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Boost Your Bottom Line: 3 Clever Ecommerce Strategies to Supercharge Your Profits

We ecommerce sellers all jumped into business with one big goal: to make money. Right? But once the thrill of the first sale wears off, the reality is that selling online isn’t the same as selling face-to-face. It’s a whole different ball game that requires mastering new skills. And it’s easy to lose sight of why we started in the first place.

This month I’ve had some great conversations with our Inner Circle members about money. Specifically cashflow and profit. It’s clear to me that every single store owner needs to put some strategies in place that will make them more profitable.

So, I’ve put together this post to unpack three strategies aimed at boosting your bottom line. These are actionable tips you can start applying right away to see a real difference in your profits. 

I’m here to remind you that while it’s normal to face some unprofitable days, especially in the early stages, waiting too long to focus on profit can lead you into a crisis. 

You can avoid that by getting proactive about our profits now. Let’s dive into these strategies and make sure our businesses are not just surviving, but thriving.

First: 6 Questions Your Need To Ask Yourself

Here’s what you should be asking yourself before we get into the strategies::

1) Is the profit from my current sales covering my overhead? If not, when will it? For instance, if you double your sales, will that cover your overhead? It’s crucial to evaluate where you stand with this.

2) How much profit is left each month after covering overhead? Knowing what’s left after all expenses gives you a clear picture of your actual profitability.

3) Am I reinvesting the surplus profit back into the business, like into inventory? Even if you’re turning a profit, think about where that money is going. Is it going into growing your inventory, or is it just covering additional expenses?

4) Am I okay with how I’m using that profit? This is about aligning your financial decisions with your personal and business goals. It’s all about awareness and deciding if and when to change your reinvestment strategy.

5) When do I want to start paying myself? If you aren’t already, remember, there’s no perfect time to start. It’s tempting to wait until you hit a certain earning threshold, but goals can always shift. Consider starting small, perhaps with a modest percentage of your sales.

6) How can I keep my finances on track and boost my profit? I’ll give you a tip right now: schedule a monthly “date” with your finances. Review your profit and loss statement regularly. If you don’t have one, it’s time to get one set up.

Running a business can either be a fulfilling venture that supports the lifestyle you desire, or it can be a constant struggle with little to no financial reward. I’ve experienced both, and trust me, the first option is way more fun. So, if there’s anything I can urge you to do, it’s to take control of your profits sooner rather than later. Let’s make sure you’re not just working hard, but also making money that rewards your efforts.

Strategy 1: Optimize Your Pricing

It’s mission critical to nail your pricing. When done right, this strategy can turbocharge your profits without scaring away your customers. Here’s what you’ll do: take a look at your top 10 most frequently sold products and bump up their prices by just a dollar or two.

These are your most frequently sold items, not necessarily your biggest overall sellers. Because they sell often, even a small price increase can significantly boost your profit—more cash in your pocket, more often.

A quick word of caution:

When you start seeing that extra profit, it might be tempting to put it toward things that might feel right but will slowly drain your resources over time. Offering free shipping, for example, might sound easy and appealing, but it can be a real money sink if not managed carefully.

I got caught in a nasty cash flow crunch with my second business, Weesqueak. When I sat down to look at my numbers, I could see that I had spent $14k more on shipping than I had collected, due to a free shipping threshold I had implemented on my site. My intention had been to get people to buy more than one product, but in reality it was just shaving dollars off my bottom line little by little.

So don’t be afraid to crank up the prices a bit on your hottest items for more frequent profits that really impact your bottom line. And make sure you keep an eye on where that extra money goes. Keep it working for you, not against you.

Strategy 2: Add A “Front Of The Line Shipping” Option

Here’s a little trick that’s a win for you and your customers: introduce a “Front of the Line” shipping option. Create a rush shipping offer like within 24 hours, the next business day, or even within five business days. The timeframe doesn’t really matter as long as it’s clear and offers a perceivable advantage to your customers.

Once you’ve chosen the offer, add it as a shipping option that’s a few dollars higher than your standard shipping rate at checkout. There are always customers willing to pay a premium for faster service. 

What’s great about offering a premium shipping option like this is that it doesn’t involve any physical products or additional costs of goods sold. That means all that extra revenue from the upgraded shipping can flow straight to your bottom line. If you’re not offering this yet, you’re definitely leaving money on the table. So, figure out what quick shipping promise you can make, set it up, and watch as some customers choose to pay more for that speed and convenience. 

Strategy 3: Cash-Smart Inventory Spending

This last one isn’t so much a quick profit tactic as it is a smart, strategic move to keep your business on solid ground. This idea is inspired by the Profit First approach of accounting. What you need to do is set up a separate bank account specifically for your Cost of Goods. Here’s how it works:

Every week, after you tally up your sales, move the amount it cost to produce the products you sold into this new account. This is the money you’ll use to buy inventory. Doing this does a couple of brilliant things. First, it keeps this money out of your operating expenses, which means you won’t accidentally spend it on the next shiny object that catches your eye.

But more importantly it  helps you avoid overbuying inventory. When you see just how much cash you have in that account, you’re forced to make more mindful decisions. For example, say there’s a product you don’t sell often, and the supplier’s minimum order is way more than you need—you’ll think twice. Conversely, if there’s an item flying off the shelves that you’re constantly restocking, it’s clear where your money should go. This account makes your inventory decisions almost foolproof.

As your sales increase, the funds available for inventory will naturally increase too, preventing you from overspending or misallocating funds. It’s kind of genius, right?

Now, if you’re not sure what your cost of goods sold (COGS) is, check your profit and loss statement (P&L). But if you need to calculate it yourself, here’s the formula:

For a given period, here’s the formula for COGS

Beginning Inventory + Purchases
Minus
Ending Inventory
=
Cost of Goods Sold

This is crucial because eventually, you might want someone else to take over production, and if your pricing doesn’t account for labor costs, that transition could hit your wallet hard. Best case scenario? You start paying yourself now. That’s the dream, right?

Remember, the money in your Cost of Goods account is only for inventory purchases. This setup is a game-changer for making savvy decisions that keep your business healthy and thriving.

And there you have it—three solid gold strategies to ramp up your profits and keep your business thriving. Whether it’s tweaking your pricing, adding a speedy shipping option, or managing your inventory funds like a pro, each of these steps is designed to boost your bottom line and make your business operations smoother. Remember, it’s all about being intentional with your resources and making decisions that align with your long-term goals. So go ahead, implement these changes, and watch your ecommerce store go from surviving to flourishing.

RELATED LINKS:

Block some time this week to listen to this episode, and fine tune your pricing strategy:

https://thesocialsalesgirls.com/pricing-to-maximize-profit-episode-167/

A Profit First Expert Shares How To Manage Inventory

A Profit First Expert shares how to manage inventory. Episode 82 – The Social Sales Girls

Do This Now And Be More Profitable

Do This Now And Be More Profitable. Episode 204 – The Social Sales Girls

A Lesson On Fixing Your Cash Flow

https://thesocialsalesgirls.com/a-lesson-on-fixing-your-cash-flow-episode-166/

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GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

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