Here at Precision, we have found that many clients come to us because they are struggling to sell their products on digital sales and eCommerce platforms such as Amazon, eBay, Etsy or Shopify. Read on to learn how you can successfully market your online business on an eCommerce platform, as well as the importance of financial planning.
Struggles of the ‘price war’
It is often very difficult to differentiate your products from those of other sellers on eCommerce platforms. This is one of the fundamental problems business owners face when they try to sell their products online.
Many vendors on eBay and Amazon are very transparent, aiming to give customers as many details about their products as possible. This often results in a ‘price war’ amongst competitors, who fiercely fight to beat each other’s product prices.
Businesses engage in price wars to differentiate themselves from other sellers. Unfortunately, price wars force margins to become smaller and smaller. Eventually, this can become intolerable for business owners.
Push your USP to the forefront
If you own an online business, you might know just how easily you can be drawn into price wars on eCommerce platforms with other sellers. To avoid price wars, take a step back and look for alternative methods of differentiating your business from others. Try not to focus on price alone. Instead, consider the aspects of your business that are bespoke, or perhaps a little more high-end than your competitors.
This is the unique selling point (USP) of your business. You need to ensure that your USP shines through your online shop and product listing. Then, when a customer next compares your product against a competitor’s, they will be more likely to purchase yours.
USPs are a vitally important marketing tool if you sell products on eCommerce platforms. If you’d like to learn how to implement your brand’s unique selling point, read our article on transforming your business with a USP.
Remember eCommerce platform fees
Some eCommerce platforms charge fees for using their website to sell your products. For example, eBay places fees on business subscriptions and listings. The platform also charges for upgrades which boost your listing, such as adding a reserve price or the ‘buy it now’ function.
On top of these charges, eBay also takes a percentage of each product sale as a ‘final value fee’. If you do not account for these fees before you enter business on an eCommerce platform, you will soon find that they will eat into your profit margins.
Commit to financial planning
Fees and charges are unavoidable business costs when selling products on eCommerce platforms. The most effective way to manage these costs is to create a profit-loss sheet for your online business.
As your small business grows through an eCommerce platform, you will meet to implement effective financial planning. Organising your business finances ensures that you are accounting for your revenue, expenses and fees. This enables you to predict whether you will reach your profit targets once the fees have been deducted from your sales.
Use online accounting software
We often recommend implementing online accounting software for clients who are organising the back end of their business. Accounting software provides immeasurable help with financial planning, a crucial component for any business operating on an eCommerce platform.
Here are five excellent accounting platforms you can use to manage your business finances online:
Capitalise on eCommerce platforms with Precision
We’ve witnessed many online businesses attempt to sell their products on an eCommerce platform, but struggle to find the correct strategy. Fortunately, our accomplished team of business management consultants have decades of experience in improving sales, marketing and financial planning for an array of businesses.
Should you choose to work with our consultancy, we can help you find an effective strategy for managing your online business. Get in touch with our friendly team today. We will soon respond to offer a quote or arrange your first consultancy session.