Tag: costs

How Can Online Businesses Effectively Deal with Product Returns?

Not too long ago, I ordered a really cool-looking pair of boots on Amazon. These were reasonably priced, and the reviews were mostly positive. What I received looked like a toddler designed and 3D-printed these boots, and I immediately returned them to the seller. Most people love the convenience of online shopping and being able to order almost anything without having to leave the couch. However, not being able to physically see and touch the product can cause issues and disappointments. As a result, consumers returned products worth $428 billion in 2020, with an estimated average return rate of 15% to 20%.

While returning items can be a hassle for customers, it is also expensive and time-consuming for companies. Let’s see the main reasons customers return items, the consequences for businesses, and what can be done to reduce item return rates.

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Free Shipping : Necessity or Margin Killer?

If you shop online, I’m sure you’ve been there: you find an item you really like at a decent price, you add it to your cart, begin checking out, and find out that shipping will add an extra $7 to your bill. What an awful surprise. The idea of paying for shipping greatly upsets you, and you give up on your purchase. Does this sound familiar? I’ve certainly done that many times. In the age of Amazon Prime, should other online businesses offer free shipping? Is charging for shipping a thing of the past?

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6 Ways Technology Can Lead You to Massive Success

“Metaverse”, “Cloud Computing”, “Datafication”; these days, it feels like every other news article about business is trying to use as many technology keywords as possible. We hear about innovation and disruption in the entertainment, medicine, and transportation fields everyday. I’d say that half of the people using these buzzwords have no idea what they are talking about, but they feel they have to use them to sound smart. It is easy to get a sense of technology being important for businesses and entrepreneurs, including those operating online. A huge part of top companies are tech for certain reasons. Technologies and technical processes can create opportunities and improve operations. After all, the internet is the reason ecommerce exists in the first place. But technology can also kill businesses unwilling to adapt to the ever-changing environment. Let’s see how.

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What Inflation Means for the Ecommerce Entrepreneur

At the beginning of 2022, we all realized how crazy inflation is. It hit me hard when I saw the price of my favorite brisket sandwiches increase by $1.50. Everything becomes so much more expensive : our favorite foods, plane tickets, housing, gas, etc. Many of us changed our shopping habits in response to the high inflation rates (I still buy the brisket sandwiches but sadly travel less often). Businesses had to adapt to maintain their profitability but also to keep customers interested. Let’s see how inflation impacts ecommerce and businesses in general.

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How to Not Get Crushed When Competitors are Slashing Their Prices

We have all experienced this. Sales that previously looked great start to decrease month after month. Is it because of lower customer demand? Or is it due to issues with distributors? Perhaps there is something about the competitors’ landscape we did not notice? Seeing a new competitor enter your market is never a great experience, but realizing they offer similar products and services at a shockingly-low price is especially scary. But what should a company do after the initial panic?

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The Difference Between Penny-pinching and True Low-cost Strategies

The difference between penny-pinching and true low-cost strategies

Happy New Year to my readers! I know it’s been a while; I took a short break from writing during the holidays (and after getting a bad case of Covid), but I am excited to be back with more content.

Over the last few weeks of 2021, I wrote about economies of scale and discussed ways for businesses to improve their bottom line. Of course, every company wants to lower their costs to either improve their profits, pass savings onto their customers to gain market share, or for other reasons. But some companies are going further and excel at reducing costs: these are the successful adopters of low-cost strategies. 

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How Can Small Businesses Take Advantage of Economies of Scale?

As you probably already know, economies of scale are cost reductions that occur when companies increase production. When you open an economics textbook and you read about it, you might find examples about company XYZ ordering 1 million units from their supplier instead of 100,000. I remember being a college student and learning about these economics concepts; it did not feel much different than learning about trigonometry in middle school: “When am I going to use this outside the classroom?” was my immediate thought.

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