Being an Efficient Online Retailer

Over the past few days I have rapidly summarized the first two major areas retailers need to focus on to drive success online. The final area I'm going to cover is driving up margins from the products sold through a website. To do this a retailer will need to make sure that they have great control over the costs of sourcing and delivering goods and indeed the pricing of products on the web.

The level of sophistication ranges widely between retailers from the smallest to the largest. However, tools are available that allow any retailer to maximize their profit by managing their costs. Here are some important points to focus on:

Before you start selling online it is always good to produce a business plan and financial forecasts.Running a store online can be a simple way of getting into running your own business. Like all businesses costs need to be managed. With retailing, however, the costs involved in your business can be quite dynamic. Working out the cost to source, store, market and fulfill goods is key. It is also important to make sure that the margin you receive on each sale covers the costs to keep the lights on.

A couple of days ago I posted the first in my series on the Big 3 things that retailers need to focus on to improve the returns they get from their website. In Part 1 I looked breifly at the first of the big 3 - bringing buyers to your site. Today I'm going to look at the obvious next step: getting them to buy something.

Converting vistitors into buyers is not an exact science. What works for one type of retailer might not be right for another. However, there are some general rules to follow that should help you to transform your business, these are listed below.

Improving Site Conversion

Site conversion is simple to describe. Say you master all the techniques described briefly above and 10,000 people a day come to your site. What if none of these people buy anything? That would be an awful lot of wasted effort. You want to convert the highest number of visitors into buyers possible. By focusing on this "conversion rate" you can make your marketing pennies go a lot further.

There are 10 commandments (sorry Moses I'm stealing your shtick) for improving site conversion. One day I'll expand on these points – and indeed all the others in this post – but for simplicity bare these things in mind:

These are just some general thoughts, if you have any further questions you can always email us at info@shopcreator.com or post on our Forum.

When we sign up a new major customer these days they generally already have an online presence. I read a statistic the other day that stated more than 7 out of 10 businesses have a website today. I would argue this figure is higher for retailers. This means that we are no longer selling the concept of "getting online", we are converting customers from existing platforms.

To convert a customer we need to prove that we can provide a greater return from their website than they currently receive. As many retailers originally launched online with free software, old software or self built solutions we can almost always offer some form of uplift. After 10 years of providing ecommerce services we have learned a thing or two.

The biggest areas that retailers seek to improve can be summarized into 3 distinct categories: More traffic, better conversion and greater efficiency. I have worked with a number of retailers where the web channel was originally less profitable than the bricks and mortar high street outlet. In extreme cases this leads to retailers either dumping their website or letting it go to rack and ruin. One huge misconception is that selling online is easy. It isn't.

Over the next week I'll be covering the big 3 ways we seek to improve an ecommerce business. The first category is:

Increasing site traffic

One of the greatest mistakes retailers make is something we call The Field of Dreams Theory. This translates (obviously to those who know the fine work of Kevin Costner) as "if we build [a website] they will come". Of course this isn't true. Additionally many retailers rely on old school marketing like brand campaigns and press offers to drive traffic. This just doesn't work.

Best practice for driving site traffic to an ecommerce site means you need to learn to manipulate a number of different traffic sources:

By optimizing the channels available online, essentially by spreading your web footprint, you increase the chances of "finger fall" (that is footfall but online – what a great buzz word). By creating legitimate references to your products in all the places that your customer demographic might visit you can capture more site traffic. You only have to look at the sophisticated tools Amazon and eBay use to market themselves online to imagine what best practice might look like.

If you have any thoughts on the subject above, you can always comment below. For more detail watch this space or contact us at info@shopcreator.com