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5 Ways to Increase Your Online Profit

Resources to help you take your online sales to a new level

As an online seller, you relish the freedom to set your own working hours, make your own business decisions and be more in control of your destiny. But growing pressure to reduce your prices or provide free shipping are crimping your online profit potential and making that destiny thing harder to keep a hold of.

Never fear. There are a number of things you can do to increase your online profits. Here are five to consider.

Reduce your costs

The most obvious way to boost your bottom line is to lower your costs. Start by looking for business expenses to cut, such as switching to a cheaper cell phone plan or bundling services to get a lower overall rate.

Likewise, your selling costs could be due for re-evaluation. See if you can cut out fees for unnecessary listing extras, or source free or lower-priced shipping materials to keep your online business lean and mean.

The right bookkeeping tools can help you get a handle on your expenses and sales, and give you better insight into your business performance, allowing you to make the right decisions of how to increase sales or where to cut costs.

Reposition your merchandise

Product bundling allows merchants to create unique products that are more resistant to the competitive downward pricing that so often occurs with commodity retail items—allowing you to preserve your selling price and your profit margin. You don’t have to be an artisan to create new products, but you do need to use some creative thinking. Creating product bundles can not only set you apart from the competition, it can also serve a real need in the marketplace.

You can also aim to sell more in each transaction using cross-selling techniques. By suggesting additional, related items to someone who is already buying from you, you can increase your average order size and boost your online profit. Check out these effective cross-selling techniques.

Focus on a niche

Instead of trying to compete with large retailers that market to a broad audience with a broad assortment of products, specialize in a niche. Define a target niche market and cater to that market’s unique needs. Then keep a pulse on how those needs change and what other needs arise. Dig deep to explore the sub-niches and micro-niches.

One benefit of a niche marketing strategy is that your business will attract customers who already know what they want, and are ready to buy.

Reassess your product offering

To improve your profit potential and move your business forward, it may be necessary to change up your product mix. If you have inventory that’s moving slowly—or not at all—get tough with your product line. No matter how much you like those widgets, if they’re not selling, they’re a drag on your online profit.

Sometimes adding new products to the mix can breathe new life into your business. Think about it: If your customers consistently buy this product, wouldn’t they also like that one? Identifying your proven products can help you make informed decisions about how to expand your product line based on what’s already working.

Try a new inventory source

Buy low, sell high. That’s the idea behind retail arbitrage, or buying something at retail to resell at a higher price. Many resourceful online sellers source profitable merchandise from chain stores, grocery outlets, even competitors. Read these tips on how to score underpriced items on eBay and flip them for a big online profit.

Another way to source inventory with low investment is to become a trading assistant, or consignment seller. Selling other people’s stuff saves you the time and money of sourcing merchandise, while giving you the freedom to explore market niches you might not have considered before.

About the author

Crista Souza
Crista Souza is founding editor of TheOnlineSeller.com. A journalism graduate of San Jose State University, she spent 13 years as a business and technology reporter in Silicon Valley. Crista has been writing about B2C and C2C ecommerce since 2008. Opinions expressed here may not be shared by The Online Seller and/or its principals.



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