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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 Strategies Can You Use To Counter Amazon’s Dominance?


Amazon’s dominance continues into 2017. Can anyone survive or compete? Here are some useful strategies to survive the Amazon giant and other low cost players:

  1. Maintain a low cost distribution and fulfillment strategy: Avoid high shipping costs by using flat rate shipping – here your store will pays a set price to ship a specific box irrespective of what the shipment weighs or how far away its destination is in the domestic destinations for USA and Canada. Amazon succeeds primarily due to its fulfilment capabilities.
  2. Use the correct packaging – bigger boxes mean higher shipping costs.
  3. Develop a concrete online brand strategy to pull product searches away from Amazon and move them towards Google so that your products have visibility and your pure play ecommerce site has visibility and traffic.
  4. Forget the Price War: It is always challenging to compete on price, you can’t win a price war with low-cost players like Amazon.
  5. Differentiate your business on design, innovation, and continuously offer a unique product mix.
  6. Smart businesses don’t use these tactics in isolation, you have to continuously innovate amazon-logoand be open to experimentation.
  7. Reduce costs and minimise working capital (cash management).
  8. Maximize return on assets  and maintain high asset utilization.
  9. Standadize products to reduce costs of testing.

For a comprehensive analysis of your needs and effective solutions, contact us.


What Will Happen In Ecommerce In 2017?

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

Amazon Go Is The Future of AI

What do you get if you connect the Internet of Things and Artificial Intelligence? Amazon Go! Have you watched the Amazon Go ad? Imagine walking into a store, shopping and walking out without any kind of physical transaction. Everything you choose is logged and charged directly to your mobile phone. Watch this:

Have You Seen The Amazon Prime Commercial? You Should!

Found Any Good Deals On Alibaba’s Singles Day?

Found any good deals on Alibaba’s Singles Day?

Here are some interesting facts:

  • Mobile phones accounted for 69% of transactions during the promotion.
  • Transactions had passed last year’s record of $9.3 billion before noon.
  • Top-selling items by retailers included baby-related and nutritional products, Nike sneakers and Levi’s jeans.
  • Alibaba makes money through advertising and charging vendors a proportion of their sales.

Ecommerce Analytics: What You Need To Know


There have been many changes over the past 2 years in various analytics packages available to your ecommerce business, including:

The undeniable fact is the need for accurate and relevant data to monitor performance and guide decision making. What is important to your business and when? Reliable analytics are essential to determine:

  • Analytics when starting the business
  • Customer related analytics
  • Analytics for scaling growth
  • Customer acquisition analytics
  • Analytics for daily or routine use

What you need to know is that different analytics will apply to your business at different times and depending on your strategic requirements.

We can help you identify and set up a reliable, customized metrics dashboard for your online store. Contact us.

Are You Ready for the Amazon Expansion?


Are you ready for the Amazon expansion? Recent reports suggest Amazon is planning to open 2000 brick and mortar stores starting in 2017.  Analysts are now wondering if this could be the beginning of the end for the strictly Pureplay model or ecommerce companies need both a physical store and online portal to survive.

All About Profit

Amazon’s latest earnings report certainly show disappointing results. Net income was $252 million in the third quarter, or $0.52 per diluted share, compared with $79 million, or $0.17 per diluted share, in third quarter 2015.

This downward trend was mainly due to:

  1. High Shipping costs.
  2. Increased revenue from cloud services – an increase of 55%, $3.23 million.
  3. High fulfillment expenses – The company added 18 fulfillment centres in 2015.
  4. Investments in artificial intelligence, Alexa.
  5. Increased expansion in India.


The question to ask is what is the best strategy? Are you going to pursue a  Pureplay model, the retail model, or a combination of both? Contact us and we will help you to research the best strategy for your business.

Have You Tried The New Amazon Echo?

Have you tried the new Amazon Echo? What was your experience? Here is the view from CNET reviews:

We like the way is is portable and be easily stashed away anywhere. It is not the prettiest, cutest device out there but certainly has great functionality. Give it a try.


If Twitter Is Bought By Salesforce…


Should Salesforce buy Twitter? What can we expect if it happens? Does this deal even make sense?

According to “digital evangelist” Val Afshar, Salesforce buying Twitter would make perfect sense:


As a market leader in CRM, Salesforce buying Twitter would have benefits for Twitter in terms of sales growth and market share. Many of the products that Saleforce provides, customer service software, market research tools, etc are already integrated with social media. By adding a social media network with over 300 million monthly users, Saleforce will have a far wider reach and add enhanced offerings to current and potential customers.

Business Insider also notes that this deal makes sense as Twitter is one of the most widely used prospecting tools used by salespeople these days.”

We aregoing to continue watching this deal closely, stay tuned. Apparently Google also has an eye on Twitter.  (brrr!) May the best company win!




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