One of the biggest challenges a young e-commerce business faces is becoming self-sustaining in an industry dominated by large, well-established competitors.
To stay afloat during the difficult early years, newcomers essentially have to work smarter, not harder. In the context of this article, “smarter” means making use of the neverending supply of innovative tools that help streamline operations and maximize profits.
Thanks mainly to the rise of cloud-based computing and the SaaS business model, technology companies can develop and deliver incredibly useful, accessible tools to help small e-tailers stay visible and competitive. And, with the success that many of these tools are showing, it’s unlikely that innovation in this space is going to stop anytime soon.
Tech companies know that by adopting a recurring revenue model with multiple price points, they appeal to a massive target market comprised of up-and-coming customers who can’t afford enterprise-level software. These developers understand that the supply of “little fish in a big pond” is unlikely to end. By continuing to innovate and deliver value to them, they’re securing their own futures.
So, the incentive to innovate and stay accessible is there. The onus falls on young online retailers to do some legwork and find out which products deliver the best value in areas where they need it.
Reading an article like this is a great starting point. Let’s take a look at some of my personal favorite tools that level the ecommerce playing fields. The main focus of these tools isn’t to help small companies take on their monolithic competitors, but rather help them plug obvious leaks in their various processes.
Recover abandoned carts
According to Statista, 88% of intended e-commerce purchases never happen. We’re not going to delve into the reasons why this happens; it’s a complex topic and one that’s worth exploring when you get the time.
Imagine you’re able to reduce that rate of abandonment by only four or five percent. Open a spreadsheet and do the math quickly. What impact does an additional 5% of sales have on your bottom-line? There is a proven way to do this without making any changes to your UX, your marketing or sales processes, or your pricing strategies.
Abandoned cart recovery services are popular, effective, and show an incredible ROI. The main method of recovery is via email, but many services offer additional, highly configurable mechanisms to the same end.
OptinMonster makes use of exit-intent popups for one last attempt at recovering a conversion, while BigCommerce makes use of targeted, personalized email blasts. There are several other excellent options in this space; any small e-commerce company is sure to find one that suits their needs and budget.
Reprice intelligently
This strategy is especially important if your retail business is on an ecommerce platform like Amazon or Shopify. Intelligent, automated, real-time repricing is absolutely essential if you want to remain competitive while still maintaining good margins.
It’s an understatement to say that the right repricing tool will have a positive impact on your store’s visibility and sales volume, especially in an environment as competitive as Amazon. Even the most basic of automated repricing services can provide a significant increase in sales.
Manual or even semi-manual repricing is a fool’s errand, and it scales very poorly with sales growth. Investing in a top-end repricing partner is a fantastic way for a small e-commerce store to keep up with its more established competitors.
Improve inventory management
Just because an online retailer has a digital shopfront doesn’t mean they don’t have to deal with real-world, physical products. Making sure that stock levels can accommodate sales is a major challenge in the retail world, both online and off.
Effective inventory management means that storage fees are kept to an absolute minimum while ensuring that the retailer never misses a sale due to an item being out of stock. This is a difficult balance to strike with analog tools and, again, as a store begins to grow and sell across multiple channels, the task becomes exponentially harder.
A great inventory management tool removes these risks by offering stock controllers extremely granular and accurate insights on interactive dashboards. They also automate certain time-consuming activities, like proactively compiling order forms. Many of these tools can be integrated with suppliers’ ordering systems, which further simplifies processes that were time-consuming and prone to error.
Turn customers into lead generators
A young startup needs to make use of every marketing channel at its disposal. One of the most commonly overlooked avenues in this regard is the influence of an existing customer. Referral programs are an extremely effective lead generation mechanism – studies have shown that they can improve sales by up to 20% if implemented correctly.
With third-party services like ReferralCandy, it’s easy to set up a program where your customers are rewarded when one of their referrals results in a conversion. Thanks to rock-solid, highly effective processes and technology, these referral programs all but run themselves. There’s no need for the retailer to get involved in the daily grind of validating sales and ensuring payouts happen.
A reputable referral program tool will also offer excellent analytics into the success of various campaigns. Understanding why a particular program worked while another didn’t is only possible with good reporting, and most of these tools will have you covered in this regard.
Level the e-commerce playing field
It’s tough, stepping into an industry as saturated as e-commerce; especially when there are many competitors so well-established that they appear to have become a law unto themselves.
However, there are heroes that fragile young businesses can lean on. They offer smart, innovative, affordable tools that help narrow the gap between the giants and a company that’s just entered the market. Don’t hesitate to utilize as many of these tools as your business can afford.
John Hurley is a professional geek who loves nerding out on the latest trends and tools for growing online businesses. And he’s got a guilty pleasure for romantic comedies.
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