New Business Strategies For Successful Online Entrepreneurs
Everywhere you turn on the Internet you will find advertising that entices people
to start an online business and become rich tomorrow or if not tomorrow, by the second day for sure. Online entrepreneurs who are really out there in the cyber universe, making a living know that it is not nearly so easy.
However, a recent report from eBay's new, UK-based Online Business Index suggests that, despite difficult economic conditions, the best online entrepreneurs are doing exactly what they need to be doing to survive, analyzing their markets and their businesses and making the needed adjustments.
What are they doing to survive? For now, their tactics have largely focused on cost reductions rather than trying to drive revenue upwards. For example:
- Thirty-five percent are changing stock levels
- Twenty-six percent are reducing office costs
- Twenty-two percent are cutting advertising costs.
- Twenty percent are reducing shipping costs.
Have you thought about any of these strategies?
Changing stock levels
Reducing your stock level has several advantages.
- Keep cash more liquid, not tied up in inventory.
- Less potential for being left with non-moving stock that must be sold at deep discount.
- Less manual labor involved in receiving, storing, monitoring, facility space.
The downside is that you may not have product to ship when you need it, and if you have read the latest research, excellent customer service is key to competitive advantage.
One way to achieve savings while minimising the potential for outages is to look carefully at purchasing patterns from the last few years and adjust for this year's expectations. You may find that you do not need as much stock in the summer but you need to have very deep inventory starting in mid-October. Use your business data to drive your decisions.
Reducing office costs
This can be difficult since most online businesses are already taking advantage of low overhead. However, in this recession, everyone is having huge sales in order to move inventory and gain cash. This may be an excellent time to review your buying patterns and look for unique purchase opportunities.
Cutting advertising costs
This strategy can sometimes be translated into cutting your own throat. You need advertising to bring in business to drive your revenue and growth. Reducing advertising expense may not be prudent, unless your reductions actually make you more efficient. Take a careful look at your ROI on your pay per click campaigns, for example. Think about lopping off the least productive 20% of the ads and save that money. It is not a perfect solution but may be necessary for now.
Reducing shipping costs
Many businesses are finding that they can reduce shipping costs, which lowers overall costs to the consumer, by employing software that essentially searches for the lowest cost method of shipping in each circumstance.
You can prove your mettle as an online entrepreneur by turning this economic crisis into an opportunity.
by: Jane Dawson
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