E-commerce can help almost any retail business grow their sales and increase profit margins. Today we want to talk about what the ideal business for E-commerce looks like --- the kind of business that is all-but-ready, and really just needs to launch online inventory + payment services and setup a fulfillment/distribution strategy to succeed.
First, let’s talk about what the goal of E-commerce is. E-commerce can help your business in three ways:
1. Expand your customer base by making your product more accessible to people in a larger geographic area.
2. Increase sales by making your product more accessible to people in your current service area, thereby increasing willingness to buy with both new and existing customers
3. Increase profit margins with more cost-effective ways to fulfill and transact sales
The real benefit for your customers will be convenience. The corresponding benefit for you will be less resistance between the customer and the sale. But online ordering and fulfillment offers two more advantages: automating processes, and better utilization of resources.
For traditional retailers with a local presence and physical retail space, this could be that the transaction is occurring through a payment portal, instead of through a cashier with an hourly rate. That frees up your sales associates to do other things, like answer customers, or, alternatively, pick automated order sin their downtime.
Its worth noting that this is similar to “self-checkout” stands in grocery stores, where multiple register scans serve multiple customers simultaneously under the supervision of one associate. This automation improves convenience for shoppers, and lowers the labor costs of operating traditional checkout stands.
The ideal retailer for E-commerce
In addition to lowering internal costs, you can reach more customers with E-commerce. All in all, you have the potential to sell more, and at a higher profit margin. We believe all retailers can get a positive Return-on-Investment with E-commerce, but there is a certain type of small local business that is naturally well suited to this. This is your business if:
1) you have (or can create) demand for your product that is non-local
2) You have (or can create) the internal capacity for fulfillment without making major change to your business
#1 is simple: People from out of town know about your company (or they could with some strategic brand awareness). The problem is, they are not always in a position to buy from you. E-commerce gives those who already have an interest in buying from you away to buy from you.
#2 is about logistics. If you have the capacity to either store more inventory or increase the flow of inventory, you’re set. A small retail business is actually ideal for this, especially if your inventory is already kept on or close to the sales floor. Your associates can pick orders when they’re not helping customers. And a promise like “orders placed before 3pm are guaranteed to ship the next day” can be easily met without making your employees work extra hours.
This blue print is not a requirement for success; rather, its an indicator that your business is ripe for it. Most, if not all, retailers can benefit from E-commerce. To discuss how E-commerce might work for your business, you can call Todd at (360) 294 8310 or click here to fill out a contact form.