I've been running Coffee Hit for 12 years now. During that time our primary focus has been online, both B2B and B2C. As the world changes due to COVID-19 and consumer behaviour has rapidly moved to online I thought id share some tips to help you as you transition and focus to online sales.
1. Don't overstock with inventory
Its tempting when you speak to your supplier and they offer you a 5% discount if you buy x amount. When your getting started just don't do it. Inventory on the shelf is cash you cant use for other things. My rule of thumb is if the supplier is in the UK I only want to hold 30 days worth of stock. Start off with local suppliers and get the best price you can but only buy 30 days worth of stock. Cash is king, so keep it as cash!
2. Be realistic about your delivered costs
Don't guess or ignore all the costs associated with getting the product from the supplier to you, then from you to the customer. Courier costs from the supplier and to your customer, the box, the tape, the staff to pack, the space to store. then allow 5% will come back to you as returns. Another 1% will be lost in the mail. As a general rule, we allow 15% for costs.
3. Don't compete on price
It's tempting to price your product at the lowest price. My experience is the lowest price brings the wrong type of customers. It's better to differentiate yourself with service. Exceed their expectations. This takes time but in the long-run has much more value than quick sales with no profit. Think about what can we do that would exceed their expectations and show how much you care. Also, look at bundling the product with other products you sell. As a general rule, we won't sell a product unless we can clear at least a 30% gross margin.
4. Use email marketing
People still read email. It's the single most effective form of advertising. On Facebook & Google ads you might get 2-3% engagement. With email, it's typically 40-60%. Make your email interesting and informative. Also, give them a great offer. Has to grab their attention. Free shipping is the best. Put as your heading Free Shipping this Weekend! Don't be afraid to send emails. If they don't want to hear from you they will unsubscribe, that's fine. What you end up with is a leaner list of very interested people. For every customer interaction make sure you ask for permission to get their email address.
I hope these tips help you with your online business. If you have any questions don't hesitate to reach out!
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