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Is Ecommerce Unprofitable?

I came across an article on Forbes today titled The Inconvenient Truth About E-Commerce: It’s Largely Unprofitable . The writer, Steven Dennis, states that despite the massive shift from brick and mortar stores and the digital revolution, most ecommerce businesses remains unprofitable and most investors will not reap an adequate ROI.

This is due to high start up costs for new brands, difficulties in getting  customers and high fulfillment costs.

This is an interesting article but ignores various factors and approaches;

  1. The digital market continues to grow. In the USA  online sales in 2015 had a global volume of $335 billion. Despite the doom and gloom experts believe that digital purchases will exceed $530 billion in 2020. That is an annual growth rate greater than 10%. Sales are growing, not stagnating.
  2. Long Term: Ecommerce needs a long term strategy. Most entrepreneurs expect high returns within 6 months to a year. However most ecommerce companies need time to develop their brand and earn customer loyalty.
  3. As modern consumers move from desktops to mobile ecommerce trends have shifted. Growth in ecommerce markets, especially China, South Korea and India, is now driven by mobile. Emarketer states that Analysys International Enfodesk reported that nearly two-thirds of retail and consumer-to-consumer (C2C) ecommerce sales in China in Q4 2015 occurred via mobile. That was up from 55.5% the previous quarter—the first time mobile accounted for a majority of ecommerce sales in the country. As mobile grows, the upward trend in sales will continue across the world.

How Can You Make Your Ecommerce Business Profitable? 

A recurring question from ecommerce companies is how to increase net profits, not just revenue in a highly competitive market, especially for new companies. There are two main strategies that have become popular in 2017:

  1. Pushing up gross margins
  2. Reducing costs

However these two strategies by themselves are not sufficient. Whether your business is pursuing an omnicahnnel strategy or pureplay, you need experts with years of experience to help you increase profit and scale the business.

Contact us now and we can help you grow AND make a profit.

How a Multi-Million Dollar Ecommerce Brand Uses Video, Facebook, and Pinterest to Close More Sales

Here is a great video from Digital Marketer on how one brand is achieving remarkable results using Social to close more sales;

Event Selling: Making Money On The Superbowl

Oct 18, 2015; Indianapolis, IN, USA; New England Patriots quarterback Tom Brady smiles from the bench during the NFL game against the Indianapolis Colts at Lucas Oil Stadium. Mandatory Credit: Thomas J. Russo-USA TODAY Sports
Oct 18, 2015; Indianapolis, IN, USA; New England Patriots quarterback Tom Brady smiles from the bench during the NFL game against the Indianapolis Colts at Lucas Oil Stadium. Mandatory Credit: Thomas J. Russo-USA TODAY Sports

Every major sporting event presents a great opportunity for ecommerce sales to sell. As Matt Lindar noted recently, Super Bowl means super business for some online retailers.  It’s not only team merchandise that sells but anything else associated with advertisers and online stores, including Ebay, Amazon and dedicated Sports ecommerce merchants.  event-buy

The question is, what can you do to get a share of the pie? Here are some ideas:

  1. Increase traffic to your website by writing content that is associated with the big event.
  2. Offer incentives or special discounts during to the event period. Many companies had special offers before and after the Superbowl.
  3. Run contests and puzzles or other user engaged activities based on the event.
  4. Advertise! if you can afford it, afford on high visibility media, sports magazines and even TV stations that are screening the event.
  5. Use event related keywords and add hyperlinks to your posts during the event period.
  6. Direct Mail – send a carefully crafted and witty email to your email list just before or after the event with special offers or event related promotion.
  7. Offer expedited delivery at no extra charge during the event week.
  8. Promote your special offer through multimedia, Youtube videos and create other engaging content.
  9. Launch a creative social media campaign related to the event just prior to start.

For more ideas on how you can increase sales during a big, special event, contact us.


What Will Happen In Ecommerce In 2017?

What are your forecasts for ecommerce in 2017? Here are some thoughts from DigitalMarketer:

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