and the internet of things.
Some strategies to improve the manufacture and distribution of goods and services in a supply chain are;
- Minimizing all operating (manufacturing, transportation, and distribution) costs
- Use advanced software for tracking, inventory management, and analytics
- Managing demand and supply using a multi-channeled platform
Individual sales accompanied by a great customer experience works to maximize customer profitability. Providing multiple shipping options will give the customers a wide range of options while increasing the potential profit margin from a sale.
The time gap between a product's demand and supply is made as short as possible. The fast delivery will help minimize costs in running the supply chain while reducing the rate at which customers decline orders and improving their overall business experience.
The need for more accurate results in demand and inventory forecasting is ever-increasing. Advanced technologies such as AI can be used to analyze data from more than one market at a time. This technology results in more accurate trend analysis, helping the business take advantage of emerging opportunities.
24- IT Modernization and Big Data
Big data refers to an extensive database that can accept data from various sources at an enormous rate and volume. This data variety, volume, and velocity make the processing very complex to handle.
Big data has the potential to be processed into valuable insights used to drive and sustain business growth. Investment in modernizing the information and software technology needed to analyze the big data from your eCommerce business will almost always pay back ten-folds.
Take advantage of insights and patterns from analyzing big data from customer demographics and buying behaviors to craft marketing campaigns and messages that ultimately maximize customer profitability.
Sourcing for data can become a headache for small businesses that can't afford to invest in systems and technologies to handle such data. Access to large stores of proprietary and third-party data can be a reliable and less expensive alternative an e-commerce business can leverage.
Return on IT investment is seen both in the short and long term. In the short term, this can be improved and efficient business processes that reduce the cost of doing business.
In the long term, the reduced cost of doing business will lead to a concurrent increase in the profit margins generated by the company.
Now you understand how important it is to constantly work on increasing the profits of your eCommerce store. You should also know that this is not an exhaustive list of all the strategies that can increase eCommerce profits. However, this article gathered the strategies that proved to be most effective.
Of course, you do not have to implement all of that. All you have to do is start somewhere and then keep testing and optimizing as you go through the process.