Low margin retailers and e-tailers, how do YOU make a respectable bottom line profit?

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S

samz

  • #1
    Hi

    Looking over my accounts my cost of sales (stock only) have been consistently approx 40-45% of my sales. I sell unbranded ladies fashion on Ebay. Ebay and Paypal fees are at least another 10%. I have a business loan and a small unit which I use for stock, dispatch operations and photography. Apart from other smaller expenses, there is of course myself to pay. I'm drawing the bare minimum and really would like to be earning more by now.

    I've been LTD and VAT registered for 2 years now, previous to that I was a sole trader. To be honest there is no sign of me being able to draw any more ££'s out of the business. I take a respectable turnover and have a steady stream of visitors to my store but I feel that I should be earning more than I do.

    I have been toying with having a standalone website for some time, infact my husband is working on a low cost shopping cart site, but from my experience there are no guarantees in terms of getting the traffic across from Ebay and pulling in new traffic at a low cost. I don't want to end up blowing lots of ££'s on expensive adword campaigns and still not reaching my end goal. Organic online growth is great but very difficult to achieve especially with my product.

    Any words of wisdom? Shop retailers and etailers welcome!
     
    S

    samz

  • #3
    gemd89 said:
    I wouldnt advise it. Can you not increase the stock/items you sell on ebay?

    Clothing is very competitive online - I tried it once and you either need a huge SEO or advertising budget or both.

    Gemma
    Click to expand...

    Thanks. I'm sure that I could but this doesn't really deal with the issue of fees, plus, it's very much the case of having all my eggs in one basket.
     
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    S

    samz

  • #6
    dynamic08 said:
    Watch your overheads!

    Office? Storage? automation?
    Click to expand...

    I would say that my overheads are okay, my Ebay and Paypal fees together with my unit costs are very much equivalent to those of a small shop. I have friends who are paying similar amount in rent to my fees and unit costs combined in their shops, and selling similar gear. They just do better numbers than me - sell more gear. Ebay is very competitive in my product area and I really have to fight for every sale. My friends do have competition, but not to the same degree.
     
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    D

    dynamic08

  • #9
    How much are you paying for what space? Could you move into containers to get cost down?

    Maybe you could wait for people to buy 1 item and then offer them upgraded shipping if they purchase another item.

    Or a free pair of socks when 2 items purchased?

    People like to think they are getting something for nothing and will spend extra todo just that.
     
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    martin10

    Free Member
    Feb 19, 2011
    8
    1
  • #11
    I also run an ebay business and I find that you have to review your costs regularly. By this I mean your listing fees. if you do an analysis you might find that you can still achieve the same turnover with less listings. Get rid of the slow movers. can you list your items via multiple variation listings ? I made big savings by using this. You can list 30 items in one listing, so one listing fee. Final fees and paypal costs are okay because you can build that into the cost of the product.
    The problem with websites is that people prefer to use ebay. I've got a website which I advertise with my ebay sales but people keep coming back to my ebay shop. I think people do get nervous about purchasing from websites they have not heard of before but are prepared to buy off anyone on ebay.
     
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    Talay

    Free Member
    Mar 12, 2012
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  • #12
    martin10 said:
    ...I think people do get nervous about purchasing from websites they have not heard of before but are prepared to buy off anyone on ebay.
    Click to expand...

    Very good point. I would add to this saying that the quality of the website really matters. A shoddy, cheap store front is viewed as more risky than a first class fully developed 21st century website, whereas the real truth may be the exact opposite.
     
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    needundies

    Free Member
    Mar 14, 2012
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  • #15
    The major trend I seem to be finding is that lot's of eCommerce sites with Staff / premises overheads are simply shutting up shop and moving their entire operation over to "Fullfilled by Amazon". The FBA fees do look hefty but when you consider all the red tape and costs involved in trying to keep the operation in-house then it does start to look attractive.
     
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    Talay

    Free Member
    Mar 12, 2012
    4,170
    944
  • #16
    needundies said:
    The major trend I seem to be finding is that lot's of eCommerce sites with Staff / premises overheads are simply shutting up shop and moving their entire operation over to "Fullfilled by Amazon". The FBA fees do look hefty but when you consider all the red tape and costs involved in trying to keep the operation in-house then it does start to look attractive.
    Click to expand...

    Including Marks and Spencer !
     
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