Expense control in the pyjama revolution
More than ever the right outfit for a shopping expedition is pyjamas, and the best time to shop is, well, whenever it suits you – because shopping is an online activity, even in the middle of the night, if that’s what you prefer. But that trend hides potential pitfalls for would-be online retailers, not the least of which is expense control. Here’s why.
The number of e-commerce web sites is growing fast to support legions of ‘at-home’ shoppers. The sites are often started by aspirational retailers backed by an idea and a desire to succeed, but with no knowledge of how to run a business.
To them, we’d say the most vital lesson is to learn how to be an expense manager and keep spending under control. Finger-in-the-air assessments have no place in any business, and could point to financial failure.
Let’s get the e-commerce basics out of the way. People serious about an e-commerce web site really do need to take it seriously. A site built by the son of a friend just isn’t good enough. On-line shoppers are increasingly sophisticated, and will click away from sites that aren’t user-friendly. So here are the basic lessons, and how they relate to cost control.
Lesson 1. Have control over site content. You don’t want to pay someone else every time you add stock or change prices. That’s an unnecessary cost.
Lesson 2. Be mobile-friendly. More than half of on-line shopping is done on mobile devices. Don’t miss sales because you must maximise revenue – the gap between expenditure and income is what the whole exercise is about.
Lesson 3. Understand ‘free’. When an open software source platform says it’s free, only part of the solution is. You’ll have to pay to make it work, as well as spending time on it. Check all of the costs before committing.
Lesson 4. Time’s money. Aside from money management, your time has a value, so minimise the amount you spend running your e-commerce business by having the right systems in place to support you. No point spending 60 hours a week doing stuff that could be done in 35 or less.
Lesson 5. Get paid. Make it simple, by using internet-optimised payment methods like PayPal. They smooth the process, and are user-friendly (especially on mobile devices). That’ll discourage people from clicking away, and maximise your revenue (That’s another way of viewing Lesson 2).
Lesson 6. Know your spend. Use the free-to-download expense manager app Solo Expenses to keep track of your outgoings. Failure to record all of them will mean you can’t measure the financial performance of your e-commerce shop. Spending on stock is an obvious cost, but how much are the cardboard boxes, parcel tape, postage, fuel to get to the Post Office, and business insurance on your car.
Of all the money management apps, Solo Expenses makes expense management easy, so you can see what’s being spent, and where you could spend less – and make more profit. What’s more, it really is free to download – and that’s the best cost-control step ever!