Making more money than last year is a worthwhile new year’s goal for online sellers, but allow me to suggest an even better goal – to make real money.
This goal is in keeping with the explosion of sellers on marketplaces like Shopee, Lazada and DTC brand stores built on platforms like Shopify in Asia Pacific. In the last three years, the pandemic has created a whole class of online business owners who are trying to escape the fixed income trap and trying their hand at e-commerce.
Many online sellers in the Asia Pacific are new to e-commerce, transitioning from brick-and-mortar stores or starting from scratch. This often leads to a “shotgun, revenue at any cost” approach, where sellers throw anything at the wall to see what sticks.
This should not be celebrated, as it discourages proper research into what works. In reality, there are many best practices that can help fast-track the success of e-commerce entrepreneurs in the Asia Pacific. Online sellers should work smarter, not just harder.
As the Co-Founder and CEO of Konigle, a software that helps online stores implement profitable growth tactics automatically, I’ve been privy to see what works and, just as importantly, what doesn’t work with online selling across the world.
In the spirit of helping more online entrepreneurs hit their financial goals for the new year, I’d like to share some of these profitable growth tactics, which are often overlooked by online sellers.
Go with the tailwinds
I have often seen online sellers search high and low for a unique growth hack that will lead to exponential growth for their store. There is nothing wrong with searching for these creative strategies, but it can get counterproductive when entrepreneurs spend all their time canvassing for this silver bullet.
Also Read: How e-commerce brands can tap into the US$600 billion social commerce market potential
The simplest alternative to such tactics is to go with the industry tailwinds simply. In the world of e-commerce, the most common tailwinds are the events and occasions when people are ready and willing to shop more.
An example of this would be any seasonal sale, such as 11-11 or Cyber Monday. Most online sellers would get more out of planning an aggressive campaign for such seasonal sales than devising a stand-alone, one-off strategy.
Prepare for the worst
This is the worst-case scenario that can happen to any e-commerce entrepreneur: An online shopper learns about your brand, goes to your site in search of a particular product, navigates his way to the relevant listing, and then finds that the product is out-of-stock.
For the vast majority of online stores, this event will represent a two-fold loss: They will not sell that particular product, and the customer will likely never return, feeling that the brand is unreliable.
Though entrepreneurs don’t like when their products are out of stock, they need to prepare for this eventuality. It can and will happen. The best way to prepare for this scenario is to implement an out-of-stock alert, where sellers can submit their contact information in order to be notified when the item returns on your virtual shelves. Implementing this kind of alert will make customers more understanding of any inventory issues and more likely to patronise the brand again in the future.
Optimise your pricing
When viewing late-night informercials or navigating a department store, you may have noticed that prices tend to cluster around certain numbers. This is no accident. Numerous studies have shown a psychological benefit to pricing that ends in particular figures, such as 9, .99, .95, 0, and 5. This is known as charm pricing, for it may charm customers into purchasing who may have otherwise been on the fence about buying.
Also Read: How to start and scale an e-commerce business in 2023
This is a much better strategy than what I commonly see in the region: Sellers will just blindly follow the recommended sales price of the brand or manufacturer, even though that figure will likely not be optimised.
Charm pricing strategies differ by industry and product. They also vary by country. Online sellers can use this comprehensive study to identify the best strategy for their store and implement it store-wide. We did a study of over 1.5 million DTC online stores worldwide and found that stores using charm pricing made an estimated four per cent more in revenue, in addition to having a better brand recall.
Final thoughts
These are just three simple tactics that would serve online sellers in the Asia Pacific well. There are other tactics I could have added, but the bigger takeaway should be about our orientation as sellers. Rather than buy into the hustle-culture of relentless working, we should prioritise spending more time working on the business rather than just in the business in the new year.
Central to this goal is examining what others have already done and applying their learnings to our own store. This way, we can realise the full potential of e-commerce, allowing us to make real money, aka profitable revenue.
–
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image credit: Canva Pro
The post Profitable e-commerce: Making real money in the new year appeared first on e27.