10 Ways to Optimize Cost in
eCommerce Business in 2024

Did you know that at least 30% of all things bought online are returned, compared to only 8.89% in physical stores? 

The most common reasons behind the product return is poor quality, wrong product descriptions, colour differences, and late delivery. Sometimes businesses don’t deliver what they promised which forces the buyer to return the product. If your return rate is less than 30%, thank your fortunate stars since you’re doing well. If your rate is more than 30%, there is obviously some work to be done to lower it. When the customers return a product, from shipping to packaging cost, it’s you who bear everything. So, returns are a major headache for an eCommerce business. To decrease returns, make sure to list your products properly. Share high-quality images and videos, focus on detail-rich product descriptions, implement size guides, prioritize packaging and promote exchanges instead of returns. There are many buyers who return a large number of things at once and benefit from a flexible return policy. Serial returners may cost businesses thousands of dollars because they utilize an item once, such as clothing and jewellery and then return it for a full refund.  

According to research, 30% of customers purposefully overbuy things because they know they can simply return them for a full refund. 

Keep an eye on a customer with the habit of returning products. With enough information, you can send a warning or even temporarily block their account to prevent them from purchasing from you and increasing your return percentage. If the process seems complicated, you can outsource eCommerce management services from certified professionals. They have the expertise to manage your eCommerce product account in a way that reduces product returns.

Reducing your inventory cost actually helps you make more money. Controlling costs hasn’t always been at the top of the priority list in the ever-changing eCommerce world because the competition was mild in the past and businesses were able to keep a consistent amount of inventory. Now more competitors are arriving in the market with new and better products at a competitive price and it is causing a problem for a lot of old sharks of the eCommerce business. We know the costs involved in warehousing and fulfillment of products is significant. But you need to reduce your inventory cost in order to sell the less popular or less bought items with high competition in the market. Eliminating excess products from the inventory can help in reducing storage costs. Another proven way to completely eliminate inventory management is by opting for a dropshipping model for your business. Run promotion campaigns like a free complementary products, discounts, and gifts to sell the unpopular and highly competitive products in the market. Slow-moving items might also be bundled with more relevant, best-selling products in the inventory to boost sales. Promotions will not only help you get rid of outdated stock, but they will also drive customers to newer, more enticing goods, resulting in greater sales. If you want to keep your inventory updated and running according to your market demands, you can take assistance from a company that delivers eCommerce management services.

Did you know that 79% of businesses with high-performing supply networks increase revenue faster than others, while companies with optimized supply chains have 15% lower supply chain expenses, less than 50% inventory holdings, and 3X quicker cash to cash cycles? 

The supply chain is the backbone of an eCommerce business, so it’s essential to streamline it. By improving their supply chain, nearly all retailers can achieve considerable efficiency benefits in both fulfillment and returns.   Supply chain optimization refers to the techniques and methods used to improve the performance and efficiency of manufacturing and distribution supply chains while taking into consideration all restrictions.  

12% of businesses claim that distribution costs are causing them to lose money.  

Supply chain optimization may help a business save money in a variety of ways. Infrastructure costs may be better controlled and managed by streamlining warehousing, logistics, and delivery procedures. Businesses can also start automating repetitive, duplicate, and redundant operations in addition to supply chain infrastructure optimization. Increasing process efficiency results in immediate cost savings in terms of transaction execution and labour. One can take the help of a company for eCommerce management services and optimize their supply chain management.

With exponential technologies such as Robotic Process Automation, Artificial Intelligence, Machine Learning entering the scene, we can expect a paradigm shift in the eCommerce industry. The most important purpose of Robotic Process Automation is to assist eCommerce companies in delegating recurrent regular tasks to a bot, allowing talents and time to be used for more tangible tasks. There is no end to how wide eCommerce businesses can benefit by making use of RPA. Using RPA in your eCommerce business, you can plan the whole inventory of your business, manage resources, escape the wrath of claims and refunds, keep the track of the shipments, reverse shipments and manage inventory more effectively. With the implementation of Robotic Process Automation into your eCommerce business, you can bring your unnecessary cost down and optimize your savings to a great extent. For the right RPA integration with your eCommerce business, one can outsource eCommerce management services and get the expertise of professionals.

Many small business owners find the concept of lowering operational costs appealing. When operating costs are lower, money is saved. Or, even better, reinvested in the growth of the company. However, if you’re selling a real item, there are some expenses you can’t avoid. One is, of course, your product’s packaging. You might say a cost of a box won’t affect my profits, but on a large scale such as running an eCommerce business, it matters a lot. Sizing the packages optimally, using economical material can save costs incurred on the packaging. Lowering package costs can frequently imply that growth is easier to attain and it takes less investment for developing and scaling your eCommerce company. Your packaging is more than just a box into which you place your items when shipping them. Keep it tough, but affordable. When it comes to shipping packages, one size does not fit all: you need to choose the smallest and lightest packing possible while still protecting the contents. A basic rule is that your packaging expenses should be between 1% and 5% of your order value. Keep in mind that a box within a box doesn’t protect the good as anticipated and always implies an increased packaging budget. It also makes your final package heavier, resulting in substantially greater freight expenses. For getting expert assistance on cost-effective product packaging in your eCommerce businesses, you can get eCommerce management services from a certified company.

An eCommerce brand can see a huge boost in profits by spending smartly on marketing and advertisement of its business. But you don’t have to market your products to everybody. Before starting marketing campaigns online and offline, you should first identify the market segments, do some search and analysis, and know your customers so that your company can avoid marketing to a segment that is not interested in your products. You must implement SEO and email marketing more than paid advertisements because they are affordable, lasting and result-oriented.  

61% of customers prefer to be reached by companies by email, according to Statista. 

Social media is also an effective platform for affordable digital marketing.