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Raise Your Prices
Raising prices is a terrifying prospect. As entrepreneurs, we assume that customers will abandon us, sales will dry up and our business will collapse into the dust-heap of failure. But like most fears, we tend to grossly overexaggerate the consequences and underestimate the benefits. Especially if you're reselling an existing product in your ecommerce store, a small increase in price can do miracles for your bottom line.
Imagine the following scenario for a popular item in your online store:
Now image that, after being inspired by an article on the Shopify blog, you re-priced this item at $:
Our minor% increase in prices resulted in a massive% increase in profits and gross margin!
Under the best-case circumstances – assuming you have a strong unique selling proposition and aren't competing on price – your conversion rates won't dive and you'll have achieved an instant% increase in your overall profits. Even with a significant% drop in conversions, you'd still be making more money than under your old pricing model, but with fewer customer servicing costs to consider.
I successfully used this approach with my own ecommerce store to instantly increase my bottom line by%. It was, bar none, the most effective technique I've ever used to increase profitability.
When implementing this strategy, keep the following in mind: Make sure you test different pricing levels. While raising prices is often very effective, you'll need to confirm it for your market/business.
If you have a large catalog, testing pricing on thousands of products can be a tall task. Start out testing pricing on only your best-selling products instead.
This strategy relies on having a unique selling proposition and offering value to your customers. The more price-sensitive your customers, the less effective this will be. If you don't have a unique selling proposition, you need to get one.
Don't Obsess About Per-Order Profits
Many businesses are unwilling to lose money on an order, even if that means ending the relationship with an unhappy or dissatisfied customer. You may have had a similar experience, which often goes something like this:
“I'm sorry, sir. We only made $X on your purchase, so if we (fill in your reasonable request here), we'd lose money on your business. I hope you understand.”
This is a penny-wise but pound-foolish approach, and a terrible way to do business in today's highly social and connected world. If you're not consistently losing money on orders to quickly and pro-actively resolve customer problems, you're missing out on the chance to improve your bottom line.
Customers are so accustomed to mediocre service that when a business goes out of its way to proactively resolve a problem – without charging them – they're blown away. Apart from the life-long value of that customer, you'll receive valuable referral marketing and recommendations that are impossible to purchase.
If you're running an ecommerce store, here are four ways you can invest in the future of your business and, ultimately, your long-term bottom line:
Serving customers like this will cost a bit more in the short term, but will pay incredible dividends as you build a loyal and highly vocal fan base that results in a very healthy bottom line.
Reconsider Offering Phone Support
Would you be willing to reduce your workload by% if it meant only giving up% of your business? I would, and did, when I stopped advertising my toll-free sales number on one of my sites.
We were able to take the savings – both in terms of time and money – and pour them into better serving our online customers and improving our site. While phone support is a rarity among many online businesses, it seems that a disproportionate number of ecommerce merchants still feel it's necessary.
After the previous section, which championed outstanding customer support, this may seem like a major contradiction. But great customer service doesn't mean being all things to all people. It simply means taking outstanding care of the customers you've chosen to do business with. Based on your product and market – especially if your price point is lower - offering phone sales support may or may not be a wise use of your time.
Try measuring the impact removing your phone number has on conversions. You'll likely be surprised that the vast majority of people simply order online. If you do decide to offer a sales line, try to place it in strategic places such on the “Contact Us” page or in the shopping cart, where only qualified prospects will see it. If you serve both individuals and businesses, you can also experiment with a business-only phone line.
If you decide to scale back your phone support, make sure to:
Also, don't write off the phone entirely. If a customer requests a call back, or if you need to resolve issues that require personal attention, make sure to pick up the phone.
The Biggest Danger Is Inaction
Change is always scary, and you may be reluctant to implement these suggestions for fear of what might happen to your business. But experimenting with these ideas will likely go unnoticed by most of your customers, especially those new to your business. If the changes aren't beneficial, you can always revert back to your old policies and pricing.
Successful strategy in all times and situations do not exist but permanent strategy is that the company is aware of, understand and act on the basis that the world is changing quickly and put Alasiratejaat On this basis, and especially to understand the behavior of consumers in the target markets, which will target the future as well as political, legal, economic, cultural and social changes so companies use several strategies and not a strategy, and its most successful day to surprise the client or the client's surprise either price or product type, quality, security, color, size, location and time
improve digital marketing and social media with CS Dept.
The following below are several ways to increase commercial profitability
1. Manage your costs - Close management of your costs can drive your profitability. Most businesses can find some wastage to reduce, it's important not to cut costs at the expense of the quality of your products and services.
2. Review your offer - Look carefully at what you offer, who you sell it to and at what price and see if you can make improvements.
Pricing considerations. It's a good idea to review your pricing regularly. Changes in your marketplace may mean that you can raise your prices without risking sales. However, it's wise to test any price rises before you make them permanent.
3. Buy more effectively - One of the most obvious routes to increasing your profitability is to buy more effectively. It makes sense to review your supplier base regularly and see if you can buy the same raw materials more cheaply or efficiently. However, try to ensure that you maintain quality at the same time.
4. Concentrate your sales efforts - There are two key strategies for boosting profitability through sales; selling more to existing profitable customers and finding similar customers to sell to.
5. Expand your market - Moving into new market areas can transform a business and, handled correctly, can significantly increase your profitability. However, expanding into new markets can be risky - and mistakes can prove very expensive.
Do your research
Before you start, carefully research the potential opportunity. Can you tailor or adapt existing products or services for new markets? This can provide new revenue at minimal cost and is ideal for boosting profit. For example, if you manufacture tools for the garden market, are there any potential applications for the tools in the construction industry?
6. Boost productivity - Measure your operational efficiency on an ongoing basis. Put systems and processes in place that will enable you to get the most from your resources.
Source: http://www.bgateway.com/business-guides/grow-and-improve/growing-a-business/increase-your-profitability
Thanks
Agree with the answers given by Mrs Loraine and Mr. Sameer Abdulwahab
I fully agree with the answers been added by EXPERTS...............Thanks.
Thanks for invitation
I amagreeing with my colleague’s answer Mr. Sameer
The Generic Strategy is as follows:
Reduce cost through better sourcing of raw materials, production streamlining though better employee productivity, elimination of bottlenecks through value analysis and make sure the wastage is less.
Increase revenue through management of whole sellers, retailers, product campaign and product launching event.
When your cost is lower and revenue is higher, you will have better profit margin
I agree with MR VINOD and ABDUL WAHAB
In addition to the answers, I would like to add:
1. Improve your product/service
2. Work on what satisfies your customers
3. Develop your business (new market)
4. Work on improving your sales
Thank You
i think by deploying social networking and modern methods into your criteria to retch Individuals easily and frequent to what they Experience the most of the time
