If you have just started an online business, you will have already realised just how heavy the competition really is. Within every single niche, there are 1000s of different companies, all competing for the same real estate. This has meant that over the last few years, price wars have erupted. Most business owners will assume that if they are not the cheapest, or if they don’t price match, they are going to be losing out to the competition. Actually, this is not true.
What Else Really Matters?
Although most consumers will do some price comparisons before making a purchase, this is not the only thing that they are going to be focusing on. Most people nowadays are impatient. This is because a lot of companies offer next day delivery (usually for orders placed before 4pm). This has now become an expectation; consumers expect their items the next day.
So, consumers will not just look at the price, but also the delivery time. If you are offering the lowest price, but take 2-3 days to deliver items, this will only appeal to the minority. If you offer a reasonable price and next day delivery, then you are going to be appealing to the majority. You will get a reputation for being not only cheap, but for offering excellent customer service.
What About Profit Margins?
Here is the problem for most businesses; profit margins. In order to offer such a low price, they have to go with an economy delivery service. This means that orders are going to take a few days to arrive. They could offer next day delivery, but this is going to mean that they have to increase their prices in order to compensate.
The majority of courier companies will offer bulk packages for businesses that are sending lots of packages per week. If you regularly send 50 packages or more per week, you have a great bargaining tool. You can enter into a contract with a delivery company and it is likely that you will be able to get 10-20% off your original rates.
Charging For Next Day Delivery
If you are finding that there is no way you can offer next day delivery based on your current profit margin, there is one other option; charging for delivery. Although this is not the ideal scenario, at least you are giving your consumers the option. They can choose to have economy delivery for free or pay for next day delivery for urgent orders.
This is where most companies fall down; stock. If you don’t have items in stock, then you are going to be talking 3-5 days in terms of turnaround for the customer. For a website owner that has 10,000 products online, it is not likely that they are going to be able to hold all these items.
That being said, there will be items that are ordered every day/week/month. Go through previous orders and list all items that have been sold within the last 4-6 weeks, with their quantities. You should have stock to cover this period of time and constantly top it up. To save space, you can store items using pallets from a company such as www.anchorpointindustrial.com.
About the Author: Alex is a professional writer that focuses on writing for high traffic and high quality blogs on the internet. He has been writing online since 2007 and has covered a range of topics. His favorite topics to cover include saving money in business, personal finance, the worldwide economy and world wide travel.