Everyone knows that part of running a successful business involves the ability to make changes quickly and efficiently. You need to have a solid customer base, a good marketing strategy, and increasing profit margins in order to guarantee the growth of your company. On paper, a retail business seems like an easy operation right? Buy wholesale for cheap, sell retail for more, make money. However, in a saturated market, you need to be on the ball and ahead of the competition in every regard if you want to survive. Here are 5 ways you can maximize your retail profits in 2016:
Lower your cost of goods
Never be happy with the amount of money you’re spending on your products. You should always be trying to get them cheaper. Whether this requires purchasing more inventory, choosing a different distributor, or looking overseas, this is the easiest way to increase your profits. However, you need to be sure that you don’t compromise the quality of your goods in the process.
Get to know your vendors
A successful supplier/buyer relationship is healthy for both businesses. But why stop at weekly orders? Start asking your vendors questions to see if there are ways you can make their job easier or more cost-effective. What’s good for them is usually good for you. If you don’t go out of your way to optimize your relationship, you’ll never reach your full potential.
Advances in technology and software are redefining the traditional retail business model. Companies are making more money and hiring less people. The most successful businesses are the ones that embrace technology and use it increase efficiency in daily operations. For example, connecting your POS to your accounting software eliminates the need for someone to manually collect your numbers and calculate profits. Make a list of every administrative task you complete in a month then ask yourself, “is there an app for that?”
Social media, email campaigns, whitepapers, opt-ins, exit offers, lead form abandonment recapture, PPC, AdWords, are you making the most of all these new lead generating/conversion tools? Many of them are free or cheap and get high quality traffic to your website if utilized properly. The internet is reworking the way we advertise and interact with our customers. Make sure you keep up.
We have never had access to so much data in the history of time. Learn how to capture, scrape, analyze and use it. This way you can offer incentives to customers based on their history, wants and habits that will increase your conversion rate.